For the brokerages named in two antitrust lawsuits over broker commissions, the time to pay up and get out is nearing its end.
As the trial date for the first— set to begin in Kansas City on Oct. 16 — approaches, Anywhere Real Estate and RE/MAX have already agreed to settle for $83.5 million and $55 million, respectively.
While on the surface, those may seem like hefty sums, the settlement amounts pale in comparison to the potentially $4 billion on the line if a jury rules against the defendants, according to one of the lead attorneys on the Sitzer/Burnett case in Kansas City, Michael Ketchmark.
That ten-figure judgment only includes what’s at stake in Missouri, Ketchmark said. If the other case, known as Moehrl, also sways in favor of the plaintiffs, the numbers could be “catastrophic.”
An attorney for the defendants in the Moehrl case told Inman in May that if the plaintiffs prevail, the damages would exceed the firms’ combined market capitalization.
A trial date has not yet been set for the Moehrl case.
Now that Anywhere and RE/MAX are out of the lawsuit, Keller Williams and HomeServices of America could be the only two brokerages left holding the bag with the National Association of Realtors.
The lawsuits allege that some of the nation’s largest brokerages colluded with NAR to inflate commissions charged to home sellers in violation of the Sherman Antitrust Act.
The class-action lawsuits aren’t “an attack against buyers’ agents,” Ketchmark said. “It’s about who pays for that.”
As part of the settlement, Anywhere and RE/MAX have also agreed to change some of their policies, though it’s not clear what those changes will include.
Both companies agreed to stop charging buyer agents’ commission to home sellers, Ketchmark has said, but the exact terms of the settlements will remain sealed until they’re approved by the judges in each case.
“I would not be at all worried if I was an agent or broker working for [Anywhere or RE/MAX],” Ketchmark said, referring to the settlement terms.
Ketchmark also emphasized that the lawsuits would not cost local agents or brokers any money.
RE/MAX’s decision came “after carefully considering the significant risks and costs associated with continued litigation,” a spokesperson for the company, which submitted its settlement agreement last week, said in a statement.
RE/MAX plans to dole out the funds with available cash on hand, with the first quarter of the sum to be issued on or before Sept. 29, according to a document filed with the Securities and Exchange Commission.
Anywhere, the parent company of Coldwell Banker, Century 21 and Sotheby’s International, agreed to settle earlier this month after executives noted in its first quarter earnings that the lawsuits had “meaningfully impacted” its operating EBITDA.
Also coming down the pike is another antitrust lawsuit geared toward pocket listings. The plaintiff in the case, Top Agent Network, claims NAR’s Clear Cooperation policy violates antitrust laws by mandating agents report their listings to their prospective MLS within one day of marketing a home.
“NAR is not entitled to force the entire industry onto the MLS, and agents have the right to use alternate property sharing services as they and their clients see fit,” Tobias Snyder, an attorney for Top Agent Network, wrote in an emailed statement.
The lawsuit, which a judge in the Ninth Circuit appellate court ruled to reopen last month, will now move forward into discovery.
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