The New Jersey Multiple Listing Service, a regional MLS in Northern New Jersey that is owned and operated by two local Realtor organizations, has withdrawn a policy that prevented some property listings from reaching Realtor.com and several other home-search Web sites.
While New Jersey MLS officials were reportedly contacted by representatives for the U.S. Federal Trade Commission — an agency that has been investigating similar policies at more than a dozen other MLSs across the country — MLS officials stated in a communication to members this month that the decision to rescind the rule was in response to the practices of neighboring MLSs.
National Association of Realtors general counsel Laurie Janik announced earlier this year that 14 separate government investigations had been launched over MLS policies that prevent some property listings information from being publicly displayed on some public Web sites. The Realtors Association of Northeast Wisconsin MLS changed its restrictions relating to the public display of some property listings in late August after an FTC investigation.
The Northern New England Real Estate Network and Austin Board of Realtors in Texas also lifted similar restrictions, and both of these groups announced agreements with the FTC in response to investigations.
In March 2005, the New Jersey MLS announced in a newsletter that “exclusive agency” property listings would no longer be sent to public home-search Web sites, including NJMLS.com and Realtor.com, as of April 1, 2005.
In exclusive agency listing agreements, home sellers are not obligated to pay their agent if they locate a buyer on their own, and sellers can actively market their own properties. The MLS did not place similar restrictions on the more common “exclusive right to sell” property-listing agreement, which provides that a seller must pay the agent or broker who listed the property even if the seller personally located the buyer for the property.
Subscribers of the New Jersey MLS reported that they received a notice from the MLS this month stating that the exclusive agency restrictions had been lifted. According to the notice from the New Jersey MLS, “The board of directors determined at their monthly meeting that surrounding MLSs are sending exclusive agency listings to public Web sites. In the spirit of keeping our members competitive and informed, effective immediately all exclusive agency listings will be sent to the following public Web sites: Realtor.com, NJMLS.com, IDX sites.”
IDX refers to Internet Data Exchange, a format for sharing online listings among brokers who are members of an MLS.
Tina Griffin, executive director for the New Jersey MLS, did not respond to Inman News’ requests for comment. Tom Beritelli, president for the New Jersey MLS board of directors, and board vice president Nelson Chen also refused to comment for the article.
New Jersey MLS, which has about 8,600 members, is owned and operated by the Eastern Bergen County Board of Realtors and the RealSource Association of Realtors. Bob White, association executive for the Eastern Bergen Realtor board, said he had no comment about the MLS board’s decision to change the exclusive agency restrictions.
Meanwhile, the New Jersey MLS Web site, NewJerseyMLS.com, still stated (as of Tuesday, Sept. 26) that exclusive agency listings “will not be sent to the public Internet (i.e. njmls.com public Web site, Realtor.com, member Web sites with IDX agreements).”
In 2004, Derek Eisenberg, president of Continental Real Estate Group in Hackensack, N.J., and the creator of a flat-fee real estate network, told Inman News that a similar policy change on exclusive agency listings by the Monmouth-Ocean MLS in New Jersey led him to restructure his operations. That MLS and others have maintained that the policy changes for exclusive agency listings were intended to prevent confusion when an agent and a seller were separately marketing the same property, as prospective buyers may see a property simultaneously advertised as a for-sale-by-owner property and as an agent-represented property.
Eisenberg said that he believes there is another motive for such policies — to make exclusive agency listings less appealing to sellers. “It’s a bad-spirited rule,” he said of the New Jersey MLS policy, adding that it may have led some brokers to place exclusive agency property listings in other MLSs to avoid the New Jersey MLS restrictions and get the listings onto the Realtor.com site.
As a result of restrictions on exclusive agency listings, he said he faced increasing liability in some transactions that led to higher insurance costs for those transactions.
Gary Ragusa, owner of Realmart Realty, a flat-fee real estate company in South Amboy, N.J., said that he has been in contact with the FTC about MLS policies, and he believes that the FTC may have influenced the MLS’s decision to reverse its policy on exclusive agency listings. “The FTC has been pretty aggressive and has been pursuing (this issue),” he said. Ragusa said the exclusive agency listings policy didn’t impact his business, as he works with all of his seller clients through exclusive right to sell agreements.
He said that other MLSs in the area, too, have also changed their policies relating to exclusive agency listings.
The FTC and U.S. Department of Justice, working separately or in cooperation, have also taken action on a range of other industry policies and practices over the past couple of years — forcing some states to withdraw bans on real estate rebates to consumers, for example, and opposing legislation in a number of states that requires all real estate licensees to perform a specific range of services for their clients, even if their clients do not want or need those services.
Last year, the Justice Department filed an antitrust lawsuit against the National Association of Realtors, charging that the trade group’s policies for the sharing and display of online property listings information are too restrictive. The Realtor association has held that its policies are legal and provide for the sharing of a huge volume of property listings information. The Justice Department has issued subpoenas to several MLSs related to the lawsuit, the Realtor association has announced.
FTC officials have not disclosed a full list of MLSs that it has targeted in its investigations of exclusive agency listings policies, and the National Association of Realtors has also not revealed the full list of MLSs under investigation.
Steve Cook, a spokesman for the National Association of Realtors, said in a statement, “We don’t speak for the boards and MLSs involved in these cases.” The association is not providing any legal advice to its local boards and MLSs relating to the FTC investigations, Cook also stated.