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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: JBTFD who wrote (15155)	11/16/2003 6:29:56 PM
From: biometricgngboy	Respond to of 306849

Realtors group delays start of rule for online listings Critics have said it limits competition Kelly Zito, Chronicle Staff Writer Sunday, November 16, 2003 Momentum appears to be building against a controversial new real estate industry rule governing the use of online home listings. At a meeting of the National Association of Realtors in San Francisco earlier this month, the trade group's board agreed to push back the policy's implementation date to July 1 from Jan. 1. Although the group did not publicly disclose a reason for the postponement, regional Multiple Listing Services, which pool home listing data, have complained about the short time line (the policy was approved in May). What's more, the Department of Justice recently opened an investigation of the plan after consumers and legal experts attacked it as anticompetitive, particularly for online discount brokerages. To Patrick Lashinsky, vice president of marketing at Emeryville's ZipRealty, the vote to delay could mean the most hotly debated portions of the so-called Virtual Office Web site plan will be scrapped. The National Association of Realtors "said the policy would fly through and have no problems at all," Lashinsky said, but the delay "is a sign there's going to be more examination of it, and I think the members realize they don't want to end up with a big lawsuit." However, association officials remain confident the policy will stand. "This is a controversial decision. Everyone knows that," said association spokesman Steve Cook. "But we believe sellers and their listing agents have the right to determine how and where their properties are listed." The battle over the Virtual Office Web site policy centers on a provision that allows real estate brokerage firms to withhold their listings from other firms' Internet pages. Also called the blanket opt-out, the rule works as follows: Brokerage A, which controls the lion's share of an area's home listings, could elect to withhold its data from Brokerage B. While Brokerage B would still receive Brokerage A's listing data through the Multiple Listing Service, it would be prohibited from showing that information on its Web site. Although Brokerage B may still send customers that data using phone, e- mail and faxes, consumers may have to search multiple sites to get access to all of the listings in a given area. Aside from boosting market share for the larger players, the policy is aimed at protecting their commission rates by cutting discount brokerages out of the loop, Lashinsky said. That's because ZipRealty, ERealty of Houston and others usually charge sellers, who pay for the sales commissions, less than the typical 6 percent of the sales price. Although most homes in the United States are sold through traditional, large real estate companies, smaller discount firms say their business is booming and therefore putting pressure on commissions. ZipRealty will sell about 6,000 homes this year, compared with 600 in 1999. Cook denies that the plan is designed to leave discounters at a disadvantage. What's more, he said, any policy that doesn't include an opt-out provision is doomed to failure. "Listing agents put together that data. It doesn't appear magically," he said. "To say that person has no say on how those properties are marketed will not encourage participation in the system." sfgate.com