The news comes a week after NAR announced a massive $418 million settlement. As part of the settlement, Compass also agreed to make some minor changes to its business practices.
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A week after the National Association of Realtors announced the settlement, Compass has now also agreed to settle its commission lawsuit for $57.5 million. A recent submission and the Securities and Exchange Commission.
Compass is now the fourth major entity to reach a settlement. This follows NAR’s $418 million settlement last week, RE/MAX’s $55 million settlement, Anywhere’s $83.5 million settlement, and Keller Williams’ $70 million settlement.
Overall, the industry has so far secured approximately $684 million in settlements from antitrust cases alleging artificially inflated commissions.
The Compass settlement covers Umpa v. NAR and Gibson v. NAR. Other defendants in these lawsuits include eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna Real Estate, Douglas Elliman, NAR, Keller Williams, HomeServices of America, HomeSmart International and Real Brokerage, among others.
If the remaining securities firms that have not settled yet have reached their respective transactions, they can pay to the settlement fund according to the formula according to their sales volume and join the NAR settlement.
SEC filings said 50% of the settlement amount will be deposited into the settlement fund within 30 days of the court’s preliminary approval of the agreement, which is expected to be reached in the second quarter of 2024. Compass will pay the remaining balance within one year of the agreement being reached. The court gave preliminary approval.
As part of the settlement, Compass also agreed to make a number of business practice changes, including reminding brokers and agents that there are no rules requiring agents to make or accept compensation offers and requiring brokers and agents to disclose to clients that the law does not require commission.
The company also said its brokerages and agents will be prohibited from claiming that buyer representation services are free, and brokerages and agents will be required to provide listing agent compensation to potential buyer’s agents as quickly as possible.
Brokers and agents will be prohibited from providing compensation to rank listings unless requested by the client, and all brokers and agents will be reminded that they are obligated to show properties regardless of whether a buyer’s agent is compensated .
“I am pleased to report that Compass has settled all nationwide claims in the Gibson and Umpa seller class action lawsuit and agreed to Adjusted to practices agreed to by other settlement brokers.” “The settlement payments and other agreements resolve all claims against Compass by home sellers nationwide, and we do not anticipate any impact on our ability to serve you.” By settling, Compass is not saying we did anything wrong. The reason we chose to settle is to minimize disruption and focus on serving you and your clients.”
up to its Fourth Quarter 2023 EarningsAs of 2023, Compass had $166.9 million in available cash and cash equivalents.According to the data, the company is the largest residential real estate brokerage firm in the United States in terms of 2022 sales, with sales of approximately $228 billion. real trend. The company’s sales in 2023 will reach US$184 billion, continuing to maintain its No. 1 sales position.
NAR’s $418 million settlement, if approved, would protect about 1 million agents and brokers from about two dozen lawsuits filed by U.S. home sellers
These lawsuits and settlements will have far-reaching consequences for the entire industry, affecting commission structures and client relationships, potentially affecting mortgage partner agency programs and more. Additionally, a new trade group is currently in the works, led by the agency’s Mauricio Umansky and Compass attorney Jason Haber, in part in response to dissatisfaction with NAR’s handling of the lawsuit.
To date, all settlements proposed in the commission’s lawsuits still await final court approval. Representatives from RE/MAX and Anywhere plan to hold a final court approval hearing in May 2024.
This story is developing. Please check back for more details.
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