REX takes another blow at NAR in bloated attack on “cartel economy”
The discount brokerage struck Wednesday following a petition from the National Association of Realtors two days earlier to force the DOJ to uphold its antitrust regulations.
Discount brokerage REX Real Estate unleashed a meteoric attack on the National Association of Realtors (NAR) on Wednesday following the trade organization’s petition on Monday to force the US Department of Justice (DOJ) to uphold its antitrust regulations .
Denigrating the trade organization’s “cartel economy”, sweeping lobbying tactics and “anti-consumer” rules, REX general counsel Michael Toth applauded the DOJ for what he described as consumer rights.
“[The] filing by NAR underlines their business model – cartel economy, $ 100 million in lobbying, tens of billions of excessive fees and countless anti-consumer rules that restrict housing affordability, ”Toth said in a press release. “The federal government is finally rising to hold the real estate cartel accountable for overcharging sellers and home buyers from thousands to tens of thousands of dollars on every transaction and pushing consumers to line their pockets.”
In June, a judge specifically asked REX to stop labeling Zillow, NAR and others as a “cartel”.
NAR said in its statement Monday that the DOJ’s July announcement of its withdrawal from the regulations “came within the terms” of their “fully binding” agreement.
“The DOJ must be governed by principle, and the NAR simply expects the department to honor its commitments,” NAR Chairman Charlie Oppler added in the statement.
In its response released Wednesday, REX said the NAR petition “seeks to avoid greater accountability to federal officials.” The statement also summarized the months-long battle that REX, DOJ and NAR have been plunged into, in part spurred by REX and CEO Jack Ryan’s perceived mission to reform latent antitrust policies within the industry and to serve as an “agent of change for consumers.”
REX went on to claim that the NAR petition was less about working on a resolution with the DOJ and more about pursuing what REX sees as its manipulation of homebuyers.
“In its legal case against the DOJ, NAR falsely claims it was working to implement the proposed settlement,” REX and COO co-founder Lynley Sides said in the statement. “In reality, it was a barrier to home buyers. Immediately after the settlement, REX moved to replace illegal rules preventing consumers from viewing homes with news that favor consumer choice and forcing NAR to tell consumers the true price of their services, NAR lawyers stepped in. to end the conversation. Homebuyers are still excluded from their homes because of the NAR and often don’t know what they are paying. This is why the investigation by the Ministry of Justice must continue.
The DOJ’s July statement regarding its withdrawal from the regulations said it would allow “a wider investigation into the rules and conduct of the NAR without restriction.”
Oppler argued, however, that such DOJ actions could have far-reaching implications, alluding to the DOJ establishing itself as an entity that can act on its own and withdraw from future agreements at will.
“If this view prevails, it would undermine strong public policy in favor of honoring settlement agreements and the public confidence that the government will keep its word in future cases,” Oppler said.
In March, REX filed an antitrust complaint 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 publish its ads in MLS.
As part of its quest to disrupt the industry, the brokerage also obtained records in January of Houston-area real estate agents who were caught directing clients and provided the evidence to the DOJ for facilitate their investigation against NAR. The company also previously commissioned a study, published in March and written by government attorney Mark Nadel, showing real estate commissions are inflated to $ 50 billion a year due to a lack of price competition. resulting from the NAR rule that commissions must be shared by buyers and sellers agents.
The discount brokerage previously submitted a comment letter to the DOJ in February, calling on the agency to end NAR’s commission-sharing rule.
“REX has long been the only player in the industry to fight real estate broker cartel policies that cost consumers thousands to tens of thousands of dollars for every transaction,” REX said in its statement. “Recently, the federal government has shown increased interest in the anti-competitive antics of the National Association of Realtors, which REX has continued to challenge.”
Email Lillian Dickerson