Commissions lawsuits: The latest
See the most recent developments in landmark commissions lawsuits — Moehrl, Sitzer/Burnett and others — that could change how agents get paid.
Lawsuits that could reshape the real estate compensation landscape are moving toward resolution, with some parties settling and the industry considering what it all means.
The plaintiffs, a group of home sellers, are seeking billions in damages over rules they say forced them to pay buyer's agent commissions that would have been paid by homebuyers in a truly competitive market. NAR calls the current compensation structure a win for consumers, saving sellers time and creating a larger pool of buyers with professional representation.
The major cases — Moehrl and Sitzer/Burnett — could affect millions of transactions and agents across the country, and change how NAR, brokerage companies and MLSs do business.
Real Estate News will continue to cover this story as it unfolds, adding its most recent stories as well as other brief updates to this page.
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Nosalek case moves forward as plaintiffs respond to summary judgment request
The Massachusetts buyer-broker commissions lawsuit continues to progress, with the plaintiffs providing incendiary evidence to support their claim that a conspiracy has taken place.
HomeServices of America, one of the defendants in the case, had submitted a motion for summary judgment on July 14. Attorneys for the plaintiffs filed documents in response to the motion on Nov. 16, citing comments made by Allan Dalton, a senior vice president at Berkshire Hathaway HomeServices. Dalton had appeared on a Tom Ferry podcast and promoted questionable commissions negotiation tactics; the video was introduced during the Sitzer/Burnett trial and created a stir due to its vulgar language directed at a client.
The plaintiffs also cited training videos pushing for high commission rates as well as agent requirements to join MLS PIN as examples of HomeServices' alleged involvement in maintaining high commission rates.
Judge Patti Saris did not immediately rule on the motion for a summary judgment and has not set a date for a jury trial. HomeServices and Keller Williams are the remaining defendants in the case after MLS PIN, along with brokerage companies Anywhere and RE/MAX, reached settlement agreements. The agreements are not expected to be finalized until next year.
Keller Williams, NAR, HomeServices of America hire top appellate attorneys
With a high-stakes appeal to the nearly $1.8 billion Sitzer/Burnett verdict looming, the defendants have expanded their legal teams.
Keller Williams brought former U.S. Solicitor General Paul D. Clement on board. Clement has argued more than 100 cases before the Supreme Court and his "extensive experience representing clients across diverse, high-profile cases of national significance" is well-matched for this case, said KW spokesperson Darryl Frost.
"The verdict here raises serious legal issues and poses a threat to a wide range of business by converting practices enshrined into state law into per se antitrust violations," Clement said.
Hearing scheduled for Anywhere, RE/MAX settlements
Judge Stephen Bough will hear a motion for preliminary approval of settlements in the Sitzer/Burnett case later this month.
In September, ahead of the trial, Anywhere and RE/MAX both agreed to monetary settlements and policy changes related to buyer agent compensation. Anywhere agreed to pay $82.5 million in damages and RE/MAX settled for $55 million in damages.
The hearing is scheduled for 9 a.m. Central Time on Monday, Nov. 20.
Expanded Leeder commissions case names multiple brokerages
Another antitrust case was filed late last week following the verdict in Sitzer/Burnett.
Attorneys for Leeder/Batton filed a complaint in U.S. District Court in Northern Illinois on Nov. 2 naming Compass, eXp, Redfin, Weichert Realtors, United Real Estate Group, Howard Hanna and Douglas Elliman as defendants. The claims are similar to those made in the Sitzer/Burnett and Moehrl cases, but in this case the plaintiffs are buyers, rather than sellers, who say they have overpaid.
The plaintiff may sound familiar: The Leeder case was originally filed in 2021 and named NAR, HomeServices of America, Anywhere, Keller Williams and RE/MAX as defendants. The case was dismissed in May 2022, but an amended complaint was filed. In dismissing the original case, the court ruled that homebuyers were "indirect purchasers" of commission fees, so antitrust law wouldn't apply.
Both cases contend that homebuyers across America have been paying too much and receiving too little from buyer agents.
Judge Andrea Wood, who is also handling the Moehrl commission class-action case, is expected to rule later this month on the latest motion for dismissal brought by the defendants.
