Keller Williams Elite Sued Over $650 Buyer Broker Fee

What happened

On Oct. 19, homebuyer Gregory A. Deivert sued Keller Williams Elite, the brokerage that represented him, over a $650 "broker fee" he paid when he bought a home in October 2023, Real Estate News reports. The complaint was filed in the Court of Common Pleas of Lancaster County, Pennsylvania. It alleges breach of fiduciary duty and violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law.

Deivert says the fee was charged "for nothing" and came on top of a 3% buyer broker commission paid by the seller. "The fee had no service behind it, no cost behind it, and no name that accurately describes it," the filing states. According to HousingWire, the complaint says the fee was first disclosed on the closing statement. By that point, it argues, a buyer won't refuse to close over $650.

The suit also alleges that KW Elite tells its agents to describe the fee to buyers as mandatory and as covering "paperwork" or other administrative work. The complaint pushes back on that: "Preparing those documents is not a service to the client that stands apart from brokerage; it is brokerage." It argues that Pennsylvania's Real Estate Licensing and Registration Act already requires brokers to sign written agreements, give required disclosures and keep transaction records. In the complaint's words, "A licensed broker cannot charge its client a separate fee for complying with the statute that licenses it."

Deivert wants a jury trial and is seeking:

• class-action status for KW Elite buyer clients who paid a flat fee on top of a commission paid by the seller or the seller's broker
• damages and disgorgement of the fees
• a permanent injunction against the fee

KW Elite did not return HousingWire's request for comment.

Why it matters for agents

The complaint points beyond one office. It alleges that Keller Williams market centers nationwide charge similar fees under other names, including a $499 "Additional Broker Commission," a $395 "Compliance Fee" and a $595 "Selling Agent Broker Fee."

There's a pattern of similar cases. In June, Florida buyers sued Compass over a $475 transaction fee. Real Estate News reports that case was dismissed without prejudice in August, and HousingWire says the plaintiffs dismissed it voluntarily. A Consumer Policy Center report says these fees are common but often not clearly disclosed. HousingWire notes that, according to some reports, including the Consumer Policy Center's, consumers pay up to $2 billion a year in brokerage transaction fees.

If your brokerage charges a flat fee, look at when buyers first hear about it and how it's described. When the Compass suit surfaced, a NAR spokesperson said members must act in clients' best interests. The spokesperson said that includes "explaining and disclosing all contracts related to the transaction in clear and understandable language and avoiding the misrepresentation of pertinent facts."