Key Takeaways:
– No one can predict the future of real estate, but you can prepare.
– Virtual Inman Connect on Nov. 1-2, 2023, and Inman Connect New York on Jan. 23-25, 2024, are events where you can find out what to prepare for and pick up the tools you’ll need.
– Franchisors Anywhere Real Estate and RE/MAX have agreed to a proposed settlement in another major commission antitrust lawsuit known as Nosalek.
– The case centers on the “Buyer Broker Commission Rule” and alleges that MLS PIN adopted a similar rule to NAR’s requiring compensation to be offered to buyers’ brokers.
– The proposed settlements in the Nosalek case include the MLS PIN class members in the settlements for two other commission class actions, Sitzer/Burnett and Moehrl.
– Anywhere’s settlement in the Sitzer/Burnett and Moehrl cases includes payment of $83.5 million, changes to business practices and commission structure, and the ability to cut ties with NAR.
– RE/MAX’s settlement in the Sitzer/Burnett and Moehrl cases includes payment of $55 million and changes to business practices.
– The plaintiffs and defendants in the Nosalek case have requested a temporary pause to determine the appropriate treatment of the plaintiffs and to preserve resources.
inman:
No one can predict the future of real estate, but you can prepare. Find out what to prepare for and pick up the tools you’ll need at Virtual Inman Connect on Nov. 1-2, 2023. And don’t miss Inman Connect New York on Jan. 23-25, 2024, where AI, capital and more will be center stage. Bet big on the future and join us at Connect.
Franchisors Anywhere Real Estate and RE/MAX have agreed to a proposed settlement in another major commission antitrust lawsuit known as Nosalek, according to legal filings submitted on Monday and Tuesday.
Previously known as the Bauman lawsuit, the case centers on the so-called “Buyer Broker Commission Rule.” Plaintiffs in the case alleged that the broker-owned multiple listing service MLS Property Information Network (MLS PIN), while not required to follow NAR rules, still adopted a rule similar to NAR’s that requires sellers’ brokers to offer compensation to buyers’ brokers in order to submit a listing to the service.
The Nosalek settlements propose that the MLS PIN class members be included in the “substantive terms” of proposed settlements in two other major commission class actions, Sitzer/Burnett and Moehrl.
Both Anywhere and RE/MAX submitted settlements for Sitzer/Burnett and Moehrl in September. While RE/MAX concurrently announced the terms of its $55 million settlement at the time, Anywhere did not reveal the terms of its $83.5 million settlement until early October.
In the proposed Nosalek settlements, plaintiffs and defendants have requested a stay (temporary pause) of 30 days to determine the “appropriate treatment” of the plaintiffs in the case, and to preserve the resources of the plaintiffs, the franchisors, and the court. The Sitzer/Burnett case has been stayed in regards to both Anywhere and RE/MAX. Moehrl has been stayed in regards to Anywhere, and RE/MAX has applied for a stay in Moehrl.
Anywhere’s legal filing notes that the various parties are “presently conferring regarding the appropriate treatment of the Nosalek Plaintiffs and the class they purport to represent.”
Anywhere declined to comment on the record regarding the new legal filing.
In the case of RE/MAX, a spokesperson told Inman in an email that “we are pleased that the Nosalek plaintiffs have agreed that the substantive terms of the Burnett/Moehrl settlement should include the proposed MLS PIN class members in the Nosalek case.”
In early September, Judge Patti Saris of the U.S. District Court in Massachusetts granted preliminary approval of a proposed settlement between the plaintiffs and MLS PIN, which stipulated that the MLS overhaul commission policies, pay $3 million and “cooperate” in ongoing litigation against the other defendants in the suit, which include Anywhere, RE/MAX, Keller Williams and HomeServices of America. The MLS also denied wrongdoing and any liability as part of the agreement.
However, by early October, Judge Saris had approved a two-month deadline extension to review the proposed settlement at the request of attorneys from the Department of Justice’s Antitrust Division. In a filing, DOJ attorneys expressed “significant concerns with the planned rule changes under the Proposed Settlement.”
In addition to paying $83.5 million in relief, Anywhere’s settlement in the Sitzer/Burnett and Moehrl cases saw the franchisor agree to changes related to business practices and commission structure, as well as the ability for company-owned brokerages and agents to cut ties with the National Association of Realtors, if they so chose.
The franchisor — which owns brands such as Coldwell Banker Realty, Corcoran and Sotheby’s International Realty — also said it would prohibit company-owned brokerages from claiming “free” buyer agent services. Anywhere also agreed that company-owned brokerages and affiliated agents would need to include the listing broker’s compensation offer for potential buyers’ agents as soon as possible in active listings, and that it would prohibit company-owned brokerages and affiliated agents from using any type of technology to sort listings by offers of compensation unless the client explicitly requested it.
