Home Topics Real Estate REX targets Zillow with new lawsuit

REX targets Zillow with new lawsuit

REX claims Zillow’s move to IDX feed is “driving consumers away from REX”.

After working with the Department of Justice (DOJ) on its lawsuit against the National Association of Realtors (NAR) and the lawsuit against the state of Oregon, discount real estate agent REX has targeted Zillow. The company filed an antitrust lawsuit against Zillow, Trulia and NAR on Tuesday.

Jack Ryan | Image credit: REX

“REX is bringing this lawsuit in order to keep the digital centers of the real estate industry open so that consumers can benefit from innovations and cost savings that result from competition,” the complaint said.

REX was founded, according to the complaint, to “drastically reduce commissions”. One of the methods the company is aiming for is operating outside of the Multiple Listing Service (MLS), a collaborative data feed often operated by local brokerage associations, which enables broker websites to share property listings more easily and consistently.

The complaint argues that under the NAR – and enforced by MLS – sellers are required to pay a buyer-broker commission. There are currently several legal disputes that seek to have the seller pay a brokerage fee on behalf of buyers.

The complaint puts Zillow, one of the largest publicly traded real estate companies in the country, on the heels of a recent back-end switch from Zillow. Previously, the entries on Zillow.com came from a patchwork of thousands of separate feeds through agreements with brokers and MLSs.

Now the company is powered by an IDX feed, which is downgrading the number of feeds flowing into Zillow from the current thousands to around 600. The change comes when the company is representing employee representatives in its iBuyer transactions, forcing the company to obtain a broker license in each state.

With the move, Zillow not only fills his site with entries from the MLS, but also sends his own represented entries to members of the MLS. Through the switch, Zillow is limited by local MLS rules.

As part of the change, Zillow is also putting a greater emphasis on agent listings, so those listings that are more prominent can also generate the perception of fewer listings overall. In the Zillow mobile app, non-agent lists are filtered out by default, but users can switch between agent and non-agent lists.

“Zillow’s recent website changes make non-MLS listings accessible only through an in-depth, covert and misleading tab that consumers don’t see and deceive even professional real estate agents,” the complaint said.

“The result is that REX’s listings are losing significant traffic, severely damaging REX’s reputation, ability to implement its innovative and disruptive business model, and driving REX consumers back into the MLS regime, ensuring higher commissions that benefit the members of NAR. “

REX has been aggressive in the fight against so-called “anti-competitive practices” in the real estate industry over the past year. The company has tapped the political heavyweights of Republicans Jeb Bush and Chris Christie to support lobbying in the fight against “predatory real estate behavior”.

The result of the partnership between REX, founded by former hopeful US Senate Jack Ryan, and the DOJ was an agreement that will force Listings to disclose the amount of brokerage compensation paid to buyers.

The settlement also explicitly states that MLS and brokers must “provide consumers with any property that meets their criteria, regardless of the compensation offered or the name of the listed broker”.

With the complaint, damages and an injunction are requested, with which entries related to REX are removed from the area for non-acting entries of the Zillow search portal.

A spokesperson for Zillow told Inman that the company had made the necessary changes to the appearance of some entries on the website to comply with MLS rules.

“Zillow is committed to providing consumers with the most complete and up-to-date information on housing and listing on a single platform,” a Zillow spokesperson said in a statement. “As part of our move to IDS (MLS Internet Data Exchange) feeds and the fact that we became a formal MLS participant earlier this year, we’ve changed the way some entries are displayed on the website to reflect the Comply with MLS rules. “

When buyers use one of our platforms to search for real estate, they may see two options to view their search results – ‘Agent Listings’ and ‘Other Listings’ – including listings for sale by owner and listings in brief that are not enabled on the MLS or on most other real estate sites. “

At the same time, the spokesman told Inman that the company had also worked to change the industry’s display rules.

“As part of our efforts to empower consumers, we’ve been actively working to update the industry rules, including the merge rules, to provide a seamless search experience so we can continue to display all types of listings on our platform . Said the speaker.

Email to Patrick Kearns


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