Major Lawsuit Settlement: How Real Estate Brokers at RE/MAX and Anywhere Are Affected
RE/MAX and Anywhere have settled all claims against their firms and their Agents. All Agents of those firms have been removed from any liability or any further prosecution. The lawsuit continues against other firms and Agents across the US.
Real Estate Broker Lawsuit: The Burnett v. NAR Case Explained
In the United States District Court for the Western District of Missouri, a court case was filed, Burnett et al. v. National Association of Realtors, et al. (NAR). Defendants includes NAR, Anywhere, RE/MAX, Keller Williams, and Berkshire Hathaway Home Services.
The lawsuit claimed that Defendants created and implemented rules that require home sellers to pay commissions to the broker or agent representing that buyer, and that caused home sellers to pay total commissions at inflated rates through anticompetitive and unlawful practices.
Settlement by RE/MAX and Anywhere: What It Means for Real Estate Brokers
RE/MAX and Anywhere both paid to settle this suit. RE/MAX and Anywhere are not admitting any liability or that they did anything wrong. Both sides want to avoid the uncertainties and expense of further litigation.
Filing a Claim: Who is Eligible in the Real Estate Broker Lawsuit?
For Colorado, if you listed a home to be sold between March 6, 2015 and February 1, 2024 on Pike Peak MLS (Colorado Springs area) or REcolorado (Denver area) and you paid a commission, to ANY real estate brokerage firm in connection with the sale, you are eligible to file a claim. You are encouraged to file a claim. The lawyers have collected a lot of money for this payout 🙂
If you want to submit a claim, it must be completed by May 9, 2025 at this link:
https://realestatecommissionlitigation.com
What are the effects for Buyers from this Lawsuit?
In Colorado effective 8/17/2024, a Buyer must sign a Buyer Agency Agreement (Exclusive Right to Buy Contract), in order to view a property. You, as a Buyer, cannot contact an Agent and simply go view a property without a contract anymore. You MUST be under contract with an Agent to view one or more properties. The contract can be for the single property, multiple properties, or encompassing a period of time. The contract also states the agreed upon Buyer Agent commission and terms negotiated between the Buyer and Agent. This process must be completed prior to viewing any property.
If you want to view multiple properties with multiple Agents, you will be asked to sign multiple Buyer contracts. VERY IMPORTANT – If you want to go this route and many Buyers do, so you can interview different Buyer Agents, make sure the contract is ONLY for the property you are seeing with that Agent for that day. Do NOT sign a contract for a period of time like a 3 or 6 month contract.
If you sign multiple Exclusive Right to Buy contracts with multiple Agents for a period of time (let’s say 3 months with 2 Agents), you are under contract with 2 Agents to pay 2 Agents. Who gets paid at close? Both? You might be on the hook to pay both commissions on your own aside from the real estate contract. Once you have decided on which Agent you want to use, then it will be much easier to have a contract for a period of time. That way, you can view many properties with the Agent of your choice with a blanket contract.
Buyer Agent compensation(s) offered by a Seller, if any, are no longer published anywhere. If the Seller offers any compensation to a Buyer Agent, that is a negotiated item in the Contract to Buy Sell. Yes – It’s now a guessing game because you, as the Buyer, don’t know how much the Seller is offering to pay your Agent at close, if any. A Seller Agent may or may not disclose that information to your Agent. It depends on the Sellers willingness to disclose that information. The Buyer Agent commission is a negotiated item just like the price, inspection items, close/possession date, etc.
- The fee for your Agent must be written in the contract in Additional Provisions and specified the payment option in Section 29 in the Contract to Buy Sell “Buyer’s Brokerage Firm Compensation”.
What are the effects for Sellers from this Lawsuit?
Sellers have the right to negotiate compensation offered to a Buyer Agent during the negotiations of the overall price of the real estate for sale. As it has been in the past, The Listing Agent and the Seller will discuss a compensation to be offered to a Buyer Agent, or none. If you, the Seller, are offering a low fee (or no fee at all), you will need to discuss the amount that you may be paying your Agent at close. If you offer a low fee, you may not get your property sold or it may be difficult. Most Buyers are still going to ask the Seller to pay their Agent at close. This could be difficult for many Buyers because that payment is not financeable. It would be in cash. Who has extra cash for an item like this when trying to purchase a property? Not many people. Offering a low Buyer Agent fee may kill your chances of selling your property.
You should discuss this new law and a strategy with your Lisitng Agent. Make sure you have a good Agent who understands these changes and the ramifications.
In any event, the compensation offered by you, the Seller, will be confidential, not published anywhere, and should be written in the real estate contract. If it is not, then you may not be paying the other Agent. Congrats to you ! A messed up transaction could mean thousands of dollars flowing in the wrong direction for you. Not so good for you.
Overall:
These changes can be significant when negotiating the price, terms, and who pays what in a real estate transaction beginning August 17, 2024.
Buyers and Sellers are advised to discuss these items in detail with your Real Estate Agent, so you understand the full impact of your contract when submitting an offer to purchase a real estate.
In these times, it is very important that you retain a good, solid, seasoned Real Estate Agent. If the contracts (Seller Listing Contract, Buyer Agency Contract, and Contract to Buy Sell) are not clear, well written and understood by all parties, you as a Buyer may be liable for your Buyer’s fee at close. Can you imagine going to close and you need an extra $15-30k to pay for your Agent or the other Agent because that fee wasn’t negotiated or written properly in the contracts? That could be devastating.
With this new law, your best advisor is your Realtor, who should be a seasoned, knowledgeable real estate professional with years of experience, negotiating skills, transactions, and a strong knowledge of Colorado real estate contracts.
If you have any real estate questions or if I can help in any way, please let me know.
About Jim Garcia: Jim Garcia has been a resident and Realtor in Castle Rock, Colorado in Douglas County since 2006. Jim is one of the top producing Agents at RE/MAX Professionals. He specializing in residential transactions with Buyers and Sellers in Castle Rock, Castle Pines, Parker, Elizabeth, Douglas County, Elbert County and other nearby regions.
With over 25 years of experience as a senior business executive, serving as CEO/COO, he brings expertise in construction, contract negotiations, intricate real estate transactions, fix & flips/holds, 1031 exchanges, short sales, foreclosures, and investment properties. Whether you are looking to buy or sell Castle Rock Colorado homes, homes for sale in Parker Colorado or any of the surrounding areas, Jim Garcia can be a great resource for your real estate needs. Jim has recently expanded into Elizabeth Colorado in Elbert County. If you would like some help with homes in Elizabeth Colorado like horse property, land, luxury homes or any other needs, Jim can help.
Jim is a Master Certified Negotiation Expert in Real Estate.In 2022 and 2023 Jim was awarded one of the Best Real Estate Agents in America and one of the Best Real Estate Agents in Colorado by Realtrends. He is also one of the top 1.5% of all Agents in the USA.
If you have any questions about this article for Colorado real estate items, feel free to reach out to Jim to ask any questions. Jim can help with your real estate needs throughout Colorado, please let him know.
Jim Garcia
RE/MAX Professionals
(720) 385-4497
JimGarcia100@gmail.com