Broker commission settlements inch toward $1B

How HomeServices of America, NAR and brokerage deals stack up

HomeServices $250M Settlement Is A Bargain

HomeServices of America's Gino Blefari (Facebook, Getty)

Sheridan Wall

Apr 30, 2024, 7:00 AM

Settlement dollars are stacking up for the home sellers suing the nation’s largest brokerages and trade group.

HomeServices of America last week announced a $250 million deal to settle claims that it violated antitrust laws by conspiring with the National Association of Realtors to inflate agents’ commissions.

Until the agreement, the firm was the last defendant standing in the Missouri-based case known as Sitzer/Burnett. Others named in the case — including NAR, Anywhere Real Estate, Keller Williams and RE/MAX — previously agreed to settle for a combined $627 million.

HomeServices’ potential payout, which is pending court approval, would bring the total to about $877,000. That’s not including settlement agreements proposed in similar lawsuits around the country.

Other big names in brokerage, including Compass, @properties and Douglas Elliman, have entered into their own agreements with the plaintiffs, pushing the sum to more than $940 million.

But even that number isn’t as big as the $1.8 billion judgment handed down by the jury in the Sitzer/Burnett case. Under antitrust law, the judge could choose to treble the verdict, hiking the figure to more than $5 billion.

As the lone defendant, HomeServices could’ve been on the hook for all of it, if its efforts to contest the verdict didn’t pan out. The company would have requested the judge lower the damages in accordance with the other settlement deals, but that would likely only shave a few hundred thousand off, leaving the firm to contend with the rest.

Unlike NAR — which acknowledged potential bankruptcy if it continued to fight the lawsuits — HomeServices doesn’t appear strapped for cash considering the reserves of its parent company, Berkshire Hathaway. The company, headed by Warren Buffet, reported $160 billion cash on hand at the end of 2023.

HomeServices and its parent companies aren’t out of the woods just yet. The agreement only applies to lawsuits brought by home sellers, not home buyers, and it excludes Berkshire Hathaway Energy Company, which is named as a defendant in the lawsuit known as Gibson.

The industry is also under renewed antitrust scrutiny from the Department of Justice after a federal appellate court greenlit the agency to reopen its Trump-era probe into NAR. Though the trade group already agreed to major rule changes as part of its settlement, the DOJ could hand down additional regulations or seek its own legal action against NAR and other real estate players.

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