Trouble Piles Up As NAR Faces 'Extinction-Level Event'
Zillow is suing multiple listing services across the United States, accusing them of forcing Zillow’s listing service out to maintain illegal monopolies. The lawsuit represents another blow to established residential real estate players, including the beleaguered National Association of Realtors.
The lawsuit, filed Dec. 22 in an Arizona federal court, says Seattle-based Zillow’s home tour scheduling platform ShowingTime is being phased out by multiple listing services, including the Arizona Regional Multiple Listing Service, the Milwaukee-based Metro Multiple Listing Service and MLS Aligned, a collective owned by six listing services, The Seattle Times reported. Zillow alleges a violation of federal antitrust laws and an attempt by multiple listing services, many of them NAR-affiliated, to secure a monopoly.
The challenge to NAR and other prominent real estate organizations follows an October decision to award $1.8B to home sellers after a jury found that NAR and several large residential brokers conspired to artificially inflate real estate commissions.
It also comes as the NAR reels from sexual harassment allegations against former President Kenny Parcell that led to his resignation last year and as it fends off more than 10 lawsuits, The New York Times reported. The organization is facing bankruptcy, according to the NYT.
Amid a Justice Department investigation of NAR for antitrust violations, large brokerages like Re/Max and Coldwell Banker no longer require agents to maintain NAR memberships. Redfin will require some agents to stop paying dues after it cut ties last year.
Together, the moves could equate to a death blow for the organization that trademarked the term Realtor, the NYT reported. Several high-profile real estate agents are talking about starting their own groups if NAR goes under.
“This is an extinction-level event,” Jason Haber, a real estate agent with Compass and one of the most outspoken critics of NAR, told the NYT. “You cannot dispassionately look at the facts and say that everything is OK.”
Real estate mogul and reality TV star Mauricio Umansky is one agent laying the groundwork to start an alternative association, according to the NYT. Similar to the Zillow lawsuit, Umansky is suing NAR after it tried to shut down his private home listings site.
Multiple listing services act as crucial tools to collect and distribute listings of homes for sale and offer real estate agents data analysis, platforms to schedule home showings and other services.
When Zillow purchased ShowingTime in 2021, the listing services in Arizona, Wisconsin and elsewhere banded together to create MLS Aligned and Aligned Showings, their own showing platform, according to The Seattle Times.
Originally, the listing services allowed agents to use either ShowingTime or Aligned Showings, but the Arizona and Wisconsin listing services announced they would remove ShowingTime from their portals.
In the lawsuit, Zillow argues this creates a monopoly in those regions through anti-competitive and exclusionary conduct. MLS conspired to cut off the integration of ShowingTime into MLS member portals “rather than competing on the merits by improving their product and allowing listing agents the freedom to continue to choose between ShowingTime or Aligned Showings,” the lawsuit says.
Arizona Regional Multiple Listing Service CEO Matthew Consalvo told The Seattle Times the suit has no merit.
“We fully dispute the allegations, but have no additional comments as the matter will be [handled] by our outside legal counsel,” he said in a Friday statement.
The other listing services didn't respond to requests for comment.
The complaint seeks a court order to block the listing services from imposing their showing platform alone, plus unspecified financial damages, The Seattle Times reported.
