Compass is the latest brokerage to reach a settlement deal.

A Securities and Exchange Commission filing on Friday morning shows Compass agreed to a settlement amounting to $57.5 million. This adds to the total settlement funds in industry lawsuits contributed by the National Association of Realtors (NAR), Keller Williams, Anywhere and RE/MAX

The NAR settlement reached last Friday, March 15, 2024, left 94 brokerages to pay their own way, whether they chose to settle independently or opt into NAR’s settlement agreement. 

Compass chose the first of those options.

Read on for the highlights of the settlement agreement. 

Compass’s Settlement Details

The SEC filing discloses the Compass agreement to settle its Umpa and Gibson lawsuits. The agreement mandates Compass contribute $57.5 million to the settlement fund. Half is expected to be deposited within 30 days of court approval, with the remaining portion to be deposited a year later. The court’s preliminary approval is expected to take place in the second quarter of 2024. 

Like Anywhere, RE/MAX, and Keller Williams, Compass agreed to revise some of its business practices to reach a settlement. These changes include: 

  • “Reminding its owned brokerages and agents that the Company has no rule requiring agents to make or accept offers of compensation;”
  • “Clearly disclose to clients that commissions are not set by law and are fully negotiable;”
  • “Prohibiting its owned brokerages and buyer agents from claiming buyer agent services are free;”
  • “Requiring its owned brokerages and their agents to include the listing broker’s offer of compensation for prospective buyers’ agents as soon as possible;” 
  • “Prohibiting its owned brokerages and their agents from using any technology (or manual methods) to sort listings by offers of compensation, unless requested by the client;” 
  • “Reminding its owned brokerages and agents of their obligation to show properties regardless of compensation for buyers’ agents for properties that meet the buyer’s priorities;” 
  • “Developing training materials for its owned brokerages and agents that support all the practice changes outlined in the injunctive relief.”

From the court document: 

“The settlement resolves all claims in the Lawsuits and similar claims in other lawsuits alleging claims on behalf of sellers on a nationwide basis against the Company and its subsidiaries (collectively, the “Claims”) and releases the Company, its subsidiaries and affiliated agents from the Claims. 

The proposed settlement is not an admission of liability, nor does the Company concede or validate any of the claims asserted against it.

“Under the Settlement Agreement, the Company agreed to pay $57.5 million (the “Settlement Amount”) into a qualified settlement fund, as follows: 

    • 50% of the Settlement Amount within 30 days of the court’s preliminary approval of the Settlement Agreement, which the Company expects to be in the second quarter of 2024
    • the remaining 50% within one year of the court’s preliminary approval. 

In a statement to the Wall Street Journal, CEO Robert Reffkin reaffirmed that Compass is not admitting to any wrongdoing. 

“The reason we have chosen to settle is so we can minimize distractions.”

Robert Reffkin

CEO, Compass

The proposed settlement remains subject to the court’s preliminary and final approval. 

Stay tuned for more as the story develops.