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REX Takes On Zillow and National Association of Realtors’ Alleged Cartel Activity In Antitrust Filing On Behalf Of American Consumers

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REX’s complaint and preliminary injunction seeks relief from NAR and MLS rules meant to prioritize Big Brokers’ profits over American consumers

Austin, TX – March 9, 2021 (PRNewswire) On behalf of its clients and all American consumers concerned about competition and transparency in real estate, REX has filed a federal antitrust complaint in Seattle, Washington against Zillow, Trulia, and the National Association of Realtors (NAR). REX, a real estate technology company, is breaking the stranglehold that REX believes the NAR and its members have held over consumers for generations, resulting in fees that are two to three times higher than in most developed countries. REX filed the complaint after the company’s clients complained about the second-class treatment that non-cartel homes were receiving.

Recently, Zillow quietly began obtaining brokerage licenses throughout the country and then joined NAR and local associations. In January, as a part of its cooperation with NAR and MLSs, Zillow began moving homes out of its initial search results for sellers who chose not to use agents adhering to the NAR and local multiple listing service (MLS) practices which hike fees and lower customer service. REX is fighting against second-class status for anyone who wants to sell outside the NAR/MLS regime.

Prior to this significant update to Zillow’s platform, everyone had equal access. As the company celebrates its 15th anniversary, Zillow is straying from its disruptive roots by joining the Big Broker ranks. Evidence shows that deprioritizing non-MLS members – such as creating a separate page as Zillow has done – has significant impact on consumers looking to buy and sell real estate in the market. This separate page ultimately benefits NAR/MLS members while hurting consumers.

Once Zillow became a broker and began joining the NAR and MLSs, the company started subscribing to the same old practices that have caused Americans to pay the highest real estate commissions in the world. This practice forces home sellers to agree upfront to pay thousands of dollars in excess fees to the broker firm on the other side of the deal.

Collusion with the NAR/MLS cartel rules hurts consumers who refuse to comply with traditional real estate’s pre-arranged 6% fees at a time when technology has largely replaced labor costs. $60 billion in fees are extracted from American consumers every year.

“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,” said REX CEO Jack Ryan.

“We launched REX to put the consumer back in charge of real estate and transactions,” Ryan continued. “This case builds on the DOJ’s recent antitrust settlement with NAR/MLSs that beat back some anticompetitive 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.”

In addition to lodging the antitrust complaint in federal court, REX filed a preliminary injunction motion asking for immediate relief.

The internet has radically altered how Americans shop for homes with technology replacing much of the historical labor costs of brokers in real estate transactions. Yet, the complaint alleges, the NAR and its members, Zillow and Trulia included, are using collusive tactics to restrain trade by forcing Americans to agree to abide by the NAR and MLSs’ association rules and paying traditionally high commissions to continue posting new listings to what was once a democratized digital platform.

REX’s complaint against Zillow and NAR comes on the heels of the DOJ’s November 2020 Federal lawsuit and proposed settlement against the NAR. REX assembled a legal team which includes antitrust experts and former leaders who drove antitrust investigations of digital platforms that consumers engage with every day. NAR is also facing a growing list of complaints and class actions in Federal and state courts filed by consumers concerned about fees, a lack of transparency, and outmoded practices that prioritize Big Brokers’ profits over consumers’ best interests.

Key Arguments Made By REX In The Complaint:

  • Aggregator sites facilitate transactions that allow millions of Americans every year to relocate for new personal and professional opportunities.
  • Direct consumer access to available homes—and the ability for licensed non-NAR, non-MLS brokers and agents to make homes directly visible to consumers—opens the pathway for new, innovative real estate service providers. And, critically, it introduces competition that benefits consumers through greater choice in output and downward pressure on traditionally high commission structures which lowers cost to consumers.
  • After NAR and its MLS partners, which now includes Zillow, closed transparent access to home inventory by agreeing to private rules that disadvantage all but their own membership, consumers and competition will suffer.
  • Consumers are harmed as is REX’s innovative and competitive model by the collusive agreements between the NAR and Zillow, along with their MLS affiliates. Zillow recently joined NAR-affiliated MLSs and imposed its associational rules to conceal all non-MLS listings on Zillow’s heavily trafficked websites.

About REX (rexhomes.com)
REX is resetting the traditional real estate broker model and upending how Americans interact with real estate — from buying and selling processes to managing all aspects of your home, including maintenance, landscaping, mortgage, escrow, title, insurance, and moving. REX is dramatically lowering costs and improving the consumer experience in real estate to help Americans unlock the wealth in their homes. We’re headquartered in Austin, TX and run by engineers, data scientists, and market experts with prior experience at Google, Facebook, Amazon, Apple and Uber. REX works as a partner in the global fight against housing insecurity. For every 50 homes sold at REX, the company builds a home for a family that would otherwise be unable to realize the dream of homeownership. Check out REX’s newsroom (newsroom.rexhomes.com) for the latest press releases, podcast episodes, market analysis, useful data for stories on tech and real estate, and information about the company.

CONTACT
Colin Maynard
cmaynard@rexhomes.com
(916) 834-4274

SOURCE REX

Survey Reveals COVID-19’s Effects on Home Buying and Selling, Underlines Importance of Digital Capabilities

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The survey results cover effects of low interest rates on buyer behavior, pervasive concerns over real estate fees, and other factors affecting homeowners during COVID-19.

