In a considerable defeat to NAR and local Realtor boards fighting to keep control over home sale listings, the Justice Dept. has enacted a settlement which, assuming court approval, will provide these same listings to a variety of alternative (and most online) sources. From a USA Today story:
The Justice Department gave a boost Tuesday to online real estate brokers — and potentially their clients — by forcing new industry policies that give Internet-based agents access to home listings they were previously denied.
The tentative settlement, which still requires court approval, could save consumers thousands of dollars when buying a home.
Online real estate agents often charge discounted commission fees and let buyers review listings at their own pace.
For years, however, Internet-based brokers have complained that the National Association of Realtors wanted to let real estate agents exclude some of their listings from their online competitors, many of whom offer discounted prices. More than 800 multiple listing services nationwide are affiliated with the Realtors group.
In a September 2005 lawsuit, government lawyers said such policies discriminated against online brokers. The settlement, filed in U.S. District Court in Chicago, opens the MLS databases to online and traditional residential property agents...
In a report last year, the Justice Department and Federal Trade Commission found limits on discount brokers' access to Web listings of properties for sale prevented consumers from getting the cost savings and other benefits online competition has brought other industries.
The report found that more consumers use the Web when house hunting than rely on "For Sale" yard signs.
Even so, online brokers who were locked out of the MLS databases were unable to compete with real estate agents, government attorneys said. In at least one case, in Emporia, Kan., an Internet-based agent was forced out of business after the local MLS denied his access to any property listings in the local market.
Glenn Kelman, chief executive of Redfin, an online real estate brokerage based in Seattle that operates in 20 large metropolitan areas, said the settlement came as a relief for executives at the company, which bills itself as a lower-cost alternative to traditional real estate agents.
However, Kelman said he was concerned about a piece of the settlement that lets sellers' agents block Internet users from making comments on listings. Such comments, common on retail websites such as Amazon.com, are "just part of how today's consumers make decisions," Kelman said.
That part of the deal, however is a "a small price to pay to get an agreement and to get this behind us," said Patrick Lashinsky, chief executive of Emeryville, Calif.-based online broker ZipRealty Inc.
Tuesday's settlement will not take effect until late summer at the earliest, or 60 days after it wins court approval. It would be in place for 10 years.
It neither imposes a fine on the National Association of Realtors, nor does it force the group to acknowledge any liability.
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