In an open letter, Jack Ryan alleges the National Association of Realtors’ rules prevent hundreds of thousands of Americans from attaining homeownership. He called on NAR to repeal the rules at its Realtors Conference and Expo in San Diego in November.

Jack Ryan, the co-founder and CEO of REX Real Estate, has sent the National Association of Realtors a letter calling on the trade group to rescind rules the discount brokerage deems anti-competitive at its annual conference in November.

REX sued NAR and Zillow in March, alleging antitrust violations for a NAR rule, dubbed the “No-Commingling Rule,” that prompted Zillow to separate non-multiple listing service listings from MLS listings on its website, including listings from REX. Earlier this month, a federal judge denied motions from NAR and Zillow to dismiss the case.

Ryan addressed his letter to NAR President Charlie Oppler and NAR President-Elect Leslie Rouda-Smith. He said NAR should eliminate the no-commingling rule, which REX calls “the segregation rule,” at its upcoming event, the Realtors Conference and Expo in San Diego, where the trade group will already be consideringrule regarding listing broker attribution as well as rules regarding buyer agents touting their services as “free,” filtering listings by commission or brokerage name and broker back office feeds.

“This meeting is the perfect opportunity for NAR to address various policies which currently prevent hundreds of thousands of Americans from achieving the American Dream of home ownership,” Ryan wrote.

Jack Ryan | Credit: REX

“NAR can showcase its new commitment to competition and to housing accessibility by making several changes such as rescinding its Segregation Rule, supporting rollbacks of anti-rebate rules, and addressing lockbox rules.”

Pointing to a recent NBC News feature that discusses the struggles of homeowners attempting to sell homes for sale by owner (FSBO) and REX’s case against Zillow and NAR, Ryan said NAR should adopt rules that encourage sharing of property information and accessibility to all homes for sale.

“The segregation rule fragments the real estate consumer experience,” he wrote. “The solution is to let consumers see everything on the market and empower them to choose the home they want to purchase at the price they want to pay. Now is the time for NAR to eliminate the plainly anti-consumer segregation rule and make the real estate web accessible to all homes for sale.”

In an emailed statement, NAR President Charlie Oppler condemned REX’s rhetoric as that of an industry freeloader.

“REX continues to make unfounded claims and attempt hollow legal maneuvers then rehash those in the media to make up for its business shortcomings,” Oppler said. “A federal judge warned REX in a published opinion to stop making false accusations because it is ‘neither persuasive nor remotely accurate.’

“In REX’s case against Zillow and how it displays MLS properties versus non-MLS properties, REX is trying to argue they should take benefits of local broker organizations without contributing to them. That’s not about NAR but it is about someone trying to freeload.

“More broadly speaking, antitrust laws are not meant to serve as a business strategy. Courts have repeatedly held they are there to protect consumers and competition, not competitors like REX. And ironically, the businesses REX is trying to gain an unfair advantage over are overwhelmingly one- to three-person mom and pop shops (88 percent of Realtors are small businesses) who are working hard to compete on service and varied commission models.”

Charlie Oppler | Credit: NAR

Oppler did not address the policies that Ryan highlighted in his letter. Rather, he emphasized the benefits of MLSs for real estate brokerage competition.

“Further local market MLSs fundamentally advance competition and equity for consumers and small businesses,” Oppler said. “Local MLS real estate organizations level the playing field among brokerages, allowing those small brokerages to compete with large ones. Because of these local broker organizations, there is unprecedented competition among brokers, especially when it comes to service and commissions.

“Local broker organizations ensure equity, superior customer service and greater cost options for buyers and sellers. They provide sellers equal access to the largest possible pool of potential buyers and create the greatest number of housing options for buyers in one place. And sellers making offers of compensation to buyer brokers gives first-time and low/middle-income homebuyers a better shot at affording a home and professional representation.”

Ryan also condemned NAR rules limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for a NAR-affiliated MLS. A proposed settlement between NAR and the U.S. Department of Justice would have required NAR to adopt a rule that requires all member boards and MLSs to allow any licensed real estate agent or agent of a broker, to access, with seller approval, the lockboxes of properties listed on an MLS.

The DOJ withdrew from that settlement in July, but NAR’s MLS advisory board will discuss lockbox rules at an upcoming meeting in October in advance of NAR’s conference.

“The lockbox policies should have been off the books long ago as I cannot see any consumer rationale for why any MLS member would bar any licensed real estate agent from showing homes by blocking them and their customers from access to the lockboxes and the Supra key,” Ryan wrote.

“In today’s real estate market, characterized by record thin inventories and skyrocketing prices, no consumer should be locked out of a home that they want to see through a licensed agent. Competition and consumer choice require opening up Supra access to all licensed agents and allowing a truly free market for homebuying and selling to flourish.”

Michael Toth

SentriLock, a competitor to Supra, is a wholly-owned subsidiary of NAR. It’s unclear why Ryan referenced Supra specifically. Inman has asked REX for comment and will update this story if and when we hear back.

Katie Johnson

Lastly, Ryan said that REX’s general counsel, Michael Toth, had written a letter to NAR’s general counsel, Katie Johnson, last week asking NAR to join REX in supporting the repeal of anti-rebate laws in the ten states with rebate bans still on the books. REX is currently suing the state of Oregon over its anti-rebate law.

“These policies harm consumers and licensed real estate agents alike with their anachronistic anti-consumer standards,” Ryan wrote. “Based on the National Association of Home Builder’s Priced Out model, a 2 percent real estate buyer’s rebate would enable over 700,000 Americans to enter the home ownership market.

“However, consumers and real estate agents in the 10 rebate states are disadvantaged. These anti-rebate rules are an affront to all licensed real professionals, who deserve to be able to negotiate freely with consumers for the price of their services.”

REX has repeatedly publicly blasted NAR for allegedly anti-consumer rules and has referred to the trade group, Zillow and others as a “cartel,” even after a judge expressly told REX to stop doing so in June.

As part of its quest to disrupt the industry, the brokerage provided recordings of Houston-area real estate agents who were caught steering to the DOJ to aid in its investigation against NAR.

REX also commissioned a study that found that real estate commissions are inflated by as much as $50 billion per year because of a lack of price competition resulting from NAR’s rule that commissions be shared between listing brokers and buyer brokers. The discount brokerage previously submitted a comment letter to the DOJ in February, appealing to the agency to bring an end to NAR’s commission sharing rule.

Editor’s note: This story has been updated with comments from NAR and to attribute them to NAR President Charlie Oppler.

Read Ryan’s letter:

Email Andrea V. Brambila.

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