Will new virtual firms pave way for full MLS?

Editor's note: This article, reposted with permission by The Real Deal, highlights policies and proposals floated to get New York City's real estate market back on track. Click here to view the original article.

By CANDACE TAYLOR

A new breed of online brokerage is springing up in New York, altering the landscape of real estate sales in Manhattan and worrying traditional firms, who fear the changes may hurt their business.

In the past, New York firms have contended with Web aggregators like StreetEasy and Trulia, which gather and post information on local brokerage listings.

But thanks to a recent settlement between the federal Department of Justice and the National Association of Realtors, the Real Estate Board of New York is now sharing all of its members' listings directly with online brokerages, known as "Virtual Office Web sites."

These VOWs, as they are called, allow consumers to view those listings -- including those from other firms -- online.

Experts say the change will have far-reaching consequences for the industry in the coming year and beyond. Some believe VOWs could also pave the way for a comprehensive Multiple Listing Service, which has long been resisted here.

Eric Gordon, the managing director at Realplus Online Listing Exchange, a shared listing database that's the closest thing New York has to an MLS, called the emergence of VOWs in Manhattan "huge."

"In a lot of ways, it levels the playing field between the small and large firms," he said.

The change stems from a lawsuit filed by the Department of Justice against NAR in 2005. The suit alleged that NAR's policy of allowing brokers to withhold listings from VOWs violated antitrust law because it stymied competition.

A 2008 settlement between the Department of Justice and NAR requires that VOW users be able to choose from the same database of available homes as customers at traditional brokerages. Because VOWs' business model is to operate online rather than from brick-and-mortar offices, the settlement said, customers may browse through all of the listings a flesh-and-blood broker could access for them in person.

In essence, "the law views a VOW as the same as a storefront," explained Steven Spinola, the president of REBNY. ...CONTINUED

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