Five brokerages snag green light on broker commission settlements

A federal judge issued an initial greenlight for deals proposed by five brokerages targeted in antitrust lawsuits over broker commissions. 

Judge Stephen Bough on Tuesday preliminarily approved settlement agreements from Compass, Douglas Elliman, The Real Brokerage, @properties and Realty One, according to court documents filed with the U.S. District Court of the Western District of Missouri. 

The companies were all named as defendants, along with the National Association of Realtors, in the lawsuit known as Gibson. Upon final approval by the judge, the deals will release the brokerage from all claims brought by home sellers.

The firms combined agreed to pay at least $86 million, according to the plaintiffs’ motion to approve the settlements. Elliman, which announced its settlement on Monday, could boost the total by another $10 million in contingent payments per the terms of its deal.

At World Properties LLC, the Chicago-based parent company of @properties and Christie’s International Real Estate, offered $6.5 million to the total, a number which the company previously declined to disclose. 

News of the judge’s decision comes just a week after Bough approved NAR’s agreement to pay $418 million to settle the lawsuits, including Gibson and Sitzer/Burnett — another Missouri-based case and the first of its kind to head to trial. 

The plaintiffs’ motion to approve the NAR deal triggered a 60-day deadline for larger brokerages to opt in to the settlement. Under the terms, firms with transaction volumes exceeding $2 billion can pay an amount determined by a formula to receive coverage. 

Under the terms of the trade group’s settlement, the approval also means NAR will enact certain rule changes in July. This includes barring listing brokers from making offers of compensation on multiple listing services and mandating buyer’s agents obtain signed agreements from their clients. 

Bough previously granted preliminary approval to other deals proposed in the Sitzer/Burnett case, including agreements with Anywhere Real Estate and Keller Williams. The total settlement sums offered by brokerages and NAR so far are approaching $1 billion, though they’re still less than the $1.8 billion judgment issued by the jury in the Sitzer/Burnett case. 

HomeServices of America was the latest brokerage to settle. The firm announced on Friday that it would pay $250 million to settle all claims brought by homesellers. The deal does not extend to its parent company Berkshire Hathaway or Berkshire Hathaway Energy Company.