BAM Key Details:
- Details of the Anywhere and RE/MAX settlements reveal two more no-confidence votes in the National Association of Realtors (NAR).
- Anywhere and RE/MAX will no longer require any of their brokerages or agents to belong to NAR or adhere to NAR’s Code of Ethics or MLS Handbook, among other changes.
One of the standout details for both involves the National Association of Realtors® (NAR). Per the agreements, Anywhere and RE/MAX will no longer require any of their brokerages or agents to belong to NAR or to follow its Code of Ethics.
Anywhere Settlement Details
Sources expect a hearing for preliminary approval of the Anywhere settlement next month, with a final court approval expected in the middle of 2024.
“I am pleased that Anywhere has reached a nationwide settlement with the plaintiffs in the Burnett and Moehrl cases. 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.”
Anywhere’s settlement details include injunctive relief (as well as monetary damages) requiring Anywhere Advisors to make specific changes in its practice. The agreement will be binding on all company-owned brokerage operations—including Coldwell Banker Realty, Corcoran, and Sotheby’s International Realty—for a period of five years after the court gives its final approval.
Anywhere will also recommend the same practice changes to its independently owned and operated franchise network.
In addition to paying $83.5 million, practice changes stipulated in the settlement include the following:
- “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 also agreed to “advise and remind company owned brokerages, franchisees, and affiliated agents that the company has no rule requiring offers of compensation.”
On top of that, Anywhere has agreed to the following changes:
- “Anywhere will not require company owned brokerages, franchisees, or affiliated agents to belong to the National Association of REALTORS® (NAR) 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.”
RE/MAX Settlement Details
RE/MAX’s settlement details, which also require court approval, include paying $55 million into a settlement fund, and would release all RE/MAX brokerages and affiliates from claims related to the Burnett and Moehrl lawsuits, as well as any similar claims in the future.
“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.”
In its settlement, RE/MAX agrees to the following eight changes:
- “RE/MAX, LLC, as the franchisor, will continue to encourage you to be transparent in your dealings with all home sellers and buyers – especially in the areas of cooperation and compensation. RE/MAX, LLC won’t require you to make offers of compensation or accept offers of compensation from cooperating brokers. We’ll also continue to encourage you to be very clear that commissions are negotiable and not set by law or RE/MAX, LLC corporate policy. That can and should be communicated in listing agreements, buyer representation agreements and pre-closing disclosure documents. If you use documents mandated by the government or MLS, we’ll recommend that you include an additional disclosure outlining these facts.
- “RE/MAX, LLC will continue to expect RE/MAX buyer-side brokers and agents to be transparent in accurately disclosing their compensation structure. In other words, you should continue to be honest and upfront about how much your services cost – and how you expect to be paid.
- “RE/MAX, LLC, via remax.com, will continue to display offers of cooperative compensation made by listing brokers and agents where such data is available. RE/MAX, LLC will encourage you to do the same on your listing displays, platforms and feeds.
- “RE/MAX, LLC will continue to not provide any software that filters or restricts MLS listings based on the level of compensation being offered. And we’ll encourage you not to filter search results in this manner – unless directed to do so by a client.
- “RE/MAX, LLC will remind you of your professional obligation to show and market properties regardless of what the offer of cooperative compensation might be.
- “RE/MAX, LLC 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.
- “RE/MAX, LLC will develop educational materials reflecting and consistent with the business practices detailed above – and we’ll make sure our current content aligns with them as well.
- “RE/MAX, LLC will not require you to be members of the National Association of Realtors (NAR) 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. ”
NAR Membership Not Required
So, while NAR is busy trying to reframe its interpretation of its own Participation Rule, Anywhere and RE/MAX have become the next big names in real estate to say, without any hazy language or gaslighting, that listing with zero-percent buyer agent commission is allowed—and NAR membership is either discouraged or 100% optional. Earlier this week, Redfin was the first to take this stance when if announced it was leaving NAR.
Now, if we could decouple NAR membership from MLS access in every state, agents would finally have a real say as to whether NAR’s advocacy is worth the dues it charges.
One of the class action lawsuits, Sitzer/Burnett, is set to go to trial on October 16 and could result in over $1 billion in damages. The other (and larger of the two), Moerhl, is set for trial in 2024 and has the potential for $40 billion in damages, though the recent settlements by Anywhere and RE/MAX could significantly reduce industry losses.