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A 2008 settlement between the National Association of Realtors (NAR) and the U.S. Department of Justice (DOJ) is set to expire in November, prompting speculation about how the Realtor organization will control access to listing information going forward.
The terms of the agreement require Multiple Listing Services (MLSs) affiliated with NAR to allow virtual office websites – websites where consumers can enter their contact information to access detailed MLS listings – the same access to home listing information as other traditional brokerages.
The tech-driven discount brokerage Redfin capitalized and profited on the additional information and would like to see it continue.
“More liberal data-sharing policies among listing services and a new partner-assisted strategy have opened a new phase of growth for Redfin,” Redfin CEO Glenn Kelman said in a statement shortly after the settlement was reached. “We used to evaluate new markets in terms of what the local listing service would let us publish, and the ground our own agents had to cover. Now that the settlement is in effect and our partners can help us in outlying areas – and now that we’ve got new markets like Chicago contributing profits very quickly – we expect to expand quickly.”
When the settlement expires on Nov. 18, NAR is technically free to return to its old way of doing business, but acting general counsel Ralph Holmen said not to expect any big, immediate changes.
“We know the Department of Justice has a view on the law that is consistent with that settlement,” Holmen said. “And we know that isn’t
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going to change. You’re not likely to see a lot of changes after the expiration. Any changes in our policies will be carefully, thoughtfully and incrementally implemented.”
In fact, most of the data available to the public on the web isn’t impacted by the settlement, according to Holmen. He isn’t concerned about the DOJ trying to extend or modify the settlement, either.
“The Department of Justice could ask the court to extend the settlement,” he said. “But it would not be simple or straightforward to persuade the court to extend this settlement.”
The Internet plays a far different role in consumers’ lives today than it did in 2008. Then, the first iPhone was a year old; today smartphones are ubiquitous. Increasingly, consumers –particularly younger consumers – expect information to be free and at their fingertips.
Information Stranglehold Bad for Business
Aside from the DOJ’s feelings on the matter, the non-partisan think-tank Information Technology and Innovation Foundation found in a November 2017 report that the total control that the MLSs have over their data is bad for consumers.
“These restrictions have no legitimate business justification, but do undercut the business models of online services that allow consumers to be less reliant on brokers for buying a home and to gain better insights into the homebuying process,” the report said.
The report predicts the struggle for control over real estate listing information will heat up after the expiration of the settlement. It calls for MLS data to be made free and open to the public and called for NAR and the MLSs to be investigated for antitrust violations.
Redfin CEO Glenn Kellman and Vice President Chelsea Goyer disagreed with many of the study’s recommendations and vigorously defended the MLSs in a December 2017 rebuttal to the report.
“Without MLSs as a clearinghouse for all listing data, the real estate market will become much less competitive and efficient, as new websites will find it cost-prohibitive to aggregate listing data on their own,” they wrote.
Consumers have an insatiable appetite for real estate listing information, and Holmen said the expiration of the settlement won’t change that.
“If you look around on the Internet, there is no shortage of property listing websites for consumers,” Holmen said. “They’re everywhere.”
