Real estate brokerage sues Oregon for "unlawful surtax on homebuyers"

It calls for an end to rebate bans, claims they drive up homebuying costs and stifle competition

Real estate brokerage sues Oregon for "unlawful surtax on homebuyers"

Real estate brokerage REX has filed a lawsuit against the State of Oregon for its antitrust practices and anti-rebate policies.

The company filed the lawsuit on Monday alleging that the state’s anti-rebate policies prevent homebuyers from “receiving discounted real estate fees [which] harms consumers and stifles competition.”

Following its launch in Oregon last year, REX claimed to receive a letter from the Oregon Real Estate Agency targeting its Buyer Rebate Program (BRP), which saves Oregon homebuyers roughly $385 million in fees each year by refunding half of the commission.

“While commission rebates are available to most US home buyers, Oregon’s overt rejection of real estate rebates to preserve its traditional real estate conglomerate doubles as an unlawful surtax on Oregon home buyers,” REX said in the court filing.

In addition to Oregon, eleven states have anti-discount policies banning real estate brokers from rebating their commission to customers, including Alabama, Alaska, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, Oklahoma, Tennessee, and West Virginia.

The “unfair policies” are sabotaging homebuyers, the brokerage said.

“Because of the rebate bans, real estate fees levitate far above the costs of providing these services and far above what hard-working Oregonians can afford to pay for them,” REX said. “Oregon’s policies provide an unfair advantage to high-fee, conventional businesses at the expense of new entrants like REX and the consumers they serve.”

REX points to traditional firms – such as Redfin, Coldwell Banker, RE/MAX, Keller Williams, Compass, and Century 21 – as Oregon’s real estate syndicates.

“These conventional brokerage firms and their ilk are distinguished by their faithful support of the National Association of REALTORS (NAR) and Oregon Association of REALTORS (OAR), the trade groups responsible for the broker-centric real estate model that burdens consumers with outmoded restrictions and exorbitant fees,” REX said in the filing.

Last month, the US Department of Justice sued the National Association of Realtors (NAR) for their anti-competitive practices. Like NAR, Oregon’s Real Estate Agency faces multiple challenges against their policies.

Read more: Realtors settle with DOJ over broker commissions (mpamag.com)

If the state’s policy were ended and real estate fees were dropped by 1.5%, REX said it will be able to deliver $5,400 in savings to the typical buyer – allowing 7,700 more Oregon households to purchase homes.

“Oregon’s rebate ban is an affront to middle- and lower-income families struggling to pull together a down payment. Consumers lose $60 billion in excessive fees to the real estate cartel behind policies like Oregon’s prohibition on discounts. REX’s business model is founded on returning real estate fees to our customers,” said Jack Ryan, CEO and co-founder of REX. “Our lawsuit against Oregon is a major step toward putting real estate consumers first.” 

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