A familiar face for the new case as DOJ investigation looms
After initially assigning U.S. District Court Judge Fernando Gaitan to what is now known as the Gibson case, a change was made on Nov. 1. Stephen Bough, who oversaw the Sitzer/Burnett case and is still working on finalizing it, will take over.
Bough has plenty on his plate with Sitzer/Burnett: He is expected to issue some form of "injunctive relief" — a ruling that could mandate immediate changes to how the real estate compensation system works. He has also been asked by NAR to lower the amount of damages recommended by the jury, and proposed settlements with Anywhere and RE/MAX still need to be approved.
The formal complaint in the Gibson case filed on Oct. 31 noted that the DOJ is "conducting an active investigation into anticompetitive practices" in the residential real estate brokerage business, including a focus on compensation and restrictions to access to listings. That comes on the heels of an Oct. 16 Bloomberg report that the enforcement agency is close to deciding whether to pursue their own case after a multi-year investigation.
One other note: Court documents show the jury didn't ask any clarifying questions during their brief deliberations, and out of the thousands of exhibits/documents introduced in the case, they only requested one, which was related to calculating the damage amount. Jurors also declined to speak to the media, and the judge repeatedly told reporters not to bother them.
KANSAS CITY, Mo. — Moments after the jury in the Sitzer/Burnett case presented their unanimous verdict in support of the plaintiffs, lead attorney Michael Ketchmark announced his intention to file a new, nationwide class action complaint naming NAR and seven brokerage firms as defendants: Compass, eXp, Redfin, Howard Hanna Real Estate, United Real Estate, Douglas Elliman and Weichert Realtors.
The complaint, which alleges a conspiracy to keep commission rates inflated and force sellers to pay buyer agents, follows a very similar playbook as Sitzer/Burnett.
The new suit, however, has a broader scope, aiming to include every home seller in the U.S. who used a listing broker affiliated with the defendants and listed it on an MLS between "Oct. 31, 2019 to present," according to the filing. The complaint did not list a specific damage amount, but stated that damages should provide "appropriate injunctive and equitable relief."
"Our goal is to take the message from Missouri across the nation and return the process of selling homes to the fair market and allow people to reap the benefits of technology and to stop this conspiracy from affecting people in our country," Ketchmark said.
KANSAS CITY, Mo. — After less than three hours of deliberation, the jury ruled for the plaintiffs in the landmark Sitzer/Burnett trial, awarding full damages of nearly $1.8 billion.
The trial, which lasted more than two weeks in U.S. District Court, was a battle between home sellers in Missouri and real estate industry titans: The National Association of Realtors, Keller Williams and HomeServices of America.
The sellers alleged that NAR and others participated in anticompetitive practices by forcing them into a system where they pay a commission that is split between buyer and seller agents. That led to inflated fees that hover around 6% of the selling price, according to the plaintiffs, who sought nearly $1.8 billion in damages.
KANSAS CITY, Mo. — As the Sitzer/Burnett trial enters its third week, the defense called on one last witness from Keller Williams to testify before resting its case Monday morning.
Jen Davis, vice president of MAPS coaching for KW, talked about the value buyer agents bring to the table and the problems that would ensue if the current commission system were to go away.
The trial then entered the closing arguments phase, which began with a dramatic presentation from plaintiffs' attorney Michael Ketchmark. He accused the defense of using misdirection tactics throughout the trial but told the jury this was a clear case of conspiracy and antitrust violations, and said the plaintiff class was seeking nearly $1.8 billion in damages.
The defense took a more methodical, less emotional approach, reiterating that the claims of a conspiracy and antitrust violations were unproven and untrue.
"The plaintiffs utterly failed to prove a conspiracy," said NAR attorney Ethan Glass, who added that the evidence presented by the plaintiffs was taken out of context. Attorneys also said defense witnesses had been unfairly attacked on the stand.
The jury will begin deliberations Tuesday morning at 9 a.m. CT.
KANSAS CITY, Mo. — Week two of Sitzer/Burnett came to a close with testimony from Keller Williams Co-founder Gary Keller and President Marc King.
Keller took the stand in the morning, saying there was no such thing as a "standard" 6% commission, adding that KW doesn't require agents to charge a specific amount.
