Flat-fee brokerage sues NAR, alleges steering
Homie says the defendants — NAR, 4 top brokerages and a Utah MLS — conspired to control competition in the industry and steered buyers away from its listings.
Despite reaching settlements in lawsuits brought by home sellers, the National Association of Realtors and major brokerage firms are now facing commissions-related litigation from within the industry.
Earlier this month, Michigan agents sued NAR over membership requirements, citing settlement-based rule changes as a factor. And today, Homie — a flat-fee brokerage based in Utah — filed a suit alleging anticompetitive behavior and steering.
NAR 'controls competition': Homie filed a complaint on Aug. 22 in U.S. District Court in Utah, alleging that the National Association of Realtors and its members "control competition in the residential real estate brokerage industry by controlling the nation's MLSs."
The complaint also said the defendants, which include brokerage firms and a Utah MLS, conspired to prevent disruptive innovation, arguing that home sellers in the class action commissions lawsuits were not the only victims of anticompetitive practices.
"Had Homie been allowed to compete with Defendants and their co-conspirators, it would have gained market share at Defendants' expense while posing a competitive check on Defendants' ability to charge exorbitant prices for brokerage services to consumers," court documents stated.
Defendants: Along with the National Association of Realtors, brokerage companies Anywhere Real Estate, Keller Williams Realty, HomeServices of America and RE/MAX are named as defendants, along with the Wasatch Front Regional Multiple Listing Service, which is tied to UtahRealEstate.com.
Accusations of steering: In its complaint, Homie provides details of emails and texts from NAR member brokers telling the company they would not show Homie listings to their clients because the commission fee was too low. The term "steering" — an issue at the heart of the commissions lawsuits — was used 20 times in the complaint. Homie attorneys wrote in the complaint that "home buyers would have resisted this steering if they could have."
The filing listed examples of alleged steering, including this remark from an MLS comment field: "If you up the commission, I will bring my buyers. If not, I will not. It's a disservice to your client. Please educate them. Please let them know that. I truly have a buyer that would possible [sic] buy this house. I won't show it until the commission is raised."
The complaint also said local NAR members used Facebook groups to organize boycotts of Homie's listings with low buyer-broker commissions, sometimes using the hashtag #boycottHOMIE.
About Homie: The company was founded in 2015 in Utah but expanded to several states, including Arizona, Colorado, Idaho and Nevada. On its website, the company claims it has saved clients more than $100 million in commissions and fees by offering a flat fee for home selling services.
According to an April 19 article in The Salt Lake Tribune, Homie "is stripping its brokerage services and ending employment for its real estate agents." The company clarified in the article that some employees would be offered work as contractors, but all agents lost their W-2 employment status, while title and lending teams were unaffected.