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Another giant real estate company has seen the writing on the wall.
Keller Williams is now the third real estate franchisor to reach a settlement with plaintiffs in two bombshell lawsuits that could upend how consumers pay agents nationwide, agreeing to hand over $70 million and change its business practices.
On Thursday, Feb. 1, plaintiffs for the suit known as Sitzer | Burnett filed a motion for preliminary approval of the deal in the U.S. District Court in Western Missouri alerting the court that Keller Williams, which has 180,000 agents under its umbrella, had agreed to settle all of the claims against the company as part of a proposed nationwide class settlement. The deal was jointly negotiated with the plaintiffs in a larger bombshell suit known as Moehrl.
“Today, after months of protracted negotiations, including a post-trial mediation with a well-respected mediator and continued negotiations and sharing of financial information, Plaintiffs and Keller Williams reached a settlement,” the plaintiffs’ filing said.
Attorneys for the plaintiffs said the deal is “substantially similar to those reached with Anywhere and RE/MAX,” two real estate franchisors that reached settlements with the plaintiffs before Sitzer | Burnett went to trial in October, for $83.5 million and $55 million, respectively. Those settlements have already received preliminary approval from the court.
“[T]he non-monetary terms of the settlement are identical in all material respects to the terms of the Anywhere and RE/MAX agreements,” the filing said. “As with Anywhere and RE/MAX, the settlement was reached after a lengthy investigation and exchange of documentation relating to Keller Williams’s ability to pay.”
If approved by the court, the settlement means Keller Williams will pay substantially less than it could have to resolve Sitzer | Burnett. On Oct. 31, in a historic verdict, a jury found that Keller Williams, RE/MAX, Anywhere, the National Association of Realtors, HomeServices of America and two of its subsidiaries, BHH Affiliates and HSF Affiliates, conspired to inflate broker commission rates paid by homesellers. The jury awarded $1.78 billion in damages to a class of approximately 500,000 Missouri homeowners. If that award stands, it would be trebled by law to more than $5.3 billion.
The deals leave NAR, HomeServices of America and two of its subsidiaries, BHH Affiliates and HSF Affiliates, as the remaining defendants in the case.
“I’m relieved to share that we have negotiated a nationwide settlement of the Sitzer | Burnett case – on terms that protect our agents, our franchisees, and our industry,” Gary Keller, executive chairman of Keller Williams, said in an email sent to all Keller Williams leaders, agents and associates Thursday morning.
“Crucially, the settlement releases individual agents and franchisees from copycat litigation filed in the wake of Sitzer/Burnett.”
Since the Sitzer | Burnett verdict, an ever-rising pile of similar lawsuits have been filed across the country.
The settlement is not just a resolution, but a “launchpad,” according to Keller.
“We had full confidence in the strength of our appeal,” Keller said. “But we also knew the appellate process could be long and unpredictable – and that our franchisees and agents would have no protection and complete uncertainty while that process played out over time. Our Keller Williams family needs and deserves protection now, not later.
“We came to the decision to settle with careful consideration for the immediate and long-term well-being of our agents, our franchisees, and the business models they depend on. It was a decision to bring stability, relief, and the freedom for us all to focus on our mission without distractions. It allows us all to turn our attention back to what we do best: delivering unparalleled value in an ever-evolving real estate market.”
KW spokesperson Darryl Frost told Inman the $70 million payment in the deal “will not impact our operations or our ability to support our franchisees and agents.”
Sitzer | Burnett was originally filed in 2019 and won class action status in April 2022. Moehrl, which names the same defendants, was also filed in 2019 and got class certification in March 2023.
The suits allege that some NAR rules violate the Sherman Antitrust Act by inflating seller costs. The suits primarily target NAR’s Participation Rule (also known as the cooperative compensation rule), which requires listing brokers to offer buyer brokers a commission in order to list a property in a Realtor-affiliated multiple listing service.
According to the plaintiffs’ filing, the settlement creates a $70 million common fund and includes “the same injunctive relief provided under the RE/MAX settlement, i.e.: to make it clear to franchisees that offers of compensation are not required; increased transparency to consumers including recommending that franchisees inform consumers that commissions are negotiable; to advise franchisees that agents must show properties regardless of the existence or amount of offered cooperative compensation; to not express or imply that there is a minimum commission requirement; to develop training materials consistent with these terms; and to not require NAR membership of agents.”
Keller’s full email is below:
Keller Williams Family,
I’m relieved to share that we have negotiated a nationwide settlement of the Sitzer/Burnett case – on terms that protect our agents, our franchisees, and our industry. Crucially, the settlement releases individual agents and franchisees from copycat litigation filed in the wake of Sitzer/Burnett.
This is a significant moment for our entire Keller Williams family. As you all know, we fought hard for our agents and franchisees and their ability to manage their own businesses according to accepted, ethical industry practices. However, over the past few months, the Sitzer/Burnett verdict drove speculation and uncertainty across the industry.
We had full confidence in the strength of our appeal. But we also knew the appellate process could be long and unpredictable – and that our franchisees and agents would have no protection and complete uncertainty while that process played out over time. Our Keller Williams family needs and deserves protection now, not later.
We came to the decision to settle with careful consideration for the immediate and long-term well-being of our agents, our franchisees, and the business models they depend on. It was a decision to bring stability, relief, and the freedom for us all to focus on our mission without distractions. It allows us all to turn our attention back to what we do best: delivering unparalleled value in an ever-evolving real estate market.
Evolution is certain. I hope and believe that all of us at Keller Williams will be leading that evolution for many years to come. We will continue to play by the rules, act ethically, advocate for the integrity of the industry, and – of course – deliver value.
Keller Williams was built for entrepreneurs. This ethos is at the core of our business, allowing agents the freedom to manage their businesses, set their service fees, and negotiate compensation with clients independently. That was true before these lawsuits, it was true at trial, and it remains true as we put this settlement behind us.
I want to thank you for your unwavering support during these challenging times. Your resilience, dedication, and trust in Keller Williams have been pivotal to our ability to navigate this period.
As we move forward, we will continue to pivot, adapt, and thrive – just as we always have. This settlement is not just a resolution; it’s a launchpad. We will remain focused on what we do best: building our businesses and transforming the real estate industry together.
Thank you for your continued commitment to excellence and for being an invaluable part of the KW family.
Thank you for all you do to help others live their best lives possible.
Onward with gratitude …
Read the settlement agreement:
Editor’s note: This story has been updated with an embed and link to the motion for preliminary approval and settlement agreement.
Email Andrea V. Brambila.
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