Special to Realty/Builder Connection
Multiple Listing Services will be open to all real estate sales companies after the National Association of Realtors and the U.S. Department of Justice reached a favorable settlement earlier this summer that ended a two-year DOJ investigation followed by two and a half years of litigation.
The battle was over NAR’s MLS policy as it pertained to the display of listings on brokers’ virtual office Web sites, or VOWs.
The settlement means that online brokers must be allowed to gain membership to local MLS sites.
The lawsuit-ending deal bans NAR from treating online brokers as different from traditional brokers or discriminating against them. NAR settled with the DOJ without financial penalty or admission of guilt.
The settlement must be approved by a Federal judge and NAR, in a statement to member organizations, said “If a state or local association owns and operates its own MLS, NAR will request that the MLS adopt and implement the revised Virtual Office Web site (VOW) policy within 90 days of the effective date of the order — which we anticipate will be late summer.”
According to the NAR statement, “The proposed terms are a win for NAR, Realtors, and consumers, and confirm that MLS members must be actively engaged in real estate brokerage by actually helping people buy or sell homes.”
The litigation was initiated by the government on antitrust grounds, saying that restrictive MLS policies were stifling competition and hurting consumers.
A New York Times analysis predicted lower earnings by agents due to competition from the online companies that offer discounted commissions, and that now will be able to access MLS. NAR’s general counsel told the Times that the settlement would have no real impact on buyers or sellers.
“I don’t think they’ll see anything different,” said Laurie Janik. ‘This lawsuit never had anything to do with commission rates, or discount brokerages.”
She said the suit arose from misunderstandings about the way that NAR works.
“This was a five-year education of the Department of Justice, unfortunately, and the real estate industry had to pay for that education.”
A business professor at Western Michigan University who is a senior fellow of the American Antitrust Institute told the Times that traditional Realtors would see a large drop in income.
“It is pretty clear that there was anenormous amount of discrimination against brokers who were trying to use the innocative business models,” said Dr. Norman Hawker. “There are lots of entrepreneurs who have been looking for a green light in the form of this order to begin offering discounted rates.”
NAR’s statement said “the proposed order provides clear rules for operating a virtual office Web site and preserves the right to determine whether or not listings are displayed on other brokers’ Web sites. It also gives sellers the right to prohibit certain features, such as home-value estimates and blog posts, to accompany the display on VOWs.”