RE/MAX will make changes to its business practices as part of a pending eight-figure settlement to end legal challenges to its broker commission fees.
The real estate player will put $55 million into a settlement fund to end its involvement in two class action suits, it said Monday in a Securities and Exchange Commission filing. The complaints accuse Realtor firms of violating antitrust laws in requiring home sellers to pay broker fees for both the buyer and seller, which they say could lead to inflated costs.
The business in a statement Monday denied the allegations and said it settled in the interest of its agents and franchisees to avoid the risks and costs with prolonged litigation. The company didn't elaborate on its rule changes, and details are unlikely to be made public until federal judges in separate districts approve the agreements.
The settlement comes after co-defendant Anywhere Real Estate, parent of Coldwell Banker and Century21, agreed earlier this month to an $83.5 million settlement in both lawsuits. Remaining defendants including HomeServices of America, Keller Williams Realty and the National Association of Realtors, are scheduled to go to trial Oct. 16 in Missouri federal court.
Monday's update is the latest win for consumers in a long-running battle over broker commission rules. Consumers in a series of lawsuits have argued for "decoupling" in which buyer and seller pay broker shares separately, ideally leading to negotiations for lower fees.
A multiple listing service two months ago paid a $3 million settlement to similar complainants in Massachusetts. The Department of Justice reached a settlement in 2020 with NAR to update its business practices but feds pulled out of that deal in 2021 to further investigate.
NAR meanwhile has argued the commission rates are optional and that their rates are negotiable. HomeServices in a self-funded study also suggested a major change in the commission rules would make mortgages less affordable and suppress homeownership among lower-income borrowers.
It's unclear how RE/MAX's settlement will be split among the two federal cases it's facing in Illinois and Missouri. The settlement amount won't have a material effect on the firm's business, it said, and will incur the expense by Sept. 30. It will pay out the agreement in three separate installments related to each case's formal approval by a judge.
