HomeServices America, the Fourth-Largest Real Estate Brokerage in the U.S.
Reported a Loss of $170 Million Last Year
Housing Market Slows Amid Rising Home Prices and Mortgage Rates
Berkshire Hathaway, led by Warren Buffett, is reportedly negotiating to sell its real estate brokerage firm 'HomeServices America' to Compass, the industry leader, according to an anonymous source cited by the U.S. Wall Street Journal (WSJ) on the 13th (local time).
Berkshire acquired HomeServices America, a subsidiary of the energy company 'Iowa Utilities,' when it purchased the company in 2000 and has retained it since. HomeServices America is the fourth-largest real estate brokerage firm in the U.S., with approximately 820 brokerage offices and 270 franchises as of last year. Sources said the deal could be finalized soon, but the acquisition price has not yet been determined.
The WSJ noted that this deal comes amid a slowdown in the housing market caused by rising home prices and mortgage rates, which has put pressure on real estate brokerages. Last year, home sales hit their lowest level for two consecutive years since 1995.
According to Berkshire's annual report, HomeServices America recorded a loss of $170 million last year, mostly due to litigation-related costs.
In 2023, four major real estate brokerages agreed to pay hundreds of millions of dollars to settle lawsuits related to fee collusion, with HomeServices America agreeing to pay $250 million at that time.
The WSJ also highlighted that Berkshire rarely sells companies, citing recent disposals such as the sale of a workers' compensation insurance company in 2019 and the disposal of its newspaper business in 2020.
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