Austin, TX – Jan. 8, 2021 (PRNewswire) REX, the tech company resetting the real estate industry, conducted a survey of customers who worked with us since the onset of COVID-19 — the results, released today, show COVID-19’s significant impact on the residential real estate transaction. They also prove REX’s remodeling of the brokerage model provides transparency and ease for customers at a level unmatched by other real estate companies.

COVID-19 and the Home Transaction
COVID-19 offered an opportunity for our customers to move in ways that worked for them, in ways that may have otherwise been impossible if not for COVID-19.

The pandemic swayed many to buy or sell in 2020; 24% of buyers and 11% of sellers report that COVID-19 affected their decision.

Relocation and working from home
During COVID-19, some homeowners moved away from dense cities — 24% of REX buyers relocated to a less populated area.

Respondents indicated pandemic avoidance as a driving force: “With the ability to work remotely, we decided to move out of the city and into the country closer to our family. We also wanted to be in an area with less exposure,” said Alana Osumi, who sold their home with REX. Another buyer, Nathan Masters, said, “[COVID-19] prompted us to move to a mountain community, away from the city.”

Others moved because the added freedom of work-from-home made living in cities less crucial. “I got [a] work-from-home option from [my] employer so I could buy in a different city,” one buyer said. “We wanted to get out of an apartment and into a single-family home to have more room and [to] work from home,” said another.

Market shifts and economic uncertainty
Approximately a third of buyers and sellers changed the timing of their home transaction due to COVID-19, citing the pandemic as either slowing down or speeding up the process for them.

In some instances, market uncertainty caused homeowners to stall the process, in others, low interest rates pushed them to expedite.

“We were trying to decide if the market [was] going to completely tank or if it’s going to stay stable. We decided to pull the trigger in hopes that values remain high in Portland,” said one buyer. Another was more hesitant: “We nearly did not go through with the purchase of our home due to the uncertainty of the entire economy,” they said.

“[We] thought selling early when it all started made sense, because we were concerned if we waited maybe lenders would change financing guidelines, making it harder for buyers to qualify, or [would] not lend at all,” said one seller.

But low interest rates pushed 37% of buyers to buy a home sooner than planned.

“Interest rates dropped due to the economy, so we decided to buy 6 months before our rental agreement was up,” said Nary Sos, who bought her home with REX.

Online platforms
COVID-19 necessitated better digital capabilities in real estate — making online platforms more important. Nearly 89% of sellers visited more than one online platform to compare prices of other homes in their area. All buyers used multiple online platforms to shop for a home.

In a pattern that predated COVID-19, homeowners increasingly shop for their next home online, without the aid of real estate brokers.

The REX Experience
REX’s ease of use and straightforward, digital platform enabled those buying and selling during COVID-19 to turn away from the exhausting broker-led traditional transaction and eliminate stress.

Turning away from traditional realtors
A majority of REX customers spoke with or interviewed two agents before choosing us — a taxing process, especially during COVID-19. Through our team of advisors and suite of services, REX offers an easier and more efficient approach to completing the transaction.

Serving experienced and inexperienced home sellers
REX serves non-experienced and experienced sellers — those who have never sold a house before, versus those who have sold one, two, three, or more. Sellers were nearly evenly distributed across experienced and non-experienced sellers.

REX works for those unfamiliar with the transaction, who need additional guidance, but is also trusted by those with experience selling a home, who realize the traditional model is unnecessary for a successful sale.

Shared sentiment on fees
Customers reported strong sentiments on transaction fees.

97% of sellers were concerned about real estate fees before learning about REX. Interestingly, 69% of buyers were concerned about real estate fees before learning about REX — still a majority, but significantly less than in the seller demographic — this may be indicative of the broad misconception present across the real estate market that buyer’s agents are free, and that buyers are not charged during the transaction. This misconception has been caused by the National Association of Realtors’ practice of advertising buyer’s agents services as free, a practice which has recently faced scrutiny from the Department of Justice, who sued the NAR for this and other anti-competitive behavior. The DOJ/NAR settlement requires the NAR to stop this practice.

Use of the REX app
The REX app continues to grow as a home shopping platform. Of buyers who downloaded the REX app while working with us, 71% still have it downloaded today.

Survey Metrics and Methodology
The survey was sent to 941 potential respondents (640 sellers and 301 buyers) who bought or sold their home with REX from February 1 to September 15, 2020. The time frame aimed to include all whose transactions could have been affected by COVID-19. The February start date accounts for the fact that the home transaction typically takes several weeks to complete, landing customers in mid-March or later, when COVID-19 was in full swing. The survey received 160 responses from 106 sellers and 54 buyers. The survey opened on November 5, 2020 and closed on December 3, 2020.

Quotes have been lightly edited for clarity.

About REX
REX (rexhomes.com) is upending how Americans interact with real estate — from buying and selling processes to managing all aspects of your home’s maintenance and upkeep. REX is dramatically lowering costs and improving processes in real estate to help consumers unlock the wealth in their homes. We’re headquartered in Austin, TX and run by engineers, data scientists, and market experts with prior experience at Google, Facebook, Uber, Amazon, and Apple. Our team crafts a custom plan for each client which can draw from a suite of services such as appraisal, repairs, photography, staging, listing and marketing the home, search, virtual tours and in-person showings, escrow, mortgage, title, insurance, moving, and even ongoing repairs for new homeowners.

REX works as a partner in the global fight against housing insecurity, and was built on the foundation of creating opportunities for others and giving back. For every 50 homes sold at REX, the company builds a home for a family that would otherwise be unable to realize the dream of homeownership.

Media Contact: Kelsey Thomas, (929) 260-4886

SOURCE REX