This past Saturday, Warren Buffett, co-founder, chairman and CEO of Berkshire Hathaway, and Greg Abel, CEO of Berkshire Hathaway Energy, gave their input on the latest commission lawsuit settlements across the industry, at Berkshire Hathaway’s annual shareholder meeting—including discussion regarding HomeServices of America’s announced $250 million settlement.
“There’s no question the industry will go through some transition because of that settlement—ours and every other major player in the industry settled. The National Association of REALTORS® settled for more than $400 million,” Abel explained. “So, effectively everybody was swept up in that settlement, and it did set the ground for both HomeServices and the industry to move forward.”
Despite new—and pending—rule changes regarding agent practice and seller commissions among national brokerages, Abel noted that “the real estate agent is still an important part of these transactions,” and while commission structure will surely experience some kind of impact, REALTORS® will continue to play important roles within the industry.
Abel also mentioned to shareholders that HomeServices “decided the ultimate settlement,” as previously reported by RISMedia, and they are obligated—and capable—to pay the full amount.
Buffett concluded that the system of commissions in the industry has “really worked out very well,” sharing his content based on data and figures, and he had “been involved to some degree in watching the whole system operate, and I know what our average agent makes. I know how long they work on things sometimes that don’t materialize.”