He stuck to his assertions during cross-examination, though he remarked at one point that he felt like he was being personally attacked by the plaintiffs' attorney.
King's testimony followed a similar narrative, and he insisted that the company has no involvement when it comes to setting or negotiating commissions.
Testimony and closing arguments are expected to wrap up on Monday. Depending on the length of the arguments, the jury could start deliberating as early as Monday afternoon.
KANSAS CITY, Mo. — The defense in the Sitzer/Burnett trial went to work on Thursday refuting earlier testimony and trying to demonstrate the negative consequences of a change to commission practices.
The jury heard testimony from three economic and industry experts: Lawrence Wu, Stefan Swanepoel and David Stevens.
Wu, who is president of NERA Economic Consulting, appeared to be the defendants' star witness. He refuted claims made by the plaintiffs' expert witness last week and presented his own findings. During an aggressive cross-examination, the plaintiffs' attorney attempted to discredit Wu, forcing him to admit that he was paid and coached by the defense team.
Swanepoel and Stevens, industry consultants, both discussed the impacts of eliminating the cooperation compensation rule, with Stevens testifying that it would cause "extremely serious damage" to buyers in particular.
Plaintiffs in the Nosalek case — a buyer commission lawsuit filed in Massachusetts in late 2020 — want to reach a deal with RE/MAX and Anywhere following the brokerage companies' settlements in the similar Sitzer/Burnett and Moehrl class action cases.
The plaintiffs filed documents earlier this week requesting that legal proceedings against the two brokerages cease because of a pending settlement.
In June, the plaintiffs reached a $3 million settlement agreement with Massachusetts-based MLS PIN that included changes to how the MLS handles buyer agent commissions. That agreement is currently under review with a final approval hearing scheduled for March 7, 2024.
If RE/MAX and Anywhere agree to settle, the only remaining defendants will be HomeServices of America and Keller Williams.
KANSAS CITY, Mo. — The defense expressed its displeasure with attorneys for the plaintiffs, going as far as requesting a mistrial due to the introduction on Tuesday of what HomeServices lawyers called an "ambush video."
Describing a BHHS executive's commentary on the Tom Ferry Podcast Experience in 2019 as "vulgar," attorneys argued that it was not part of the exhibit list and the defendants were deprived of the opportunity to review it beforehand to determine its authenticity or credibility, according to court documents.
The judge denied the request for a mistrial, but upheld other objections from the defense and instructed the jury to disregard the video.
In afternoon testimony, witnesses representing HomesServices of America stuck to their talking points, insisting that HomeServices' franchise operations were independent and responsible for their own policies and procedures.
KANSAS CITY, Mo. — After a grinding morning session and tense cross-examination in the afternoon, members of the Sitzer/Burnett jury appeared fatigued on day six of arguments and testimony.
Both the defense and plaintiffs covered familiar ground when questioning NAR leaders, particularly CEO Bob Goldberg, who reiterated his statements from Monday that NAR has nothing to do with commissions and that they have always been negotiable.
The defense also called NAR Director of Engagement Rodney Gansho to the stand in the morning, who testified that local associations, not NAR, control MLSs. But during cross-examination, Gansho was visibly rattled as the plaintiffs produced an email from Gansho suggesting that MLSs would suffer severe consequences if they didn't play by NAR rules.
The day wrapped up with testimony from HomeServices of America Founder Ron Peltier and initial testimony from CEO Gino Blefari. During cross-examination, Peltier was confronted with a video of BHHS exec Allan Dalton suggesting controversial tactics for agents dealing with objections to commissions rates. Peltier responded that it did not reflect the company's training practices.
KANSAS CITY, Mo. — With a week of testimony behind them, attorneys for the plaintiffs concluded their case Monday morning, focusing on the allegations of antitrust violations at the heart of the case.
Linda O'Connor, a former member of NAR's Professional Standards Committee, testified about an email she sent to the committee in 1999 detailing her concerns about antitrust law violations, which she said were ignored. Keller Williams was also in the spotlight as Darrell King, former director of compliance at the company, appeared to waver when discussing KW's antitrust policies.
