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NAR Countersues REX Alleging False, Misleading Advertisements

January 31, 2022

The National Association of REALTORS® has countersued REX-Real Estate Exchange Inc., alleging the real estate startup has made false and misleading advertisements to consumers and damaged the association’s reputation. The association claims REX has deceived consumers and discouraged them from obtaining the “pro-consumer, pro-competitive benefits” offered by NAR members and through independent, local MLSs.

“NAR will oppose attempts to mislead consumers, including attempts to mislead consumers about buying or selling a home generally or about the services or cost of using REALTORS®, most of whom are small businesspeople,” NAR President Leslie Rouda Smith said in a statement.

NAR’s answer and counterclaim were filed late last week as part of an ongoing legal dispute between NAR and REX in the U.S. District Court for the Western District of Washington in Seattle. REX initially filed the federal antitrust lawsuit in March 2021 against Zillow and NAR.

In its counterclaim, NAR alleges that REX “falsely advertises” and misleads consumers to inaccurately believe that REX’s clients will receive greater proceeds because sellers won’t have to pay commissions to the buyer’s broker. NAR also alleges that REX made false statements claiming that NAR has a series of anticompetitive policies, including alleging that NAR’s policies preclude the negotiation of commissions between brokers who place their listings on the MLS.

NAR states in its counterclaim that its rules and MLS policies make clear that commissions are always negotiable between the listing broker and buyer broker during a transaction.

“Independent, local multiple listing services benefit competition and fair housing, and NAR will ensure consumers can make the choice to participate in local broker marketplaces, or not, with a full understanding of how they work,” Rouda Smith said in the statement. “The truth is that if home buyers and sellers are deceived into avoiding multiple listing services, they would lose the services’ pro-consumer, pro-competitive benefits. Sellers lose exposure to the largest available pool of buyers, and buyers lose access to the largest available pool of properties for sale. Our goal with this action is to protect consumers.”