On Tuesday, a federal judge in Missouri preliminarily approved an antitrust class-action settlement, mandating the National Association of Realtors to pay $418 million and implement changes to the process of buying and selling homes in America.
U.S. District Judge Stephen Bough’s approval marks a crucial initial phase in the ongoing process, leading up to a final hearing scheduled for November 26 in Kansas City, Missouri.
The lawyers representing the plaintiffs, who negotiated the settlement, laud it as a transformative milestone in the home-buying and selling landscape of the United States.
As per the terms of the settlement, home sellers will no longer be obligated to offer a commission to buyers’ agents for their properties to be listed on “multiple listing services,” the primary platforms for most home sales. However, commissions can still be negotiated as part of the transaction process.
In the broader context, Bough presided over a trial last year, culminating in a $1.8 billion verdict against the National Association of Realtors and other defendants.
Inflating commissions
Home sellers in the class action accused the defendants of artificially inflating the commissions paid to agents for buyers.
While the National Association of Realtors has staunchly defended the industry’s commission practices, asserting their role in fostering efficiency and transparency in residential home transactions, they did not admit any liability as part of this settlement. The Chicago-based trade group welcomed Bough’s preliminary approval in a statement issued on Tuesday.
Meanwhile, the U.S. Justice Department announced it will pay $138.7 million. HomeServices, a brokerage company, remains the only defendant in the case, seeking to overturn the verdict.
In terms of figures, this settlement represents the largest sum reached thus far in litigations concerning real estate commissions, bringing the total proposed settlements to $626 million. Notably, Anywhere Real Estate, Compass, and Re/Max separately agreed to pay $83.5 million, $57.5 million, and $55 million, respectively.
