The Utah-based real estate brokerage Homie has filed an antitrust complaint against the National Association of Realtors (NAR), claiming that the organization’s member agents have steered prospective buyers away from Homie’s listings.
According to a Deseret News report, Homie co-founder and CEO Johnny Hanna accused NAR’s member agents were boycotting his company out of the perception that they would be paid lower commissions in the sales of Homie-listed properties. Homie, which is active in Utah in Arizona, offers flat-fee services for home sellers and a 1.5% commission for buyer brokers – lower than the 2.5% to 3% that many buyer brokers are accustomed to receiving.
“NAR allowed brokers representing home sellers and home buyers to use NAR’s MLS only if those brokers agreed to adhere to and help implement terms that significantly restrain competition,” said the lawsuit, which was filed in federal court in Salt Lake City. “Thus, innovative entrants, seeking to compete on price and other terms of service attractive to home sellers or home buyers, have been stymied by traditional real estate brokers who acted in concert through the MLS to promulgate a web of rules and practices that created substantial barriers to competition.”
“Homie was subject to both express and tacit boycotts in Utah by incumbent brokerages, some affiliated with the corporate defendants, boycotts organized through the MLS, online social media platforms, and public statements,” the lawsuit continued. “These boycotts, which were facilitated by NAR’s exclusionary rules and policies, had their natural and intended effect on Homie’s business, gradually but inexorably reducing its market share, revenue, and profits until the firm was unable to compete effectively despite a business model that, before defendants’ predation, had proven its viability.”
Hanna added that NAR began targeting his company after its 2015 launch because it did not adhere to its commission policies.
“The whole reason why we’re suing is the NAR has worked to artificially inflate commissions and been engaged in anticompetitive practices since we started,” said Hanna.
Homie is seeking unspecified damages and injunctive relief against NAR. The company’s lawsuit also cites other defendants including Anywhere Real Estate Inc., Keller Williams Realty Inc., HomeServices of America Inc., HFS Affiliates LLC; Re/Max LLC, and Wasatch Front Regional Multiple Listing Service Inc.
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This is not a boycott and why cut-rate, no service providing listing services should go out of business. Agents disclose their commissions. If a buyer chooses not to want to pay the portion of the agreed upon commission rate per the buyers agent agreement not paid by the seller, it’s their choice. The buyer controls this, not the agent. The market, not agents, or NAR or any other brokerage is the reason this company lost business.
I totaly agree! With the new commsion rules there is no percentage anywhere associated with MLS.
All commissions are negotiable. Just seems like your business model isn’t working.
I checked Homie website. Great reviews. 4.5 rating. Unfortunately, local brokerages do at times boycott your listings when a brokerage has a large piece of the listing contracts. NAR required rules of engagement from the beginning has been one of monopoly & control, serving the public, not their members. Buyers must sign BRA. Buyers are responsible for cost of their Agent. Sellers have a choice to pay or not. Contracts are negotiable.
Absolutely agree. You get what you pay for in terms of representation and service.
If you can stand there and tell me agents don’t steer people away from less than typical commissions, you are only fooling yourself. I have always negotiated commissions and have actively had other agents voice displeasure with the amount offered. Those that claim to represent their buyers in every sense of the word and then avoid lower offered commissions are complete frauds
Correct. Once again, a broker or a group are whining up the wrong tree.
Another frivolous lawsuit that the NAR will fail to adequately defend…. The ease which my clients are exhibiting when the commission structures are explained is baffling when we realize the NAR attorneys were not able to get a jury of 12 to understand we actually do a lot and are fairly compensated, when we are compensated.
I’m not familiar with Homie but whatever discount service they’re offering they would likely not like taking even less…
Exactly, NAR’s failure to tend to business and defend againt frivolus lawsuits is going to result in one lawsuit after another, paying millions for onesided “business model(s)” destined to fail.
NAR didn’t fail to represent us in the case. It was “per se” not reasonable use. Guilty before you step into court.
