IDX VOW MLS, US v NAR wow!
Faced with the prospect of a crushing defeat this coming July in US District Court in Chicago, the National Association of Realtors has folded its hand in a case that accused the Association of unfairly restricting access by discount brokers to online listing information. Swimming in an acronym soup was a policy that kept home buyers from seeing properties listed by discount brokers while accessing listings through their realtors' web sites. IDX is the current electronic "Broker Reciprocity Program" workaround. VOW and another, short-lived system, IDL, were supended by NAR pending the US Department of Justice antitrust action. From the US Department of Justice settlement announcement:
Justice Department Announces Settlement with the National Association of Realtors
Settlement will Result in More Choices, Better Services and Lower Commission Rates for Consumers
WASHINGTON — The Department of Justice announced today that it has reached a proposed settlement with the National Association of Realtors (NAR) that requires NAR to allow Internet-based residential real estate brokers to compete with traditional brokers. The Department said the settlement will enhance competition in the real estate brokerage industry, resulting in more choice, better service, and lower commission rates for consumers. NAR has agreed to be bound by a 10-year settlement to ensure that it continues to abide by the requirements of the agreement.
In September 2005, the Department’s Antitrust Division filed a civil antitrust lawsuit in U.S. District Court in Chicago, against NAR challenging policies and related rules that obstructed real estate brokers who use innovative Internet-based tools to offer better services and lower costs to consumers. The Department said that the policies prevented consumers from receiving the full benefits of competition, discouraged discounting, and threatened to lock in outmoded business models. The case was scheduled to go to trial in July 2008 before Judge Matthew F. Kennelly.
If approved by the court, the proposed settlement would require NAR to change policies and adhere to certain conduct remedies to resolve the Department’s competitive concerns.
Under the terms of the settlement, NAR will repeal its anticompetitive policies and require affiliated multiple listing services (MLSs) to repeal their rules that were based on these policies. NAR will enact a new policy that guarantees that Internet-based brokerage companies will not be treated differently than traditional brokers. Under the new policy, brokers participating in a NAR-affiliated MLS will not be permitted to withhold their listings from brokers who serve their customers through virtual office websites (VOWs). In addition, brokers will be able to use VOWs to educate consumers, make referrals, and conduct brokerage services. Such brokers will not be excluded from MLS membership based on their business model. NAR will report to the Department any allegations of noncompliance. NAR also has agreed to adopt antitrust compliance training programs that will instruct local Associations of Realtors about the antitrust laws generally and about the requirements of the proposed settlement specifically.
“Today’s settlement prevents traditional brokers from deliberately impeding competition. When there is unfettered competition from brokers with innovative and efficient approaches to the residential real estate market, consumers are likely to receive better services and pay lower commission rates,” said Deborah A. Garza, Deputy Assistant Attorney General of the Antitrust Division. “In addition, under this settlement, NAR will foster compliance with the antitrust laws by educating its members and its 800 affiliated MLSs.”
Read the Proposed Final Judgement and the Stipulation or the full Case Filings for "United States v. National Association of Realtors"
Online brokers score a victory
Regulators give agents access to withheld property listings, saying buyers will benefit
Realtors agree to share more multiple-listing service data with online brokers
The settlement with the Justice Department could lower fees by aiding Internet competition.
Realtors Settle Listings Battle
Web Brokers to Be Allowed Access
Realtors Agree to Stop Blocking Web Listings
Industry reacts to DOJ vs. NAR settlement proposal
Experts: Agreement provides more certainty for innovators
Settlement may give online realtors access to more listings
Story Highlights:
- Consumers may save average of more than $2,000 under proposed settlement
- Settlement means traditional realtors will be allowed to use online sites to sell
- Brokers will demand lower commissions and pass savings on to buyers
- The agreement must be approved by a federal judge in Chicago
"Consumers should be able to save up to 1 percent of the price of a home," said Deborah Garza, deputy assistant attorney general of the Antitrust Division. She bases the percentage on the typical discount an online broker currently offers.
Citing 2006 figures, Garza said the median price of a home in the United States was $225,334. So, a drop of 1 percent in a Realtor's commission would be $2,253.
"When there is unfettered competition from brokers with innovative and efficient approaches to the residential real estate market, consumers are likely to receive better services and pay lower commission rates," Garza said.
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