Keller Williams Realty has agreed to pay $20 million as part of the landmark wave of real estate commission lawsuits that have reshaped how Americans buy and sell homes. The settlement resolves claims that Keller Williams participated in a conspiracy with the National Association of Realtors (NAR) and other brokerages to keep real estate commissions artificially high by requiring home sellers to pay the buyer’s agent commission as a condition of listing their property on the Multiple Listing Service (MLS).
Browse all open class action settlements on OpenClassActions.com.
Status: Settlement Approved
What Were the Commission Practices?
For decades, the standard real estate transaction in the United States involved the home seller paying a commission of around 5% to 6% of the sale price, split between the seller’s agent and the buyer’s agent. This commission structure was maintained through MLS rules that required sellers to offer a minimum commission to buyer’s agents as a condition of listing their home.
The lawsuits alleged that this system was anticompetitive. Home sellers had no practical way to avoid paying the buyer’s agent commission, and buyer’s agents had little incentive to compete on price because the commission was guaranteed regardless of how much work they did. The result, plaintiffs argued, was that Americans paid billions of dollars more in real estate commissions than they would have in a truly competitive market.
A Missouri jury agreed, awarding $1.8 billion in damages against NAR and several brokerages in the Sitzer/Burnett trial in October 2023. That verdict triggered a cascade of settlements from major brokerages seeking to resolve their liability.
How the Real Estate Market Is Changing
As part of the broader settlement between NAR and the plaintiffs, new rules took effect in August 2024 that fundamentally changed how real estate commissions work. Sellers are no longer required to offer a commission to buyer’s agents as a condition of listing on the MLS. Buyers must now sign written agreements with their agents that specify the agent’s compensation before the agent can show them homes.
These changes mean that for the first time, buyer’s agent commissions are truly negotiable. Buyers can shop around for agents willing to work for lower fees, and sellers are no longer forced to subsidize the buyer’s representation. Early data suggests that average commission rates have already begun declining in many markets.
Who Gets Paid From the Settlement?
Home sellers who paid a real estate commission in connection with a sale listed on a NAR-affiliated MLS during the relevant class period may be eligible for a payment. The claim period and distribution details are being finalized by the settlement administrator. Given the massive size of the class — millions of home sales over many years — individual payments will likely be modest relative to the commissions originally paid.
However, the real benefit of this litigation is forward-looking. The structural changes to real estate commission practices are expected to save American home sellers and buyers billions of dollars over the coming years.
Find more open class action settlements on OpenClassActions.com.
This article is for informational purposes only and does not constitute legal advice. The information presented is based on publicly available court records and news reports. Written by Steve Levine for OpenClassActions.org.