HomeServices of America, the last remaining brokerage defendant in the landmark Sitzer/Burnett commission case, has agreed to pay $250 million in damages to settle lawsuits that will change agent compensation across America.
The New York Times first reported the story.
The deal comes just days after the federal judge overseeing the commission case in Missouri approved a preliminary settlement that will see the National Association of Realtors and multiple other residential brokerages collectively pay hundreds of millions of dollars in damages and make large-scale changes to longstanding commission policies.
NAR, the industry’s de facto trade association, later agreed to pay $418 million over five years to settle the claims. HomeServices, owned by Berkshire Hathaway Energy, resisted settling the case and will pay far more than its large brokerage contemporaries, most of which are paying between $50 million and $90 million to settle claims.
In October, a jury in Kansas City, Missouri determined that NAR and the brokerages conspired to inflate or stabilize commissions via NAR’s Participation Rule, which required listing agents to make an offer of compensation to a buyer’s agent. The jury verdict came to $1.76 billion, which would have been trebled to $5.4 billion in damages. It spurred dozens of copycat cases filed in other states and resulted in a series of settlements in the winter and spring.
Earlier this week, Judge Stephen Bough, who is overseeing Sitzer/Burnett and several other related commission cases, preliminarily approved the settlements, which are expected to go into effect in mid-July.
The settlement stipulates that beyond no longer requiring agent participants be members of the NAR, listings agents can no longer display buyer agent commissions in the MLS but can put it on their brokerage’s website or elsewhere. The NAR settlement protects brokerages that had $2 billion or less in sales volume in 2022; it did not include roughly 85 brokerages that did more than $2 billion that year, and they’ll have to reach separate settlements with the plaintiff’s attorneys.
The Department of Justice has also taken an interest in the Sitzer/Burnett case and may attempt to convince Judge Bough to change the terms of the settlement. The DOJ may also file charges separately to prevent any display of buyer agent commissions on any platform.
HomeServices of America is the third-largest brokerage in the country by transaction sides at 235,861 in 2023, according to the latest RealTrends rankings. The Minnesota-headquartered firm had $133.8 billion in sales volume in 2023, behind only Compass, Anywhere Advisors and eXp Realty.
Related
Source link
