CONSUMER

Redfin agrees to pay $9.25 million to settle real estate broker commission lawsuits

May 6, 2024, 5:26 PM

SEATTLE, WA - OCTOBER 31: A Redfin real estate yard sign is pictured in front of a house for sale o...

SEATTLE, WA - OCTOBER 31: A Redfin real estate yard sign is pictured in front of a house for sale on October 31, 2017 in Seattle, Washington. Seattle has been one of the fastest and most competitive housing markets in the United States throughout 2017. (Photo by Stephen Brashear/Getty Images for Redfin)

(Photo by Stephen Brashear/Getty Images for Redfin)

(AP) — Redfin has agreed to pay $9.25 million to settle federal lawsuits that claim U.S. homeowners were saddled with artificially inflated broker commissions when they sold their home as a result of longstanding real estate industry practices.

The online brokerage and real estate services company disclosed the proposed settlement Monday in a regulatory filing with the Securities and Exchange Commission.

The settlement, which Redfin agreed to Friday, would resolve pending class action lawsuits filed in federal court in the Western District of Missouri, and also shield the company, its subsidiaries and agents from similar cases around the country, according to the filing.

“Resolving this litigation now and removing uncertainty is in the best interest of the company, our employees, and our investors,” the company said in a statement Monday.

Here’s how many investors and cash buyers are in Utah’s housing market

Seattle-based Redfin noted that it doesn’t expect the settlement, which must be approved by the court, to have a material impact on its future operations, adding it expects to record a $9.25 million pre-tax charge for the quarter ended March 31.

Shares in Redfin were up 3.7% in afternoon trading Monday.

Redfin is the latest big brokerage to agree to settlement terms in order to put an end to lawsuits related to the real estate industry’s broker compensation structure, following Re/Max, Keller Williams Realty, Compass and Anywhere Real Estate. Last month, HomeServices of America, which is owned by Warren Buffett’s Berkshire Hathaway, agreed to pay $250 million to settle the lawsuits. And in March, the National Association of Realtors agreed to pay $418 million.

All told, the real estate industry has now agreed to pay more than $950 million to make the lawsuits go away.

Utah has more ‘million-dollar cities’ as home prices climb

The lawsuits′ central claim is that the country’s biggest real estate brokerages and the NAR violated antitrust laws by engaging in business practices that required home sellers to pay the fees for the broker representing the buyer.

Attorneys representing home sellers in multiple states argued that homeowners who listed a property for sale on real estate industry databases were required to include a compensation offer for an agent representing a buyer. And that not including such “cooperative compensation” offers might lead a buyer’s agent to steer their client away from any seller’s listing that didn’t include such an offer.

In October, a federal jury in Missouri ordered the National Association of Realtors and several other large real estate brokerages to pay nearly $1.8 billion in damages. The defendants were facing potentially having to pay more than $5 billion, if treble damages were awarded.

The verdict in that case, which was filed in 2019 on behalf of 500,000 home sellers in Missouri and elsewhere, led to multiple similar lawsuits being filed against the real estate brokerage industry.

KSL 5 TV Live

Consumer

FILE - This combination of 2017-2022 photos shows the logos of Facebook, YouTube, TikTok and Snapch...

Matt Gephardt and Sloan Schrage

Scammers offer to help regain control of hacked social media accounts for a fee

People are advertising they can help you get back into your hacked social media accounts. It is a lie.

1 day ago

Utah Capitol where lawmakers passed a deal to possible raise a tax and quickly spend the money on d...

Lindsay Aerts

Lawmakers defend Sept. 1 contract deadline on downtown plans

The deal to raise Salt Lake City's sales tax to help house the new NHL team and revitalize downtown is moving fast and lawmakers are defending the deadline.

2 days ago

Ben Van Leeuwen scoops Kraft Mac & Cheese flavored ice cream Wednesday, May 15, 2024, in the Br...

Dee-Ann Durbin, The Associated Press

Sour Patch Kids Oreos? Peeps Pepsi? What’s behind the weird flavors popping up on store shelves

Van Leeuwen Ice Cream usually draws customers with gourmet takes on classics like vanilla and pistachio. But occasionally, the artisanal ice cream maker headquartered in New York slips in what it calls a “shock flavor,” like Hidden Valley Ranch or pizza.

4 days ago

ROHNERT PARK, CALIFORNIA - APRIL 17: In an aerial view, a sign is posted on the exterior of a Red L...

Michelle Chapman and Dee-Ann Durbin, AP Business Writers

Red Lobster seeks bankruptcy protection days after closing dozens of restaurants

Casual dining chain Red Lobster has filed for bankruptcy protection late Sunday, days after shuttering dozens of restaurants.

4 days ago

Abravanel Hall is pictured in Salt Lake City on Wednesday, May 8, 2024. Smith Entertainment Group, ...

Lindsay Aerts

Plan for updating Abravanel Hall estimated to cost hundreds of millions

Estimates for updating Abravanel Hall, home of the Utah Symphony, are estimated to cost over $200 million.

4 days ago

Protesters descend a staircase in the Minnesota State Capitol building in St. Paul, holding signs a...

Eva Rothenberg, CNN

Minnesota lawmakers strike minimum pay deal for Uber, Lyft drivers

Minnesota lawmakers successfully struck a deal with rideshare companies Uber and Lyft to establish a minimum wage standard for their drivers.

5 days ago

Sponsored Articles

Electrician repairing ceiling fan with lamps indoors...

Lighting Design

Stay cool this summer with ceiling fans

When used correctly, ceiling fans help circulate cool and warm air. They can also help you save on utilities.

Side view at diverse group of children sitting in row at school classroom and using laptops...

PC Laptops

5 Internet Safety Tips for Kids

Read these tips about internet safety for kids so that your children can use this tool for learning and discovery in positive ways.

Women hold card for scanning key card to access Photocopier Security system concept...

Les Olson

Why Printer Security Should Be Top of Mind for Your Business

Connected printers have vulnerable endpoints that are an easy target for cyber thieves. Protect your business with these tips.

Modern chandelier hanging from a white slanted ceiling with windows in the backgruond...

Lighting Design

Light Up Your Home With These Top Lighting Trends for 2024

Check out the latest lighting design trends for 2024 and tips on how you can incorporate them into your home.

Technician woman fixing hardware of desktop computer. Close up....

PC Laptops

Tips for Hassle-Free Computer Repairs

Experiencing a glitch in your computer can be frustrating, but with these tips you can have your computer repaired without the stress.

Close up of finger on keyboard button with number 11 logo...

PC Laptops

7 Reasons Why You Should Upgrade Your Laptop to Windows 11

Explore the benefits of upgrading to Windows 11 for a smoother, more secure, and feature-packed computing experience.

Redfin agrees to pay $9.25 million to settle real estate broker commission lawsuits