Gary Keller and Marc King Testify in Sitzer/Burnett Commission Trial: Debunking the Myth of Standard Commissions
Gary Kelly – Keller Williams
In the ongoing Sitzer/Burnett buyer-broker commissions trial, the defense recently concluded much of its case, with key testimonies from Keller Williams (KW) Co-founder Gary Keller and President Marc King. Both leaders vehemently denied any conspiracy regarding commission rates, challenging the notion of a “standard 6% commission.” This article delves into the details of their testimonies and what it could mean for the real estate industry.
Gary Keller: The Mythical Animal of 6% Commission
Gary Keller took the stand to dispel the widely held belief in a standard 6% commission rate in real estate transactions. Under rigorous cross-examination, Keller maintained that the idea of a standard 6% commission is a “mythical animal.” He emphasized that Keller Williams does not impose any commission rates on its agents, thereby debunking the plaintiffs’ claims of a conspiracy to maintain such rates.
Personal Attacks and Collusion Theory
During the testimony, Keller expressed that he felt personally attacked by the plaintiffs’ attorney, Michael Ketchmark, rather than being questioned on the brokerage’s policies. He also clarified that he was unaware of any “collusion theory,” a topic that had been raised earlier in the trial by former KW industry analyst Michelle Figgs. Figgs had suggested that Keller believes in a collusion theory as an explanation for stable commissions, a claim that Keller firmly denied.
Marc King: No Company Mandate on Commissions
KW President Marc King also took the stand, echoing Gary Keller’s sentiments. King stated unequivocally that there is no company mandate dictating commission rates. His testimony reinforced the defense’s argument that commission rates are not standardized within Keller Williams, further weakening the plaintiffs’ case.
Upcoming Jury Deliberations
The trial is nearing its conclusion, with a short additional piece of testimony expected on Monday. Following this, both the plaintiffs and the defense will present their closing arguments. Depending on the duration of these arguments, jury deliberations could commence as early as Monday afternoon.
The testimonies from Gary Keller and Marc King have shed light on the complexities surrounding commission rates in the real estate industry. By challenging the notion of a standard 6% commission, they have opened up a broader discussion that could have far-reaching implications. As the trial moves into its final stages, all eyes will be on the jury’s deliberations, which could set a precedent for future cases involving commission rates.
- Gary Keller
- Marc King
- Sitzer/Burnett trial
- Keller Williams
- Commission rates
- Buyer-broker commissions
- Real estate industry
- Conspiracy
- Standard 6% commission
- Jury deliberations
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## Overview of Testimony
Gary Keller, the co-founder of Keller Williams, testified in the Sitzer/Burnett trial, a landmark lawsuit revolving around broker commissions:
- Denial of Standard Commission: Keller denied the existence of a "standard commission," stating agents set their own commissions.
- Company's Role in Commissions: He emphasized that Keller Williams does not dictate commission rates for its agents.
- On Being Questioned: Keller felt personally attacked during the cross-examination and stood firm on his testimony.
- On KW Events and Commissions: He clarified that presentations at KW events, including the KW Family Reunion, were not discussions on what to charge but were about the flow of money.
- Collusion Theory Rejection: Keller refuted claims suggesting he believed in a "collusion theory" for stable commission rates.
- Charitable Acts and Influence: The plaintiff's attorney criticized Keller for mentioning his charitable acts, suggesting it was an attempt to influence the jury.
- Response to Accusations: Keller objected to characterizations that implied real estate agents might scare sellers regarding commission reduction.
## Context of the Trial
- Class-Action Lawsuit: The trial is part of a class-action lawsuit involving the National Association of Realtors, Keller Williams, and HomeServices of America, with allegations of antitrust statute violations and inflating costs through commissions.
- Plaintiffs' Claims: The plaintiffs seek $1.78 billion in damages, representing overpayment in commissions across 265,297 home sale transactions.
## Additional Testimonies
- Marc King's Testimony: KW President Marc King also testified, echoing Keller's narrative that the company does not involve itself in setting or negotiating commissions.
- Gino Blefari's Deposition: In a training video presented during the deposition, Blefari discussed his practice of pre-writing a 6% commission into listing agreements and only negotiating if they go up, clarifying that it was not price-fixing but negotiation.
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