The chairman of the House Financial Services Committee has requested the federal government study the restrictions placed on Multiple Listing Services and their impact on home buyers.
In a Thursday letter, chairman Michael Oxley (R-Ohio) formally requested the General Accounting Office assess and report on four main areas: how the residential real estate transaction is evolving as a result of electronic commerce; any barriers to greater use of electronic commerce in residential real estate transactions; how removal of those barriers could benefit both consumers and real estate professionals and how those changes could affect home ownership.
“In particular, please review the role of multiple listing services,” Oxley wrote. “The MLSs effectively are the residential real estate marketplaces…Today all, or virtually all, MLSs appear to provide information about homes for sale in electronic form, yet there appear to be significant limitations on the accessibility of this information. Please review and explain any rules for Internet display of MLS information, and any other relevant regulatory structure. Please determine whether these relationships and regulations are promoting or limiting transparency, competition, and home ownership.”
At the end of the two-page letter, Oxley also outlined nine questions he would like addressed. Several deal specifically with the MLS, such as asking whether MLSs in effect function as the marketplaces for residential real estate. He also has requested the GAO look into the legal and practical effects of the IDX and VOW rules adopted by the National Association of Realtors.
“Could these rules result in the blocking of legitimate commerce, particularly against certain licensed real estate brokers?” Oxley wrote.
Other questions included:
- “What is Realtor.com and how does this company generally promote the use of technology by consumers and real estate agents? Is this an IDX or a VOW site subject to the NAR rules?”
- “What are the state law obligations of real estate agents and brokers to consumers to promote homes for sale, and how, if at all, are these obligations consistent with restrictions on display of information over the Internet?”
- “Has the Internet facilitated the custom of agents representing both the buyer and the seller in the same transaction and, if so, is this good for the consumer?”
The request comes amid an ongoing investigation by the U.S. Department of Justice into a provision of a NAR policy that permits brokers to opt out listings from other brokers’ VOWs on a blanket or selective basis. 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.
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.
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