T
he Utah-based tech real estate company, Homie, has filed a lawsuit against the National Association of Realtors (NAR), accusing them of actively blocking any disruption in the home-buying industry and maintaining the status quo at the expense of both Homie and customers. The lawsuit claims that NAR's rules have erected substantial barriers to entry for new competitors, making it impossible for them to innovate in the industry.

    Homie is not alone in this struggle; the status quo has made real estate needlessly expensive for both prospective homebuyers and sellers. The lawsuit argues that if Homie had been allowed to compete with NAR and other established players, it would have gained market share at their expense while providing a competitive check on their ability to charge exorbitant prices for brokerage services. By excluding new entrants like Homie, NAR has harmed competition, harmed consumers, and caused injury and damages to Homie.

    An NAR spokesperson declined to address Homie's claims directly but stated that their goal is to promote a local real estate marketplace that provides fair and equal access to property information and promotes competition while empowering Realtors to serve clients on their homebuying and selling journeys.

    Homie has named several real estate brokerages, including Anywhere Real Estate and RE/MAX, as co-conspirators who championed NAR's "anticompetitive" rules in order to squash industry disruptors like Homie. Both RE/MAX and Anywhere Real Estate declined to comment on the matter, while other defendants did not respond.

    Homie's lawsuit is part of a wave of scrutiny aimed at NAR. The trade group recently updated its rules in response to an antitrust settlement, agreeing to pay $418 million over the next four years and adopting new rules that separate a Realtor's commission from a property's listing price.

    Homie's lawsuit presents a clear narrative of the challenges they have faced since their founding in 2015. The Utah company entered the scene in 2015 and offered home sellers a flat fee to list their homes, doing away with exorbitant commissions. However, Realtors didn't like this new structure because it meant they earned less money.

    The status quo of home sales involves sellers typically agreeing to pay their broker a commission of between 5% and 6%. The seller's broker then shares their commission with the buyer's agent. To prospective homebuyers, this looks like they're getting their brokerage service for free because it's built into the overall listing cost and inflating the home's price.

    NAR's new rules now require buyers' agents to disclose their compensation in writing upfront before showing a property. They also prohibit selling agents from including commission fees on multiple listing service (MLS) listings.

    Homie took direct aim at the industry in some of its advertising, seen on billboards along Interstate 15. One billboard read, "Agent charging you $30,000 to sell? Eat my shorts." Most homes on the market are advertised through multiple listing services owned by NAR members and therefore subject to NAR's "Exclusionary Rules and Policies." Realtors are incentivized to adhere to and help implement terms that significantly restrain competition.

    Homie claims it has direct evidence of such exclusion. Utah Realtors actively conspired against Homie from the outset, the complaint claims, and explicitly avoided working with Homie's clients. One client emailed Homie to cancel their contract because they found a "great house" but "several agents refused to show me properties when I mentioned that I was working with Homie."

    According to the lawsuit, Realtors posted their grievances on industry Facebook pages and forums. It was all part of the industry's "anticompetitive campaign" to exclude Homie from the Utah real estate market. As it lost clients, Homie says its market value declined, and Utah Realtors celebrated.

    Homie is suing NAR for the damages it suffered, including lost profits, in an amount to be determined at trial. It is also asking for a permanent injunction of NAR's Clear Cooperation Policy, which it says keeps "low-price competitors" out of the game.

    "By shining a light on these unjust practices, we're not just hoping for change - we're demanding it," Homie said on its website. "We envision a real estate industry where fairness and equity are the standards, not the exceptions. We're committed to building a future where the real estate market works for everyone, not just a privileged few."