The key isn’t just the clear cooperation rule, but that the rule paid all Buyer Brokers the same fee regardless of their agreement with the buyer, their experience, or their participation in the sale process. That’s “per se” unfair.
The limited service brokers like Homie were always at a disadvantage, not from an organized boycott, but from independent contractor buyer brokers individually choosing not to work for less than they were worth.
Normal market forces combined to look like a trend and assigned a “cause” by someone not willing to accept responsibility for their own actions, undercutting the market to get listings.
You ever take an overpriced listing that didn’t sell? You adjusted or lost it.
Homie didn’t adjust to market forces.
Ironic that the new NAR rules could put them right back in play without the low coop price stigma.
Seems to me that they were predestined to fail! With huge overhead, investor funded to keep them afloat, so when the money ran out what do you do but sue and not take any of the blame. Don’t settle NAR or maybe that’s just what you do!
We in Florida should dothe same. I hope Utah runs them out of business. We all need to be away from the NAR and onto something else. I cheer them on!
A new accociation is already here. The American Real Estate Association.
They are not going to make it unless they start answering the phone.
I will never send the NAR another dime!
WHEN IS SOMEONE GOING REALIZE THE ATTORNEYS MADE A LOT MORE ON THE LAWSUITS than 2.5 or 3 %. I have been at closings where the attorney said I made more than they did. Well, I showed house after house, I arrange inspections, and everything necessary to get to closing. The paralegals usually do all the work, and the attorney, may or may not do the closing. One of my sellers got post cards inviting them to join the class action suit on over 20 yr old deals. Attorneys do not seem to realize we take them the business. I think the real estate companies should do a class action suit against the attorneys. But where do we find an attorney to represent us? What about all the states ATTORNEY GENERALS?
Agree! It’s the attorneys fleecing the people. The lead attorney claims since 2019, he’s logged 7000 hours on the case, so he’s requested $10.1mil. That more than $1440 AN HOUR!! but yet us agents are the bad people!
I agree with you. In my case, I’ve been in this industry mostly as a buyer agent since 1998. Thanks to this group of people who did the lawsuit agains NAR and the real estate companies that charge a “flat fee”, buyers may decide not to work with us. Then, who is going to support me? I am a 58 years old, widow, with a 15 years old son. Where I am going to find another job?
All of this is ridiculous.
You get what you pay for and maybe they weren’t that good! If you have to offer such a low rate it’s probably because you’re not worth a higher rate. Quit trying to blame others for your failure.
NAR did a terrible job and so did the other RE companies who settled. The suit was for protecting the sellers against fees and the goal to save the seller money. Well, consider the fact that when we list a property in MLS, Zillow, Realtor.com, Homes.com, etc all pluck the seller’s marketed property that the real estate agent has spent money to procure and place those properties on their websites for everyone to see. But, who get the lead when the consumer clicks on the “contact agent” button? Now the listing agent. These corporations are making money off the seller’s property and the seller is not getting a dime. The listing agent does not get the lead, to try and double end the deal and “save” the seller money by not charging a full fee. Where is the benefit for the seller? Does the seller know these corporations are making money off of them? When I explain that I don’t get the lead on their property, the seller does not like that and also thinks is wrong……is that not a viable law suit?
This is because they (NAR), one of the largest trade organizations sold us, their members, out many years ago for millions of dollars, licensing our trademark to a company that sells our work back to NAR members at exorbitant fees, thats the travesty. Our own trade organization takes our dues asking that we hold to a Code, when they sold us out.
I agree, NAR has sold us out and continue to sell us out. Who else is sick of getting all of these text messages trying to sell us health insurance? That is NAR selling off our information to the highest bidder.
