Sellers sue REX, Colorado brokerage over alleged ‘blacklisting’
A couple who listed their property with REX in 2021 claims the now-defunct firm aided a conspiracy by not disclosing that buyer agents refused to show the home.
Key points:
- Sellers relocating from Colorado hired REX to list their home, but later learned that a buyer agent told REX she would not show the home since compensation was not guaranteed.
- The couple is suing REX, The Platinum Group and its agent Kelly Conner Young, who allegedly said she would tell other agents not to work with REX.
- The complaint alleges federal and state antitrust violations, breach of fiduciary duty and breach of contract by REX, and conduct inconsistent with NAR’s Code of Ethics.
In 2021, discount brokerage REX Real Estate released audio recordings of buyer agents nationwide who refused to show REX listings once they found out the brokerage didn't routinely offer buyer-broker commissions.
Now, the sellers of one of those listings have filed suit. On Oct. 12, Jon and Cassi Anderson filed a complaint in the U.S. District Court for the District of Colorado against The Platinum Group; Kelly Connor Young, a 25-year agent with The Platinum Group; and REX itself, alleging violations of state and federal antitrust laws.
REX, which touted itself as a disrupter and champion for consumers when it launched in 2015, purported to save buyers and sellers thousands of dollars by not participating in the traditional commission structure. The brokerage shunned NAR and its affiliated multiple listing services, which, at the time, required listing brokers to offer a buyer agent commission.
'I won't bother to show it'
The Andersons, a military couple, hired REX to sell their Colorado Springs home when Jon was transferred to Nellis Air Force Base in Nevada. After listing their home, REX received a phone call from Young at The Platinum Group, which REX recorded and subsequently released as evidence of agent steering in March 2021.
The recording, which was published by Inman, survives. The call begins with a disclosure that the call may be recorded and redacts the name of the agent calling. She identifies herself as being from Colorado Springs and notes her interest in the couple's listing, which was posted on REX's website.
A partial transcript reads:
REX representative: "Alright, I do see that one here, and the reason why you didn't see it on the MLS is because we actually don't advertise any of our properties on the MLS. So, with that being said, our sellers are not obligated to pay that buyer's agent commission. However, we'd never want you to work for free. Typically, with a buyer agent in your position, the way you're compensated would be by the buyer. But we do make that process very simple with our online [offer] submission process."
Agent: "Don't worry about it. I won't bother to show it. Who's your local agent though? Because I'll make sure and tell people not to work with them."
REX representative: "I wouldn't — I don't think that would be in the best interest. I mean, that would be — "
Agent: "That's okay. You know, you guys don't participate in our MLS, so that's absolutely fine, you know? They would never even know that we were here."
REX representative: "I mean, I suppose."
Agent: "Yeah. Okay. Have a great day. Bye."
Sellers didn't know they were 'blacklisted'
According to the complaint, the Andersons were not aware that some agents had refused to show their property and that REX had failed to share that information until a Wall Street Journal reporter who had obtained the recording called them in October 2023.
"No one from Defendant REX Real Estate informed the Plaintiffs that their home was being blacklisted by Defendant Kelly Connor Young or Defendant The Platinum Group," the complaint says.
"As a result, the Plaintiffs suffered reduced exposure, fewer showings, diminished bargaining leverage, delay, and economic loss."
To support its antitrust claims, the complaint argues that the defendants' "refusal to show, or agreement to discourage showings of, nontraditional listings diminished sellers' access to a material segment of qualified buyers and diminished transferred military buyers' access to available housing options."
Sellers using nontraditional brokerages were also less able "to compete for prospective buyers on price, commission terms, listing method, and service model, while limiting buyers' access to otherwise available homes," according to the filing.
A conspiracy aided by silence
By withholding information from its clients, REX contributed to an alleged conspiracy by Young and The Platinum Group to reduce competition, the filing suggests. That not only affected the home's sale price, it caused "a delay in getting the house sold," resulting in financial harm since the Andersons were paying a mortgage on their unsold home in Colorado and rent in Nevada at the same time.
"Defendants' conduct constitutes a group boycott and concerted refusal to deal, restraining trade and harming homeowners and consumers alike," the complaint says.
Moreover, the complaint alleges that the defendants' conduct is "inconsistent" with Articles 1, 3, 15, and 16 of the NAR Code of Ethics, "which prohibit misleading statements and interference with other brokers' client relations and require realtors to treat all parties honestly."
The suit accuses all three defendants of violating the federal Sherman Antitrust Act and the Colorado Antitrust Act, and alleges breach of fiduciary duty and breach of contract by REX.
REX has not operated since 2022, blaming its demise in part on Zillow's listing display rules. The discount brokerage sued the portal in 2021 but failed to convince a jury or appeals court that Zillow had engaged in deceptive business practices.
Real Estate News has reached out to Young, The Platinum Group Owner & President Steve MacFarlane, and David Boies, an attorney who has represented REX, for comment.