Zillow logo, gavel, scales of justice

Zillow wins case over how it handles non-MLS listings 

A jury decided that Zillow did not harm The Real Estate Exchange, known as REX, by moving its listings to a secondary tab with less traffic.

September 29, 2023
3 minutes

Key points:

  • The federal case originally had an antitrust claim that also included the NAR as a defendant, but the judge ruled against that in August.
  • REX went to trial with claims against Zillow of false advertising and unfair or deceptive acts.
  • The Real Estate Exchange was a low-commission brokerage that ceased operations in May 2022.

A jury has determined that Zillow did not make deceptive changes to the way it displays non-MLS listings, a significant victory for the company.

The Real Estate Exchange, known as REX, sued Zillow and the National Association of Realtors over what it says were deceptive practices to conceal non-MLS listings on Zillow's heavily trafficked website. REX was a low-commission brokerage that ceased operations in May 2022.

In a trial in U.S. District Court in Seattle, a jury decided on Sept. 29 that REX did not prove Zillow used false advertising in its decision to put non-MLS listings on a different section of the website. The jury also said Zillow proved its defense on a second claim about unfair or deceptive acts.

"We're pleased with today's victory and are ready to move on and focus on what matters: helping customers who come to Zillow get into their next home," said Will Lemke, corporate communications manager for the company, in an email.

NAR was dropped from the case after U.S. District Judge Thomas Zilly ruled in August that REX Homes' antitrust claim was without merit, effectively removing NAR as a party to the case. The case continued as Judge Zilly allowed REX's claims that included unfair/deceptive trade practices.

The case was filed in March 2021, and in the original complaint, REX claims its business was damaged when non-MLS listings on Zillow were relegated to a secondary search results tab, limiting traffic to those listings.

Zillow had modified its site in January 2021 after it began using the Internet Data Exchange (IDX) feed that handles MLS listings. Zillow said it made the change in order to comply with NAR guidelines, specifically its co-mingling policy.

REX had been founded with lofty goals

REX launched in 2015, with the goal of transforming the real estate industry to "push past the outmoded practices of traditional real estate brokers to provide a superior outcome for both buyers and sellers at one-third the cost," its website claimed.

At the time the lawsuit was filed, REX was a licensed broker active in 19 states. Instead of marketing homes through the MLS, the company used digital technology to market directly to consumers, "using data modeling and machine learning to 'match sellers and buyers of homes as accurately and speedily as possible on Zillow, Google, Facebook, and other channels,'" according to the court filing. 

REX claimed its model reduced the total commission paid to 3.3% on average, well below the national brokerage rate of around 5.5%. It also estimated that in a five-year period, the company saved consumers more than $29 million in commissions.

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