Discount real estate brokerage and industry firebrand REX Real Estate has released audio recordings of agents from across the country who refuse to show the brokerage’s listings once they find out that the brokerage does not offer buyer broker commissions.

REX, which is proudly not a member of the National Association of Realtors and eschews multiple listing services in part because they require listing brokers to offer a co-op fee, told the Houston Chronicle about such recordings in January, but did not release any on its website until this week.

Jack Ryan | Credit: REX

“[T]raditional realtors continue to shut down deals when engaging REX’s own licensed agents,” the brokerage said in a post Tuesday. “Why is this problem so commonplace? Traditional realtors are incentivized to chase higher cost and hide fees from consumers.

“Is it time for a change — or even an overhaul of the traditional real estate cartel forcing consumers to pay inflated fees? CEO Jack Ryan says audio clips recorded by REX’s licensed agents attempting to provide their clients with the best customer service and lowest cost on the market should be required listening for all American real estate consumers.”

The brokerage posted three undated recordings from Colorado, Florida and California, respectively. All three are of agents, two of whom identify themselves as Realtors, calling REX to inquire about a listing that is not showing up in their MLS. The agents’ names have been edited out of the recordings.

In the Colorado exchange, a REX representative says, “The reason why you didn’t see it on the MLS is because we actually don’t advertise any of our properties on the MLS. So with that being said, our sellers are not obligated to pay that buyer’s agent commission, however, we’d never want you to work for free. Typically with a buyer agent in your position, the way you’re compensated would be by the buyer, but we do make that process very simple with our offer online submission process.”

The agent replies, “Don’t worry about it; I won’t bother to show it. Who’s your local agent though because I’ll make sure to tell people not to work with them.”

When the REX representative declines, the agent says, “You guys don’t participate in our MLS, so that’s absolutely fine. They would never even know that we were here.”

In the Florida exchange, the agent says her buyer wanted her to show them one of REX’s listings and asks, “What do you pay for a commission? What do I get if I sell the house?”

When the REX representative replies, “There’s not a preset amount, it is negotiable,” the agent says, “Are you kidding me? Forget it. Bye.”

In the California exchange, the Realtor asks whether REX cooperates with other agents and pays compensation. REX’s representative replies, “We don’t pay compensation. That would typically come from the buyer. The way that is presented in the offer, it’s placed on top of the price being offered for the property. So, for example, whatever amount the buyer is offering for the home, you would place your commission on top of that, however, it would typically come from the buyer directly.”

In response the Realtor says, “I’ll tell them that the property sold. Thank you.” Then she hangs up.

In January, Ryan told the Chronicle he believed the recordings obtained by REX significantly contributed to getting a U.S. Department of Justice lawsuit against NAR off the ground.

On November 19, the DOJ filed an antitrust lawsuit against NAR alleging the trade group’s rules were illegal restraints on Realtor competition. The DOJ and NAR filed a proposed settlement at the same time that required NAR to repeal or change several rules the DOJ deemed anticompetitive, including a requirement that the amount of compensation offered to buyer brokers for each MLS listing be made publicly available.

“We went to them and said, ‘Hey, Department of Justice Antitrust Division, why is it that real estate fees in the U.S. are two to three times that of anywhere else in the world?’” Ryan told the Chronicle.

Ryan said REX agents often had difficulty getting other agents to show REX listings to their buyers for fear of missing out on a higher commission provided by non-REX listings. REX agents, unlike most real estate agents in the industry, are salaried employees and do not work based on commission. The brokerage’s website touts that it saves sellers an average of $20,000 in fees.

So, when REX agents started to notice patterns of outside agents declining to bring buyers to their listings, the company started saving recordings of phone calls to provide to the DOJ.

Inman asked REX why it posted the recordings now, when the calls were recorded, how many similar such recordings REX has, whether the posted recordings were provided to the DOJ, whether most agents that contact REX attempt to work with REX or not and whether REX filed complaints against the recorded agents with their local Realtor association or state regulatory body.

Inman also asked whether REX informs its seller clients that some agents refuse to show their listing because REX doesn’t offer a buyer broker commission and what REX does if a seller does want to offer a buyer broker commission. REX did not respond.

Mantill Williams

In an op-ed Thursday, NAR’s president, Charlie Oppler, clapped back against attacks on the real estate commission structure, accusing detractors of duplicity under the guise of protecting consumers in order to get “a payout.” Multiple antitrust lawsuits against NAR have cited agent steering as reason to dismantle the current commission structure.

Asked what NAR thought of the recordings REX posted, NAR spokesperson Mantill Williams said in a statement, “Regarding conduct allegations, every Realtor is bound by a strict code of ethics based on professionalism, consumer protection and the golden rule.

“If the alleged calls reveal a violation of our code of ethics, we would strongly encourage a consumer to file a complaint with the local or state association, which would trigger an ethics investigation and which could result in multiple types of discipline up to and including suspension or termination of MLS privilege. The state real estate licensing commission could also take disciplinary action against the real estate agent, which can result in termination or suspension of their licensure.”

Email Andrea V. Brambila.

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