Startup online brokerage REX has filed a federal antitrust complaint against Zillow, Zillow-owned listings site Trulia and the National Association of Realtors, claiming that the trio constitute a cartel that has locked homes its agents represent out of Zillow’s search results.
REX represents homes in Massachusetts and 17 other states, plus the District of Columbia. Unlike most other brokerages, its agents are salaried and it charges a fixed 2 percent commission covering both sides of the transaction instead of the typical 5 percent to 6 percent charge created by the combined buyer’s agent and seller’s agent commissions.
REX claimed that Zillow, which has recently been obtaining brokerage licenses in several states and which has joined NAR and other real estate organizations, colluded with NAR starting in January to remove listings from initial search results on its website that are not represented by an agent that adheres to local multiple listing service practices.
REX claims that these standards result in “fees that are two to three times higher than in most developed countries.”
“Zillow began like so many other platforms: it served a great value to American consumers. Unfortunately, we see Zillow as backtracking on their original mission to serve consumers, instead focusing on their own profits,” REX CEO Jack Ryan said in a statement.
REX said that listing aggregator sites like Zillow offer a unique platform to offer consumers and companies like itself to reach customers, and any attempt to close access to this platform to REX or others hurts consumers.
Through a spokesperson, Zillow said REX’s claims were meritless and it intends “to vigorously defend ourselves” and that it has been “actively working” to update real estate industry rules around comingling MLS and non-MLS listings on its platform.
“Zillow is committed to providing consumers with the most complete, up-to-date housing and listing information possible on a single platform. As part of our switch to MLS Internet Data Exchange (IDX) feeds and becoming formal MLS participants earlier this year, we were required to make changes to the way some listings appear on the site in order to comply with MLS rules. As a result, when using one of our platforms to search for homes, buyers may see two options to view their search results – “Agent listings” and “Other listings” – which include For Sale by Owner listings or Coming Soon listings not on the MLS or, for that matter, on most other real estate sites,” the company said in a statement.
The case comes after NAR and the federal Department of Justice settled an antitrust lawsuit in the waning days of the Trump administration that struck down four of the association’s policies in force on MLS sites it controls:
- Prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn.
- Allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free.
- Enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered
- Limiting access to the lockboxes that provide licensed brokers with access to homes for sale to NAR-affiliated real estate brokers.
MLS PIN, Massachusetts’ main MLS, is locally owned and not controlled by NAR.