Company accused of spreading misinformation about its services and NAR's anti-competitive policies
The National Association of Realtors has hit Austin-based brokerage REX-Real Estate Exchange with a lawsuit alleging that REX has made false and misleading advertisements and statements about its services.
NAR accused REX, a digital real estate platform that aims to make homebuying and home management more affordable, of deceiving consumers into avoiding the “pro-consumer, pro-competitive benefits” of multiple listing services (MLS).
The complaint comes a year after REX filed a federal antitrust complaint in Seattle against Zillow, Trulia, and NAR after its clients “complained about the second-class treatment that non-cartel homes were receiving.”
Read more: Realtors settle with DOJ over broker commissions
“We launched REX to put the consumer back in charge of real estate and transactions,” said REX chief executive Jack Ryan. “This case builds on the DOJ’s recent antitrust settlement with NAR/MLS that beat back some anti-competitive practices. We believe this litigation will define whether technology will serve and protect big brokers and the NAR cartel or whether it will make good on its promise of greater ease, service, transparency and lower commission fees for consumers.”
Now, NAR is suing the company back for falsely, it claims, advertising that home sellers can bypass commission fees, when, in reality, REX’s seller-clients may still have to pay commissions when a homebuyer is represented by an agent.
NAR also noted that REX claimed that its “innovative and superior technology” – which uses artificial intelligence and data analytics to identify the “perfect” buyer for a seller’s property – offers lower commission fees. However, REX admitted it relies on Zillow’s website to display its listings.
“Independent, local multiple listing services benefit competition and fair housing, and NAR will ensure consumers can make the choice to participate in local broker marketplaces, or not, with a full understanding of how they work,” said NAR president Leslie Rouda Smith.
“The truth is that if home buyers and sellers are deceived into avoiding multiple listing services, they would lose the services’ pro-consumer, pro-competitive benefits,” Smith added. “Sellers lose exposure to the largest available pool of buyers, and buyers lose access to the largest available pool of properties for sale. Our goal with this action is to protect consumers.”
Additionally, NAR said the brokerage had falsely advertised that NAR had enacted a series of anti-competitive policies – like making agent commissions non-negotiable to brokers who want to put their listings on the MLS – to prevent competitors from offering consumers lower transaction fees.
NAR said that its rules and MLS policies have always allowed listing brokers and their cooperating broker to negotiate on compensation at any time during the transaction.
NAR is seeking monetary damages and reimbursement of costs and attorneys’ fees, as well as an injunction preventing REX from continuing its allegedly misleading practices.
