News

Check out market updates

New homebuyer commission lawsuit takes aim at HomeServices

Less than a week after HomeServices of America  settled the home seller commission lawsuits for $250 million, the firm again finds itself in the crosshairs of antitrust litigation.

On Monday, homebuyer James Lutz filed a class-action antitrust lawsuit in a U.S. district court in Florida, accusing HomeServices and its subsidiaries, BHH Affiliates and HSF Affiliates, of conspiring to artificially inflate real estate agent commissions.

Lutz, a resident of Colorado, purchased a home in Key Colony, Florida, in 2021 with the help of a buyer’s agent employed by a HomeServices of America franchise. Lutz is being represented in the suit by Randall P. Ewing Jr., from Korein Tillery LLC in Chicago, who is one of the lead attorneys on the Batton homebuyer commission lawsuits.

HomeServices of America was dismissed from the original Batton suit earlier this year.

While this lawsuit is different from the vast majority of the other commission lawsuits in that it was filed by a homebuyer and not a seller, the premise of the suit is the same. In the complaint, the plaintiff alleges that the National Association of Realtors‘ (NAR) “Participation Rule,“ which requires listing brokers to make a blanket offer of compensation to the buyer’s broker in order to list a property on the MLS, has driven up commission costs. Lutz’s attorneys wrote that this has “led to higher home prices paid by buyers.”

“These rules, which include a requirement that sellers set aside a portion of the purchase price for buyer-agent commissions, prohibitions on modifying the commission, and permission to filter listings by commission, all enable NAR and its members to maintain buyer agent commissions at supracompetitive levels unrelated to brokers’ experience or the services provided, steer home buyers away from lower commission homes, and drive out discounters — among other harms,” the complaint states.

While only HomeServices is listed as a defendant, AnywhereKeller Williams, RE/MAX,  CompasseXp World HoldingsRedfin, Weichert Realtors, United Real EstateHoward Hanna and Douglas Elliman are listed as co-conspirators.

The class for the suit is nationwide and encompasses all persons who purchased a home in the U.S. that was listed on a NAR-affiliated MLS between Dec. 1, 1996, and the present.

Lutz is demanding a jury trial and is seeking damages and permanent injunction “to permanently enjoin and restrain Defendants from establishing the same or similar rules, policies, or practices as those challenged in this action in the future,” the complaint states.

While HomeServices of America, as well as many of the brokerage firms listed as co-conspirators, have reached nationwide settlement agreements for the commission lawsuits, the agreements only pertain to the claims brought by sellers, not buyers, such as those in this suit or the two Batton lawsuits.

“While we are just beginning to analyze this buyer antitrust case that was filed immediately on the heels of our settlement of the Burnett action, we maintain our position that HomeServices’ conduct and business practices were at all times lawful and procompetitive,” Chris Kelly, an executive vice president at HomeServices, wrote in an email. “We also note that Plaintiffs’ theory of damages in this follow-on lawsuit is directly at odds with the damages theory accepted by the jury in the Burnett case and could potentially result in a duplicative recovery that would be unfair, unjust, and violative of HomeServices’ rights. “

Leave a Reply