Keller Williams Agrees to $70M Settlement
Keller Williams, a prominent real estate brokerage firm, has agreed to a substantial $70 million payment as part of a proposed settlement to resolve over a dozen nationwide litigation related to agent commissions. The settlement, submitted to federal courts in Illinois and Missouri, includes provisions to enhance transparency for homebuyers and sellers regarding the commissions paid to real estate agents.
According to Michael Ketchmark, the attorney representing the plaintiffs in these lawsuits, this landmark agreement is a significant victory for homeowners and homebuyers nationwide. The central issue in these legal actions revolves around allegations that major real estate brokerages unfairly compel homeowners to pay inflated agent commissions when selling their homes.
In a noteworthy development from last October, a federal jury in Missouri found that the National Association of Realtors and several prominent real estate brokerages, including Keller Williams, conspired to require home sellers to pay commissions to homebuyers’ agents, which violated federal antitrust laws. The jury ordered the defendants to pay approximately $1.8 billion in damages, with the possibility of facing over $5 billion in treble damages if awarded. Similar lawsuits against the real estate brokerage industry are currently pending.
Keller Williams’ decision to pursue this proposed settlement stems from its desire to remove itself from the cloud of litigation and uncertainty. This settlement, if approved, would release the company, its franchisees, and agents from similar agent commission lawsuits nationwide. Headquartered in Austin, Texas, Keller Williams operates over 1,100 offices with approximately 180,000 agents.
In a companywide email, Gary Keller, the executive chairman, stated, “We made the settlement decision after carefully considering the immediate and long-term well-being of our agents, franchisees, and the business models they rely on. It was a choice to bring stability, relief, and the freedom for all of us to concentrate on our mission without distractions.”
As part of the proposed settlement terms, Keller Williams has committed to ensuring that its agents inform clients that commissions are negotiable, with no minimum amount mandated by clients or law. Additionally, the company has pledged to ensure that agents working with prospective homebuyers disclose their compensation structure, including any “cooperative compensation,” when a seller’s agent offers compensation to the agent representing the buyer for their services.
Under this settlement, which awaits court approval, Keller Williams agents will no longer be required to be members of the National Association of Realtors or adhere to the association’s guidelines. Notably, two other major real estate brokerages reached similar settlement agreements in the preceding year: Anywhere Real Estate Inc. agreed to pay $83.5 million, while Re/Max agreed to pay $55 million.