The Capital Gains exclusion for personal residences sold after May 6, 1997, is $ 500,000 for married couples filing jointly and $ 250,000 for singles.

During the five year period ending on the date of sale, the taxpayer is required to own the home for at least 2 years and lived in the home, as the taxpayer's main home for at least 2 years. This exclusion can only be used once in two years unless the house is sold due to an illness or a job move.

Taxpayers that have Capital Gains exceeding $ 500,000 ($250,000 single) on personal residence sales after August 4, 1997, cannot defer taxes by purchasing a more expensive house.  The rollover rule has been repealed (remember IRC Section 1034?).

Saul

Example 1home owned and occupied for 3 years.

Amanda bought and moved into her main home in September 2002. She sold the home at a gain on September 15, 2005. During the 5-year period ending on the date of sale (September 16, 2000 – September 15, 2005), she owned and lived in the home for 3 years. She meets the ownership and use tests.

Example 2met ownership test but not use test.

Dan bought a home in 1999. After living in it for 6 months, he moved out. He never lived in the home again and sold it at a gain on June 28, 2005. He owned the home during the entire 5-year period ending on the date of sale (June 29, 2000 – June 28, 2005). However, he did not live in it for the required 2 years. He meets the ownership test but not the use test. He cannot exclude any part of his gain on the sale, unless he qualified for a reduced maximum exclusion (explained later).

Hi everyone,

Each year at this time, as we prepare for tax season, I run a series of
posts to assist you in your preparation for 2005 taxes and for your 2006
planning.

When it comes to tax expense categories, everyone will have their own system
but I would suggest the following system which has worked well for me over
the years. Last years Schedule C is a good place to start as you develop
your record keeping system. The more categories the better. Avoid any one
category being a big catch all...IRS is likely to question a large deduction
in a category entitled Misc.

I have Business Categories and Household Categories and keep them separate.

Start with general categories (Keep all receipts in an organized manner, I
use the green Pendaflex Folders and the little plastic tabs and then create
sub folders (using manila folders, properly titled).

Major Category: Telephone
 Sub Category(s): Office
        Cellular
        Phone cards and Long distance
        Home (not tax deductible except that which is
business related)

Major Category: Office Supplies
Major Category: Auto
 Sub Category(s): Fuel
        Insurance
        Maintenance and repair
        Tires
        Registration and License Fee
        Misc

Major Category: Interest for items purchased for your business, such as auto
loan, or credit card interest on business expenses.

Major Category: Dues and Subscriptions
 Sub Category(s): Association of REALTORS
        MLS
        Magazines
        Lock Box Fees

Major Category: Compensation to others. Personal Assistant or anyone to whom
you made payment over $500 (including referral fees you may have paid). Make
sure you submit to the payee a 1099 and file the 1099s and the appropriate
cover form with the IRS prior to the 1099 filing deadline.

Major Category: Advertising
       Newspaper
       Magazines
       Business cards
Major Category: Marketing

Major Category: Promotions (pads, flyers, magnets, flyswatters, raincaps)

Major Category: Forms

Major Category: Education

Major Category: License Fees

Major Category: Signs and Sign Riders

Major Category: Computers and related Equipment (Section 179 allows for
deduction up to certain limits in the year of purchase)

Major Category: Software

Major Category: Meals and Entertainment (keep 100% of expenses, only 50% is
deductible)
 
MajorCategory: Travel

Remember, you can deduct "anything that is reasonable and necessary in the
pursuit of taxable income."

The better you are at record keeping, the more you will save on taxes.

Personal categories include charitable contributions, medical expenses after
they exceed 7.5% of your Adjusted Gross Income, state income tax paid, real
estate taxes.

Saul

Saul Klein
Certified Financial Planner (CFP)

I recently received the following in an e-mail message:

>>
My husband is a Broker and I am a Realtor. We are very interested in more
information about REIT's (Real Estate Investment Trusts). There is a
attorney my husband is speaking with in regards to this, but we also wanted
to get further education through you if possible.  Are there any specific
Seminars you hold in regards to this?? If not maybe you can refer me to
someone I can network with. Your help is greatly appreciated.
<<

Here is my reply:

A REIT is a sophisticated "group investment." Group investments can have
different legal structures, benefits, and consequences.

