Keller Williams, RE/MAX (RMAX), and Realogy (HOUS) are in court on Thursday to seek final approval for settlements over anticompetitive real estate commission practices across the US. The separate agreements with home sellers would roughly amount to $209 million.
Yahoo Finance Reporter Alexis Keenan joins Wealth! to break down the settlement and why plaintiffs aren't happy with the proposed resolution.
For more expert insight and the latest market action, click here to watch this full episode of Wealth!
This post was written by Nicholas Jacobino
Video Transcript
Several real estate brokerage firms head to court today seeking final approval over a sweep sweeping settlement concerning realtor commissions.And not everyone is happy about the proposals here here with more.We've got our a our own Alexis Keenan, who's, who's been all across this.I mean, I'm just losing my words at this juncture because I mean, there's so much that's on the table with this potential with this proceeding that's taking place.There is a whole lot of dollars and cents here.So what's happening today?It's a fairness hearing in a federal court in Missouri and it is to justify part of a whopping $900 million settlement.But that's really an alternative to a 1.8 billion verdict that a jury handed down in October to 500,000 approximately home sellers in Missouri.Now, if you remember back then, the jury said that the National Association of Realtors along with its affiliated brokers that they violated antitrust law by entering into these agreements with sellers mostly, but some there are cases involving buyers too that forced the sellers to fork over commissions to buyers agents.Now, both before and after the trial these defendants have been negotiating settlements.You have the National Association of Realtors, Berkshire's Home Services of America and Keller Williams, they all went to trial remax and anywhere real estate they did not go to trial.But they, along with Keller Williams are in court today and millions of people, millions of would be potential plaintiffs aren't happy with this $900 million.They don't want it and they say that it increases the settlement class.That's one reason they really don't like this deal because the original group of plaintiffs, those 500,000 or so home sellers in Missouri.Well, now these agreements, the settlement agreements they extend nationwide.Those are sellers dealing with these real estate brokerages and the nar across the nation.That's approximately 30 million people as opposed to 500,000.So there are these copycat cases that had evolved after this during and after this big verdict in Missouri and those plaintiffs want their day in court.So their lawyers are in court today saying this settlement agreement, it's just unfair.OK. And so we've got an example you do of how the settlement dollars might work out for sellers.Tell us more about that.Yeah.So basically in the first quarter of this year, the average home sale price in the United States that was $420,000 approximately.OK.So this is just some sketchy map to give home sellers an idea of what they would be getting giving up here.Now, if you assume a 6% commission, that would be split, that's the typical commission.If you have representation on both sides of a residential real estate deal, giving approximately 3% to each side split between buyers and sellers, that would be about $25,000 in that particular transaction that the seller would be forking over and having to pay a part to the buyer's agent.Now, if you take that bucket of $900 million that these defendants have on the right now, you then slice out about a third for attorney's fees.If all of the 30 million eligible claimants here were to file a claim and ask for their money, they get about $20.So 25,000 versus $20 that's why these plaintiffs are upset.Yeah.Yeah, I, I we all would be upset about that too.Alexis, thanks so much for continuing to track this proceeding.I appreciate it.