A model agreement hammered out by industry players representing listing portals, MLSs and brokerages in the hopes of standardizing the terms under which listings are provided to big search sites like Zillow, Trulia and realtor.com should be viewed as a floor, not a ceiling, says a prominent real estate industry consultant and attorney.

Brian Larson, who advises brokers and MLSs, says the model content licensing agreement — drafted by Clareity Consulting, and offered by nonprofit real estate intellectual property protection group REDPLAN — is worth buying (REDPLAN is providing the model agreement to members at no charge, and will license it to nonmembers for $500).

But Larson cautions readers of his blog that they should regard the terms in any standard agreement “only as a floor and not as a ceiling. Starting with an agreement that the portals have already said they’d be willing to sign is potentially leaving a lot of value on the table. You will never know whether a given portal will agree to a term unless you ask for it.”

Larson says he hasn’t seen the latest draft of REDPLAN’s model content licensing agreement, released this week. But he says the draft of the model agreement he saw in December was more favorable to MLSs than Zillow’s standard offering to MLSs at the time.

Nevertheless, Larson says, “I can’t see why we would start with Zillow as a model. A model agreement for MLSs should start with all the things that an MLS might want and then work back from there based on what each portal is willing to give.”

In announcing that the final draft of the model agreement was available this week, REDPLAN said that while it includes many protections for listing brokers, it makes concessions in several areas that portals are unlikely to give way on, including:

  • Paid placement for listings
  • Home valuation estimates
  • Agent reviews
  • Commingling of “for-sale-by-owner” (FSBO) listings

The model agreement, REDPLAN said, “is meant to be a compromise between what MLSs used to able to get in such agreements years ago and what they’ve been signing with publishers to date — again, something better than what they’ve been signing over the past year or two.”

But Larson says that not only are some portals more likely to make concessions on certain points than others, but their willingness to compromise may change over time.

In any event, Larson said, don’t expect to save money by relying on a model agreement instead of hiring a consultant to represent you in negotiations — such as Larson’s firm, Minneapolis-based Larson Skinner.

Larson said his firm will represent MLSs in negotiations with portals for a flat fee, which they may be able to recover from the portals.

Regardless of whether they plan to hire an attorney to represent them, Larson “strongly urge(s)” MLSs to license REDPLAN’s agreement to see if it includes terms that they might want to incorporate into their portal agreements.

REDPLAN says MLSs are welcome to use the model agreement as a starting point, or negotiate any of its terms.

But the model agreement already includes concessions the portals agreed to make in the hopes that they could avoid managing hundreds of locally drafted agreements, REDPLAN said.

The model agreement gives MLSs and brokers “a much better value exchange than they’ve been getting in the mostly boilerplate agreements they have signed to date,” REDPLAN said, with protections including:

  • Always displaying the listing agent and brokerage
  • Clearly identifying all parties
  • Not resyndicating
  • Keeping information current
  • Prioritizing feeds
  • Displaying source and copyright
  • Sharing traffic information
  • Providing unbiased display
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