There was a time in my real estate career when I was involved with
investment groups or what we called "real estate syndications." I
participated as a consultant to limited and general partnerships, broker to
partnerships, and as both a limited and general partner in a number of real
estate partnerships. I current continue to be involved in a general
partnership I have been involved in for 27 years (with my real estate
brokerage partner and two high school friends). The assets of the
partnership are a 5 bay coin operated carwash and two adjacent parcels
(single family homes). This general partnership has a formal partnership
document created by an attorney specialist, and is successful because the
investments are sound and the partners have trust and respect for one
another, not to mention a long history as close friends. General
partnerships are not suitable for everyone.

There are no seminars that I know of on the subject today that I would
recommend. There were years ago, especially as real estate investing
benefits were amplified by the Economic Recovery Tax Act (ERTA) in 1981.
There were also books on the "whys and how tos." In the early 1980s I worked
with and attended seminars with an attorney, author, seminar promoter and
syndicator named Mark Long. Mark wrote "Big Money Brokerage, Volumes I and
II." It is out of print but I googled and found the following:
<http://www.biblio.com/search.php?tid=0&auid=0&stage=1&author=Long+Mark&titl
e=BIG+MONEY+BROKERAGE>. It will provide a decent "primer" on the subject.

Each investment group provides opportunities to acquire properties which the
individuals would not have the ability to purchase on their own. Tax law and
the "active participation rule" limit some of the immediate tax benefits
which were available to investors of 20 years ago. That being said, getting
groups together to invest in real estate can still be a great career path
for competent real estate professionals.

There are different investment group structures.

1. Partnerships - Tax consequences are passed through to partners and taxed
at the partners tax rates. There are General Partnerships and Limited
Partnerships.

A. General partnerships - All the general partners have unlimited liability
(Joint and Several Liability) and because all general partners participate
in the management of the partnership and its assets, General Partnerships
can be difficult to manage.

B. Limited partnerships - Have two classes of partners, General Partners and
Limited Partners. All General partners are responsible for the management
and control of the partnership and its assets and have unlimited liability.
Limited partners liability is limited to their investment and they have no
control over the partnership or its assets. There are two types of limited
partnerships, Private Placements and Public Placements.

1) Private Placements are the least regulated of the two and have the lowest
legal and compliance requirements and consequently, the lowest legal fees
and costs to put together. When creating a limited partnership, the total
number of "unqualified investors" is 35 (last time I worked in this
area...it may have changed so check first). The marketing of the investment
opportunity must be private and to people you know or with whom you have a
pre-existing relationship. There are "specified offerings" and "blind pool
offerings." With specified offerings, the general partners acquire property
or the rights to property and then market the interests in the partnership
with the property and its specifics outlined in the prospectus. With Blind
pools, the general partners may create a profile of the property type they
intend to acquire and investors invest without knowing the ultimate property
to be owned.

2) Public Placements require more legal, registration, compliance and
disclosure (and expense) but the offering can then be made to the "public,"
making it easier to raise more money from more investors (not limited to the
number or type of investors).

2. Real Estate Investment Trusts (REITS) - A REIT is a corporation (lots of
legal, compliance and disclosure requirements...and expense) which must
invest its assets in real estate and has the liability characteristics of a
corporation...limited liability of all investors, and tax consequences are
"passed through" as they are in partnerships. Partners can offer their
shares for sale to other investors and REITS are typically more liquid than
partnership investments.

3. Limited Liability Companies - Specific to the laws of your
state...similar to a corporation investing, which limits liability of all
investors.

4. Joint Ownership (Usually Tennant in Common Ownership - This is where
several parties might own a real property asset as Tenants in Common. This
is sometimes done informally, with the deed being the only document
indicating a "partnership exists." Make sure you have an attorney create
some sort of "land holding agreement" which stipulates what happens "if," if
a partner wants out, if a partner dies, etc.

When should you use one of the above over the other? One rule of thumb could
be the amount of money you plan to raise. I would say REITS are in the 100
Million Dollar range, Public Placements in the multi million dollar range,
and Private Placements in the multi hundred thousand dollar range.

When you take other people's money and make investments for which they have
no management control, you are more than likely dealing in a "security" and
securities laws come into play. Be very careful and engage the services of a
good attorney who has knowledge of these things. Investor communication and
management is very important, as is managing the expectations of the
investors.

