As the Web has quickly become the predominant tool used by consumers to research available homes, industry attention has focused on listing brokers’ rights to make their listings more easily and widely accessible to consumers online — and the intermediary role in this process played by multiple listing services and Web site technology and listings data feed vendors.
Those of us who advise participants in the real estate industry know that the MLS serves an important industry function: to enable home sellers to benefit from an exclusive listing broker’s commitment to expend resources on the promotion of the seller’s property while allowing other MLS participants to present the seller’s property to their buyer clients and customers. Both the listing and cooperating brokers know they will be paid if the property sells during the listing term to a buyer procured by the cooperating broker.
Given that one of the primary roles of MLSs is to enable listing brokers to quickly and efficiently find buyers for listed properties, MLSs must be vigilant about employing “best practices” that enable their member brokers to take advantage of any online opportunity to market a broker’s own listings that the broker deems appropriate as part of its duty to seller clients. The National Association of Realtors’ MLS policy supports the proposition that a listing broker has the right to transmit MLS information about the broker’s own listings wherever the broker chooses.
Section 12 of NAR’s model suggested rules for MLSs operated by Realtor associations provides that:
“Nothing contained herein shall be construed to preclude any participant from utilizing, displaying, distributing, or reproducing property listing sheets or other compilations of data pertaining exclusively to properties currently listed for sale with the participant.”
Further, there seems to be universal consensus that the listing broker creates and owns the copyright and other intellectual property rights associated with the content the listing broker provides to the MLS. When uploading listing data to the MLS database compilation, the listing broker may assign or license these intellectual property rights to the MLS, but in every case the listing broker should retain the rights to use its own listing data uploaded to the MLS to carry out the broker’s responsibilities as the seller’s exclusive marketing agent.
Since this policy was originally developed, real estate information on the Web has proliferated and Web site technology vendors have begun to play a powerful role in the display and dissemination of listing brokers’ information online. In that regard, every MLS should ensure that it does not impose restrictions upon listing brokers that limit a broker’s ability individually or through its Web technology vendor to disseminate or promote a broker’s own listings data as the broker chooses. Additionally, MLSs should not impose similar restrictions on a listing broker’s Web technology vendor, thereby achieving indirectly what they cannot or should not impose directly on the listing broker.
Why should brokers be concerned? If, as a result of the above restrictions, listing brokers are prevented from marketing their own listings in a manner they deem most appropriate, which may include distribution to a broader audience through a new platform at a lower cost, they are at a decided competitive disadvantage. In other words, competing business models that are not limited by certain MLS-imposed property display restrictions are taking control of their own marketing activity that may better serve the needs of their seller clients.
One case in point relates to the broker’s right to have its Web vendor, upon request, allow search engine robots to index its own property listing information on the broker’s own Web site, or provide a data feed of the broker’s own listings to a search engine that will direct links back to the broker’ own Web site. Having listings accessible to users of these search engines is more critical than ever since the majority of home buyers now begin their research online using various search engines.
For example, major “generic” search engines such as Google, Yahoo! and MSN are a vast resource for home buyers, sellers and brokers, though it is increasingly apparent that searching for specific information categories such as real estate on these engines is a lengthy, sometimes inefficient process. Consequently, indexing property information on specialized real estate vertical search sites, such as Trulia.com, is becoming a more attractive alternative for listing brokers.
The role of vertical search engines in property data search is similar to that of generic search engines such as Google. In fact, they use the same technology and general methods to acquire and index information for users to access as search results. One such method is “spidering,” or “crawling” technology. Search-engine robots crawl or search publicly accessible Web pages for the desired information. Web site owners who do not desire their sites to be “indexed” can insert a code into their Web server instructing search engines not to index a site. If this code in not present, the search engine indexes the page by extracting and storing “snippets” of content that are returned to users in the form of search results linking to the desired information source page. Google performs this task with millions of Web pages every day.
As a second method, Web site operators can send or “push” information to some search engines for indexing purposes. This allows search engines to perform the indexing function more accurately and effectively. Listing brokers or their technology vendors may create the feed of the broker’s own listings from the MLS’ IDX data feed or full MLS data feed used to support the broker’s own Web site.
Needless to say, many listing brokers want their listings accessible through select search engines and are allowing Web site crawling by search engines, or they are providing direct data feeds to these services. But from time to time, MLSs or Web site technology vendors contend that the MLS data license agreements signed by the brokers and their chosen vendors require this information to be blocked from search engine access — even when the search engines are only indexing property information from the listing broker that appears on the broker’s own Web site. The license agreements are also cited as prohibiting or limiting the vendor from honoring a brokers’ directive that information about the brokers’ own listings be separated from the IDX or full MLS feed and sent to search engine operators.
Given that listing brokers owe obligations to effectively market their sellers’ property, listing brokers would be well advised to negotiate for the removal of terms from their MLS license or Web technology vendor agreements that restrict their right to use MLS information about their own listings. They should also insist that these agreements expressly permit the listing broker, or their Web technology vendor at their direction, to transmit MLS information about the broker’s own listings wherever the broker deems appropriate. If a broker directs a Web technology vendor to unblock a search engine’s access to the broker’s own listings, or transmit the broker’s MLS listing information to a third party and the vendor refuses, the listing broker should seek an alternate Web technology vendor who will not interfere with the broker’s decision about how best to serve the broker’s seller clients.
Carefully consider your commitment as a listing broker to effectively market your seller clients’ properties, as well as the continued livelihood of your business. These restrictions limit your marketing opportunities and are in effect helping those who are not encumbered with these restrictions to build their own business at your expense.
Robert D. Butters, Esq., is an attorney with Arnstein & Lehr LLP, representing real estate brokerage, franchise and technology companies, and MLSs.
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