Zillow suit calls for changes to Realtor MLS rules

Zillow is calling for a change in National Association of Realtors rules that would allow all homes for sale to appear under the same search tab, a court filing shows.

The real estate site, which had until recently shown all homes for sale under its main search function, had changed the way its search function works to comply with the association’s rules.

Real estate agents share information about their listings with one another through platforms known as multiple listing services, most of which are run by the national association’s local affiliates, including the Houston Association of Realtors. In order to have better access to that data, Zillow became a member of several multiple listing services. The National Association of Realtors forbids members from listing homes for sale received from its multiple listing services with other listings sites, a rule that protects its platforms from aggregators.

As a result, Zillow relegated homes for sale that were not listed in a multiple listing service, in

cluding homes for sale by owner or for sale by real estate agents who are not members of a multiple listing service, to a secondary tab. Shortly after, Rex, an Austin-based brokerage that is not part of a multiple listing service, sued, saying its exposure to potential customers tanked and alleging the National Association of Realtors and Zillow violated antitrust laws.

Rex is an Austin-based discount brokerage that offers to sell homes for a fraction of the typical real estate agent fees, prices it can achieve because it does not pay the buyer’s agent, which would be required if it was a member of a multiple listing service. Its chief executive, Jack Ryan, has taken credit for spurring a November Department of Justice suit against the NAR over commission guidelines.

Zillow filed its opposition to Rex’s suit Friday evening. Zillow called Rex’s claims “without merit,” saying that it was required to follow the National Association of Realtors’ rules, but said it hoped those rules would change.

“Although Zillow has invested in a two-tab listings display to continue to show non-MLS listings, it believes a change to (the National Association of Realtors’ rules) permitting Zillow and other data aggregators to combine listings data would improve the consumer experience on Zillow’s online platforms,” it said in the filing.