The U.S. Justice Department and Federal Trade Commission are accepting public comments through Nov. 28 relating to a workshop on real estate competition that was held last week in Washington, D.C.
The workshop was particularly timely given a spate of activity by both federal agencies this year on real estate-related issues – most notably the Justice Department’s filing of a lawsuit against the National Association of Realtors trade group in September over the association’s policy for the online display and sharing of property listings among brokers. The Justice Department alleges that the group’s property listings policy is overly restrictive.
Federal agencies also have stepped up efforts to challenge statewide bans on rebates to real estate consumers and to oppose state laws and regulations that seek to establish a range of new service requirements for all real estate companies. These so-called minimum-service laws could in same cases limit consumer choice and harm competition in the real estate market, the federal agencies have charged.
Federal and state agencies are also investigating MLS policies that set restrictions on certain types of property listings that are commonly associated with discount real estate companies.
Susan Barnette, a real estate broker, stated in her published comments that “competition in this industry has never been better than it is today,” adding that “all (multiple listing service) members are treated equally, regardless of their size or their business model, and yet the rights of property owners and their listing brokers are respected.”
Barbara Delgrosso, a Florida Realtor, stated in her comments that the MLS system “is set up for professional Realtors to share their listings,” and should not be treated like a public utility. “Brokers…taking a small amount of money to list an owner’s property on our MLS without any representation should be stopped,” she stated. “When MLS allows anyone to list their property on the Internet, it invades our privileged territory and makes a joke out of the whole idea of professional Realtors.”
According to the Justice Department, Realtor groups control about 80 percent of all MLS systems across the country, and many of these Realtor-operated MLSs require their members to also be members of the local Realtor association.
Glen Baird of VirginiaMLS.com Realty stated in his comments that he believes the National Association of Realtors’ new online listings policy is anticompetitive. The association has asked MLSs not to implement that new policy, known as the Internet Listing Display policy, because of the Justice Department lawsuit. And the association also has withdrawn an earlier policy, the Virtual Office Web site policy, or VOW policy, because of the litigation. Baird said he opposed language in the ILD policy that allows companies to withdraw their listings from being shared with other brokers but to be posted on other third-party Internet sites, such as Realtor.com.
David Faudman, a real estate professional and CEO of CleanOffer, a real estate technology company, commented that the Realtor trade group should not attempt to set national policy for local MLSs. “Let local buyers and sellers drive the behavior of real estate agents and their MLSs,” he stated. “Any data display policy that NAR tries to enforce on all local MLSs can only be viewed by DOJ as anti-competitive.”
The ownership of property listings information also was highlighted in comments to the federal agencies. Joseph G. Ferrara, a co-founder of Sellsius LLC, charged in his comments that “ultimate ownership of the listing abides with the seller,” and “brokers ‘own’ listings only by virtue of their relationship with sellers, who give them authority to advertise/promote for the purpose of selling.”
With more than 76,000 brokerage firms and 1.2 million Realtors to choose from, the real estate industry is not only competitive but “is a model of competition that works,” commented Michael Fields, a real estate broker in Raleigh, N.C. “We are an industry made up predominantly of small businesses and independent contractors who represent the entrepreneurial spirit this country was founded on.”
Policies restricting the practices of so-called limited-service real estate companies have been misconstrued as restraining trade, said Kurstin Johnson, owner of Vista Encantada Realtors in Albuquerque, N.M., in her comments. “I think the misunderstanding came from resistance to the limited-service companies. The reality here…is that the issue is not restraint of trade, but of liability. Limited service companies blur the line of representation, therefore creating huge liability for the agent representing the buyer.”
She added, “By simply putting the listing in the MLS and leaving the seller to do everything else including negotiating the purchase agreement directly with the buyer’s Realtor, he puts the buyer’s Realtor in a very bad position. I don’t think there is anything wrong with restricting a trade practice which is dangerous to the public.” She also said it will become clear to the federal agencies “why we in the industry have concern about limited service companies.”
The Federal Trade Commission and Department of Justice will continue to accept written and electronic comments through Nov. 28, according to a notice published in the Federal Register.
A comment filed in paper form should refer to “Competition and Real Estate Workshop – Comment, Project No. V050015” in both the text and on the envelope, according the notice, and the original submission and two complete copies should be mailed or delivered to both of the following addresses: Federal Trade Commission/Office of the Secretary, Room 135-H (Annex F), 600 Pennsylvania Ave. NW, Washington, DC 20580; and Antitrust Division, U.S. Department of Justice, Liberty Place Suite 300, Attention: Lee Quinn, 325 7th St. NW, Washington, DC 20530.
Public comments filed in electronic form should also be submitted to both of the federal agencies, according to the notice. Electronic comments can be submitted to the Federal Trade Commission at https://secure.commentworks.com/FTC-realestatecompetition, and to the Justice Department at RealEstateWorkshop@usdoj.gov. The Justice Department requests that attachments to electronic comments include a comparable text version, such as Word or Word Perfect.
Public comments can also be submitted electronically at http://www.regulations.gov.
Send tips or a Letter to the Editor to firstname.lastname@example.org or call (510) 658-9252, ext. 137.