A gavel against the backdrop of office buildings.
Illustration by Lanette Behiry/Real Estate News; Shutterstock

Are more settlements coming in the commission lawsuits? 

As the industry digests Anywhere’s decision to settle the Moehrl and Sitzer/Burnett cases, more such deals, and policy changes, emerge as likely outcomes.

September 7, 2023
4 minutes

Key points:

  • Two landmark class-action lawsuits continue to move toward the courtroom, starting Oct. 16.
  • The chances of NAR and other defendants prevailing may have decreased with a potential settlement in place.
  • If companies do settle, it’s expected that requiring buyer broker agreements will be part of the package.

Anywhere Real Estate this week kicked off what is expected to be a momentous few months for two major court cases that could reshape the way agents get paid.

The company's decision to settle two class-action lawsuits revolving around buyer agent commissions has some in the industry speculating about what happens next.

Will other defendants — including Keller Williams, HomeServices of America and RE/MAX — follow Anywhere's lead, or stick with the National Association of Realtors, which says it is committed to defending itself in court?

James Dwiggins, CEO at NextHome, said it's possible that all defendants will settle, including NAR. The Sitzer/Burnett case is scheduled to go to trial on Oct. 16, while a court date for the Moehrl case has yet to be finalized.

"The fact Anywhere settled shows their concern about losing," Dwiggins said in an email. "It sets up the others to settle now, with the main question being how much."

What's probably happening now? Each firm is assessing likely outcomes as it ponders a settlement, said Raymond "RJ" Jones, vice president of communications and investor relations at Similarweb.

"Settlement also is dependent on other factors, mainly the willingness of the plaintiff to agree to a settlement," said Jones, who has held executive positions at Zillow, eXp and Keller Williams.

What's also in that calculation is whether these firms can get a nationwide settlement, which is not a foregone conclusion, said Russ Cofano, CEO of Collabra Technology. The Moehrl case involves sellers from some regions of the U.S., while Sitzer/Burnett involves home sellers in the state of Missouri.

"The purpose of a nationwide class settlement is to eliminate copycat litigation. I don't believe Anywhere will settle if there is a meaningful risk of follow-on liability," said Cofano, who also has served as an attorney and industry legal counsel.

What would the defendants need to give up for settlement?

Details of the proposed settlement between Anywhere and the plaintiffs for Moehrl and Burnett/Sitzer were not available during the initial court filings; those details are expected to emerge when Anywhere and the plaintiffs ask the judges to approve their plans.

A figure of $83.5 million that Anywhere would pay the home sellers in the Moehrl case was sent out in error but remains widely reported, giving those in the industry at least a ballpark figure to consider as it awaits further details.

If that amount is accurate, it appears lower than anticipated, said Jones.

"This suggests that the settlement is strategic on both sides: Anywhere pays what it can without going into financial duress, and the plaintiff maximizes what is possible for cash settlement now, rather than see potential settlement funds be diminished by … other future lawsuits that may arise," Jones said.

The industry is also awaiting details about policy changes Anywhere may have agreed to in the settlement. Dwiggins expects the end result will be that all companies will implement buyer broker agreements.

"The sooner that happens, the better for real estate companies and consumers," Dwiggins said, noting that 12 states already require this and the federal government seems to be pushing for a national standard.

Until more details are released about the Anywhere settlement, those watching these cases closely are left to glean what they can from comments from the plaintiffs' attorneys, which refer to having won significant changes to Anywhere's practices.

"This likely means we will start to see clear and distinct attachments of seller commissions to the sellers and buyer commissions to the buyers," Jones said. "It is unlikely that the plaintiff would have entered into the settlement without movement towards separating the buyer agent commission from the seller agent commission."

Get the latest real estate news delivered to your inbox.