Rosalind Evans
A landmark decision has been made by a U.S. judge in Missouri, approving $208 million in antitrust settlements with major real estate brokerages. This marks a significant development in the legal battle over alleged inflated home sales commissions.
Landmark Decision: Settlements Approved
U.S. District Judge Stephen Bough in Kansas City approved the settlements with Anywhere Real Estate, Keller Williams, and Re/Max despite a few objections. The judge emphasized that the “minuscule” number of objections was not enough to derail the settlements, which aim to address claims that these companies conspired to inflate the commissions that sellers pay to buyers’ agents.
The Background: Longstanding Industry Practices
Historically, industry rules required home sellers to pay a commission to buyers’ agents to list their homes on a multiple listing service (MLS). This practice was widespread across the United States and embedded in the real estate market’s functioning.
Reactions from Brokerages
The three brokerages involved, Anywhere Real Estate, Keller Williams, and Re/Max, have expressed relief at the court’s decision. They stated that the ruling would allow them to focus on business operations. Importantly, they denied any wrongdoing. “We welcome the court’s order, which will enable us to move forward,” said a spokesperson from Re/Max.
The Judge’s Perspective
Judge Bough noted that nearly 200,000 claims were submitted seeking compensation from the settlement by May 2. Only 61 class members opted out, indicating broad acceptance of the settlement terms. The judge defended the scope of the settlements, highlighting that nationwide agreements were necessary to prevent “protracted and costly piecemeal litigation.” He asserted that the brokerages would not have settled on anything less than a nationwide basis due to the potential for crippling liability.
Ongoing Litigation and Objections
Despite the approval, attorneys for home buyers in related antitrust litigation in Chicago, who had objected to the settlements, declined to comment. They previously argued that the settlements could unfairly sideline some of their claims. Last fall, a jury in Judge Bough’s court found another group of brokers liable for conspiring with the National Association of Realtors to inflate broker commissions. Although the panel awarded nearly $1.8 billion, subsequent deals were reached for far lesser amounts.
A Step Forward
This approval is critical in addressing longstanding issues within the real estate commission structure. While objections remain and further settlements are pending, the decision provides a foundation for resolving widespread claims and moving towards a more transparent real estate market.
