Who does not participate: brokerage firms not covered by the NAR agreement.

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More than 90 real estate brokerage firms have not received coverage under a $418 million agreement reached by the National Association of Realtors with plaintiffs in major lawsuits against contract commissions nationwide for antitrust violations, although most of them can join the deal if they choose. The proposed agreement, which has not yet received final court approval, would resolve the lawsuits in the case known as Sitzer | Burnett, as well as other lawsuits against NAR involving more than 1 million of its members (or about two-thirds), all state and local Realtor organizations, all multiple service listings owned by Realtor associations, and all firms with a NAR member as a founder whose residential real estate transactions in 2022 were $2 billion or less, according to Real Estate Almanac T360. "($2 billion) was the agreed-upon number with NAR, and it seemed like a logical number," Michael Ketchmark of Ketchmark & McCreight, general counsel for the Sitzer | Burnett plaintiffs, told Inman. According to Ketchmark, the plaintiffs wanted large companies to pay their share as well. "The focus is on the big corporate real estate brokers," he said. "It seemed logical to limit it to them. The most important thing is that they need to agree to these changes and agree to change the way they do business."

As part of the proposed agreement, NAR agrees not to establish rules that allow selling agents to set fees for buying agents, and fee offers will not appear in the Realtor multifamily listing database. Brokers will need to work with buyers to enter into a written agreement for buyer representation before inspecting homes. They will still be able to negotiate fees through a flat commission paid directly by consumers, concessions from sellers or a share of the commission received from the listing broker. Regarding the $418 million that NAR would be required to provide, under the proposed deal, 30 days after filing a motion for preliminary approval of the order splitting agreement, NAR would be required to deposit $5 million into an escrow account that would become a fund under the agreement. If the agreement is finally approved, NAR would be required to deposit $197 million into the escrow account within 90 days of that approval. For three years after this $197 million payment, NAR would be required to replenish this account annually by $72 million, plus interest.

• Compass New York $227.98 billion
• HomeServices of America Minnesota $165.72 billion
• eXp Realty Washington $159.14 billion
• Douglas Elliman New York $42.83 billion
• Redfin Washington $39.76 billion
• Howard Hanna Real Estate Pennsylvania $37.66 billion
• @properties Illinois $24.51 billion
• HomeSmart Arizona $23.00 billion
• Weichert Realtors New Jersey $22.00 billion
• United Real Estate Texas $20.89 billion

According to Ketchmark, the list provided in the Almanac "is a fairly reliable guide for the industry to see who is covered by what," but it does not show all the brokerage firms that have already entered into agreements for case resolutions. "Every day, brokerage firms reach out to us and arrange mediation negotiations and settle these cases," Ketchmark said. "As expected, it takes time from the start of an agreement to its official completion.

The proposed NAR deal includes a mechanism that allows everyone except those associated with HomeServices of America - the only company still fighting the Sitzer | Burnett case - to join the agreement. When asked how many brokerage firms have requested to buy in, Ketchmark said he could not provide details. "My phone won't stop ringing, that's all I can say," Ketchmark said. "Quite a few of these companies are publicly traded, so there are SEC rules governing what I can say and what I can't, as well as federal rules in the judicial system regulating what I can say and what I can't. But this is something that is attracting attention among industry representatives, and brokerage firms that care about protecting their members are acting quickly to find a solution to this issue."

At least one brokerage firm is unsure whether it has the right to purchase. Howard Hanna representative Lindsay Kovach told Inman, "As you may know, we are defendants in the Umpa case, and neither party involved in the Umpa process has the right to join under section 18 (h)." However, according to Keachmark, the defendants in the Umpa case and another commission case with a plaintiff named Gibson "absolutely have the right to participate." "They just need to reach out to us. This is a narrow interpretation," he added. "Howard Hanna would certainly have the opportunity to take part in the agreement and participate if it agrees to comply with changes in practice and reach a monetary settlement," he continued. "We are ready to negotiate a settlement with any brokerage firms and any defendants in these lawsuits. Our main goal is to change their approach and recover some funds that we believe were taken illegally."

Compass, United Real Estate, William Raveis, Fathom Realty, John L. Scott Real Estate, and Brown Harris Stevens declined to comment on the news. Redfin, Douglas Elliman, The Agency, The Real Brokerage, HomeSmart, @properties, and Weichert Realtors did not respond to requests for comments. Laura Ellis, Chief Strategy Officer at Republic and President of the Sales Division at Baird & Warner, stated: "We have reviewed the proposed NAR agreement and are currently evaluating our options and next steps. Once we complete our assessment and determine the best strategy for our firm, our agents, and our clients, we will communicate that as appropriate." Lara Ellis, spokesperson for eXp Realty, told Inman: "We are confident in our legal position, but cannot share details while we are in court." Realty One Group CEO Kuba Zhevgenev told Inman: "This is an evolving story. We will comment soon." Email Andrea V. Brambila. Like me on Facebook | Subscribe on Twitter.