Anywhere, RE/MAX settlements receive preliminary approval
The agreements, which cover multiple buyer-broker commissions lawsuits, were deemed “fair, reasonable and adequate” by the judge.
Key points:
- The preliminary approval moves the two brokerages one step closer to closing the book on buyer agent compensation litigation.
- Court documents reveal details about required policy changes and provide insight into how the amount of monetary damages was determined.
- Employees from Anywhere and RE/MAX will be required to provide testimony for the plaintiffs when the Moehrl case goes to trial next year.
U.S. District Judge Stephen Bough has given preliminary approval of a settlement between home sellers and RE/MAX and Anywhere Real Estate, moving the brokerage companies one step closer to ending a long chapter of litigation.
Calling the proposed settlements in the buyer-broker commissions lawsuits "fair, reasonable and adequate," Bough provisionally certified the agreements to include not only the Sitzer/Burnett, Moerhl and Nosalek cases, but to also cover all other MLS regions "four years prior to the date a new or amended complaint is filed."
A final approval hearing for the settlements will be scheduled in the coming weeks, and, barring any changes or delays, final approval is expected sometime next year. It is unclear at this stage whether the Department of Justice will step in like it did in the Nosalek case, questioning the agreement reached between MLS PIN and the plaintiffs. Real Estate News has reached out to the DOJ and the plaintiffs' attorneys for comment.
In September, ahead of the Sitzer/Burnett trial, Anywhere and RE/MAX both agreed to monetary settlements and policy changes related to buyer agent compensation. Anywhere agreed to pay $83.5 million in damages and RE/MAX settled for $55 million.
A spokesperson for RE/MAX said the company is satisfied with the preliminary approval.
"This development signifies progress in our ongoing efforts and commitment to a resolution. We anticipate final approval of the settlement, which includes releases for all U.S. independent regions, franchisees, and agents, sometime next year," according to a statement from the company.
Anywhere is also pleased that the settlement process is moving forward.
"Our efforts to resolve these claims removes future uncertainty and legal expense for Anywhere, our franchisees, and affiliated agents as, together, we focus on serving home buyers and sellers as they move to what's next," said Ryan Schneider, Anywhere's CEO and president.
Court documents filed in the Moehrl case on Nov. 20 detailed the policy changes that RE/MAX and Anywhere will need to make. Previously disclosed terms include eliminating NAR membership requirements and disclosing to consumers that commissions are fully negotiable and that there are no minimum commission requirements.
The filing also outlined how the court arrived at the monetary damages, which involved a detailed financial analysis of both companies. The damages amount to around 14% of each firm's total market capitalization.
The documents noted that both RE/MAX and Anywhere will need to cooperate with the plaintiffs during the upcoming Moehrl trial by supplying testimony — to be used by the plaintiffs — from up to three employees. A robust media campaign is also being planned to let impacted homeowners know that they are entitled to compensation.
In a press release, Anywhere announced it would recommend and encourage its independently owned and operated franchises to adopt these policy changes. The company's franchise network includes Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Corcoran, ERA and Sotheby's International Realty brands.
As for the other defendants in Sitzer/Burnett — the National Association of Realtors, Keller Williams and HomeServices of America — Judge Bough is still accepting post-trial motions following the nearly $1.8 billion verdict, which won't be finalized until next spring at the earliest.