Feds pry open multiple listings | AspenTimes.com

Feds pry open multiple listings

Christopher S. RugaberThe Associated Press

WASHINGTON – Realtors in Colorado and four other states agreed to allow discount brokers full access to their online multiple listing services as part of a landmark settlement with federal regulators announced Thursday.The Federal Trade Commission said the enforcement actions are intended to send a signal to real estate brokerages nationwide that discount or “non-traditional” brokers should be allowed equal access to the combined online listings of homes for sale in local markets.”The rules these brokers made drove up costs and reduced choice for consumers, and they violated federal law,” said FTC Competition Director Jeffrey Schmidt.At issue is whether homes for sale listed by discount online firms show up on websites operated by local multiple listing services, whose members typically are full-service firms that charge commissions of 6 percent or higher. In six of the seven enforcement actions, the MLS allowed discounters to list homes online in databases viewable by brokers, but refused to allow the listings to be published on websites available to the public.The agreement should have little effect on brokers in western Colorado, said John Wendt III, managing broker at Mason Morse’s Glenwood Springs office.”I don’t have a problem with it at all,” Wendt said. “I think the real estate world is big enough to accommodate all kinds of different options for buyers and sellers.”Wendt, with more than two decades experience between Durango and Glenwood Springs, said the FTC’s action was aimed primarily at Front Range brokers who worked to keep discount firms from fully utilizing the listings. On the Western Slope, discount brokers have had an easier time accessing the multiple listings service, Wendt said. The MLS, as it’s known, is a database that provides extensive lists of homes for sale and detailed information on each home. Until the rise of the Internet, access to the MLS was limited to licensed, full-service brokers. The FTC agreement opens the MLS up to more players in the real estate market.”I think it’s a better world – more information available to more people,” Wendt said.Discount brokers typically work through the Internet. They allow home sellers to list their homes for a flat fee or discounted commission. In exchange, the homeowner must market and show his own home, and negotiate the selling price without the counsel of a real estate broker. Full-service brokerages usually charge a percentage of the sale for their services, although some sales involve a flat fee, and provide the services listed above that aren’t offered by discount or Internet brokerages.”When we look for property on the MLS, we don’t look at the commission on the property, we look for property that meets the buyer’s needs,” Wendt said. If a sale involves a discount brokerage or a home sold by owner, compensation for the buyer’s agent is part of the negotiations.In addition to Colorado, the FTC said it reached consent agreements with five multiple listing services New Hampshire, New Jersey, Virginia and Wisconsin. But two real estate groups in Michigan declined to settle and the FTC will pursue claims against them before an administrative law judge in Washington.In the seventh case, a brokers’ group blocked rival discounter home listings from inclusion on the MLS itself. The practices must be discontinued under the consent decrees or an MLS could face civil penalties of $11,000 per violation.There are 900 multiple listing services in the United States, says Mary Trupo, a spokesperson for the National Association of Realtors, an industry trade group that operates the realtor.com Web site. The NAR estimates that 77 percent of home buyers start their search on the Internet and then contract a real estate agent.”Although we do not agree with today’s FTC actions, we are happy to learn that the FTC, which does not customarily reach out to industry, is looking to work with NAR on this issue,” NAR’s President Thomas M. Stevens said.The FTC’s Schmidt said more cases are in the works. “There are clearly additional … multiple listing services where we think some of these rules continue to be a problem and we’re continuing to look at those,” he told reporters at a news conference.Investors seemed to take the news in stride. Shares of Realogy Corp., which franchises Century 21, ERA, Coldwell Banker and Sotheby’s International, rose $1.04 or 4.5 percent to $24.38 on the New York Stock Exchange Thursday.Aspen Times Managing Editor Allyn Harvey contributed to this report.

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