The discount brokerage struck on Wednesday following the National Association of Realtors’ petition two days earlier to compel the DOJ to uphold its antitrust settlement.
Discount brokerage REX Real Estate on Wednesday unleashed a blistering attack on the National Association of Realtors (NAR) following the trade organization’s petition on Monday to compel the U.S. Department of Justice (DOJ) to uphold its antitrust settlement.
Blasting the trade organization’s “cartel economics,” deep-pocketed lobbying tactics and “anti-consumer” rules, REX General Counsel Michael Toth went on to applaud the DOJ for defending the rights of consumers.
“[The] filing by NAR underscores their business model — cartel economics, $100 million in lobbying, tens of billions in excessive fees, and countless anti-consumer rules that restrict housing accessibility,” Toth said in a statement. “The federal government is finally standing up to hold the real estate cartel accountable for overcharging home sellers and buyers thousands to tens of thousands of dollars on every transaction and steering consumers to line their own pockets.”
In June, a judge expressly told REX to stop referring to Zillow, NAR and others as a “cartel.”
NAR said in its statement on Monday that the DOJ’s announcement in July of its withdrawal from the settlement “reneges on the terms” of their “fully binding” agreement.
“The DOJ must be governed by principle, and NAR simply expects the department to live up to its commitments,” NAR President Charlie Oppler added in the statement.
In its response released on Wednesday, REX said NAR’s petition “seeks to avoid more accountability to federal officials.” The statement also summarized the now several months-long battle that REX, the DOJ and NAR have been steeped in, in part spurred by REX and CEO Jack Ryan’s perceived mission to reform the latent antitrust policies within the industry and serve as “a change agent for consumers.”
REX went on to allege that NAR’s petition was less so about working on a resolution with the DOJ than continuing what REX views as its manipulation of homebuyers.
“In its legal filing against DOJ, NAR falsely claims it was working to implement the proposed settlement,” REX Co-Founder and COO Lynley Sides said in the statement. “In reality, it was standing in the way of homebuyers. In the immediate aftermath of the settlement, REX worked to replace the unlawful rules preventing consumers from seeing homes with new ones promoting consumer choice and forcing NAR to tell consumers the true price of their services, NAR’s lawyers intervened to shut down the conversation. Homebuyers are still locked out of homes because of NAR and often do not know what they are paying. This is why the DOJ investigation must proceed.”
The DOJ’s statement in July regarding its withdrawal from the settlement claimed that doing so would allow for “a broader investigation of NAR’s rules and conduct to proceed without restriction.”
Oppler argued, however, that such actions by the DOJ could have far-reaching implications, alluding that the DOJ was establishing itself as an entity that could act of its own accord, and back out of future deals at will.
“If that view prevails, it would undermine the strong public policy in favor of upholding settlement agreements and public confidence that the government will keep its word in future cases,” Oppler said.
In March, REX filed an antitrust lawsuit against NAR and Zillow over NAR’s segregation rules, which require Zillow to separate non-MLS and MLS listings on its website. REX does not post its listings in MLSs.
As part of its quest to disrupt the industry, the brokerage also obtained recordings back in January of Houston-area real estate agents who were caught steering clients and provided the evidence to the DOJ to aid in their investigation against NAR. The company also previously commissioned a study, which was published in March and authored by government attorney Mark Nadel, showing that real estate commissions are inflated by as much as $50 billion per year because of a lack of price competition resulting from NAR’s rule that commissions be shared by buyers and sellers agents.
The discount brokerage previously submitted a comment letter to the DOJ in February, appealing to the agency to bring an end to NAR’s commission sharing rule.
“REX has long been the only industry player fighting real estate broker cartel policies which cost consumers thousands to tens of thousands of dollars on every transaction,” REX’s said in its statement. “Recently, the federal government has shown increased interest in the National Association of Realtors’ anti-competitive antics, which REX has continued to challenge.”
Email Lillian Dickerson