The new CEO of Buffett's homeServices believes that buyers and sellers can deal with tariffs and changes
HomeServices of America's new CEO, Berkshire Hathaway HomeServices of America, said that concerns about tariffs impacting mortgage rates weigh on both home buyers and sellers but are unlikely to have a significant effect on sales of existing homes.
In a recent interview, Chris Kelly, the new owner of the largest residential real estate firm in the United States, said that when mortgage rates fluctuate because the economy is changing, buyers and sellers tend to be hesitant.
Higher borrowing costs contributed to a greater-than-expected 5.9% drop in March U.S. sales of existing homes, to a seasonally adjusted 4.02 million unit annual rate, with more weakness likely as tariffs fan fears of a recession.
Kelly stated that the high level of volatility in recent months has given buyers and sellers some pause. Kelly said that 4 million people are likely to move in the coming year.
HomeServices, a division of Berkshire Hathaway Energy (part of Warren Buffett’s conglomerate), owns or has franchised more than 2,200 offices of brokerage with 82,000 agents.
In 2024 it lost money, mostly due to its $250 million settlement of an antitrust lawsuit accusing the National Association of Realtors of inflating their commissions.
HomeServices is the last defendant in the landmark case to have settled, although Berkshire Hathaway Energy has related claims.
The settlement on brokerage commissions ended the practice where sellers would pay commissions to their agents (typically 5%-6%), who would then split them with buyer's agents.
Only agents could see the splits, which were communicated via private databases called multiple listing services. Sellers complained that this was a secretive process and that closing costs were inflated.
Clear Cooperation Policy of the NAR requires that agents list properties in their MLS within a day after marketing them to the public.
Critics say that it limits the ability of sellers to select marketing strategies. Supporters claim it increases transparency and equal access to listings.
Kelly explained that the battleground is now: What happens if more listings are exclusives or marketed in a more restricted way? From our perspective, most properties are better off with the broadest exposure, which is putting them in the MLS.
He said that "we always want to give the consumer a high level of clarity about the fee and commission structures."
HomeServices' appetite for buying brokerages, which was once very aggressive, has been curtailed. Kelly says that the company will focus on "tucking-ins" to brokerages who might not be able to compete with themselves.
He also noted that HomeServices had diverse revenue streams, including mortgages, insurance and title, citing the company's stake in Title Resources Group, a nationwide underwriter, which could cushion the blow if one segment fails.
Kelly, 49 years old, joined the HomeServices network in 2007, when he quit his private law firm to become ReeceNichols, a Kansas and Missouri-based ReeceNichols.
Later, he moved to the parent corporation. Kelly reports to Berkshire vice chairman Greg Abel who is expected succeed Buffett in the role of chief executive. (Reporting and editing by Deepababington in Omaha, Nebraska)
(source: Reuters)
