NAR: approval of IDX franchisor indexing policy ‘open, transparent, inclusive’

Trade group will revisit rule change this week

Changes to the National Association of Realtors’ Internet Data Exchange (IDX) policy that allowed franchisors to begin indexing and displaying their franchisees’ listings in January were the product of more than a year of open deliberations and review, NAR said in a statement issued Friday.

Two referral networks that represent dozens of real estate brokerages — The Realty Alliance and Leading Real Estate Companies of the World — have asked NAR to repeal the policy at the association’s midyear meeting this week in Washington , D.C. The issue is on the agenda of NAR’s Multiple Listing Issues and Policy Committee.

In an April 18 letter to NAR, Ron Peltier, chairman and CEO of HomeServices of America Inc. — the nation’s second-largest brokerage company, and a member of both referral networks — said the policy raised "significant antitrust concerns."

In his letter, Peltier said "NAR, which ostensibly exists to benefit its members," appears to have acted with nonmembers "to impose an arbitrary mandatory rule upon its membership to force the delivery of member data to nonmembers without their consent."

A NAR spokesman provided a statement to Inman News outlining a process that began in August 2009, that ultimately led to the rule change allowing franchisors to index and display IDX listings. The change to the IDX policy, the statement noted, was recommended by a work group formed to study the issue, and approved by two committees and NAR’s board of directors in November.

"While NAR policies are reviewed, and in some cases enhanced, on an ongoing basis, it is extremely inaccurate to characterize the process by which they are developed or amended as anything less than open and deliberative, or to suggest that all constituencies in the Realtor family don’t have a full opportunity to participate in the dialogue and debate," the NAR statement said.

NAR said the process that led to the change began in August 2009, at a meeting of a work group tasked with studying the issue of indexing of listings by search engines.

The issue at the time was whether NAR’s IDX policy — aimed at protecting information in listings from data "scraping" by third-party Web sites — should also apply to search engines like Google, which collect information and store it in internal databases in the process of indexing Web sites.

After NAR staffers ruled that the policy did apply to search engines, many brokers and agents protested that requiring them to block search engines from indexing their sites would hamper their ability to promote their clients’ listings.

NAR’s Multiple Listing Issues and Policy Committee recommended that the IDX policy be amended to allow search engine indexing. But in May 2009, NAR’s board of directors decided to send the matter back to a work group studying other changes to the IDX policy.

It was at an August 2009 meeting of the work group, NAR said, that Realogy Franchise Group President and CEO Alex Perriello "suggested consideration be given to expanding the IDX policy to permit (indexing and) display of IDX information by national real estate franchisors."

Three months later, at NAR’s 2009 annual meeting, the group’s board of directors approved the work group’s recommendation that the IDX policy be amended to clarify that brokers were not required to protect listings from being indexed by legitimate search engines like Google.

The amendments adopted at that time did not extend IDX display rights to real estate franchise organizations. The following May, NAR noted, Perriello made a presentation to more than 800 Realtors, MLS administrators and association executives attending the NAR MLS Forum.

He made a case for franchisor websites like those Realogy operates on behalf of brokerages — such as Century21.com, ERA.com and ColdwellBanker.com — be permitted to index affiliated brokers’ IDX websites to enhance the search results.

That way, Perriello said at the time, consumers would be able to see, on the initial search results page, not only the listings represented by the brokerages in that franchise, but virtually all of the listings in the market they were interested in. Unaffiliated brokers, he said, would also benefit by allowing franchisor websites to index listings, because their listings would be exposed to consumers who are likely to be drawn to the franchisors’ larger websites.

NAR formed another work group, which met in August 2010 to consider franchisor indexing of IDX listings, and also whether the IDX policy should be amended to address delivery of IDX information by participants using RSS subscription. The work group recommended that NAR adopt both proposals.

At NAR’s 2010 convention in November, the Multiple Listing Issues and Policies Committee did not approve the work group’s recommendation to amend the IDX policy to expressly authorize IDX display and delivery of listings using social media sites, RSS subscription, mobile devices and other electronic means.

A number of MLS administrators raised concerns about monitoring and compliance of listings feeds to social media sites and mobile devices. The committee is scheduled to revisit that issue next week at NAR’s midyear meeting.

The Multiple Listing Issues and Policies Committee did recommend amending the IDX policy to allow franchisors to index and display IDX listings. The next day, NAR’s Executive Committee also recommended such an amendment, which was approved by a voice vote of NAR’s 860-member board on Nov. 6.

"The process by which the NAR Internet Data Exchange policy was amended in late 2010 was open, transparent, inclusive and deliberative," NAR’s statement said.

The change became effective in January with publication of NAR’s Handbook on Multiple Listing Policy, and Realogy’s Century 21 franchise became the first to implement it.

A spokesman for Realogy said the company had no comment. A spokewsoman for HomeServices who was provided with a copy of NAR’s statement said Peltier’s letter was focused solely on legal issues.

"At no time has HomeServices stated that the process by which this rule was passed was anything less than open, transparent, inclusive and deliberative," the HomeServices spokeswoman said. "Rather, the HomeServices point of view expressed in its letter to NAR focused solely on the legal issues surrounding its request that the committee reconsider its adoption of the franchisor IDX rule."

NAR had previously said it was "aware of concerns expressed about the policy by HomeServices. The issue is going to be considered by the Multiple Listing Policy Committee at the midyear meetings."


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