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Keller Williams Reaches a $70 Million Settlement to End Real Estate Agent Commission Lawsuits Nationwide

By Nadia El-Yaouti | Posted on February 9, 2024

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National real estate brokerage Keller Williams is the latest domino to fall in the flurry of lawsuits targeting real estate commission percentages. The brokerage has agreed to enter into a proposed $70 million settlement agreement to end the barrage of litigation filed against it.

In 2019, homebuyers banded together to push back against what they said were violations of the federal Sherman Antitrust Act by leading real estate brokerages. Keller Willimas was named in the multi-state lawsuit filed against the National Association of Realtors and several other large real estate brokerages. A federal jury in Missouri ruled last October that the defendants had violated federal antitrust law by inflating commission prices for agents. The October ruling ordered the defendants to pay over $1.8 billion in damages.

The multistate lawsuits represented home sellers in Missouri, Kansas, and Illinois, where the plaintiffs claimed that forcing a home seller to pay a nonnegotiable commission to the buyers’ agent resulted in home sellers paying more than they would have in the sale had the antitrust violations not taken place.

It has been a longstanding industry practice that real estate agents get a commission ranging from 5-6% after the sale of a house. However, these lawsuits argued that this percentage could have been much lower had the brokerages not conspired to inflate commission costs which subsequently led agents to steer prospective buyers to homes listed with a higher commission.

To come out from under this cloud of litigation, Keller Williams has agreed to the proposed settlement and promises to take additional steps in offering greater transparency to homebuyers and sellers about commission costs paid out to real estate agents. As part of this transparency, Keller Williams agents will need to go over their compensation structure when working with homebuyers, including going over any “cooperative compensation,” which is the compensation a seller's agent agrees to give a buyer’s agent for working with them.

Keller Williams is the third company to agree to a settlement. National leaders RE/MAX and Anywhere Real Estate have also agreed to pay out a combined $138.5 million to end litigation.

Other industry leaders, including the National Association of Realtors (NAR) and HomeServices of America, were also found guilty, but both plan to appeal the verdict.

The Texas-based real estate brokerage Keller Williams operates over 1,100 offices in the area and employs over 191,000 agents. Gary Keller, the company's executive chairman, wrote in a company-wide email last Thursday, “We came to the decision to settle with careful consideration for the immediate and long-term well-being of our agents, our franchisees, and the business models they depend on.” Keller goes on, “It was a decision to bring stability, relief, and the freedom for us all to focus on our mission without distractions.”

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