The National Association of Realtors has filed a lawsuit against REX-Real Estate Exchange Inc.—a Woodland Hills-based online brokerage that emphasizes “AI and big data to push past the outmoded practices of traditional real estate brokers”—over claims of false and misleading advertisements and statements about its services.
In court filings, NAR alleges that REX misleads consumers falsely advertising that sellers will receive greater proceeds because, in a REX transaction, sellers don’t pay commissions to the buyer’s broker. However, NAR notes that REX has admitted that when a home buyer is represented by an agent, REX’s seller-clients may pay buyer-agent commissions.
NAR further alleges that REX is falsely claiming that it developed innovative and superior technology that can proactively identify the “perfect” buyer for a seller’s property using artificial intelligence and data analytics, allowing it to offer lower commissions. Instead, NAR says REX has admitted it relies on Zillow to display its listings, using technology that was built by Zillow on the exact terms REX wants.
Additionally, the suit claims REX has falsely advertised that NAR has enacted a series of anti-competitive policies to prevent competitors from offering consumers lower transaction fees—a claim that the Association disputes.
The filing also takes issue with previous claims made by REX that refer to NAR as a “cartel.”
“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,” said NAR President Leslie Rouda Smith.
“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,” Smith said. “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.”
This is the latest legal turn in the real estate drama between the two entities, following REX’s 2021 lawsuit against Zillow and NAR. REX previously claimed that changes to Zillow’s website “segregate, conceal and demote” listings that aren’t from the MLS, putting REX at a disadvantage and potentially harming their business.