The U.S. Justice Department’s antitrust division is still investigating a National Association of Realtors’ policy that dictates how brokers can display one another’s home listings on the Web. A department spokesperson this week confirmed the probe, but wouldn’t say how much longer it is expected to continue.
NAR has set a July 1 deadline for MLSs to comply with the virtual office Web sites policy it adopted last May. But many MLSs are waiting for news on the DOJ investigation before they fully implement the NAR rules.
NAR General Counsel Laurie Janik said Justice Department officials told her they were “mindful” of the July 1 implementation date.
The DOJ’s investigation has focused on a provision of NAR’s policy that permits brokers to opt out listings from other brokers’ VOWs on a blanket or selective basis, according to Janik. The DOJ also has been interested in a provision that restricts the use of names and contact information collected through a VOW in connection with referrals of business to companies other than real estate brokers.
NAR pushed the original Jan. 1, 2004, deadline to July 1 because of the DOJ investigation.
The display of online listings is an important trend for brokers and agents because the majority of consumers now begin their search for homes and real estate services online. Listing are a lure brokers and agents can use to attract these online consumers to their Web sites.
George Stephens, broker of Texas-based ERA Stephens Properties, has heard numerous discussions about VOWs during the past year. He is immediate past chairman of the Texas Association of Realtors and former director of compliance for eRealty, one of the first brokerages to operate a VOW.
“My sense is that depending on which local market you’re operating in, VOWs themselves are either not heard of or (not) understood to any degree or they are causing significant heartburn,” Stephens said.
More brokers and agents are aware of VOWs and online listings display today than were a year ago, he said. NAR’s contested VOW policy contributed to that awareness as did the Internet, news reports and real estate franchises’ efforts to educate brokers about the subject.
Listen to what George Stephens has to say about online data display.
In markets like Boston, brokers have operated VOWs for many years. Jeffrey Bastress, broker/owner of Sterling, Mass.-based Back Roads Real Estate, launched his VOW in 1996. So far, no brokers have said they want to selectively opt out their listings from his Web site, he said.
“The policy, if nothing else, is bringing it to everyone’s attention,” he said.
Bastress admitted he is among the many real estate brokers and agents who don’t fully understand the differences between VOWs and Internet Data Exchange (IDX), which is another way brokers can display one another’s listings online.
In Philadelphia, IDX is prominent and well received among brokers, according to Rita Johnson, president and CEO of Trend Regional MLS, which has 23,000 members in Southeastern Pennsylvania, Southern New Jersey and Delaware. Thirty-five VOWs operate in that region and are mostly agent Web sites rather than broker-operated.
“My sense is that where IDX is successful, VOWs are not really an issue,” Johnson said.
Almost all of the brokers in Milwaukee also share their listings via IDX, according to Peter Shuttleworth, EVP of Multiple Listing Service and co-chair of a NAR subcommittee that is charged with considering whether to consolidate NAR’s IDX and VOW rules into one policy. Those discussions are on hold during the DOJ investigation because the subcommittee doesn’t know what questions need to be addressed, he said.
Some MLSs have a more conservative view on VOWs than others have. MAP MLS, a broker-owned operation based near Chicago, takes the stance that a broker’s listings are displayed only where he or she wants them displayed, MAP CEO Bud Fogel said.
MAP has 12,000 members and about 325 shareholders. Coldwell Banker last month pulled all of its listings from 10 of its Chicago-area offices out of the larger, association-owned Multiple Listing Service of Northern Illinois (MLSNI) and exclusively put them into MAP. Some observers speculated the company’s move had to do with listing data control.
“What has happened is the idea that listings have become community property. That’s much different from our view…The listing brokers have a much more vested interest in controlling their listings when it comes to advertising or leveraging them for their business,” Fogel said.
Meanwhile, online listings display practices have triggered a few lawsuits. In Michigan, the state attorney general’s office is looking into alleged anti-competitive practices and antitrust claims related to state real estate brokers’ use of MLS data in VOWs.
No one from the attorney general’s office returned phone calls seeking comment.
Home Quarters, a discount brokerage in Novi, Mich., in November settled an antitrust lawsuit it filed against the Michigan Data Exchange MLS, which last May terminated Home Quarters’ access to its home listings data feed because the brokerage allegedly wasn’t following MLS rules that govern use of for-sale listing data on Web sites. Home Quarters operated a VOW that allegedly commingled data from multiple MLSs, didn’t properly identify broker reciprocity listings and broke certain data restriction rules.
Home Quarters no longer operates a VOW.
The Greater Lansing Association of Realtors in Michigan last fall issued a $125,000 penalty against real estate broker Tomie Raines for operating a virtual office Web site. The company has appealed the decision, which is pending a hearing at the local level.
Tomie Raines continues to operate the VOW and has met with the U.S. Justice Department regarding the matter at the department’s request.
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