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Real Brokerage makes $9.25 million deal to settle commissions suit 

The company reached the agreement in the Umpa case, the only major class action involving agent pay to name Real as a defendant.

April 8, 2024
3 minutes

Another large brokerage has agreed to a settlement deal in a commissions class action lawsuit.

The Real Brokerage will pay $9.25 million into a qualified settlement fund within the next 30 days following preliminary approval from the court in the national Umpa lawsuit, according to a news release from the company. 

The Umpa case, a class action lawsuit filed late last year in Missouri, was the only major case naming Real as a defendant. In an email, the company noted that "as with other brokerage settlements, the settlement is nationwide. It conclusively settles Umpa and releases Real from liability related to future lawsuits based on historical conduct making similar allegations."

Real also confirmed that it reached this monetary settlement through mediation. 

"We chose to settle this lawsuit to direct our energy to our agent community," Tamir Poleg, chairman and CEO of Real, said in the email. 

"We are committed to continuing to invest in our platform to provide our agents with the tools, training and technology they need to deliver the best possible home buying and selling experience for their clients. At the end of the day, we want to ensure that clients receive the best possible guidance when making one of the biggest financial decisions of their lives."

Case background: The Umpa case was brought by a seller who sold homes in Ohio and Maryland. The lawsuit was filed on Dec. 27 in the U.S. District Court in the Western District of Missouri — the same court that received the Sitzer/Burnett and Gibson cases. The class includes anyone in the U.S. who, with some exceptions, used a broker affiliated with one of the defendants to sell a home that was listed on an MLS in the past four years.

The Umpa case is also one of nine that may be merged into one large case. A panel of judges is currently considering a consolidation request filed by attorneys in Umpa and Gibson.

Rule changes: Along with the monetary settlement, Real has agreed to make specific changes to its business practices. 

These changes include clarifying the negotiability of commissions, prohibitions on claims that buyer agent services are free, and the inclusion of listing broker compensation offers in communications with clients. Real will also develop training materials to support these practice changes, according to the news release.

Settlement impact: The Real Brokerage joins Anywhere Real Estate, RE/MAX, Keller Wiliams, Compass and the National Association of Realtors in reaching settlement agreements in the commissions lawsuits.

With sales volume of more than $12 billion in 2022, according to the T3 Sixty Real Estate Almanac, Real is one of more than 90 brokerages not covered by NAR's settlement. The March 15 deal excluded brokerage firms with more than $2 billion in transaction volume, but those companies could opt for a streamlined settlement path, as outlined in the NAR agreement. 

Had Real chosen that option, the company would have paid an amount equal to .0025 multiplied by the average annual total transaction volume over the most recent four calendar years, which may have exceeded the $9.25 million they agreed to pay in Umpa. A second option would be pursuing non-binding mediation.

Real Estate News has reached out to Real for further details on the settlement.

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