HomeServices of America, a subsidiary of Warren Buffett’s Berkshire Hathaway, is now embroiled in a new proposed class-action lawsuit filed in Miami federal court. This lawsuit accuses the real estate brokerage of engaging in practices that allegedly inflate the cost of buying homes in the United States. This legal challenge comes shortly after the company agreed to settle nationwide claims from home sellers with a $250 million payment.

The lawsuit, filed on behalf of home buyers, asserts that the typical commission structure, which can be as high as 6% of a home’s selling price split between the buyer's and seller's agents, artificially raises the price of homes. This structure is tied to the inclusion of homes in the "multiple listing service" (MLS), a database where most U.S. homes are listed for sale. According to the complaint, U.S. home sellers are compelled to pay for the services of a buyer’s agent to have their homes included in the MLS, a requirement purportedly exploited by HomeServices and other brokerages to manipulate commission costs.

The plaintiffs argue that this commission rule incentivizes agents to direct clients towards homes offering higher commissions, thereby keeping home prices artificially high. This practice, they claim, is part of an antitrust conspiracy involving not only HomeServices but also other major U.S. real estate brokerages and the National Association of Realtors (NAR). In March, NAR agreed to pay $418 million and implement changes in the way Americans buy and sell homes as part of a settlement regarding similar allegations.

The allegations suggest that the company, in collusion with other major brokerages and the National Association of Realtors (NAR), engaged in practices that violated several key provisions of U.S. antitrust law. These laws are designed to promote competition and protect consumers from monopolistic practices.

The primary U.S. antitrust law, the Sherman Act, prohibits monopolies and any attempt to monopolize any part of trade or commerce in the United States. The lawsuit implies that HomeServices of America and its alleged conspirators may have engaged in practices that restricted competition within the real estate market, particularly in how commissions are structured and enforced through the MLS system.

Furthermore, the Clayton Antitrust Act addresses specific practices that the Sherman Act does not clearly prohibit, such as mergers and acquisitions that may substantially lessen competition. The real estate brokers’ collective setting of commission rates and conditions for entry into the MLS might be viewed as exclusionary practices that could potentially lessen competition by favoring certain brokers over others.

The lawsuit alleges that HomeServices and other defendants manipulated the MLS listing process to enforce a uniform commission structure, which effectively sets a standard price floor for broker commissions. By requiring home sellers to pay the commissions of buyers’ agents, the lawsuit argues, the industry has created a system where there is little incentive for agents to lower their fees, thus maintaining high overall costs for consumers in the real estate market.

Furthermore, the plaintiffs claim that this arrangement incentivizes real estate agents to steer clients towards homes that offer higher commissions rather than homes that best meet the client's needs, further distorting market competition. This steering could potentially restrict the free flow of market information and limit consumer choice—both key elements in ensuring a competitive marketplace.

If these allegations are proven, the practices could be considered a form of price fixing, where brokerages collude to keep commission rates high, effectively imposing unfair costs on sellers and buyers. Such behavior would be antithetical to antitrust laws, which aim to foster an environment where competition can thrive without artificial price inflation or collusion among market leaders.

This lawsuit, therefore, not only seeks damages for the alleged overcharges but also calls for a broader examination and potential restructuring of how real estate brokerage services are marketed and sold in the U.S. It underscores the need for regulatory scrutiny to ensure that the real estate market remains open and competitive, free from anti-competitive practices that could harm consumers.

The lawsuit seeks damages of at least $5 million for what is estimated to be a class of thousands of affected home buyers. Despite these significant legal challenges, HomeServices has not yet commented on the new lawsuit. Previously, the company has denied any wrongdoing linked to these allegations. Additionally, HomeServices was recently dismissed from a related lawsuit in Chicago federal court due to insufficient ties to Illinois, though the broader legal battle continues in multiple jurisdictions.

The case is filed under James Lutz v. HomeServices of America Inc. et al. in the U.S. District Court for the Southern District of Florida.