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Redfin will pay $9.25 million as part of a proposed settlement agreement it reached on Friday with plaintiffs in a class-action lawsuit challenging brokerages across the country, according to a new legal filing on Monday.
The company is the latest to reach a proposed settlement after homeseller plaintiffs accused some of the biggest firms in real estate of operating in ways that violated antitrust laws.
The settlement wasn’t unexpected, as Redfin was among about 90 entities classified as brokerages that weren’t covered by the agreement reached on March 15 by the National Association of Realtors. The firms that weren’t covered under the terms reached by NAR have until June 18 to opt into the settlement, and more settlements are expected soon.
The settlement was unique, however, in that the plaintiff allegations generally claim real estate brokerages drove up the cost of transacting homes, whereas Redfin offers discounts to its clients.
“As the only U.S. brokerage that has saved consumers more than $1.5 billion in fees, Redfin never belonged as a defendant in this litigation, and we’re glad to have settled it,” a company spokesperson said in a statement. “We always have been, and always will be, advocates for transparency and saving consumers money, directly selling homes to buyers to bring down fees, and broadly publishing commission data so consumers understand how much they are paying.”
“Resolving this litigation now and removing uncertainty is in the best interest of the company, our employees, and our investors,” the company added.
Redfin was among the real estate defendants that were named in the proposed class action lawsuit known as Gibson. Compass, The Real Brokerage, Realty One Group, At World Properties and Douglas Elliman had each already reached settlement agreements in the case, and the court has preliminarily approved those settlements.
If the court approves the settlements at a final hearing, Compass can expect to pay $57.5 million, Real can expect to pay $9.25 million, Douglas Elliman can expect to pay up to $17.75 million, and Realty One Group and At World Properties will pay the undisclosed amounts that they put forth in their proposed settlements made in roughly the last week.
Other firms have agreed to settle other pending lawsuits, including HomeServices of America, which agreed on April 26 to pay $250 million and make changes to its business practices in order to settle cases against it and its affiliated companies. NAR’s settlement included a payment of $418 million over the coming years. Combined, the real estate defendants have agreed to pay nearly $1 billion in damages to a class group that will include tens of thousands of people or more.
Redfin said it would record its $9.25 million settlement amount for the first quarter of this year. It is set to release its first quarter earnings Tuesday at 4:30 p.m. Eastern.
A full copy of the proposed settlement hasn’t been added to the court docket as of Monday.
“The Proposed Settlement resolves all claims in the Lawsuits, and similar claims on behalf of home sellers on a nationwide basis,” Redfin wrote in its document, which was filed with the U.S. Securities and Exchange Commission. It added that the settlement “releases us, our subsidiaries, and our agents from the Claims.”