In the afternoon session, the defense began to lay out its case, calling on former NAR president Sharon Millett and current CEO Bob Goldberg to testify about the origins of the current rules and NAR's role as it relates to compensation practices today. Goldberg stated that NAR has no involvement in setting commissions and exists primarily to provide services to agents and advocate for the industry.
KANSAS CITY, Mo. — As the first week of the Sitzer/Burnett trial wrapped up on Friday, the plaintiffs brought in two witnesses to testify about the perceived flaws in the U.S. commissions system and how agent compensation is handled in other countries.
Law professor Roger Alford asserted that steering is a big problem in real estate and a result of listed offers of buyer agent compensation. He also noted that commission rates are significantly higher in the U.S. compared to other developed countries.
The jury also heard from Australian real estate professional Todd Reynolds, who said commissions in Australia are generally in the 1.5% - 3% range, and sellers never pay the buyer agent fees.
Sitzer/Burnett trial loses a juror; defense continues to grill expert witness
A juror in the Sitzer/Burnett trial was excused from further duty on Thursday, Oct. 19, to deal with a family medical issue. The case will continue with eight jurors; a jury trial is required to have a minimum of six jurors to render a verdict.
The trial continued Thursday morning with more sparring over whether there is evidence of a conspiracy to keep commission prices inflated. An expert witness for the plaintiffs, Craig Schulman, remained on the stand to discuss the economic data that, he claims, points to the negative consequences of the current commission system.
The defense continued to hammer Schulman about whether the home sellers received value from the agents and repeatedly asked to see any documentation proving a conspiracy, which he could not produce.
In the afternoon session, another expert witness, Roger Alford, is expected to take the stand and discuss how much consumer wealth has been lost due to inflated commissions.
Day four of the Sitzer/Burnett trial included nearly four hours of testimony from the plaintiffs' first expert witness, Craig Schulman, a Texas A&M professor who studies econometrics. Asked about the commission fee structure currently in place for residential real estate, he told the nine-member jury that it was "one of the clearest cases" of collusion and price fixing he had ever seen.
In its cross-examination, the defense pushed back hard on Schulman's testimony, emphasizing that he had no specific documentation to support his claims and asserting that sellers sign a contract and know what services they are receiving and paying for when hiring an agent.
NAR responds to critical WSJ editorial
In a letter published in the Wall Street Journal on Wednesday, NAR President Stacy Kasper responded to the Journal's Oct. 15 editorial lambasting the association. The WSJ editorial referred to NAR as a "cartel" whose rules resulted in inflated commissions.
Kasper countered that the WSJ shouldn't "fall for the hype by class-action attorneys about how local multiple listing service broker marketplaces work."
The market, and by extension the consumer, "is in the driver's seat when it comes to real estate commissions," said Kasper.
"Realtors deliver a lot of value for the $50,000 they make annually, on average, as they guide consumers through all the legal, financial and community complexities of buying a home," Kasper wrote, adding that it will become evident as NAR makes its case in court.
KANSAS CITY, Mo. — Agent training practices were put under the microscope on the third day of the Sitzer/Burnett trial as attorneys for the plaintiffs attempted to connect the dots between training sessions and inflated commissions.
The jury heard testimony from RE/MAX CEO Nick Bailey and Founder Dave Liniger, who emphasized the value of collaboration and cooperation with associations and MLSs.
Plaintiffs presented training materials produced by RE/MAX and Keller Williams, arguing that the companies encourage agents to set commissions at 6% and limit compensation negotiations with sellers. The defendants countered that agents understand commissions are always negotiable.
KANSAS CITY, Mo. — Allegations of a conspiracy to inflate buyer-broker commissions dominated the opening arguments made by the plaintiffs on the second day of the highly anticipated Sitzer/Burnett trial in U.S. District Court.
The attorney for the plaintiffs laid out their claims of a price-fixing conspiracy, zeroing in on what they believe the defendants have done to keep real estate commissions around 6% — which typically includes an even split between buyer and seller agents — for decades.
NAR's lead attorney countered that the trade association doesn't force anyone to do anything, and that it exists to help homebuyers and sellers. He also noted that the plaintiffs' claims are based on conjecture.
The afternoon session included pre-recorded testimony from NAR CEO Bob Goldberg, HomeServices of America CEO Gino Blefari, and Keller Willams Co-founder and Executive Chairman Gary Keller.
