Cohen Milstein Sellers & Toll PLLC
04/26/2024 | Press release | Distributed by Public on 04/26/2024 09:24
Home Sellers Reach $250M Settlement with HomeServices of America
April 26, 2024
Settlements now total more than $943.25 million.
WASHINGTON, DC- Home sellers have reached a $250 million settlement with HomeServices of America and certain of its subsidiaries, including Long & Foster Companies, Inc., BHH Affiliates, LLC, and HSF Affiliates, LLC, resolving class action claims against one of the nation's largest residential real estate services companies. Home sellers alleged that the National Association of Realtors (NAR) conspired with HomeServices America and several of the nation's largest residential real estate brokerage companies to illegally require home sellers to pay buyer broker fees - at an inflated rate - in addition to their own brokers' commissions.
On October 31, 2023, a jury in Missouri found HomeServices of America, NAR, and Keller Williams liable for conspiring to inflate such commissions and for nearly $1.8 billion in damages. This settlement resolves those claims against HomeServices of America. However, it does not release Berkshire Hathaway Energy Company (BHE) or BHE's or HomeServices of America's direct or indirect parents or their officers, directors, and employees from such claims or liabilities.
This settlement is in addition to the $418 million settlement reached with NAR on March 15, 2024, and more than 275.25 million in other settlements reached with Anywhere Real Estate, RE/MAX, and Keller Williams in 2023 and Compass and Real Brokerage Inc. in 2024, bring total settlements, pending court approval, to more than $943.25 million.
"This is another significant settlement for American home sellers who have been saddled with paying billions in unnecessary commission costs. This brings us a step closer to resolving this long-running case involving the industry-wide brokers' commission scheme," said Benjamin D. Brown, managing partner of Cohen Milstein Sellers & Toll and co-chair of its Antitrust practice.
In its $418 million settlement against NAR this past March, plaintiffs also achieved extensive industry reforms that will increase transparency and fairness regarding buyer broker commissions, while eliminating requirements that sellers must offer on multiple listing services to pay the commissions of brokers representing the buyers they are negotiating against.
"These settlements will return hundreds of millions of dollars to home sellers and empower both sellers and buyers in the real estate negotiation process." said Robert A. Braun, a partner in Cohen Milstein's Antitrust practice. "This is one of the most important transactions in a person's lifetime. Confidence in the process is critical."
Moehrl, et al. v. National Association of Realtor (N.D. Ill.) was the first-filed case in 2019, and centers on NAR's adoption of a mandatory rule, which required a blanket, largely non-negotiable offer of compensation to the buyer broker when listing a property on a multiple listing service (MLS), which are online platforms that real estate brokers and agents use to share listings. The vast majority of MLSs are affiliated with NAR and required to follow NAR rules.
The case, which was subsequently followed by the filing of Burnett, et al. v. National Association of Realtors, et al. (W.D. Mo.), alleged that those rules incentivize buyer brokers to avoid showing their clients homes where the seller offers a lower commission. This results in sellers offering high and mostly uniform commissions in order to avoid broker steering.
Despite the shrinking role of buyer brokers over the years - caused by advances in technology, including the internet and public access to listings - buyer brokers' commissions have remained artificially inflated. On average, home sellers overpay such commissions by thousands of dollars on any given transaction.
Burnett was the first of the two cases to go to trial, resulting in the $1.8 billion jury trial verdict in October 2023. Umpa v. National Association of Realtors, et al. (W.D. Mo.) and Gibson, et al. v.National Association of Realtors, et al. (W.D. Mo.) were filed later in 2023. The ongoing settlement process addresses and resolves claims in all four of the class actions.
Plaintiffs are represented by Cohen Milstein Sellers & Toll, Susman Godfrey, and Hagens Berman Sobol Shapiro in Moehrl, et al. v. National Association of Realtor, et al. (N.D. Ill.) and Umpa v. National Association of Realtors, et al. (W.D. Mo.); and Boulware Law LLC, Ketchmark & McCreight PC, and Williams Dirks Dameron LLC in Burnett, et al. v. National Association of Realtors, et al. (W.D. Mo.) and Gibson, et al. v. National Association of Realtors, et al. (W.D. Mo.)
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Cohen Milstein Sellers & Toll PLLC, a premier U.S. plaintiffs' law firm, with over 100 attorneys across eight offices, champions the causes of real people - workers, consumers, small business owners, investors, and whistleblowers - working to deliver corporate reforms and fair markets for the common good.
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