Anywhere’s settlement further stipulated that company-owned brokerages and affiliated agents would be required to clearly disclose that commissions are not set by law, and are completely negotiable. The franchisor said it would remind brokerages and agents that it has no rule requiring offers of compensation.
In RE/MAX’s settlements for the Sitzer/Burnett and Moehrl cases, the franchisor agreed to settle all claims against the company and pay $55 million out of its available cash resources.
“RE/MAX has now agreed to join Anywhere Real Estate in changing its practices by no longer forcing homesellers to pay buyer’s agents,” Michael Ketchmark, lead trial counsel for plaintiffs in the Sitzer/Burnett case, told Inman in an emailed statement from September. “The $55.0 million dollar settlement focuses on the RE/MAX’s ability to pay. The biggest part of the settlement is the massive changes to RE/MAX’s business practices.
“The time has now come for HomeServices of America, NAR, and Keller Williams to admit they are wrong in continuing to force homesellers to pay buyer’s commissions,” the statement added. “Our experts have shown that NAR’s anti-competitive rules result in doubling the cost of commissions in the United States. This NAR rule has cost homeowners hundreds of billions of dollars in commission over the years and put the dream of hoomeownership out of reach for many Americans.”
The Sitzer/Burnett case went to trial on Oct. 16, 2023 in U.S. District Court in Western Missouri, and is expected to continue potentially through next week.
Read Anwyhere’s proposed settlement in the Nosalek case here:
Read RE/MAX’s proposed settlement in the Nosalek case here:
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Property Chomp's Take:
The future of real estate is uncertain, and no one can accurately predict what it holds. However, it is crucial to be prepared for any potential changes and challenges that may arise in the industry. That's why attending events like Virtual Inman Connect on Nov. 1-2, 2023, and Inman Connect New York on Jan. 23-25, 2024, can be highly beneficial for real estate professionals.
These events provide an excellent platform to learn about the latest trends, technologies, and strategies shaping the real estate industry. In particular, the upcoming Inman Connect New York event will focus on topics like artificial intelligence (AI), capital, and more, which are expected to take center stage in the future of real estate.
Meanwhile, in recent legal filings, it was reported that Franchisors Anywhere Real Estate and RE/MAX have agreed to a proposed settlement in a major commission antitrust lawsuit known as Nosalek. The lawsuit, previously known as the Bauman lawsuit, revolves around the "Buyer Broker Commission Rule."
The plaintiffs in this case alleged that the MLS Property Information Network (MLS PIN), a broker-owned multiple listing service, adopted a rule similar to the National Association of Realtors' (NAR) rule, which requires sellers' brokers to offer compensation to buyers' brokers in order to submit a listing to the service. Although MLS PIN is not obligated to follow NAR rules, it chose to adopt a similar rule.
The proposed settlements in the Nosalek case suggest that MLS PIN class members will be included in the settlements of two other major commission class actions, Sitzer/Burnett and Moehrl. Anywhere and RE/MAX had already submitted settlements for these two cases in September.
To determine the appropriate treatment of the plaintiffs in the Nosalek case and to preserve the resources of the plaintiffs, franchisors, and the court, both plaintiffs and defendants have requested a temporary pause of 30 days. The Sitzer/Burnett case has been stayed for both Anywhere and RE/MAX, while Moehrl has been stayed for Anywhere, and RE/MAX has applied for a stay.
These legal developments highlight the ongoing efforts to address commission-related issues in the real estate industry. The proposed settlements aim to provide relief and introduce changes to business practices and commission structures. For example, Anywhere's settlement includes provisions related to the ability of company-owned brokerages and agents to disassociate from NAR, changes in commission offers, and the disclosure that commissions are negotiable.
RE/MAX's settlements, on the other hand, involve a settlement payment of $55 million and a commitment to no longer force home sellers to pay buyer's agents. These settlements represent significant changes in the franchisors' practices and business models.
The ongoing legal proceedings and settlements underscore the need for transparency, fair practices, and adaptability in the real estate industry. These developments also indicate that the industry is evolving and addressing concerns related to commissions and the role of buyer's agents.
As the real estate landscape continues to evolve, it is essential for professionals in the industry to stay informed, adapt to changes, and be prepared for the future. Attending events like Virtual Inman Connect and Inman Connect New York can provide valuable insights, tools, and strategies to navigate the ever-changing real estate market successfully.
So, bet big on the future of real estate and join the conversation at Connect. Be proactive in preparing for the future, and don't miss out on the opportunities to learn, grow, and thrive in the industry.