The defendants said contracts that sellers sign clearly spell out what commissions they are being asked to pay. They also noted that it's a system that's been in place for decades and stuck firmly to the argument that there is no conspiracy to keep commission rates around 6%.
KANSAS CITY, Mo. — The Sitzer/Burnett commissions trial officially kicked off today, and attorneys for both sides spent hours questioning potential jurors, narrowing the original pool of about 80 jurors down to a group of nine.
The judge in the case noted that it was one of the largest jury pools convened in the district court for a civil case. Several jurors were quickly dismissed due to their status as class members: individuals who had sold a home in Missouri since 2014.
Attention from the national media, including a scathing editorial published in the Wall Street Journal Monday morning, could make it harder for the jury to remain impartial. One attorney for the defendants commented that the WSJ story made it sound like the plaintiffs were already winning. But the defense also emphasized to jurors that the plaintiffs are solely responsible for proving their claims of a conspiracy between the defendants.
Legal teams, Sitzer/Burnett judge finalize preparations for Monday's trial
KANSAS CITY, Mo. — U.S. District Judge Stephen Bough for the Western District of Missouri heard oral arguments on Friday in the landmark Sitzer/Burnett case at the Charles E. Whittaker U.S. Courthouse in Kansas City, Missouri.
During the brief proceedings, he prepared the legal teams representing the parties in the upcoming jury trial scheduled to begin Monday, Oct. 16. Lead attorneys for the plaintiff class and the defendants — NAR, Keller Williams Realty and HomeServices of America — were present for the arguments.
Bough said jurors were summoned on Friday and would be prepared for a formal jury selection on Monday. He expects nine jurors to be selected for the trial.
Bough also heard arguments on whether the net worth of witnesses could be revealed during cross-examination.
The judge did not rule on the arguments immediately but said the salary of the witnesses could be important information considering the role of compensation in the trial.
According to electronic court records, however, Bough ruled later on Friday that he will prohibit any mention of witnesses' net worth during testimony.
— Austin Alonzo
Judge rulings ahead of Sitzer/Burnett trial favor plaintiffs
On October 2, U.S. District Judge Stephen Bough ruled on motions related to settlement agreements and a proposed change to the class representatives in the Sitzer/Burnett commissions lawsuit, set to begin on Oct. 16 in Missouri.
The key decisions:
1. Bough ruled that evidence from two former defendants, RE/MAX and Anywhere Real Estate, can be used, even though both parties have settled with the plaintiffs and are no longer a part of the case.
Specifically, evidence that includes taped depositions from Ryan Gorman (formerly at Coldwell Banker/Anywhere), David Liniger (RE/MAX), Nick Bailey (RE/MAX) and John Peyton (formerly at Anywhere) can be introduced at trial.
2. Bough also ruled that Scott Burnett, Scott Trupicano and Ryan Hendrickson can withdraw their names as class representatives. That leaves Rhonda Burnett, Jerod Breit, Jeremy Keel, Hollee Ellis and Frances Harvey as the remaining representatives.
The plaintiffs notified the court last week of their intention to withdraw. In response, the defendants in the case filed documents objecting to the withdrawal, calling it a ploy to avoid live cross-examination. The plaintiffs countered that they were following the rules used earlier in the case and that the three representatives had legitimate reasons for withdrawing, none of which had to do with cross-examination.
MLS PIN, one of several defendants in the Nosalek buyer-broker commissions lawsuit, reached a settlement agreement with the plaintiffs in June, but the Department of Justice has now stepped in to express "significant concerns" over the rule changes agreed to by the MLS.
In a Sept. 28 court filing, the DOJ said the proposed changes didn't go far enough toward making the market more competitive and asked the court to delay final approval of the settlement.
Other defendants in the case include Anywhere Real Estate, HomeServices of America, RE/MAX and Keller Williams. So far, MLS PIN is the only defendant to settle.
NAR, other defendants protest withdrawal of Scott Burnett and additional plaintiffs
With a little over two weeks until the start of the trial, defendants in the Burnett/Sitzer case objected to a plan to withdraw three named plaintiffs as class representatives.
