The National Association of Realtors has counter-sued REX-Real Estate Exchange Inc., claiming the online brokerage has made false and misleading advertisements and statements about its services to mislead consumers.
NAR’s lawsuit was filed as part of ongoing litigation between NAR and REX in the U.S. District Court for the Western District of Washington in Seattle. NAR seeks damages, an injunction restraining REX from continuing its false and deceptive practices, and reimbursement of costs and attorneys’ fees.
NAR’s lawsuit follows an antitrust lawsuit filed by REX in March 2021 against NAR, Zillow and Trulia. REX said at the time that its lawsuit was filed on behalf of its US clients and consumers concerned about competition and transparency in real estate.
In a statement released when the antitrust lawsuit was filed last year, REX CEO Jack Ryan said his company believes “this litigation will define whether the technology will serve and protect the big brokers and the NAR Cartel, or whether it will deliver on its promise of greater convenience, service, transparency and lower commission costs for consumers.”
In its countersuit last week, NAR claims that REX’s false and misleading advertisements have the effect of discouraging consumers from obtaining “the pro-consumer and pro-competitive benefits provided by NAR members” and service markets. independent and multi-list local.
“NAR will oppose attempts to mislead consumers, including attempts to mislead consumers about buying or selling a home in general or about services or the cost of using real estate agents, most of whom are small business owners,” said NAR President Leslie Rouda Smith. “Local and independent multiple listing services benefit competition and fair housing, and NAR will ensure that consumers can make the choice whether or not to participate in local brokerage markets, with a full understanding of how they operate.”
Smith added: “The truth is that if home buyers and sellers are tricked into avoiding multiple listing services, they would lose the pro-consumer and pro-competitive benefits of the services. Sellers lose exposure to the largest pool of available buyers, and buyers lose access to the largest pool of properties for sale. Our goal with this action is to protect consumers.”
NAR’s complaint states that REX misleads consumers by:
- False advertising that sellers will receive higher proceeds because in a REX transaction sellers do not pay commissions to the buyer’s broker.
NAR states in the lawsuit that REX admitted that, as is customary in the industry, when a homebuyer is represented by an agent, sellers-clients of REX may pay buyer-agent commissions.
- Falsely claiming that he has developed innovative and superior technology that can proactively identify the “perfect” buyer for a seller’s property using artificial intelligence and data analytics, allowing him to offer lower commissions.
NAR says REX has admitted that he relies on the Zillow website to display his listings and that he believes he needs access to aggregators like Zillow to compete effectively. NAR says this means that the viability of REX’s business depends on its ability to access and use proprietary technology that has been built by Zillow on the exact terms that REX wants.
- False advertising that NAR has adopted a series of anti-competitive policies – including making agent commissions non-negotiable for brokers who wish to put their listings on the MLS – to prevent competitors from offering consumers lower transaction fees.
NAR states that its multiple listing service rules and policies have always permitted trading between the listing broker and a cooperating broker at any time during the transaction. NAR said its rules expressly allow the listing broker and the cooperating broker to enter into an agreement to change the cooperative compensation, and this can happen before a property is shown, after a viewing or even after an agreement is accepted. an offer.
Michael Toth, senior vice president and general counsel at REX, said the NAR countersuit is standard operating procedure (SOP) for NAR.
“We’ve seen this playbook before,” Toth wrote. “NAR’s SOP when called upon to limit competition and consumer choice is to try to create a false narrative. NAR has not filed a new lawsuit against REX, it has filed a counterclaim without foundation in our lawsuit against Zillow and NAR’s collusion to prevent consumers from having digital access to all homes for sale.”
Toth continued, “NAR did the same thing last fall regarding the US Department of Justice. NAR claimed it was suing the DOJ, when in fact NAR was simply trying to overturn a legitimate subpoena. in NAR’s anti-competitive practices, and he did the same in our case when he misrepresented the prior consent decrees with the DOJ, which resulted in the Department of Justice intervening in our case to correct the record. The facts and the law are on the side of REX and consumer choice, not NAR and industry scrutiny.
The National Association of Realtors is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
REX, based in Austin, Texas, was founded in 2015 by Jack Ryan and Lynley Sides. It does business in 15 states – Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Nevada, New York, New Jersey, Oregon, Pennsylvania, Texas, Virginia and Washington – and the District of Columbia.