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Berkshire unit added to lawsuit over inflated real estate commissions
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Berkshire unit added to lawsuit over inflated real estate commissions
Mar 4, 2024 10:40 PM

NEW YORK, March 4 (Reuters) - A unit of Warren Buffett'sBerkshire Hathaway ( BRK/A ) was added on Monday to a lawsuitaccusing the National Association of Realtors and severalbrokerages of conspiring to keep real estate commissionsartificially high nationwide.

The complaint filed in a Kansas City, Missouri federal courtadds Berkshire Hathaway Energy as a defendant, joining Compass, Douglas Elliman ( DOUG ), eXp World Holdings ( EXPI ),Redfin, United Real Estate and Weichert Realtors.

Berkshire Hathaway Energy owns HomeServices of America, inaddition to a variety of assets including utilities, pipelinesand renewable energy projects.

HomeServices was among the defendants ordered last Octoberby a Kansas City jury to pay $1.78 billion, which a judge couldtriple, in a similar antitrust lawsuit covering Missouri agents.

Monday's complaint will not affect that verdict, whichHomeServices plans to appeal, but could increase Berkshire'sfinancial exposure from similar litigation.

Berkshire Hathaway ( BRK/A ) owns 92% of Berkshire Hathaway Energy,and has the deepest pockets among the defendants, having ended2023 with $167.6 billion of cash and equivalents.

According to the complaint, Berkshire Hathaway Energy isliable for HomeServices' conduct by "supporting and encouragingthe anticompetitive nature of its agents' activities" and"accepting the ill-gotten gains of the conspiracy."

Berkshire Hathaway Energy did not immediately respond to arequest for comment after business hours.

The lawsuit is among several challenging a longstandingindustry practice of having home sellers pay the combined 5% to6% commissions for their own agents and for buyers' agents.

Critics say commissions should be lower, and sellers shouldbe able to list homes on various databases without payingbuyers' agents.

Real estate generated $4.32 billion of operating revenue forBerkshire in 2023. Overall revenue for the Omaha, Nebraska-basedconglomerate totaled $364.5 billion.

The case is Gibson et al v National Association of Realtorset al, U.S. District Court, Western District of Missouri, No.23-00788.

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