I agree completely with this statement. NAR sold us out and settled on frivolous lawsuits from greedy sellers, they’ll probably do the same thing here. This case would have merit in that it is a requirement that we belong to NAR (thus having to follow their rules on co-op commissions) in order to belong to an MLS. We have no other option here. I also agree that NAR is in a money-making collusion scheme selling leads off of OUR LISTINGS! Same thing goes for our MLS systems through syndication to Zillow, etc. The online lead should go directly back to us, THE LISTING AGENT, or a large disclaimer should read: YOU ARE NOT CONTACTING THE LISTING AGENT, THIS IS A PAID LEAD GENERATION AD. I find that most buyers want to talk to the source if they have interest in a property, not an agent from 50 miles away who bought up all the zip codes in a region for blind leads. If they sell leads on OUR LISTINGS, then NAR and our MLS and local boards should fight harder for us to get a cut of that lead sale. As listing agents, if we did not work hard in our communities
getting and selling our listings, they would have nothing to market. I hate being FORCED into giving away my hard work time and time again.
Well said!!
Agreed. NAR, attorneys, and all the bid franchises that settled have lots of money, not my 4 broker firm. My mother-in-law got a post card in the mail for her home she sold 22 years ago in California and she was a realtor!?!
Also buyers will end up finding the listing agent, especially now that buyers have to get something in writing from the buyer prior to showing the house. Buyers don’t want client level service when clicking on the zillow/realtor.com/trulia button, they want customer level service. I think you will find out soon that the agents paying for all those ads will end up running out of time handling all of them if they follow the law and as buyers gravitate to the listing agent just wanting to see the house, not sign a contract.
My understanding is the listing agent must also sign a buyer-broker agreement with the buyer if the buyer goes directly to them.
A listing agent can show their own listing to any unrepresented buyer as long as that buyer acknowledges in writing that they are not represented by that agent.
That includes Open houses or individual showings.
You are so correct! We do all the work, collect all the information, put it in the MLS, and it feeds to all the other companies who intern charge agent So much money to get leads for our information we provided. I do not think the public fully understands this process.
Bahahahah! Their model doesn’t work in the current market so they are looking for someone to blame. After attacking the NAR and Realtors with their ads and billboards, now they are playing the victim.
I was looking for someone to say THIS!!! This business model worked well in an extreme Seller’s market. Now that it is a balanced market, buyers market in some areas, the pendulum has swung the other way. It has NOTHING to do with the NAR settlement EXCEPT the buyer brokers will now get to ask for more that what their fixed rate was previously. This mostly affects the SELLER but ultimately affects HOMIE because they can no longer guarantee these results.
Discount brokerages that only offer partial services never survive
You got that right!!!! Seller’s markets make egocentric agents/brokers think they are God. They think they’ve created something new and it’s their system that has changed real estate. Until the market changes.
Homie failed to mention that they offer the houses WAY above market value! This has always been a competetive market. How dare you think the buyers’ agents are so worthless!!!
I don’t think NAR is responsible here, if the properties were listed in the MLS and prices for the market conditions with the commission listed or known based on the listing “firm” then individual brokers would be to blame for not showing the low commission properties. I have bought and sold many properties and search for most of my own because I know brokers avoid low commission properties, not in the best interest of their client but they do it anyway.
Funny? I have never seen a plumber, or electrician show up to a homeowners house when the owner says I am only paying you half of what your estimate was. Why should a real estate broker have to do it?
How does one navigate the conundrum of commission offered to a buyer’s agent vs. representing your client’s best interest? I say, after you have selected the homes to the best of your ability that meet your client’s needs, you show the listings with the highest commissions offered first; after all, doesn’t the seller offering the highest commission deserve first crack at your buyer? Then, if none of those work out, show the lower offered commission listings. Nothing unethical about any of that. Additionally, with your buyers consent, there is nothing preventing a buyer’s agent from asking for an increased commission as part of the offer. Maybe not the best strategy if multiple offers are in play, but possible, especially depending on the price offered; what seller wouldn’t agree to a higher commission if the selling price more than compensates for the commission paid? In fact, is that not how commissions are suppossed to work?