Day One - Realtor Mid-Year May 16, 2006
I just attended my first meeting at the NAR Mid-Year. It was the MLS Association Executives Committee Meeting. There were three presenters to the group and I will provide some highlights of their presentations.
Laurie Janik, NAR General Counsel
Laurie indicated that claims against MLS under the NAR EO Insurance Policy have for the first time surpassed the number of general association claims. Out of 32 claims made this year, 18 involve MLS issues. Of the 18, 8 involve the FTC, 7 the DOJ and one involves a state attorney general. Most of the claims revolve around whether an MLS can exclude Exclusive Agency listings from data feeds to third party websites (e.g. Realtor.com). Since Exclusive Agency listing allow the seller to sell the house themselves, MLSs argue that allowing these listings to be displayed on the Internet basically enables the seller to have free advertising to attract a buyer without paying the listing side of the commission.
Laurie also discussed the DOJ lawsuit. NAR filed a motion to dismiss which raised three arguments:
First, that the DOJ is seeking injunctive relief for the VOW policy that has been rescinded and never implemented and as a result, there is no relief that can be granted under this claim.
Second, that the VOW Opt Out provision is neutral on its face, there is a presumption of cooperation and that decisions to Opt-Out are based on independent action of each broker.
Third, that the DOJ’s claim against the current Internet Listings Display Policy does not allege any anti-competitive effect.
Laurie cautioned that Motions to Dismiss are rarely granted in the 7th Circuit (where the suit is pending). She also said that 14 MLSs have been involved in DOJ subpoenas and that the NAR insurance coverage for this claim is gone so the MLSs that are involved are now spending their own money to respond to the subpoenas.
Lastly, she indicated that there was a productive settlement conference. She believes a key issue in the case will revolve around the MLS definition of “Participant” Historically, this referred to any person or company that was a licensed broker. Under the new policy, a “Participant” is required to be a broker AND be involved in either making or accepting offers of compensation. In other words, actively listing and selling property. By modifying the definition as such, companies that just put listings in the MLS on behalf of sellers or the likes of Zillow would not be allowed into the MLS as a Participant.
The second speaker was Gregg Larson of Clareity Consulting. Gregg is a consultant to the MLS industry.
He indicated that there was a second wave of regionalization going on. This has been caused by many factors, the least of which is that big brokers are demanding it. He told a story about a brokerage company in CA that has been in business about three years and has had to join 21 different MLSs.
Gregg indicated the drivers in the coming year for regionalization will be:
- Realty Alliance - Brokers are actively looking at this issue
- CAR – MLS Working Group
- NAR – Future of MLS PAG
- Zillow, Trulia, RealEstate.com, Google etc. all have no boundaries where MLSs do.
Biggest challenges include:
- Ownership
- Governance
- Protectionism
- Staff job protection
- Cash flow to local Assns
The last speaker was Ann Bailey who is also an industry consultant
She said that big brokers are starting to take a lead in innovation and they need more information from MLS in order to do that.
She referenced a California Assn of Realtors survey that indicated ranked certain factors that were important to Internet buyers when selecting an agent: These included (in order of importance):
- Agent presented the best marketing proposal
- Agent was the most knowledgeable
- Agent offered the best deal
- First agent to respond to the customer inquiry (44% of internet buyers want a response within 30 minutes)
She said that brokers have to understand the cost metrics of monetizing internet leads and that some brokers are now offering to take leads off the agent web sites for free in order to capture them for the agent. She said the brokerage of the future had to develop a culture of agents trusting the broker and the broker delivering value.
She finished with a brief discussion on “off market” data. She cited NWMLS’s recent decision to allow brokers access to this info for public display. She said there was another MLS in northern CA and several people in the audience indicated that their MLS had either made the decision or were contemplating it.
That’s all for now. More later….
-Russ
Check out these related posts:
- Day Two - Realtor Mid-Year
- DOJ, Copyright and Real Estate Listings
- DOJ-”opt-out” and a war with a “discounter”
Article Tags>> advice | agents | competition | conference | DOJ | NAR | realtor | Zillow
- Posted in : General Real Estate
- Author : Russ Cofano
Comments»
Very cool Russ…
I feel like I was there!
First, I think that you have to tip your hat to Lennox Scott (first regional co. to add sold data to website) for at least acknowledging consumer wishes and that market pressures exist–thereby acting on it with the NWMLS dissemination of sold data. I understand they will only pull the information from NWMLS sold data, which is incomplete in my view. Further,I think many would agree, it took non real estate brokers (eg Real Estate ABC, Zillow among others) to give the “huge 72 font-sized-writing-on-the-corporate-office-whiteboards” to produce change.
Secondly, there has been long-term inherent protectionism in real estate circles over business models and fee structures. The idea that MLS’s would come to settlement with DOJ over a definition of “Participant” (those that transact sales and listings) is another way of eliminating the great American way of innovation through competition and consumer choice.
I’m excited to see the innovations coming so long as consumers are the driver of influencing the decision making and not the other way around.
Wow! Up to the minute coverage! Thanks Russ!
Russ,
Did you know there is a room specifically for bloggers set up by NAR?
Very cool!
[...] p.s. I published some updates on my trip to the NAR Mid-Year at RainCityGuide. Day One and Day Two. [...]
[...] For more information and insight, read Russ’ review from this past May and this article describing the future path(s) of the MLS concept. Disclaimer: I am a member of the NAR Future of the MLS PAG (how’s that for acronym overload). [...]
[...] When I was at the Virginia Association of Realtors Legislative conference a few weeks ago, I sat in on a presentation that touched on the NAR MLS working group on which I had the privilege to serve. At the table I was sitting, several of my classmates from the Leadership Academy were a bit confused - it’s hard for two people to compress months of meetings into twenty minutes - and this is the example I gave them: What if Keller Williams, Century 21 and Re/Max decided to upload their listings to Google or Zillow or Trulia rather than to their local MLS, or even better, kept them locally, but stopped sending them to Realtor.com? [...]