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The National Association of Realtors and some of the nation’s largest brokerages and franchisors colluded to block discount brokerages from competing in the real estate market by creating and enforcing illegal rules, Utah-based discount brokerage Homie wrote in a new filing on Friday.
The filing came amid Homie’s ongoing legal effort to receive damages from NAR, Anywhere, Keller Williams, HomeServices of America, RE/MAX and HSF Affiliates, saying they “conspired” to prevent innovation and boycott low-commission listings.
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NAR and the companies asked the U.S. District Court in Utah to dismiss the case last month, denying there was a conspiracy, pointing out that Homie grew its business successfully during the alleged conspiracy, and that the company actually would have benefited from any conspiracy to inflate commissions.
In its response, Homie said NAR and the co-defendants had created a “weapon” via a variety of rules they created and enforced.
“Having fashioned a weapon and placed that weapon in the hands of their members and affiliates with instructions to use it, Defendants are liable for the effects of the weapon’s discharge in Utah,” Homie wrote on Friday.
Homie targeted the defendants in a lawsuit that largely mirrors others which have led to landmark settlements and sweeping changes to the industry. Namely, it targets the Participation Rule, Buyer-Broker Compensation Rule, Free-Service Rule, Commission Concealment Rule, Commission-Filter Rule and Clear Cooperation Rule.
All but the Clear Cooperation Rule have since been repealed, and that one is currently up for debate.
“Using their control of the MLS, Defendants promulgated rules that erected substantial barriers to entry and expansion for new lower-price competitors.”
The Utah-based Homie was once seeking to expand its market share as a discount alternative to traditional brokerages. It has since floundered, laying off staff, converting salaried agents to contractors and undergoing executive upheaval.
“Creating barriers to entry or expansion is particularly problematic where a small, aggressive competitor, such as Homie, stands ready, willing, and able to compete by offering lower prices but is thwarted by the defendants’ conduct,” Homie wrote in its filing. “NAR’s [policies in question] are unreasonable restraints of trade because they create barriers to the entry and expansion of competitors seeking to compete using lower prices.”
