A U.S. Federal Trade Commission investigation has prompted a regional multiple listing service in New England to toss out a policy that blocked some property listings from reaching some public property-search sites, including Realtor.com.
The Northern New England Real Estate Network announced today that it has reached an agreement with the FTC that resolves the investigation. The FTC last month announced a settlement with the Austin Board of Realtors in Texas relating to a similar board policy that was also rescinded (see Inman News report).
The U.S. Department of Justice and Federal Trade Commission have engaged in several other actions over the past couple of year against real estate laws, regulations and rules, charging that the measures are anti-competitive, and the leading lawyer for the National Association of Realtors in May announced a total of 14 separate government investigations that were studying whether MLSs prevent a type of property listings from reaching some public Web sites.
Federal antitrust officials have taken legal action against bans on real estate rebates to consumers; written letters in opposition to state-imposed mandates on real estate services that they said could potentially restrict consumer choice and the ability of low-cost, limited-service real estate companies to compete; and filed a lawsuit against the National Association of Realtors related to its policies for the display and sharing of online property information.
Andrew Werry, executive director for the Northern New England Real Estate Network, said in a statement, “This was a very narrow and specific investigation by the FTC into a policy … that was in place for just six months. We are happy to have this matter amicably concluded. This was a non-public inquiry initiated last year, and what this agreement essentially does is formalize on a permanent basis our voluntary decision to rescind our policy.”
The MLS, which has about 8,400 participants in a four-state area including New Hampshire, Vermont, Maine and Massachusetts, restricted exclusive agency listings from display on several property-search Web sites from May 2005 to November 2005.
Under an exclusive agency agreement between a home seller and an agent, sellers retain the right to sell their property themselves without paying a commission if the agent is not involved in the sale. The more common listing agreement is exclusive right to sell, which provides that the listing broker is guaranteed a commission.
Werry said today that the rule was intended “in general to eliminate the confusion or conflict that could arise with the display of exclusive agency listings in competition with the sellers’ marketing efforts.” For example, a seller could directly advertise a property on various Internet sites while the agent, too, was advertising the same property on various Internet sites under exclusive agency agreements, he said.
Under the rule that the MLS had adopted, exclusive agency listings could not be displayed on the MLS’s NNEREN.com site, Realtor.com, or any MLS participant Web sites.
After the FTC approached the MLS in October about the rule, the MLS decided in November to voluntarily withdraw the rule, Werry said.
FTC officials did not immediately offer a comment about the agreement with the Northern New England Real Estate Network, and a copy of the agreement was not available on the FTC Web site.
The Northern New England Real Estate Network is a for-profit real estate corporation that is owned by 19 local Realtor boards in New Hampshire and Vermont.
According to the MLS’s announcement today, the FTC will submit for 30-day public review “a complaint, consent agreement, and decision and order as part of the settlement.” The network is “not afforded the opportunity to respond to the specifics of the complaint,” according to the announcement.