Achi news desk-
HomeServices of America, the largest residential real estate brokerage in the United States and owned by Berkshire Hathaway Energy Warren E. Buffett, has agreed to settle a series of lawsuits that could change the way commissions are paid to real estate agents.
On Thursday, the brokerage approved adding $250 million to the growing 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 a HomeServices settlement since March 15, when NAR, an influential trade group with 1.5 million members, agreed to settle lawsuits that alleged the group violated antitrust laws and conspired to fix the rates. which real estate agents raise. clients. That settlement received preliminary approval from a federal judge on Tuesday, and now NAR will pay $418 million in damages and significantly change its rules on agent commissions and the databases, which are only accessible by those who n hold membership in NAR subgroups, where homes are listed for sale. NAR argued in court that it had never operated a conspiracy around commissions, and continues to say that the estate agents’ claims that the organization’s rules effectively set commission rates are unfounded.
The settlement will introduce competition to the market for real estate commissions, lowering the fees consumers are required to pay when selling a home and ultimately lowering overall home prices as a result, some industry analysts said.
For more than a century, NAR has been an unstoppable 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 real estate agents who argued they had been forced to pay their real estate agents exorbitant fees. That judgment included an order for at least $1.8 billion in damages. US antitrust law allows plaintiffs to seek treble damages, meaning that amount could 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.
But NAR wasn’t the only entity named in the lawsuits. Anywhere Real Estate, RE/MAX and Keller Williams all worked out their own settlement deals, for a total of $208.5 million, before NAR entered into its agreement. A number of additional plaintiffs have also settled, in several deals that have not been publicly disclosed, the plaintiffs’ attorneys said. With Thursday’s settlement agreement, the total damages now to be awarded in commission lawsuits in the United States have passed the $1 billion mark.
Michael Ketchmark, the lawyer on the Missouri case who has been leading the settlement talks, praised the deal but said he plans to continue pursuing legal claims against HomeServices’ parent company, Berkshire Hathaway Energy, which has carved out a path in the language of the settlement.
“The long-standing mandatory damages rule is finally dead,” he said in a text message. “A jury of ordinary Missourians spoke, and the industry heard their voice. This settlement allows us to continue to move forward with our national case against Berkshire Hathaway Energy and a handful of large corporate brokers.”
HomeServices was the last brokerage named as a defendant in the Missouri case and still vowed to fight the claims, and in a motion filed March 18, attorneys for the plaintiffs asked it to pay $4.7 billion — triple the damages awarded, less the settlement amounts from NAR and the other brokerages.
“The decision to settle was driven by a desire to remove the uncertainty brought about by the lengthy appeal and litigation process. This decision allows us to focus on our primary goal: providing unmatched value in the real estate market and serving home buyers and sellers with the highest standards of service,” said Chris Kelly, executive vice president of HomeServices, in a email statement. The settlement added, “It will protect our nearly 70,000 agents, 51 brands and over 300 franchisees and licensees from related lawsuits. The financial terms of the settlement represent a full commitment by Home Services, independent of any parent entity involvement, to effectively end our involvement in the antitrust litigation.”
The deal, which is still subject to court approval, does not close the door on Mr Buffett’s legal troubles within the real estate industry. HomeServices’ parent company, Berkshire Hathaway Energy, remains embroiled in a separate, and potentially more sweeping, lawsuit over real estate commissions.
Last month, three home sellers who filed a nationwide antitrust lawsuit in October amended their complaint to add Berkshire Hathaway Energy, the unit that controls HomeServices of America, to its lineup of defendants that includes Compass, eXp World Holdings, Douglas Elliman and Redfin. Compass settled for nearly $58 million last month, but the other brokerages have yet to budge.
And as part of the multi-billion dollar empire of Mr. Buffett’s Berkshire Hathaway Energy is by far the biggest target.
The suit claims that Berkshire Hathaway Energy played on the reputation of Mr. Buffett to attract customers and boost business, and claims that real estate agents working with Berkshire Hathaway representatives were defrauded of as much as $4.2 billion in 2023.
NAR’s legal battles aren’t resolved, either. This month, a three-judge panel of the US District of Columbia Court of Appeals ruled that the Justice Department can reopen an antitrust investigation into the powerful group, presenting an opportunity for the government to scrutinize NAR’s agent compensation rules. long enforcement over the industry.
With the many settlements, “there’s an implicit recognition that these were not pro-consumer rules,” said Randy Airst, chief executive of real estate analytics firm Exceedant.
Because HomeServices was part of Mr. Buffett’s empire, it did not face the same financial constraints as the other brokerages involved in the lawsuits, Mr. Airst said, so it was not under the same pressure to settle. The agreement, he added, points to a change in public sentiment over commissions.
“We live in a different world now,” he said.
Adblock Test (Why?)
Source link
The post Real Estate Brokerage Warren Buffett Agrees to $250 Million Settlement – The New York Times appeared first on Canada News Media.
