The Realtors Association of Northeast Wisconsin MLS has changed its rules on the types of home listings that it allows to appear on some public Web sites after an investigation by the U.S. Federal Trade Commission.
The Aug. 29 rule change amends an earlier MLS policy, adopted in October 2001, that prohibited exclusive agency listings from being displayed at the Realtor.com property-search Web site and at the Web sites of MLS members who participate in an online data exchange with other brokers called Internet Data Exchange.
In exclusive listing agreements home sellers are not obligated to pay their agent if they locate a buyer on their own. Alternatively, the more common exclusive right to sell listing agreement — which requires sellers to pay their agent even if the sellers locate the buyer — had no such MLS restrictions.
National Association of Realtors general counsel Laurie Janik announced earlier this year that 14 separate government investigations were focused on MLS policies that prevent some property listings from reaching some public Web sites.
And the FTC and U.S. Justice Department launched a series of other actions over the past year relating to the real estate industry. The Justice Department is suing the National Association of Realtors, alleging that the trade group’s policies are overly restrictive relating to the online display and sharing of property information, and Justice Department and FTC officials have also protested state anti-rebate policies and state mandates for real estate services that brokers and agents provide to all clients.
In July, the FTC announced an agreement with the Austin Board of Realtors over that group’s policy that placed restrictions on the display of exclusive agency listings. That MLS had reportedly rescinded its rule in August 2005 after the rule was adopted in May 2005.
And last month, the Northern New England Real Estate Network, which has about 8,400 participants in a four-state area including New Hampshire, Vermont, Maine and Massachusetts, announced that it scrapped a similar policy after an FTC investigation. MLS boards have cited National Association of Realtors MLS policy recommendations as justification for the rules.
In a statement, officials at the Realtors Association of Northeast Wisconsin MLS said, “It is important to note that the previous MLS rules were, and remain, in compliance with the policy of the National Association of Realtors.” The MLS has about 1,500 participants.
The Realtor group also stated, “The Internet-advertising rule change enhances public access to MLS listings by eliminating the Internet-advertising distinction between different forms of broker-client agreements and came as part of a periodic review of MLS rules. It also came in response to a nationwide review of MLS practices initiated earlier this year by the (FTC).
“The long-standing goal of MLS is to treat broker-client relationships without preference, and this rule change reflects that goal. We believe it also reflects the goal of the FTC, which has expressed its concern in Congressional testimony and in direct contacts with MLSs nationwide about any limitation of MLS services that might appear to favor one form of listing over another.”
The Northeast Wisconsin MLS was first contacted by the FTC in February. “We expect to come to a resolution with the FTC soon, which may take the form of a consent agreement,” the group announced. “While the board does not believe the prior rule had a negative practical effect, it voted unanimously to adopt this change and eliminate any doubt.”
Brady Williamson, a partner with the Godfrey and Kahn law firm who represents the MLS, said the MLS board believes it has addressed the FTC’s principal concern by changing its MLS rules, and discussions are ongoing. Williamson said that fewer than 2 percent of real estate transactions in the MLS area involve exclusive agency listings, according to recent statistics.
The National Association of Realtors has offered guidance to MLSs on how to handle publicity relating to the FTC investigations. NAR officials offered no comment today about the role the association has played in advising MLSs or assisting MLSs with the FTC investigations.
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