Anywhere, RE/MAX in Proposed Settlement Agreements Will Not Require NAR Membership for Brokers/Agents

WHITE PLAINS—After brokerage firm Redfin recently announced its intent to leave the National Association of Realtors over sexual harassment allegations that led to NAR President Kenny Parcell’s resignation, comes news that two other major brokerage firms will not require its brokers or agents to be members of the embattled organization as part of settlement agreements in pending anti-trust litigation.

National real estate brokerage firms Anywhere Real Estate Inc. and RE/MAX, LLC recently announced terms of its previously proposed settlement agreements in the Burnett and Moehrl antitrust class action litigation in which NAR and several other brokerages are also defendants. In addition to NAR, Anywhere and RE/MAX, HomeServices of America and Keller Williams are also defendants in that litigation that centers on NAR’s Participation Rule.

Anywhere Real Estate (formerly known as Realogy Holdings Corp.) announced on Oct. 6 that it had agreed to pay $83.5 million to settle all claims in connection with the Burnett and Moehrl cases. The company stated that the proposed settlement “is not an admission of liability, nor does it concede or validate any of the claims asserted against Anywhere.” The proposed settlement includes injunctive relief requiring practice changes in Anywhere Advisors, the company’s-owned brokerage operations, which includes Coldwell Banker Realty, Corcoran, and Sotheby’s International Realty, for a period of five years following final court approval.

In addition, Anywhere has also agreed to recommend and encourage these same practice changes to its independently owned and operated franchise network across the Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Corcoran, ERA, and Sotheby’s International Realty brands.

A hearing for preliminary approval of the settlement is expected to occur in November with final court approval expected in mid-2024.

“I am pleased that Anywhere has reached a nationwide settlement with the plaintiffs in the Burnett and Moehrl cases,” said Ryan Schneider, Anywhere Chief Executive Officer and President. “We believe this is the right course of action to remove future uncertainty and ongoing legal expense, serving the best interests of the company, our affiliated agents and franchisees, and shareholders, and enabling Anywhere to focus on moving real estate to what’s next.”

“The proposed settlement provides releases for our owned brokerage operations and agents as well as our franchisees and their affiliated agents, a priority for Anywhere in resolving these claims,” said Sue Yannaccone, Chief Executive Officer and President, Anywhere Brands and Anywhere Advisors.

Among some of the key components of the proposed settlement agreement include:

• Anywhere will prohibit company owned brokerages and their affiliated agents from claiming buyer agent services are free.

• Anywhere will require company owned brokerages and their affiliated agents to include the listing broker’s offer of compensation for prospective buyers’ agents as soon as possible in each active listing, consistent with MLS rules and/or capabilities of third-party website operators.

• Anywhere will prohibit company-owned brokerages and their affiliated agents from using any technology (or manual methods) to sort listings by offers of compensation, unless requested by the client.

• Anywhere has agreed to advise and remind company-owned brokerages, franchisees, and affiliated agents that the company has no rule requiring offers of compensation.

• Anywhere will not require company-owned brokerages, franchisees, or affiliated agents to belong to the National Association of Realtors or follow the NAR Code of Ethics or MLS Handbook.

• Anywhere will require company-owned brokerages and their agents to clearly disclose to clients that commissions are not set by law and are fully negotiable.

• Anywhere will eliminate any minimum client commission requirements that company-owned brokerages may have.

• Anywhere has agreed to develop training materials for company-owned brokerages, franchisees, and affiliated agents that support all the practice changes outlined in the injunctive relief.

Meanwhile, RE/MAX has agreed to pay $55 million in a proposed settlement agreement in the Burnett and Moehrl class action lawsuits.

RE/MAX President and CEO Nick Bailey

On Oct. 6, RE/MAX President and CEO Nick Bailey in an update to its Affiliates, released terms of the proposed settlement that also included that the brokerage “will not require you to be members of the National Association of Realtors or follow NAR’s Code of Ethics or the MLS Handbook. All U.S. RE/MAX brokerages will be free to determine whether NAR membership works best for them and their agents—and we’ll support the choice either way. RE/MAX, LLC also won’t hold affiliates to any current requirements in these areas.”

“It’s important to note that the nationwide settlement, which requires court approval, would release RE/MAX, LLC, the U.S. independent regions, and U.S. RE/MAX brokerages and affiliates—all of you—from any claims related to these lawsuits. It would also settle, on a nationwide basis, any similar claims that could be brought.,” Bailey stated. “We continue to deny the allegations made in the complaints and in no way acknowledge any wrongdoing. We also continue to believe in buyer agency, cooperative compensation and the idea that consumers are best served when they are working with real estate professionals.  At the same time, we believe that protecting the network from costly litigation and the risk of further damages makes this settlement the right course of action.”

RE/MAX’s proposed settlement agreement mirrors many of the key provisions of Anywhere’s settlement terms, include that the company “will continue to not express or imply a minimum commission requirement in any of our franchise agreements, training materials or other policies. In other words, RE/MAX brokerages and agents will continue to have the freedom to set and/or negotiate commissions as they see fit,” Bailey stated.

The Burnett trial in Missouri is set to begin later this month. In early September when reports surfaced that Anywhere Real Estate had reached a settlement agreement, NAR stated that it would continue arguing its case against the two class-action lawsuits challenging real estate compensation structures.

“Settlement is always an option for any party in litigation. NAR’s commitment to defend ourselves in court remains unchanged, and we are confident we will prevail in proving the lawfulness of the rules under attack,” Mantill Williams, NAR’s Vice President of Public Relations and Communication Strategy, said in a statement. “Pro-competitive, pro-consumer local MLS broker marketplaces ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers. The practice of the listing broker paying the buyer broker’s compensation saves sellers time and money by having so many buyer brokers participating in that local marketplace and, thus, creating a larger pool of buyers for sellers. For buyers, these marketplaces save them the burden of extra costs at closing, enable them to receive professional representation and make homeownership possible for more people.”

Multiple published reports indicated NAR had announced a change in how it interprets its Participation Rule, which requires listing brokers to provide buyer brokers an offer of compensation in order to list on the multiple listing service (MLS), according to HousingWire.

Inman News first reported on Oct. 6 that while NAR previously stated that the offer of compensation could be as little as a penny or a dollar, NAR now states that listing brokers can offer nothing and still comply with its Participation Rule.