Among the proposed changes, Anywhere said its company-owned brokerages, franchisees and affiliated agents will no longer be required to belong to the National Association of Realtors.
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Franchisor Anywhere Real Estate on Friday publicly unveiled the sweeping changes it would make as part of a proposed settlement in the two bombshell lawsuits that are upending the real estate industry.
The proposed settlement in the cases known as Sitzer/Burnett and Moehrl had been kept confidential until now.
“I am pleased that Anywhere has reached a nationwide settlement with the plaintiffs in the Burnett and Moehrl cases,” Ryan Schneider, Anywhere chief executive officer and president, said in the statement. “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.”
In addition to changes related to commission structure, Anywhere said in the statement that its company-owned brokerages and agents could cut ties with the National Association of Realtors.
The new details come about a month after Anywhere announced it had reached a proposed settlement in Sitzer/Burnett, which is scheduled to go to trial on Oct. 16 in the U.S. District Court in Western Missouri. The deal was jointly negotiated with the plaintiffs in the larger bombshell lawsuit known as Moehrl. The latter trial is expect in the first half of 2024.
Anywhere unveiled three proposed changes to its business practices for Anywhere Advisors, which includes Coldwell Banker Realty, Corcoran and Sotheby’s International Realty, for five years if the court approves the terms. Among them:
- 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.
The firm will also recommend those business practice changes to the independently owned franchise network, including Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, Corcoran, ERA and Sotheby’s.
Anywhere also said that it would require company-owned brokerages and their agents to “clearly disclose to clients that commissions are not set by law and are fully negotiable,” and that it would eliminate any minimum client commission requirements that the company-owned brokerages might have.
“We strongly believe in sellers making offers of compensation to buyers’ agents to bring more eligible buyers to a listing, which increases the likelihood of a successful transaction,” said Sue Yannaccone, chief executive officer and president of Anywhere Brands and Anywhere Advisors. “Certain MLSs that have already removed the mandatory requirement or eliminated a minimum amount have helped facilitate seller choice in those markets as well as provide for continued access to both buyer and seller agent services.”
Anywhere will also remind its brokerages and agents that it has no rule requiring offers of compensation, according to the proposed settlement.
The terms of the settlement must still be confirmed by the court. The company said Friday it expected a hearing for preliminary approval in November and possible final court approval for the settlement in mid-2024.
Anywhere also agreed to pay $83.5 million in relief. The proposed terms would also release Anywhere and all of its subsidiary brands from any claims in the lawsuits.
The brand said it would no longer require its brokerages, franchisees or any of its agents to belong to NAR, follow its Code of Ethics or follow the MLS Handbook. Anywhere boasts 190,800 affiliated agents in the U.S. and another 141,400 abroad.
In response to the announcement, NAR spokesman Mantill Williams said: “The proposed settlement does not change how our case is presented in court, and based on their latest filing, it appears that they are agreeing to do things already required by our Code of Ethics or MLS rules.”
“Brokerages are independent, legal entities that make their own business decisions,” Williams added. “It is incumbent on every Realtor association — local, state and national — to continue to communicate and provide true value to our members. If these brokers continue to find value in belonging to the association, then they will choose to belong.”
RE/MAX also announced last month that it had settled the bombshell lawsuits. The company said at the time it agreed to fork over $55 million and adjust its business practices. It has yet to provide a full accounting of the proposed changes it would make.
Anywhere’s announcement that it would no longer require its agents and affiliates to become NAR members was only the latest hit for the organization, which has also struggled through revelations of sexual harassment and other misconduct allegations among leadership.
On Monday, Redfin called on its Realtors to cancel their memberships to the 1.5 million-member organization.
Anywhere is the parent company of the Coldwell Banker, Century 21, Better Homes and Gardens Real Estate, Sotheby’s International Realty, ERA and Corcoran brands.