Berkshire unit, others sued in latest case over real estate commissions

Anywhere Real Estate

05/12/2023 16:47

By Mike Scarcella
       Dec 5 (Reuters) - A group of Pittsburgh area home
sellers on Monday sued local affiliates of Warren Buffett's
Berkshire Hathaway and Anywhere Real Estate subsidiaries
Sotheby's and Coldwell Banker for allegedly conspiring to
artificially inflate home-sale commissions.
    The prospective antitrust class action from a group of home
sellers was filed in Pittsburgh federal court against brokerages
including Everest Consulting Group LP, which is an affiliate of
Berkshire Hathaway's  BRKa.N  HomeServices, and several area
real estate brokerages.
    The plaintiffs claim they were overcharged on commissions
that sellers pay to a buyer's agent as part of a residential
home sale. 
    Representatives from Anywhere and HomeServices on Tuesday
did not immediately respond to requests for comment.
    U.S. sellers can pay 5% to 6% in commissions, or more, to
brokers representing buyers under the residential real estate
industry's "buyer broker" rule.
    Critics of the practice contend buyer-brokers can steer
clients to homes with promises of higher commissions.
    The commission rule was at the heart of an Oct. 31 jury
verdict in Kansas City, Missouri, federal court that awarded a
class of home sellers nearly $1.8 billion in damages for alleged
overcharges in commissions.
    HomeServices and other defendants in that case, including
the National Association of Realtors, have vowed to challenge
the damages amount and also appeal the verdict.
    The realtors association was not named as a defendant in the
new case in Pittsburgh. The organization has defended the broker
commission practice as ensuring "efficient, transparent and
equitable marketplaces."
    Attorneys representing the Pittsburgh plaintiffs from law
firm Obermayer Rebmann Maxwell & Hippel did not immediately
respond to a request for comment.
    The new lawsuit also named as a defendant West Penn
Multi-List Inc, which runs an online listing service where homes
are shown for sale and sellers indicate the commission for the
buyer's broker.
    The complaint alleged the defendants' "conduct unlawfully
restrains trade and competition, harms home sellers in the form
of inflating the cost of selling a house." It seeks triple
damages under U.S. antitrust law and other penalties.
    Other lawsuits filed in federal courts in Manhattan, Texas
and elsewhere in recent weeks after the Kansas City verdict also
allege conspiracies over broker commissions.
    Madison, New Jersey-based Anywhere in October agreed to pay
$83.5 million to resolve antitrust allegations in a pair of real
estate cases in federal courts in Illinois and Missouri.
    The company did not admit any liability as part of the
resolutions, which are subject to a court's final approval.
    
    The case is Spring Way Center LLC et al v. West Penn
Multi-List Inc et al, U.S. District Court for the Western
District of Pennsylvania, No. 2:23-cv-02061-CCW.
    For plaintiffs: Bruce Fox and Hugh McKeegan of Obermayer
Rebmann Maxwell & Hippel
    For defendants: No appearances yet
    
    Read more:
    Texas home sellers sue over inflated broker commissions
    Manhattan real estate brokerages are sued for inflating
commissions
    Real estate commission defendant Keller Williams turns to
lawyer Paul Clement for antitrust appeal
    US jury finds realtors liable for inflating commissions,
awards $1.78 bln damages

 (Reporting by Mike Scarcella)
 ((Mike.Scarcella@thomsonreuters.com;))