HomeServices of America logo and the scales of justice
Illustration by Lanette Behiry/Real Estate News

HomeServices faces new buy-side commissions suit in Florida 

The filing comes just days after the company settled similar cases brought by sellers. The firm maintains its practices were “lawful and procompetitive.”

May 1, 2024
3 minutes

A new class action lawsuit filed this week against HomeServices of America claims that the industry's commissions practice inflated home prices and misled buyers.

HomeServices was dropped from a similar suit in Illinois in February — Batton 1 — due to a jurisdictional issue, a decision that led to this week's filing in Florida.

What HomeServices is saying: The company says this case is tantamount to double dipping because it already agreed last week to pay $250 million to settle lawsuits brought by sellers making similar claims. The new suit makes clear that buyers also want compensation.

"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," ​said HSoA Executive Vice President Chris Kelly.  

"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," Kelly added.

More details on the new case: The suit, filed April 29 in the U.S. District Court for the Southern District of Florida, claims the industry's longstanding commission practices violate antitrust laws and cause buyers to pay more than they should.

"For decades, home buyers across America have been unwittingly paying too much for, and receiving too little from, services offered to them by Defendants and other real estate agent members of National Association of Realtors," the suit alleges.

The named plaintiff in the action, James Lutz, bought a home in Key Colony, Florida, using a franchisee of HomeService of America as his agent. The suit seeks class action status to include buyers across the country who bought MLS listed homes since  December 1, 1996.

"Because of the scope and magnitude of the overcharges at issue here, the economic cost to the plaintiff classes and other consumers is enormous," the suit claims. "Experts have suggested that the amount of 'annual broker fees consumers might save if there was effective price competition is as much as $30 billion or more annually.'"

No free lunch: The filing also includes references to NAR's so-called "Free Service Rule" that previously allowed buy-side agents to represent their services as "free." 

"Despite agent representations (which NAR permits and encourages) that such services do not cost home buyers anything, home buyers in fact pay a hefty cost for these services — namely, supracompetitive commissions at levels fixed by the Defendants, NAR, and other real estate brokers, which in turn lead to higher home prices paid by buyers."

NAR updated its policy in 2022 to say that "MLS participants and subscribers must not represent that their brokerage services to a client or customer are free or available at no cost to clients, unless the participant or subscriber will receive no financial compensation from any source for those services."

Get the latest real estate news delivered to your inbox.