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US Judge OKs $110 Million Settlements in Antitrust Case Against Major Real Estate Brokerages

By  |  October 31, 2024

A U.S. federal judge announced plans to approve $110 million in settlements with Compass, Redfin, At World Properties, and six other brokerages implicated in a high-profile antitrust lawsuit. The lawsuit accused these firms of conspiring to maintain artificially high commission rates on residential property sales, a charge that has sent ripples across the U.S. real estate market.

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    According to Reuters, U.S. District Judge Stephen Bough presided over the case in Missouri, dismissing a series of objections to the settlements during a Thursday hearing. These objections, raised by several parties, argued that the settlements could be overly broad and might negatively impact related cases still awaiting decisions in other federal courts.

    The case centers on allegations that some of the country’s leading brokerages violated antitrust regulations by forcing home sellers to pay commissions to the buyer’s agent to list their properties. Plaintiffs in the case argue that this practice helped the brokerages to keep commission rates high across the industry, impacting countless home sellers. Per Reuters, the companies involved, including Compass, At World, and Douglas Elliman, either declined to comment or did not respond to media inquiries following the judge’s announcement.

    Redfin, one of the companies involved in the settlement, issued a statement affirming that it was pleased to resolve the matter and move forward. The company highlighted its longstanding consumer-centric approach, noting it had saved customers over $1.6 billion by charging lower listing fees and offering buyers commission refunds when working with a Redfin agent. “We never belonged in this case,” Redfin stated, emphasizing its commitment to affordable real estate services.

    This recent approval marks the second wave of settlements overseen by Judge Bough. Earlier in May, he greenlit $208 million in settlements from other industry players, including RE/MAX, Anywhere Real Estate, and Keller Williams, who all denied any wrongdoing. Combined with the current settlements, these agreements bring the total value of recent accords in the case to over $1 billion.

    Related: Realtors Appeal to Supreme Court Over DOJ’s Investigation into Antitrust Violations

    The lawsuit gained national attention after an October jury verdict that imposed a staggering $1.8 billion penalty on the National Association of Realtors (NAR) and other defendants, sending shockwaves through the industry. Following the verdict, many brokerages opted to settle rather than prolong the legal battle, a decision aimed at mitigating potential reputational and financial damage.

    Further developments in this landmark case are expected next month when Judge Bough will consider additional proposed settlements from the National Association of Realtors and HomeServices of America, a brokerage under Warren Buffett’s Berkshire Hathaway. Per Reuters, NAR agreed in March to a $418 million settlement, accompanied by promises to reform industry commission practices. Meanwhile, HomeServices of America has pledged $250 million to settle, though neither organization has admitted liability.

    The case, officially titled Gibson et al v. National Association of Realtors et al, is being tried in the U.S. District Court for the Western District of Missouri, shedding light on longstanding commission practices and raising questions about the future structure of the U.S. real estate market.

    Source: Reuters