By Timothy J. Mullaney After an antitrust investigation lasting nearly two years, a closely watched dispute between the National Association of Realtors (NAR) and the Justice Dept. may not come to litigation after all. BusinessWeek Online has learned that lawyers for the DOJ and the realtors organization are close to an agreement over how the powerful trade group can limit the access of online-focused discount brokers to multiple-listing service (MLS) data.
Justice is expected to cut a deal with NAR that would let individual brokers withhold specific listings from multiple-listing services -- and may even let them include listings in MLS data but prevent them from being displayed on the Internet. This is critical to NAR members because exposure on the MLS is how they let the widest possible audience of potential buyers know about a home, and it's critical to discounters because many of them are popular among home buyers but have relatively few listings of their own to market.
LIMITED INFO. If deal occurs in its current form, it would likely cause NAR members to face increased competition. The compromise is likely to bar firms from being able to direct that listings be withheld from specific Web sites. That would be an important victory for discounters, who had feared they would be denied access available to other brokers. NAR spokesman Steve Cook says the association's board will meet on May 14 to approve a resolution authorizing its staff to negotiate the final details of a settlement.
At issue is a proposed NAR policy that would let brokers withhold listings from discounters and restrict the use of MLS data by companies such as IAC/InterActiveCorp (IACI) that charge brokers stiff fees in exchange for referrals from users of IAC sites like LendingTree.com and RealEstate.com.
Discounters would have been restricted to limited information about each home, without details like room size and tax bills that are routinely included in MLS listings. Critics said the disputed policy would have let individual brokers restrict the right to display their listings, thus possibly excluding firms whose business models undercut the industry's traditional 6% commissions.
"IN CONTROL." As competition has heated up, NAR members have warned that requiring brokers to share their MLS data with all competitors could lead big players to pull out of multiple-listings services altogether, taking away the industry's most important means of quickly matching buyers and sellers. "We need to be in control and to be able to tell our home sellers we know who this firm is on the other end," says Rich Rector, president of Realty Executives in Phoenix, the nation's ninth-largest brokerage firm.
Once the case is resolved, change is likely to happen fast. Among the most obvious changes if Justice prevails is the fast expansion of a host of competitors to NAR-backed Realtors.com. Mullaney is E-Business Editor for BusinessWeek in New York