Antitrust Settlement: HomeServices of America Reaches $250 Million Agreement
In a groundbreaking development, HomeServices of America, Warren Buffett’s real estate brokerage, has reached a $250 million settlement over allegations of artificially high fees. This settlement marks the last major company to settle in a landmark antitrust case against the real estate industry.
Chris Kelly, executive vice president of HomeServices of America, emphasized that the settlement underscores their commitment to protecting their agents, employees, and franchisees from related lawsuits. Despite being confident in the legality and ethics of their business practices, the decision to settle was driven by a desire to eliminate the uncertainty brought by the protracted appellate and litigation process.
Benjamin D. Brown, managing partner at Cohen Milstein Sellers & Toll, stated that this significant settlement brings them closer to resolving the long-running case involving the industry-wide brokers’ commission scheme. The National Association of Realtors, HomeServices, and other major brokerages were sued in 2019 by groups of home sellers who alleged they were paying oversized fees to brokers and agents.
HomeServices, a subsidiary of Berkshire Hathaway Energy, paid the highest settlement amount in the industry to end suits over the commission structure. The $250 million settlement, although high, did not meet the expectations of some plaintiffs looking to tie the suit to Berkshire Hathaway Energy.
In a related development, the National Association of Realtors reached a $418 million settlement with home sellers over the next four years to resolve litigation on broker commissions and fees. This settlement also includes changes in the way homes are sold, with agents no longer required to give commissions to buyers’ agents.
Despite multiple settlements, legal troubles continue for the NAR, as the Department of Justice announced it was reopening its investigation into the association. Assistant Attorney General Jonathan Kanter emphasized the division’s commitment to lowering the cost of buying and selling a home. This ongoing investigation highlights the potential implications of the recent settlements on the real estate industry.
