Anywhere reaches settlements in landmark commission lawsuits
The company and plaintiffs informed the judges that a preliminary settlement has been reached, ending two potentially damaging trials for Anywhere.
- Anywhere has agreed to settle in the Moehrl and Sitzer/Burnett class action lawsuits challenging the current system of buyer agent commissions.
- In the proposed settlement in the Moehrl case, Anywhere will pay $83.5 million.
- Other defendants in the cases, including NAR, HomeServices of America, RE/MAX and Keller Williams, are still on track to go to trial.
- "Anywhere has established itself as the voice of reason in the real estate world," said the lead attorney for the Sitzer/Burnett plaintiffs.
A major real estate brokerage has reached a settlement in two major class action lawsuits that revolve around buyer agent commissions.
In court documents submitted on Sept. 5, Anywhere Real Estate and the home sellers suing them informed the judges in both the Moehrl and Sitzer/Burnett cases that they have reached a preliminary agreement to settle all claims. The settlement agreement will need to be approved by the two U.S. District courts hearing the cases.
Moehrl: Anywhere to pay $83.5 million
In the proposed settlement for the Moehrl case, Anywhere will pay $83.5 million to the home sellers involved in the class action and will make significant changes to its practices surrounding buyer agent commissions, said Steve Berman, one of the lead attorneys for the plaintiffs.
"The monetary settlement was the most that could be obtained in light of Anywhere's available financial resources," Berman said in a statement.
"Critically, the settlement includes significant changes to Anywhere's practices relating to the conduct that we have challenged. Our antitrust team looks forward to continuing to pursue additional relief against remaining defendants for those who have been systematically overcharged for simply selling their homes in an already unstable housing market."
Sitzer/Burnett: Settlement details pending, but billions at stake
No details about the proposed settlement for Sitzer/Burnett were included in the initial documents filed Sept. 5, but Anywhere attorneys have asked that the company be excused from the pretrial conference, scheduled for Friday, Sept. 8, suggesting that the settlement is likely to be approved. Sitzer/Burnett is scheduled for trial Oct. 16.
The lead attorney for the Sitzer/Burnett plaintiffs, Michael Ketchmark, said the exact terms of that settlement are confidential until a motion is filed to the court for approval. Ketchmark represents more than 500,000 Missouri home sellers, and he noted that $4.8 billion is at stake in Missouri alone.
"We are less than seven weeks from trial. Anywhere has established itself as the voice of reason in the real estate world, and we urge the other corporate defendants and companies around the United States to follow," Ketchmark said in an email. "The time has come for NAR to change its long engrained practice of allowing the real estate industry to use its rules as a vehicle for raising and stabilizing commissions in the sale of homes. If NAR and the other corporate defendants do not agree to change their ways and start complying with our nation's antitrust laws we will hold them accountable at trial."
Settlement will 'remove future uncertainty' for Anywhere
In a statement, Anywhere said the company was pleased to reach a nationwide settlement.
"The path to obtain final approval and implement the settlement is a long one, and Anywhere has taken the first important step toward a resolution that not only releases the company but also our affiliated agents and franchisees," according to the statement. "We believe the settlement will remove future uncertainty with respect to the upcoming trial, potential additional claims, and legal expense, enabling Anywhere to focus on and continue delivering what's next for agents and franchisees. Given ongoing legal proceedings and confidentiality agreements between parties, we cannot comment further at this time."
While Anywhere has taken steps to settle, others defendants still on track to go to trial include the National Association of Realtors, HomeServices of America, RE/MAX and Keller Williams.
Impacts of the two cases
Both cases have the potential to upend how buyer agents are paid. The lawsuits claim NAR and others participated in anticompetitive practices by forcing sellers into a system where they pay a commission that is split between buyer and seller agents. The plaintiffs believe this system has led to inflated buyer agent fees to the detriment of home sellers, and they argue that homebuyers should pay for their own agents.
NAR and the other defendants counter that the current system "provides transparency and market-driven pricing options for home buyers and sellers," according to NAR spokesman Wes Shaw.
If the plaintiffs prevail, agent compensation will fundamentally change, MLSs may have to alter the way they do business, and the defendants could have to pay out a massive amount in damages.
Because of the size of the cases and the likelihood of appeals, it may take years before a final outcome is reached.
Note: The settlement amount in the Moehrl case was originally disclosed to media outlets in error. Because the figure has now been widely reported, Real Estate News has included it in this story.