Discount brokerage REX Real Estate has dropped its appeal seeking to stop Oregon officials from enforcing a state anti-rebate law. The decision comes amid reports that the brokerage appears to be shutting down its operations.
Michael Toth
REX General Counsel Michael Toth did not respond to questions regarding the company’s closure on Thursday, but said the company had decided to drop its Oregon suit to focus on “other issues.”
“Rebate bans are flat wrong,” Toth said in an emailed statement. “While REX continues to stand for industry reform, we’ve decided to focus our advocacy on other issues that cause consumers to be overcharged every time they buy and sell a home.”
REX, which offers buyers commission rebates, filed suit against Oregon officials in December 2020 after receiving a letter from the Oregon Real Estate Agency alleging REX was violating state law by sharing commission dollars with an unlicensed individual — the buyer.
REX alleged the state’s law both harms consumers and stifles competition by barring new entrants and protecting incumbent brokers who benefit from artificially high commissions.
Nonetheless, U.S. District Court Judge Marco A. Hernández granted the defendants’ motions to dismiss the case in December, saying Oregon officials were acting on behalf of the state to enforce the law and a state acting in its sovereign capacity “is generally immune from federal antitrust laws.”
At the time, Hernández stressed that he wasn’t ruling “on the wisdom of Oregon’s anti-rebate policy” and noted that REX had made “compelling arguments that excessive fixed broker commissions harm consumers and the housing market.”
REX has publicly called for the National Association of Realtors to join REX in supporting the repeal of anti-rebate laws in the states with rebate bans still on the books, including Oregon.
Currently, seven states prohibit real estate commission rebates altogether — Oregon, Kansas, Oklahoma, Missouri, Tennessee, Mississippi and Alaska — and two states restrict rebates — Iowa and New Jersey. NAR has not publicly stated its position on such bans.
REX appealed the court’s dismissal in January, but voluntarily dismissed the suit itself on Wednesday. That same day, reports from former staffers and a cryptic official statement from the company indicated that REX may be closing shop.
Still, the company vowed to continue another lawsuit it has filed against the National Association of Realtors and Zillow. REX sued NAR and Zillow in March 2021, alleging antitrust violations for an NAR rule that prompted Zillow to separate non-MLS listings from MLS listings on its website, including listings from REX.
NAR countersued, alleging in part that REX had misrepresented its business model, but the court tossed that suit last month.
“Our case against Zillow and NAR gets to the root causes of why consumers are being overcharged when they buy and sell homes,” Toth said Wednesday. “And we will continue to pursue our claims in federal court to prevail on the merits and collect the damages we’re owed.”
