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Deal on MLS real estate listings
Web brokerages win full access — but not in Canada you say.
Online real estate brokers will be guaranteed full access to listings of homes for sale under an agreement announced by American federal officials Tuesday. Under the proposed settlement with the U.S. Department of Justice to resolve a 2005 antitrust lawsuit, the National Association of Realtors agreed to prohibit real estate brokers who use multiple listing services from withholding their property listings from Web-based brokerages such as ZipRealty and Redfin.
Such companies rely heavily on Internet tools to work with their customers, and frequently offer their services at much lower rates than most traditional brokerages.
"Today's settlement prevents traditional brokers from deliberately impeding competition," Deborah A. Garza, deputy assistant attorney general with the Justice Department's antitrust division, said in a statement. "When there is unfettered competition from brokers with innovative and efficient approaches to the residential real estate market, consumers are likely to receive better services and pay lower commission rates."
But Tuesday's settlement won't result in sudden changes to what consumers find online when they are looking for homes. That's because in 2005 the National Association of Realtors suspended an earlier policy that allowed brokers to withhold listings from online brokers' Web sites - so most sites have had access to all listings for more than two years.
The agreement is quite significant for online companies and traditional ones as well. "We can compete as aggressively as we want without worrying that a broker will decide not to share his listings with us," Redfin Chief Executive Glenn Kelman said on Tuesday. "There has been a huge debate in online real estate about whether we could survive working as a broker within the MLS rules, and get access to all the listings for sale. That is now a settled issue."
Jeff Barnett, of Alain Pinel Realtors and the national chair of a Realtors group called MLS Forum, said the listing-sharing portion of the agreement is a plus for consumers. "It's in the best interests of the seller to promote their listing on all real estate Web sites," Barnett said.
Though the agreement will still allow home sellers to opt out of displaying information about their for-sale home online, only a tiny fraction do so, Barnett said.
For traditional brokerages, Barnett said, the most important aspect of the proposed settlement is that it would prohibit companies not actively involved in selling homes from harvesting listing information off of MLS sites and then charging brokers referral fees for those listings.
Tuesday's settlement will not take effect until late summer at the earliest, or 60 days after it wins court approval. It would be in place for 10 years. It neither imposes a fine on the National Association of Realtors, nor does it force the group to acknowledge any liability.
Hopefully this American decision will prompt the Competition Bureau in Canada to take some action against anti-competitive practices of organized real estate in this country.
May 28, 2008 in Real Estate Practices | Permalink
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