LOS ANGELES — A real estate company owned by Warren Buffett’s Berkshire Hathaway has agreed to pay $250 million to settle lawsuits nationwide claiming that longstanding practices by real estate brokerages forced U.S. homeowners to pay artificially inflated broker commissions when they sold their homes.
“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,” the company said in a statement.HomeServices said its proposed settlement payout represents a current after-tax accounting charge of about $140 million, though it will have four years to pay the full amount.
“This is another significant settlement for American home sellers who have been saddled with paying billions in unnecessary commission costs," Benjamin Brown, managing partner at one of the law firms that represented plaintiffs in a case filed in Illinois, said in a statement.
The major brokerages that have reached proposed settlements in these cases have also agreed to change their business practices to ensure homebuyers and sellers can more easily understand how brokers and agents are compensated for their services, and that brokers and agents who represent homebuyers must disclose right away any offer of compensation by the broker representing a seller.
While many housing market watchers say it’s too soon to tell how the policy changes will affect home sales, they could lead to home sellers paying lower commissions for their broker's services. Buyers, in turn, may have to shoulder more upfront costs when they hire an agent to represent them. -- Politicians are desperate for developers in Vancouver to build more homes to alleviate pressure in one of the continent’s most expensive real estate markets.