Attorneys for the plaintiffs sent out a notice withdrawing Scott Burnett, Scott Trupiano and Ryan Hendrickson as representatives for the class action lawsuit. It would leave Rhonda Burnett, Jerod Breit, Jeremy Keel, Hollee Ellis and Frances Harvey as the remaining representatives.
In a filing objecting to the move, attorneys for the defendants said withdrawing the three representatives was a ploy to avoid live cross-examination "to avoid testimony that could conflict with other class representatives, raising questions about the merits and/or the propriety of the class."
U.S. District Judge Stephen Bough ordered the plaintiffs to respond to this objection by Monday, Oct. 2.
With a trial just weeks away, attorneys for both the plaintiffs and defendants in the Sitzer/Burnett case filed opposing motions related to the admissibility of evidence and depositions from the defendants who already settled: Anywhere and RE/MAX.
Some of the specific evidence at issue includes taped depositions from Ryan Gorman (formerly at Coldwell Banker/Anywhere), David Liniger (RE/MAX), Nick Bailey (RE/MAX) and John Peyton (formerly at Anywhere).
As of Sept. 21, the judge has not made a ruling in response to the motions.
State antitrust claims dropped from Sitzer/Burnett case
U.S. District Judge Stephen Bough gave preliminary approval to drop two antitrust claims from the case, a move that would appear to narrow the focus of the lawsuit ahead of an October trial.
The motion to drop the state antitrust claims was brought by the plaintiffs, a group of home sellers, and wasn't opposed by the defendants, which include NAR, HomeServices of America and Keller Williams. The plaintiffs indicated that the state-level claims were redundant with the national Sherman Antitrust claim that is already in place. This will help streamline the trial, according to court documents.
RE/MAX is the latest brokerage company to reach a settlement in the Sitzer/Burnett and the Moehrl class action cases. The settlements are subject to the judges' approval.
According to an SEC filing, RE/MAX has agreed to pay $55 million to settle the lawsuits, and the company will be making as-yet-undisclosed changes to its buyer-broker compensation practices.
The National Association of Realtors is sticking with its plans to defend itself in upcoming court cases related to buyer agent commissions even after real estate giant Anywhere agreed to a settlement.
NAR issued a statement on Sept. 5 saying its "commitment to defend ourselves in court remains unchanged and we are confident we will prevail in proving the lawfulness of the rules under attack."
Anywhere Real Estate is the first defendant to reach a settlement in the Moehrl and Sitzer/Burnett cases. A lead attorney for the plaintiffs in the Moehrl case said the $83.5 million settlement was "the most that could be obtained in light of Anywhere's available financial resources." No details about the proposed settlement for Sitzer/Burnett were included in the initial documents filed on Sept. 5.
MLS PIN has agreed to pay $3 million and stop requiring sellers to offer buyer-broker compensation, a practice at the core of the Moehrl case and the Sitzer/Burnett case. In the case brought by Jennifer Nosalek and others, MLS PIN has agreed to change its rules to eliminate the "the requirement that a seller must offer compensation to a buyer-broker," according to a settlement agreement filed Friday, June 30. While not a legal precedent, the deal seems likely to influence similar cases.
The same brokerage companies named in the Moehrl and Sitzer/Burnett cases, as well as several subsidiaries, are also defendants in Nosalek vs. MLS PIN, et al — but the Nosalek settlement agreement does not include them. NAR is not a defendant in the MLS PIN case. That's because MLS PIN is a broker-owned MLS, which means it may operate with the same rules as association-owned MLSs — NAR's rules — but it is not required to.
The Moehrl lawsuit will remain a class action, as a federal appeals court on May 24 denied a request by the National Association of Realtors and other named plaintiffs to overturn that certification. "While it's not common for an appeal court to grant an early appeal on class certification, the National Association of Realtors is disappointed by the ruling," said NAR spokesman Wes Shaw.
A judge ruled that the Moehrl suit will now cover all sellers who paid commissions to named companies over a 5-year period, plus "current and future" sellers. A similar lawsuit, Burnett v. The National Association of Realtors (formerly Sitzer vs. NAR), was filed in 2019 and declared a class action in April 2022. However, Burnett is limited to Missouri, while Moehrl would affect commissions in many states.