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The Commission Lawsuits Are Coming for Real Estate Teams Too

Loan officers are familiar with early payoffs (EPOs) on mortgages, where the lender can claw-back commissions if a loan is paid off too soon. Well, something similar may start happening in real estate due to the commission lawsuits making their way across the country.

I previously discussed in a video how these lawsuits could lead to brokers clawing back commissions from agents if settlements have to be paid. However, a new lawsuit in Texas shows that big real estate teams are also being targeted now.

The lawsuit names large brokers like Keller Williams and Re/Max but also goes after real estate teams like The Loken Group and Hexagon Group. Even individual brokers like Mark Anthony Dimas are named.

The reason is simple – the lawyers behind these suits want money and will go after whoever they think has enough to make it worthwhile. It’s not about justice, it’s about squeezing as much money as possible out of the industry.

The lawsuit seeks class action status on behalf of home sellers in Texas who paid a buyer’s broker commission from November 2019 to now.

For us agents, the scary part is the idea that our past commissions may now be considered “ill-gotten gains” that need to be paid back. If brokers are forced to settle these suits, they may well come looking for their split of commissions already paid out.

Just like with EPOs, it probably won’t make financial sense to chase down individual agents. But that doesn’t mean brokers won’t try, especially for successful teams.

Beyond the financial implications, these suits also benefit the tech companies trying to disrupt real estate. Firms like Zillow and Opendoor would love nothing more than to see traditional brokerages crumble under the weight of legal settlements.

Unfortunately, while us agents and teams may not have been the original target, it looks like we may get caught in the crossfire. Stay tuned to see if these lawsuits gain traction across the country.