In a landmark settlement, Keller Williams Realty Inc., one of America's largest real estate brokerages, has agreed to fork over $70 million to clear more than a dozen lawsuits accusing the company of coercing sellers into footing the bill for bloated agent commissions. The proposed settlement, which addresses suits in Illinois and Missouri, mandates the firm to boost transparency about agent fees for both property buyers and sellers, as reported by the Chicago Tribune.
"We think it’s a tremendous victory for homeowners and homebuyers across the country," laid out Michael Ketchmark, an acting plaintiffs' attorney in the lawsuits, in a statement obtained by the Chicago Tribune. Plaintiffs hammered on the claim that big-league brokerages, including Keller Williams, pushed sellers into inflated commission fees in a way that smacked of antitrust law violations. A jury previously put the real estate agents' back against the wall in October, slapping the National Association of Realtors and various substantial brokerages with a nearly $1.8 billion fine, which might mushroom to over $5 billion if treble damages come into play, Fortune notes.
Scrambling to emerge from the threat of protracted litigation, Keller Williams opted for the settlement, which liberates the company, its brokerage franchises, and agents from comparable legal battles coast to coast. The Texas-based giant, with a network of 180,000 agents across 1,100 offices, is now focused on steadying the ship. Gary Keller, the executive chairman, expressed in a companywide email, "It was a decision to bring stability, relief, and the freedom for us all to focus on our mission without distractions," according to details shared by Fortune.
Under the specifics of the settlement, Keller Williams shall inform their clientele that commission rates are open to discussion, without any fixed minimum required by law. Moreover, the company pledged that agents representing buyers must disclose the breakdown of their pay, including "cooperative compensation" agreements typically shared between seller's and buyer's agents. Once the courts give the green light, Keller Williams agents will also cut ties from mandatory membership in the National Association of Realtors. Last year saw similar settlements with Anywhere Real Estate Inc. handing over $83.5 million and Re/Max shelling out $55 million, in moves that echo Keller Williams' recent concession, the Chicago Tribune reported.