Saul 

There are lots of e-PROs and RealTalkers heading to San Francisco Oct 27-31 for the NAR Conference and Expo.

If you have information about exciting events or get-togethers there, feel free to Click the Post A Comment link below and append a message.

We will have e-PRO ribbons and RealTalker ribbons availalble at the e-PRO booth #3400

Looking forward to seeing you in San Francisco.

Saul

Saul Klein meeting with Ralph Nader circa 1993.

I like our MLS the way it is: owned by several associations, run by an
interested Board of Directors (who actually work in the business rather than
sitting on each other's Boards and granting favors to their friends) and
very proactive (Internet-based, all listings available on company feeds if
you have not "opted out", etc.). I like a level playing field but
understand that small companies may need to sell their own listings and I am
empathetic for companies that border our marketing area (we have rules about
data dissemination) and may need to join several boards to do business.
Nothing is perfect and I cannot imagine a national MLS nor would I want to
lose the opportunity to display other company's listings.

As with other things, we need to get our own house in order before the DOJ
or whomever force us to take actions that may truly have unintended
consequences (like banks in real estate, for example).


Andrew Wetzel

>>>If I spend money to market MY listing, it is because I am hoping that I
will find the buyer and thus get commissions from both sides of the
transaction.>>>

Couple of quick points as I attempt to multi-task this afternoon:

1. - Correct me if I'm wrong but this is part of "the disconnect" that I'm
seeing, because unless you (as a buyer agent) are getting paid directly from
your buyer out of their bank account then there is only ONE commission from
one side of the transaction.

That is the fee paid by the seller to "their" (listing) agent, who in turn
pays the buyer agent's company (in the case of a co-op sale) out of their
commission essentially what is a marketing expense in exchange for the
cooperation. This expense is really no different than that of running print
ads, it gets deducted from the net the listing company will get in the end.

The money may originate with the buyer (or their mortgage company) but it is
the seller's money paid to the seller's agent when the funds get dispersed,
whether the seller's agent's company keeps the entire amount or pays some
out.

2. - The next commonly misunderstood part to me, and the most important
point overall, is ownership of a listing. Regardless of what MLS rights or
copyrights of any compilations there may be, (in most states) the Listing
Company owns the marketing rights to the listing itself (as well as the
prospecting value thereof) and regardless of what The NAR and/or The DOJ
thinks they don't have any control over your or my listing data as we
individually can dictate where and whether or not our listings (work
product) get shown, promoted or advertised.

In otherwords, I own my listings. if I don't want XYZ Realty to leverage
the prospecting value of my work product (i.e. show my listings on their web
site) while at the same time they're calling me a crook and offering
(compared to me) steep discounts to try to scoop up potential clients then
it's my right according to state law to withhold permission to advertise my
listings from them, whether in print or online.

Unless my state's law changes there's not a dang thing anyone can do about
this. It's MY right as a Broker/Owner (and the main reason I left the
Balloonheads to go out on my own 3 years ago).

I'm not entirely sure where I'm going with this post as I just got
distracted by a phone call and lost my train of thought; just felt a need to
clarify these particular points so we are all comparing apples to apples.
I'll stop here - for now :-)

Just keep in mind as this thread goes on it's (the people behind the DOJ
thing) all about one thing and one thing only - Leveraging the prospecting
value of the listing data.

Leveraging the prospecting value of the listing data.

Leveraging the prospecting value of the listing data.

Leveraging the prospecting value of the listing data.

Leveraging the prospecting value of the listing data.

Leveraging the prospecting value of the listing data.

Everything is window dressing so don't let any sleight of hand arguments
(such as Agency Duties and exposure for sellers) distract us and get us off
track of what this is really all about...

Al (trying to catch up) in CT, JIM

At 09:07 AM 9/12/2005, you wrote:
>And that's the point. Advertising on the internet (where we know that over
>70% of home buyers start their searches) eliminates the need for deep
>pockets. With the internet, IDX (or whatever fancy new term is coined) &
>the DOJ oversight, this exact scenario will be played out, at very little
>cost to the perpetrator, and to the detriment of every broker who actually
>worked to get those listings, & from whom the ADVERTISING POTENTIAL is being
>STOLEN.
>
>Bill Keegan

I am an EBA. I have IDX on my web site. Do you consider my having
YOUR listing on my web site as STOLEN?


