HomeServices of America, a real estate brokerage owned by Berkshire Hathaway Inc., reached a settlement agreement in a lawsuit taking aim at agent commissions industrywide.
The brokerage agreed to pay a total of $250 million over the course of four years in its settlement of the Missouri lawsuit, commonly referred to as Sitzer and Burnett, according to HomeServices of America Executive Vice President Chris Kelly. The company said the settlement, subject to court approval, will help protect its agents from related lawsuits.
“While we have always been confident in the legality and ethics of our business practices, the decision to settle was driven by a desire to eliminate the uncertainty brought by the protracted appellate and litigation process,” Kelly said in an emailed statement.
The real estate industry, including the National Association of Realtors, has come under scrutiny recently through multiple lawsuits that have taken aim at how commissions are structured. Last year, a Missouri jury found the Realtor group and others liable of colluding to keep real estate agent commissions high in a $1.8 billion verdict in the Sitzer and Burnett lawsuit.
The NAR agreed in March to settle litigation in the case, as well as other pending lawsuits. Other brokerages including Compass Inc. have also agreed to settlements.
“This resolution allows us to concentrate on our primary goal: delivering unparalleled value in the real estate market and serving homebuyers and sellers with the highest standards of service,” Kelly said.
The financial terms of the settlement are the sole obligation of HomeServices with no participation from its parent company. The New York Times and Wall Street Journal reported the settlement earlier.