Lawyers for NAR, HomeServices of America, RE/MAX, Anywhere and HSF Affiliates denied claims of a conspiracy to inflate commissions, arguing that Homie would have benefitted from the plot.
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The National Association of Realtors and other major real estate companies have asked a judge to throw out a case filed by discount brokerage Homie, arguing the policies didn’t amount to an illegal conspiracy to snuff out discount brokerages.
Attorneys for NAR, HomeServices of America, RE/MAX, Anywhere and HSF Affiliates on Friday filed motions to dismiss the suit filed by Homie in August. The attorneys denied there was an illegal conspiracy to inflate commissions, but speculated that Homie would have benefitted if prices had been manipulated because it could have adjusted its own prices to win additional business.
“Homie claims Defendants architected a scheme to raise prices and exclude a wave of new competitors,” lawyers for the 1.5 million-member trade group wrote. “But Homie’s factual allegations fail to connect Homie’s injuries (lost profits and market share) to the ways in which Defendants’ alleged conduct supposedly harmed competition (through higher prices and increased barriers to entry).”
“Homie’s alleged boycotting harms flowed from independent actions of local real estate agents — not Defendants,” the attorneys concluded, noting that the statute of limitations on the policies Homie is challenging have expired.
In its original complaint in August, Homie argued that texts and other communications proved real estate agents had steered clear of Homie listings because of the lower commission it offered.
Homie alleged in its complaint that local agents boycotted the company’s listings and steered their homebuying clients away from homes listed by Homie.
Homie took aim at five rules created and enforced by NAR, four of which have since been repealed. They include:
- “Broker-Buyer Compensation” Rule (1996)
- “Free-Service” Rule (1997)
- “Commission Concealment” Rule (2012)
- “Commission-Filter” Rule (2012)
- “Clear Cooperation” Rule (2019)
Only the Clear Cooperation Policy remains in effect, though NAR is actively weighing whether to keep it, amend it or repeal it outright.
NAR attorneys said Homie didn’t show that it had suffered from antitrust violations, and that it could have simply raised or lowered its prices to compete with its full-priced real estate competitors. And if individual agents boycotted Homie, the attorneys added, none of those agents was named as a defendant or directed by a named defendant to boycott Homie and therefore the alleged boycotts didn’t represent antitrust violations.
“Even if Homie and other discount brokerages were ‘targeted’ by the alleged conspiracy to inflate commissions using NAR policies as part of some ‘overall scheme’ — which Homie has not alleged — Homie still would not be able to plead an antitrust injury because it stood to benefit from higher commissions resulting from the supposed conspiracy,” the attorneys wrote.
The attorneys also addressed Homie’s claims that the Clear Cooperation Policy prevented it from marketing its clients’ properties adequately.
“The Clear Cooperation Policy only required Homie to distribute its publicly marketed listings broadly, making them available to other brokerages participating in the MLS (where, in return, Homie could view listings marketed by other brokers in a single location),” the attorneys wrote. “Thus, there are no facts alleged in Homie’s Complaint to suggest that the Clear Cooperation Policy harmed Homie (or competition) in any way.”
Attorneys for RE/MAX and Anywhere Real Estate, meanwhile, suggested in separate filings that Homie wanted to “ride the coattails” of homeseller plaintiffs who successfully sued NAR and the real estate industry.
“Perhaps recognizing that it can’t ride consumers’ coattails,” the RE/MAX and Anywhere attorneys wrote, “Homie pivots and alleges that other brokers conspired to boycott Homie.”