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Warren Buffett’s real estate brokerage agrees to $250m settlement
Anywhere Real Estate, RE/Max, and Keller Williams reached their own deals, for a total of $208.5 million.
HomeServices of America, the largest residential real estate brokerage in the United States and owned by Warren Buffett’s Berkshire Hathaway Energy, has agreed to settle a series of lawsuits that could change the way commissions are paid to real estate agents.
On Thursday, the brokerage signed off on adding $250 million to the mounting pile of damages won by home sellers who have successfully sued several brokerages and the National Association of Realtors over what they described as inflated commissions. The New York Times obtained a copy of the signed agreement.
Industry insiders have been anticipating the HomeServices settlement since March 15, when NAR, an influential trade group with 1.5 million members, agreed to settle the lawsuits that claimed the group had violated antitrust laws and had conspired to fix the rates that real estate agents charge their clients. That settlement received preliminary approval from a federal judge Tuesday, and now NAR will pay $418 million in damages and significantly change its rules on agent commissions and the databases, accessible only by those who hold membership to NAR subsidiary groups, where homes are listed for sale.
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NAR argued in court that it never operated a conspiracy around commissions, and continues to say that the home sellers’ allegations that the organization’s rules effectively set commission rates are unfounded.
The settlement will introduce competition to the market for real estate commissions, driving down the fees that consumers are required to pay when selling a home and eventually lowering home prices across the board as a result, some industry analysts say.
For more than a century, NAR has been an indomitable force in the real estate industry. But the group had been under pressure to settle legal claims since October, when a jury in Missouri sided with a group of home sellers who argued they had been forced to pay their real estate agents exorbitant fees. That verdict included an order for damages of at least $1.8 billion. U.S. antitrust law allows plaintiffs to seek treble damages, which means that amount potentially stood to be tripled to $5.4 billion. More than a dozen additional claims from home sellers across the country have also been filed against the group.
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But NAR was not the only entity named in the lawsuits. Anywhere Real Estate, RE/Max and Keller Williams hatched their own settlement deals, for a total of $208.5 million, before NAR inked its agreement.
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