In a lawsuit filed Thursday, real estate startup Homie Technologies claims that home seller consumers were not the only ones harmed by the real estate industry’s allegedly anticompetitive practices.

Defendants in the lawsuit, which was filed in U.S. District Court for the Central District of Utah, include the usual cast of antitrust lawsuit characters: the National Association of Realtors (NAR), Anywhere Real Estate, Keller Williams Realty, HomeServices of America, and RE/MAX. Utah-based Wasatch Front Regional MLS, which does business as UtahRealEstate.com, is also named as a defendant in the suit.

In the complaint, Homie claims that it is bringing this legal action to “recover the damages…suffered as an excluded competitor foreclosed by the Defendants’ conduct from effective competition in the relevant market.”

The company noted that if it had “been allowed to compete with Defendants and their co-conspirators, it would have gained market share at Defendants’ expense while posing a competitive check on Defendants’ ability to charge exorbitant prices for brokerage services to consumers. By excluding Homie and other new entrants, Defendants, in a single stroke, harmed competition, harmed consumers, and caused injury and damages to Homie.”

Like the antitrust lawsuits filed by consumers, Homie’s suit also takes aim at NAR’s rules, including the Participation Rule, which required listing brokers to make a blanket offer of compensation to buyer’s brokers in order to list a property on the MLS. As a self-described “technology driven industry disrupter,” Homie’s business model involves charging home sellers a flat fee to list their property on the MLS.

“As part of their low-cost selling strategy, sellers using Homie would commonly make an offer of compensation to buyer-brokers that was somewhat below the buyer agent compensation (BAC) offered by sellers represented by traditional brokers, including the Corporate Defendants. Buyers using Homie would receive some or all of any BAC offered by the seller,” the complaint states.

The offer of buyer agent compensation a seller decided to make would be posted on the MLS alongside the listing. According to the complaint, buy-side agents made it clear to Homie that they did not like these lower offers of compensation, using the MLS comment field and Facebook to note that they weren’t going to show Homie listings due to the lower offer of buyer broker compensation, which is known as “steering.”

“Local NAR members in Utah used Facebook groups to coordinate boycotts of Homie’s listings with low buyer-broker commissions during the period that the Buyer-Broker Compensation Rule was in effect, sometimes marked with the hashtag ‘#boycottHOMIE,’” the complaint states. “The exclusionary campaign against Homie was also conducted through the local associations of NAR in Utah that own and control WFRMLS. Local associations of NAR in Utah encouraged agents to steer clients away from Homie—one of their own members.”

In addition, the suit claims that Homie received text messages from NAR-member brokers when the Participation Rule was in effect, claiming that the buyer broker would not show the Homie listing as the buyer broker compensation was only 1.5%.

“I could always show it and then negotiate up the BBC in the contract but figured, why go through the hassle when we have three other great listings paying 2.5-4%. Anyway. Please tell your sellers for me,” one text cited in the complaint stated.

By boycotting Homie listings and steering clients, Homie claims that “innovative entrants, seeking to compete on price and other terms of service attractive to home sellers or home buyers, have been stymied by traditional real estate brokers who acted in concert through the MLS to promulgate a web of rules and practices that created substantial barriers to competition.”

The complaint states that while competition from “innovative market entrants” has been predicted for years, no firms has emerged due to the “anticompetitive conduct of traditional brokerages acting through NAR.”

“The anticipated wave of disruptive innovation and entry into the residential real estate brokerage market has not yet occurred because Defendants conspired to prevent it,” the lawsuit states. “Using their control of the MLS, Defendants imposed rules nationwide that erected substantial barriers to entry for new competitors, thereby elevating the price of residential real estate brokerage services well above competitive levels.”

Although Homie has undergone several rounds of layoffs since its founding in 2015, as of April this year it is still offering brokerage, mortgage and title services to consumers, however it has moved its real estate agents from W2 employees to 1099 contract workers.

Homie is asking for damages and a permanent injunction against the defendants and is demanding a jury trial.  

“While we cannot comment on the specifics of the complaint, the claim that competition within the real estate industry has been stifled is simply unfounded,” Chris Kelly, an executive vice president at HomeServices of America, wrote in an email. “The industry has undergone significant evolution over the past decade, with dynamic changes in the competitive landscape. For example, of the top 10 brokerages by closed sides in 2013, only three remain in the top 10 in 2023. Notably, seven of the top 10 brokerages in 2023 were not in that group just ten years ago. There has been an ongoing and continued introduction of new models, such as iBuying, that have emerged over the past decade.”

None of the other defendants returned a request for comment.