“Cooperation may crumble”: Redfin CEO reacts to NAR guilty verdict
Glenn Kelman warned of changes ahead of two lawsuits, DOJ probe
It’s a new day for real estate agents in the wake of Tuesday’s bombshell ruling, a disruption in the eyes of Redfin chief executive officer Glenn Kelman.
One day after a jury found the National Association of Realtors and a pair of residential brokerages guilty of colluding over commissions, the chief executive teed up how the suit, and other legal issues down the line, could change the industry.
“I think there’s a world coming where cooperation may really crumble,” Kelman said, according to Inman. “It’ll affect whether we have an open marketplace. It’ll affect whether there’s two agents instead of one.”
The plaintiffs in the Sitzer/Burnett case alleged that NAR’s Clear Cooperation Policy — which requires listing brokers to offer buyers’ agents compensation in listings on Realtor-controlled MLSs — inflates costs and violates antitrust statutes. The jury found the defendants, which include HomeServices of America and Keller Williams, are each possibly on the hook for $1.78 billion in damages.
The verdict and other unfolding lawsuits would bring significant change alone, Kelman said, but the Department of Justice is considering its own case against the trade group.
“The [U.S. Department of Justice] is fired up on this subject,” Kelman said. “I think they will look at the outcome of the lawsuits and then decide whether they want to get more aggressive. And every indication is that they will.”
Redfin itself is a defendant in a similar lawsuit filed by an attorney for the Sitzer/Burnett plaintiffs immediately after the ruling in that case. Others sued in the case Kelman called a “copycat lawsuit” include NAR, Compass, Douglas Elliman and eXp Realty.
Anywhere Real Estate and RE/MAX settled the lawsuit prior to the start of the Sitzer/Burnett trial, also agreeing to rule changes to increase transparency around buyer’s agent fees and to remove a requirement that agents belong to NAR.
Before the trial, Redfin already rebuked NAR as a result of the trade group’s policies, which Kelman called “indefensible.”
A recent sexual harassment scandal at NAR was the straw that broke the camel’s back, leading the Seattle-based brokerage to pull back its agents’ membership requirement, though the coupling of membership and listing database access means not all markets can enact the move.
— Holden Walter-Warner