HomeServices of America, the largest residential real estate brokerage in the United States and owned by Warren E. Buffett’s Berkshire Hathaway Energy, is now at the center of a national antitrust lawsuit with potential implications for the real estate supply structure nationwide.
On Monday, three home sellers who filed a cartel 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. The plaintiffs, who live in Florida, Missouri and Kansas, each sold a home in the past three years and paid 3 percent of the purchase price to their buyer’s agent as a commission.
The complaint alleges that in real estate, brokerages engaged in price fixing by following NAR rules and requiring home sellers to pay commission to their buyers’ agents.
With the bundle that comes from being part of Mr. Buffett’s multibillion-dollar empire, Berkshire Hathaway Energy is by far the biggest target of the lawsuit now.
And according to the lawsuit, the company played on Mr. Buffett’s reputation to attract customers and boost business. The lawsuit estimates that home sellers working with Berkshire Hathaway representatives were defrauded of $4.2 billion in 2023.
“Berkshire Hathaway has long touted the ‘Halo Effect.’ using the name and association with Warren Buffett to build customer trust; Berkshire Hathaway took advantage of this public trust by rebranding its HomeServices franchises using the name “Berkshire Hathaway HomeServices,”’ the complaint states.
Berkshire Hathaway spokespeople declined to comment.
The three home sellers are being represented by Michael Ketchmark, the same attorney who in October successfully argued that the National Association of Realtors and several major brokerages, including HomeServices and two affiliates, ran a price-fixing conspiracy against home sellers. A federal jury has ruled that the plaintiffs in that statewide case, all of whom live in Missouri, are owed $1.8 billion, and the case has sparked a series of similar lawsuits, which now number more than a dozen. They all target the NAR rule that requires a home seller to pay commissions to the agent representing the buyer.
The complaint, which notes that the U.S. Department of Justice is also investigating the residential real estate commission structure, accuses the defendants of “agreeing, combining and conspiring to impose and enforce an anticompetitive restriction requiring home sellers to pay the broker representing the buyer of their homes and to pay an inflated amount, in violation of federal antitrust laws.”
Representatives for NAR and the other brokerages named in the lawsuit were also not immediately available for comment.
Mr. Ketchmark, who has attacked and praised the real estate industry since his October court victory against NAR and real estate commissions, said that with this amended complaint, he hopes to draw attention to what he believes amounts to industry-wide collusion to exploit home sellers.
“Berkshire Hathaway is the leader of the pack. It’s much bigger than NAR,” he said in a telephone interview. “Money was not flowing to NAR from this conspiracy. The money flowed into Berkshire Hathaway’s corporate coffers. If you want to bring about change in corporate America, hit them in the pocket. And that’s exactly what it’s aiming for.”