Anywhere, RE/MAX drop buyer commission and NAR requirements
The brokerage giants have agreed to significant policy changes as part of their settlement agreements in the Sitzer/Burnett and Moehrl commissions cases.
Anywhere has revealed the terms of its $83.5 million proposed settlement in two landmark commissions lawsuits, a move quickly followed by RE/MAX.
The terms of the settlements in the Moehrl and Sitzer/Burnett cases include:
NAR membership is no longer required
Agents must clearly disclose that commissions are fully negotiable and not set by law
No more minimum commission requirements
"We believe this is the right course of action to remove future uncertainty and ongoing legal expense, serving the best interests of the company, our affiliated agents and franchisees, and shareholders, and enabling Anywhere to focus on moving real estate to what's next," said Ryan Schneider, Anywhere CEO and president.
RE/MAX President and CEO Nick Bailey shared details of its $55 million settlement plan with franchisors, saying that the agreement is "in no way" an acknowledgement of wrongdoing. "We continue to believe in buyer agency, cooperative compensation and the idea that consumers are best served when they are working with real estate professionals."
The two class-action lawsuits claim NAR, Anywhere, HomeServices of America, Keller Williams and RE/MAX have forced home sellers into an unfair system that requires them to pay a commission that is split by buyer and seller agents.
NAR says its plans are not changing
The National Association of Realtors has vowed not to settle, and on Friday said the proposed settlements do not change how its case will be presented in court. "Based on their latest filing, it appears that they are agreeing to do things already required by our Code of Ethics or MLS rules," said NAR spokesman Mantill Williams.
"NAR remains committed to our guidance for local MLS broker marketplaces that ensures consumers get comprehensive, equitable and reliable home information and that brokerages of any size, service or pricing model get a fair shot at competing," Williams added.
Zero-percent commissions will now be allowed
Anywhere also agreed to make rule changes aligned with the now-revoked Department of Justice settlement with NAR in 2020. According to an Oct. 6 court filing, Anywhere will prohibit company-owned brokerages from describing buyer agent services as free and require them to list compensation offers as soon as possible. They also will be prohibited from sorting listings by commission amount, unless requested by the client.
Anywhere is also eliminating minimum client commission requirements for company-owned brokerages and will encourage members of its franchise network to follow suit.
NAR downplayed the move toward $0 compensation offers, which has been embraced by some MLSs and has also been an issue in a similar case involving MLS PIN. Williams said on Friday that "policies require that an offer of compensation be made without specifying an amount. Practically speaking, the difference between an offer of $1 or even one penny and $0 is negligible, and regardless, those offers are always negotiable."
The proposed settlements still must be approved by judges in the buyer-broker commissions lawsuits, the first of which — Sitzer/Burnett — is set to go to trial on Oct. 16.