In the Wake of Its Historic Settlement, HomeServices Issues Comprehensive Guidance to Agents on Rule Changes


In the wake of HomeServices of America’s $250 million historic class-action, commission-focused settlement, leadership within the national brokerage has provided affiliated operating companies and agents with an extensive breakdown of what comes next for them regarding rule changes and overall impact on transactions for sellers moving forward—something that seemingly hasn’t yet been done to this degree across the industry.

While HomeServices of America (HomeServices) has agreed to make changes to policies around commissions and disclosures, the company admitted no wrong doing as part of the settlement. The amount is being paid solely by HomeServices of America, and there will be no required contributions from parent entities or franchisees.

The various pieces of collateral distributed to agents May 3 consisted of a personal letter from HomeServices President and CEO Gino Blefari, a settlement guide and a comprehensive set of FAQ’s (frequently asked questions).

Here is the letter from Blefari to franchisees and agents as part of its new guidance package:

In an exchange with RISMedia, Chris Kelly, HomeServices executive vice president, also commented: 

“We’ve told all our people, you’re going to have to be comfortable being uncomfortable for several months as some of these new policies go into effect, because we as an industry are just going to have to learn to adapt. And we’ll work through them,” he said.

From the guidance FAQ section, a few questions included: 

“Why did HomeServices elect to settle this case?

While we had strong confidence in the robustness of our appeal and can confidently state that at no time did HomeServices ever engage in any of the conduct alleged in these cases, we were also acutely aware of the lengthy and unpredictable nature of the appellate process and numerous copycat cases that have been filed. During this period, our agents and franchisees would have faced ongoing uncertainty. Our decision to settle was made after thorough deliberation, prioritizing the immediate and future welfare of our agents, franchisees, and the business models upon which they rely. This settlement brings stability and relief, enabling us to refocus on our core mission without further distractions.

Is HomeServices admitting wrongdoing as part of the settlement?

No. In the settlement agreement, HomeServices expressly maintains that neither its companies, agents nor franchisees engaged in any of the activities alleged in the lawsuits.

Why is HomeServices’ settlement amount higher than some of the other defendants?

Settlement amounts with the plaintiffs were solely determined on a financial ability to pay analysis and not reflective of any culpability or liability.”

Settlement guide

The settlement guide provided agents a better understanding of key timeframes, for example, how the settlement still awaits preliminary and final court approval (final approval was granted Thursday), financial settlement terms and the impact of the newly implemented business plans to help ensure a smooth transition forward for agents. Final approval was granted Thursday in some of the big brokerage settlements, namely RE/MAX, Anywhere and Keller Williams, but has not been approved for HomeServices yet.

Some new rule practices explained in the guidance package:

Business practice: “HomeServices will not require its company-owned brokerages, affiliated agents or sellers to make offers of compensation or require buyer representatives to accept offers of compensation.

Impact: HomeServices strongly supports providing consumers

with information and data allowing them to make educated decisions and choices in a real estate transaction,including decisions around offers of compensation. HomeServices believes there are economic benefits to both sellers and buyers when offers of compensation are part of a transaction but always subject to the sellers’

informed consent. Nothing in HomeServices’ settlement and the one entered by NAR prohibit a seller from making an offer of compensation outside the MLS.

Business Practice: HomeServices’ company-owned brokerages and affiliated agents must make clear to sellers and buyers that commissions are not set by law and are subject to negotiation.

Impact: To the extent mandated state and local forms do not already contain these explicit provisions, HomeServices’ company-owned brokerages will create and furnish such forms for use by their affiliated agents.”

Kelly also noted that when it comes to any big brokerage settling, agents often seek the utmost transparency—which HomeServices said it will provide in a new time of uncertainty, they said, as the company anticipates positive change, despite a new buyer-brought, copycat suit, as lawyers behind the largest buyer suit (known as Batton) re-filed their accusations in a new federal district court in Florida.

“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,” explained 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.”

This is a developing story, stay tuned to RISMedia for ongoing updates to lawsuit-related coverage. 





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