Keller Williams Agrees To Pay $70 Million Settlement In Nationwide Real Estate Agent Commission Lawsuits

Jamiesfeast – A proposed settlement has been reached by one of the largest real estate brokerages in the nation to resolve over a dozen lawsuits across the country over agent commissions. Under the settlement, the brokerage has agreed to pay $70 million.

The agreement, filed on Thursday, addresses the lawsuits in Illinois and Missouri. Keller Williams Realty Inc. has committed to taking various measures to enhance transparency regarding the commissions paid to real estate agents, benefiting homebuyers and sellers.

“We believe this is a significant win for homeowners and homebuyers nationwide,” expressed Michael Ketchmark, one of the attorneys representing the plaintiffs in the lawsuits.

The lawsuits allege that the largest real estate brokerages in the country participate in practices that impose unjustly high agent commissions on homeowners when they sell their properties.

In October, a federal jury in Missouri reached a verdict that stated the National Association of Realtors, along with several major real estate brokerages like Keller Williams, had conspired to enforce the requirement of home sellers paying the commission of homebuyers’ agents, which was in violation of federal antitrust law.

The defendants were ordered by the jury to pay a substantial amount of nearly $1.8 billion in damages. In the event that treble damages are granted, which could potentially multiply the actual or compensatory damages by three, the defendants may find themselves responsible for over $5 billion.

There are currently more than a dozen pending lawsuits against the real estate brokerage industry.

Keller Williams was driven to pursue the proposed settlement as a means to distance itself from the cloud of litigation and uncertainty. This settlement, if approved, would absolve the company, its franchisees, and agents from any future agent commission lawsuits across the nation. The company, headquartered in Austin, Texas, boasts over 1,100 offices and a network of approximately 180,000 agents.

In a companywide email sent on Thursday, Gary Keller, the executive chairman of the company, explained that the decision to settle was made after careful consideration for the well-being of their agents, franchisees, and the business models they rely on. He emphasized that the aim of this decision is to provide stability, relief, and the freedom to focus on their mission without any distractions.

As part of the proposed settlement, Keller Williams has agreed to ensure that its agents inform clients about the negotiability of commissions. It will be made clear that there is no set minimum amount that clients are obligated to pay, and that such a requirement is not mandated by law.

The company has additionally agreed to ensure that agents working with potential homebuyers disclose their compensation structure, which includes any “cooperative compensation.” This refers to situations where a seller’s agent offers to compensate the buyer’s agent for their services.

As part of the settlement, Keller Williams agents will no longer need to be members of the National Association of Realtors or adhere to the trade association’s guidelines. The court must approve this settlement.

Last year, two other major real estate brokerages, Anywhere Real Estate Inc. and Re/Max, also reached settlement agreements. Anywhere Real Estate Inc. agreed to pay a substantial amount of $83.5 million, while Re/Max agreed to pay $55 million in their respective settlements.

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