According to new legal filings in the U.S. Securities and Exchange Commission (SEC), Redfin will pay $9.25 million as part of a settlement agreement reached with homeseller plaintiffs in the class-action lawsuit known as Gibson. This amount comes as plaintiffs argue that Redfin—as well as other brokerages such as The Real Brokerage, Realty One Group, Compass, Douglas Elliman and @properties—worked to inflate commissions, violating antitrust laws.
The proposed settlement comes as no surprise, as Redfin—along with 87 other brokerages—was not covered in the March 15 settlement of National Association of REALTORS® (NAR). Brokerages not covered have until June 18 to opt into the settlement.
Several other brokerages named in Gibson, which was filed by the same attorneys behind Burnett, have already reached settlement agreements, and received preliminary approval by the court. The case recently added several more firms to its long list of defendants, seemingly targeting larger independents that are currently mulling whether to opt in to NAR’s agreement.
Redfin, which now becomes the latest nationwide firm to reach a proposed settlement, has stated that the $9.25 million will be included in its Q1 earning report, being released tomorrow afternoon, at 3:30 P.M. ET
Redfin CEO Glenn Kelman issued this statement Monday afternoon:
“As the only U.S. brokerage that has saved consumers more than $1.5 billion in fees, Redfin never belonged as a defendant in this litigation, and we’re glad to have settled it. We always have been, and always will be, advocates for transparency and saving consumers money, directly selling homes to buyers to bring down fees, and broadly publishing commission data so consumers understand how much they are paying. Resolving this litigation now and removing uncertainty is in the best interest of the company, our employees and our investors,” the statement read.
Redfin had previously argued in court that its inclusion in commission lawsuits was “wrong both as a matter of common sense and as a matter of law,” noting that the company has functioned as discount brokerage, and has even publicly advocated for changing some of the rules that plaintiffs claim are anti-competitive.
According to SEC documents, “(t)he Proposed Settlement resolves all claims in the Lawsuits, and similar claims on behalf of home sellers on a nationwide basis, against (Redfin) and releases (Redfin), our subsidiaries, and our agents from the Claims.”
As with other settlements reached by brokerages in the seller lawsuits, the agreement does not include an admission of liability, and is still subject to court approval. The company will pay the full $9.25 million within 30 days of receiving preliminary approval from a judge.
“We do not expect the terms of the Proposed Settlement to have a material impact on our future operations,” Redfin said in the filing.
This is a developing story. Stay tuned to RISMedia for further updates.
