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Homie, the flat-fee real estate brokerage that was once on the rise but has since been plagued by layoffs, has filed an antitrust lawsuit against the National Association of Realtors and other industry players, accusing them of “conspiring” to stifle innovation and boycott low-fee listings.
The lawsuit was filed Thursday in federal district court in Homie’s home state of Utah. In many ways, the lawsuit’s claims are similar to those in other recent antitrust lawsuits. The lawsuit alleges that NAR and other organizations violated the Sherman Antitrust Act and other laws, challenges NAR’s now-defunct Participation Rule, which required selling brokers to pay buyer’s brokers a commission to list properties on MLSs with which the real estate agents are affiliated, and seeks unspecified damages. The Participation Rule has been at the center of many other real estate antitrust lawsuits.
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Language is like anything else.
“The anticipated wave of disruptive innovation and entrants into the residential real estate brokerage market has not yet occurred because Defendants conspired to prevent it,” the complaint alleges. “Defendants have used their dominance of the MLS to impose regulations nationwide that create substantial barriers to entry for new entrants and drive up prices for residential real estate brokerage services far above competitive levels.”
The lawsuit further alleges that Homey was subject to “explicit and implicit boycotts” and that incumbents in the real estate industry were trying to “keep buyers away” from its listings. The complaint also includes transcripts of text messages in which a real estate agent purportedly discusses not showing Homey properties because the company only offers buyers’ agents a 1.5% commission.
Homie reportedly received a similar message through his local MLS.
“If you raise your fees, we’ll bring you buyers. If you don’t, we won’t bring you buyers,” one message read, according to the lawsuit.
“[R]”Raise the fee to 3 percent,” another person reportedly demanded.
The lawsuit names several defendants, including NAR, Anywhere, HomeServices of America, RE/MAX, Keller Williams and Wasatch Front Regional Multiple Listing Service, which operates the popular local website UtahRealEstate.com.
News of the new suit first Reported From HousingWire.
Reached for comment, a Homie spokesman told Inman: statement The company said on its website that the lawsuit “shine a light” on “unfair practices.”
“Our fight isn’t just about saving money,” the statement added, “it’s about every home buyer and seller who has had to endure a system that puts profits over people.”
Asked about the lawsuit, an NAR spokesperson said in a statement to Inman that the organization’s “goal is to promote local real estate markets that provide fair and equal access to real estate information, promote competition, and enable real estate agents to serve their customers during the home buying and selling process. We will respond to these claims in court.”
“While we cannot comment on the specifics of the complaint because it was recently filed, the allegation that it stifles competition within the real estate industry is completely without merit,” HomeServices Vice President Chris Kelly said in a statement.
“The industry has evolved significantly over the past decade and the competitive landscape has changed significantly,” Kelly continued. “For example, of the top 10 closed-side brokerages in 2013, only three remain in the top 10 in 2023. Notably, seven of the top 10 brokerages in 2023 were not in that group just 10 years ago. There has been a continual introduction of new brokerages, models and platforms, such as iBuying, which have emerged over the past decade.”
Both Keller Williams and Anywhere declined to comment.
In addition to alleging a conspiracy, Homey also argues in his lawsuit that NAR’s explicit cooperation policy is “exclusionary.” NAR implemented the policy in 2019 to crack down on pocket listings — homes that are for sale but not listed on the MLS. The policy has been controversial from the start and continues to face criticism today.
Homie, on the other hand, argues in its complaint that Clear Corporation “tends to prevent the creation of rival listing networks that could challenge the dominance of the NAR-controlled MLS system.”
Regarding the participation rule, the complaint alleges that the defendants “knew and intended that this policy would steer them toward properties with higher commissions.” The complaint refers to the policy as the “Buyer’s Broker Compensation Rule.”
The lawsuit comes at a turbulent time for Homey, which was once one of the best-known flat-fee brokerages in the U.S. and employed hundreds of employees. In 2021, the company announced plans to hire 1,000 buy-side agents.
But Homie ended up undergoing multiple layoffs and announced earlier this year that it was converting its agents to contractors. At the time, the company didn’t have a CEO. A spokesperson said Homie was in the middle of a “transition” and would continue to operate with only a “handful” of W2 employees.
Antitrust lawsuits like the one filed by Homie have swept the real estate industry in the last year. Many of these lawsuits were brought by consumers who challenged the way agents traditionally split commissions between buyers and sellers. The situation led to jury verdicts against the NAR and major franchisees last fall, followed by a series of large settlements from those franchisees.
NAR announced its own settlement in March, which included paying $418 million and issuing a range of new rules, which went into effect Saturday.
While Homey’s lawsuit is similar in many ways to past cases, it is also unusual in that it was brought by a company rather than a home seller or home buyer.
Ultimately, the lawsuit describes the state of the securities industry as a “stagnant industry” and says Homey has taken legal action to “recover the damages it has suffered as a result of defendants’ actions, which have excluded it as a competitor.”
Homey further alleges in the complaint that, without the defendants’ actions, the company would have been able to take market share from incumbents in the real estate industry. However, the complaint alleges that both consumers and the company suffered harms.
Read Homie’s full complaint here (refresh if you’re having trouble viewing it):
Update: This story has been updated after publication with comments from the various parties involved in the litigation, as well as additional details from the complaint.
Send an email to Jim Dalrymple II
