Special to Realty/Builder Connection
In a hearing on Capitol Hill last month, members of a U.S. House committee looking into real estate competition and the effect of the Internet heard tales of the industry’s rough-and-tumble character, but the House members appeared largely unconvinced by charges of anti-competitive behavior against Internet-based discount brokerages and skeptical of calls for federal intervention.
“I don’t see the rationale for the federal government to weigh into these issues,” said Rep. Artur Davis (D-Ala.), a member of the Financial Services Subcommittee on Housing and Community Opportunity, which conducted the hearing.
Davis’ remarks referred to a call by critics of the National Association of Realtors for Congress to pass legislation giving all real estate business models equal access to multiple listing services and allowing the Federal Trade Commission to monitor and preempt state minimum service laws, which critics say are used to protect full-service real estate brokers and restrict consumer choice.
“We fear that if Congress does not enact a law codifying the Department of Justice recommendations, the Department of Justice will at some point shift its attention elsewhere, and real estate innovators like Redfin will ... be in jeopardy of losing access to listings,” said Glenn Kelman, president and CEO of Redfin Corp., an Internet-based discount brokerage in Seattle.
• Opening up MLS participation to brokers whose business model is based not on listing and selling real estate but on making money from the display of listings on their Web sites
• Not allowing brokers to determine whether they want their listings advertised on other brokers’ sites
• Restricting state minimum service laws which take aim at brokers that enter listings in the MLS but leave deal particulars and risk to the selling agent
At the hearing, NAR President-elect Pat Vredevoogd Combs said more types of business models are represented in real estate markets today than ever before and alternative models are proliferating. She cited industry statistics showing market share by these types of companies growing to 11 percent in 2005 from just 2 percent in 2002.
“The market is much more open than it’s ever been,” she said.