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Real estate franchisor Anywhere Real Estate has reached a settlement with the plaintiffs in the two bombshell lawsuits that have the potential to shake up how real estate agents nationwide are paid.
On Tuesday, plaintiffs for one of the suits, Sitzer/Burnett, which is scheduled to go to trial on Oct. 16, filed a notice in the U.S. District Court in Western Missouri letting the court know that Anywhere, formerly known as Realogy Holdings Corp., had agreed to settle all of the claims against the company as part of a proposed nationwide class settlement. The deal was jointly negotiated with the plaintiffs in the larger bombshell suit known as Moehrl.
“The settlement encompasses both classes,” attorneys for the plaintiffs wrote, noting that the agreement is subject to the court’s approval.
“Consistent with the Parties’ agreement, Plaintiffs will promptly file a motion in this Court for preliminary approval of the proposed settlement.”
In an emailed statement, Steve Berman, counsel for the Moehrl plaintiffs and managing partner and co-founder of Hagens Berman Sobol Shapiro LLP, told Inman that the “$83.5 million settlement” is a “significant milestone” in the case.
“The monetary settlement was the most that could be obtained in light of Anywhere’s available financial resources,” Berman said.
“Critically, the settlement includes significant changes to Anywhere’s practices relating to the conduct that we have challenged. Our antitrust team looks forward to continuing to pursue additional relief against remaining defendants for those who have been systematically overcharged for simply selling their homes in an already unstable housing market.”
At the end of the second quarter, Anywhere had an accumulated deficit of $3.1 billion, of which $2.9 billion was debt, according to a public filing.
According to Michael Ketchmark, lead trial counsel for the plaintiffs in the Sitzer/Burnett case, the exact terms of the settlement will be confidential until the plaintiffs file that motion for approval.
Sitzer/Burnett, which names the National Association of Realtors, Keller Williams, Anywhere, RE/MAX, HomeServices and HomeServices subsidiaries BHH Affiliates and HSF Affiliates as defendants, was originally filed in 2019 and won class action status in April 2022. Moehrl, which names the same defendants, was also filed in 2019 and got class certification in March 2023.
The suits allege that some NAR rules — including one called the Participation Rule that requires listing brokers to offer buyer brokers a commission in order to list a property in a Realtor-affiliated multiple listing service — violate the Sherman Antitrust Act by inflating seller costs.
In January 2022, Anywhere became the only defendant so far to publicly call for NAR to make the Participation Rule optional rather than a requirement.
“We are less than seven weeks from trial,” Ketchmark told Inman in an emailed statement.
“Anywhere corporation has agreed to settle the case against it on a nationwide basis and change its practices. Anywhere has established itself as the voice of reason in the real estate world, and we urge the other corporate defendants and companies around the United States to follow.
“The time has come for NAR to change its long engrained practice of allowing the real estate industry to use its rules as a vehicle for raising and stabilizing commissions in the sale of homes. If NAR and the other corporate defendants do not agree to change their ways and start complying with our nation’s antitrust laws we will hold them accountable at trial.
“$6.7 billion is at stake at trial in just Missouri alone.”
Anywhere is the parent company of the Coldwell Banker, Century 21, Better Homes and Gardens Real Estate, Sotheby’s International Realty, ERA and Corcoran brands and has about 195,000 real estate agents under its umbrella.
In an emailed statement, Anywhere spokesperson Trey Sarten told Inman the company was “pleased” to reach a nationwide settlement with the plaintiffs in both suits.
“The path to obtain final approval and implement the settlement is a long one, and Anywhere has taken the first important step toward a resolution that not only releases the company but also our affiliated agents and franchisees,” Sarten said.
“We believe the settlement will remove future uncertainty with respect to the upcoming trial, potential additional claims, and legal expense, enabling Anywhere to focus on and continue delivering what’s next for agents and franchisees.
“Given ongoing legal proceedings and confidentiality agreements between parties, we cannot comment further at this time.”
Ketchmark declined to say whether any other settlements were in the offing with the other defendants.
In an emailed statement, NAR seemed to strongly suggest that it would not settle, saying it was looking forward to making its case at trial.
“Settlement is always an option for any party in litigation,” said NAR spokesperson Mantill Williams.
“NAR’s commitment to defend ourselves in court remains unchanged and we are confident we will prevail in proving the lawfulness of the rules under attack. Pro-competitive, pro-consumer local MLS broker marketplaces ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers.
“The practice of the listing broker paying the buyer broker’s compensation saves sellers time and money by having so many buyer brokers participating in that local marketplace and thus creates a larger pool of buyers for sellers. For buyers, these marketplaces save them the burden of extra costs at closing, enable them to receive professional representation and make homeownership possible for more people.
“In fact, the U.S. model of independent, local broker marketplaces is widely considered the best value and most efficient model in the world, with no hidden or extra costs and with more complete, verified information compared to other countries. We look forward to arguing our case in court.”
HomeServices and RE/MAX declined to comment. Inman has reached out to Keller Williams for comment and will update this story if and when a response is received.
Attorneys for Anywhere and for the plaintiffs in both lawsuits have asked the courts to stay — stop, at least temporarily — all deadlines and proceedings in the suits in regards to Anywhere only “to preserve the resources of Plaintiffs, Anywhere, and the Court and to allow the Parties to formalize the settlement agreement and to seek preliminary and final approval of the settlement.”
They requested that Anywhere be excused from participating in a Sept. 8 pretrial conference for the Sitzer/Burnett trial, but in their own notice about the settlement in the U.S. District Court for the Northern District of Illinois’ Eastern Division, attorneys for the Moehrl plaintiffs said they and Anywhere would be prepared to discuss the settlement approval process at a status conference for that case currently set for Sept. 12.
Editor’s note: This story has been updated with comments from NAR, Anywhere, and Moehrl plaintiffs’ counsel Steve Berman as well as additional details from the legal filings.
