The case could open up the way online real estate platforms – now one of the first stops for US homebuyers – work and open the door for more buyers to negotiate the hefty commissions realtors often charge.
Key context: Zillow, the # 1 real estate listing website, has recently grown beyond advertising to help homebuyers and sellers more directly – and take a larger share of the potential commissions for fixed services – through ‘immediate buy’, which he started offering its own real estate agents in select cities in 2018 and from January.
About 52 percent of buyers said according to NAR that they found their homes in 2019 through an internet search. The pandemic – which led to an increase in the interest of homebuyers as officials moved into the house to work from home and a large number of adults always moved in with parents or grandparents – further accelerated the trend. In December, Zillow predicted that 2021 would likely sell the highest growth in homes since the 1980s.
On the order of the case: A change that Zillow and Trulia made to their sites on January 12th. Previously, the sites – which control 75 percent of the online home search market, according to the company’s securities documents – allowed users to easily view all homes for sale, regardless of whether a list was posted by an agent.
But starting this year, Zillow and Trulia started separating list, Rex claims preferential treatment to the 1.3 million real estate agents belonging to NAR. Other offers, including those posted by brokers not affiliated with NAR, negatives and homes offered for sale by owners without agents, are now being moved to a separate tab, the startup says. It asks the court to restrain Zillow and Trulia from separating advertisements.
NAR’s real estate website, Realtor.com, is the next most visited website and already shows only homes for sale by NAR agents. The change by Zillow and Trulia means that three of the four most popular real estate listing platforms are now leading consumers to homes with NAR agents, Toth said.
These offers can be more expensive, as the seller is required to pay a commission, often 6 percent of a home’s sale price, which is split between agents for the seller and the buyer. Rex, which operates in Washington, DC and 25 other major cities, says it makes brokerage fees more transparent by leaving it to the home buyer to negotiate.
Rex also raised antitrust concerns about Zillow’s changes with the Department of Justice and 35 state attorneys general, Toth said. An earlier complaint by Rex led the DOJ last year to sue NAR and settle some of the rules related to displaying offers
Zillow’s side: Zillow spokesman Viet Shelton said the company made the change in January after becoming a participant in NAR’s multiple exchange services. The association’s rules for the IDX feeds require participants to separate ads, he says.
“Zillow is committed to providing consumers with the most up-to-date housing information on the most possible deals on a single platform,” Shelton said. “We’ve made changes to the way some listings appear on the site to comply with MLS rules.”
The NAR did not immediately respond to a request for comment.