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Keller Williams Settles Antitrust Lawsuit, Agrees to $70 Million Payout

 |  February 1, 2024

Keller Williams, a major home brokerage based in Texas, has agreed to a $70 million settlement to resolve allegations of conspiring to overcharge US home sellers on agent commissions. The proposed settlement, disclosed by plaintiffs’ lawyers in a Missouri federal court on Thursday, awaits approval from a judge.

This settlement marks the third agreement in the Missouri class action lawsuit, which saw home seller plaintiffs securing a $1.8 billion verdict in October against Keller Williams and other defendants, including the National Association of Realtors and units of Warren Buffett’s Berkshire Hathaway.

The lawsuit revolves around objections to an industry rule mandating home sellers to pay a commission to the agent representing the buyer. Plaintiffs argue that this rule is anticompetitive, as it allows agents to direct potential buyers to homes with higher commissions. Broker compensation typically ranges from 5% to 6% of the sales price, with the fee divided between buyer and seller representatives.

Read more: New Antitrust Suit Targets NAR and Keller Williams for Price Inflation”

Lead attorney Michael Ketchmark stated, “Our whole goal in this lawsuit is to get the National Association of Realtors and these large corporations out of the business of setting the cost of selling a home, and let the free market decide.” The settlement with Keller Williams, despite the brokerage not admitting wrongdoing, is seen as a positive step in achieving this objective.

As part of the agreement, Keller Williams has committed to paying $70 million and implementing changes, including making it clear to franchises that compensation offers from sellers to buyers’ agents are not mandatory. These alterations aim to foster a more competitive environment and provide transparency within the real estate market.

Gary Keller, the executive chairman of Keller Williams, expressed in a statement that the settlement “provides our agents and franchisees with much-needed relief, stability, and freedom from distraction while preserving their ability to run their businesses independently.” The resolution of this lawsuit is anticipated to have broader implications for the real estate industry, emphasizing the importance of a free market approach in determining the cost of selling a home.

Source: Reuters