May 14, 2005
The National Association of Realtors is revising its policy on Internet home sales in an effort to head off an antitrust suit by the U.S. Justice Department. At issue is a proposed rule that would allow Realtors to withhold detailed property listings from competitors' Web sites.
The Justice Department last week was reported ready to file its lawsuit, charging that the Realtors' action stifled competition and drove up home prices. The Realtors board of directors this weekend agreed to authorize the association's staff to seek a solution to the smoldering dispute.
"We hope we can find a common ground with the Justice Department but we want to make it absolutely clear that we are reserving the right to defend our policy. Todays board action demonstrates that we are entering these discussions in good faith," said NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City.
Mansell said the Realtors would develop "a single, uniform policy governing the display of Multiple Listing Service data on Internet Web sites."
So-called "full service" real estate brokers have been incensed by discount brokerages swiping sales by offering lower commissions. In May 2003, the Realtors association adopted a policy allowing brokers to withhold their listings from the Web sites of other brokers, hoping to reduce the number of sales hijacked by the discounters.
The policy, which has not yet taken effect, applies to in-depth listings called Virtual Office Websites. A policy covering less-detailed listings allows brokers to withhold their listings from the Web sites of other brokers, but those who do so don't get reciprocal access to the other broker's listings.
The Realtors say they should not be forced to share their listings but consumer advocates say that making listings available to the broadest audience would give home-buyers a broader selection and save them money.
Realtors may be swimming against the tide. Other "middleman" businesses, like travel agents and stock brokers, have already seen their commission structure decimated by the Internet. Realtors have so far been able to hold onto their fee structure, which averages about 6 percent.
