Zillow and the National Association of Realtors locked in a legal fight with a Texas startup, which accuses them of anti-competitive practices
Zillowand the National Association of Realtors have been accused of anti-competitive practices by REX.
- REX has filed a federal claim
trialsaying that the two hidden property listings were not from realtors.
REX, a real estate startup, has accused Zillow and the National Association of Realtors (NAR) of anti-competitive practices, claiming in a lawsuit the two are working together to remove the ads from
“Through horizontal agreements, three of the most visited hubs – Zillow, Realtor.com licensed by NAR and
REX filed its initial complaint in U.S. District Court in Washington in March, a ruling that amounts to yet another attack on NAR practices and rules. The Justice Department launched a separate investigation last year into what it called anti-competitive practices at NAR.
NAR filed a motion to dismiss REX’s lawsuit on Friday, saying the company’s amended complaint failed to connect NAR to changes to Zillow’s app.
REX’s new complaint was “a far cry from establishing a plausible agency relationship between NAR and Zillow – or NAR and any MLS – with respect to the design of Zillow’s website. REX’s amended claims therefore show that REX’s alleged injuries were not caused by NAR, “filing said.
About 70% of US real estate agents are real estate agents, which means they are members of the NAR. This organization’s Multiple Listing Service (MLS) has long been the standard for real estate agent listings. And many of those MLS listings are now published on Zillow’s family of apps.
Although NAR is a large-scale business organization, real estate agents don’t have to join. REX – its name is an acronym for Real Estate Exchange – is not part of NAR. As such, REX ads on Zillow are placed in a different category, non-MLS ads.
There is a toggle in Zillow’s search results to toggle between MLS and non-MLS listings. In the app, they are called âAgent Announcementsâ and âOther Listsâ.
âThe new web view creates a separate page, hidden behind the main results, where REX homes are now routed,â REX said in its complaint. He added: “The label is incorrect: the tab does not contain all agent lists, but exclusively MLS lists of agents. (The lawyers added emphasis.)
REX says they are able to sell homes for a lower commission by not being a member of the NAR. Details are laid out in the lawsuit: Realtors charge a commission of around 2.5% to 3% on sales, along with other non-negotiable real estate agent fees that push the total up to around 5.5. %, according to the REX trial. REX’s total commission is more than 2 points lower, averaging around 3.3%, the company said.
Zillow said the allegations made in REX’s lawsuit were “without merit.” The company’s hands are tied, a spokesperson said, as NAR rules require MLS listings to be separated from non-MLS listings.
“REX is voluntarily choosing to use Zillow’s services to advertise its properties for sale on Zillow for free,” a Viet Shelton spokesperson said by email Friday. “We encourage REX to join Zillow in advocating for changes to industry rules that would allow their ads for sale displayed on Zillow to appear as they were last year.”
Zillow and NAR both sought to close the case earlier this year. NAR and REX did not immediately respond to requests for comment.