Thomas A. Early

Saul's note:

I know you are not asking me Tom Early, but my answer would be that if I am a participant in IDX through my MLS, you have my permission to use my listings on your website.

Saul

>>Saul's note in part:
>>MLS was not created to allow consumers access to the information and the
Purpose of most MLSs today is not to provide information to the consumer,
but to provide information to MLS Subscribers and Participants.<<


Consistant with what you say, there's nothing regarding advertising in
Sandicor's "Purpose" statement but it's my understanding that Sandicor
provides FTP access to its database for, in my opinion, advertising (e.g.
Realtor.com and IDX --- or ILD). It seems to me that either the advertising
feeds should be discontinued or the Sandicor's purpose statement revised.

<http://www.sandicor.com/rules.html>
"2. PURPOSE. SANDICOR's Multiple Listing Service is a means by which
authorized MLS broker participants establish legal relationships with other
participants by making a blanket unilateral contractual offer of
compensation and cooperation to other broker participants; by which
information is accumulated and disseminated to enable authorized
participants to prepare appraisals and other valuations of real property; by
which participants engaging in real estate appraisal contribute to common
databases; and is a facility for the orderly correlation and dissemination
of listing information among the participants so that they may better serve
their clients, customers and the public."

Fred
fsalzer@sempre.com
Poway, CA

Saul's note:

Hi Fred,

Has Sandicor found a new Executive Officer yet?

I agree with your comment, and let's take it one step further in defining roles and obligations. I think MLSs can go beyond the scope of their stated purpose, but only by approval of their Board of Directors, and when it comes to the listing data...what the MLS is going to do with that listing data should be clearly defined in the Purpose and permission obtained (either Opt In or Opt Out) by the Brokers providing the data, if the use is outside the scope of the Purpose of the MLS.

IOW, anything that is within the scope of the Purpose, no permission required. Anything outside of the scope of the Purpose, permission required (of the lisiting brokers).

Saul

 In a message dated 9/12/2005 1:50:31 PM Central Standard Time,
fsalzer@sempre.com writes:

Fred writes: <advertising in
Sandicor's "Purpose" statement but it's my understanding that Sandicor
provides FTP access to its database for, in my opinion, advertising (e.g.
Realtor.com and IDX --- or ILD). It seems to me that either the advertising feeds
should be discontinued or the Sandicor's purpose statement revised. >>

Fred,
This is the point I was trying to make. NAR, the Boards and the MLSs have
already crossed the line as far as sharing the information for marketing
purposes. Most if not all of them have been doing this for years, even as you
pointed out, without it being included in their governing documents. Every
single Board and MLS which has been sharing listing data feeds with Realtor.Com
for the past 6 or 7 years has been doing just what NAR is now arguing
against.

There is no one I know of who has spent more money than NAR and Realtor.Com
on training the consumer to use the Internet to search for their next home.
Is it any wonder that today the consumer has learned that the Internet is the
place to go to look at homes? Sure the consumer wants more information.
Believe me if we do not provide it someone else will.

I think that is what most of this is really about. Who is going to be the
gate keeper for the general public, of information about homes for sale and
how to pick someone to help you buy or sell a home? In the past it was all of
us through the services of the MLS. Suddenly some want to take a step
backwards and require consumers to go to each individual brokerage firms web site
to find homes for sale.

The end result would be obvious. The majority of the mom and pop brokerage
firms will end up going out of business and left in their wake will be four
or five national firms, each with their own web sites of homes they have
listed. Then the Cendants and ReMaxs of the world will begin buying up the
smaller players and before you know it, there will be no Realty Worlds, or KW, or
Exits, or Help U Sells.

As they say, it is hard to un-ring a bell. The industry has a 50 year
history of providing information about the majority of the homes for sale through
a shared MLS system that has been a great success for all concerned. It is
going to be really difficult for the industry to roll back the clock to 1960
and tell people they have to call each office to find out what is available
for sale.

Tom Hathaway

Greg_DiSisto wrote:

"Stefan,

Do you believe that any broker member of the MLS should be able to advertise
any other broker's listings unconditionally?
It's not about whether you CAN or can't list property. Personally, I LOVE
buyers agents, whether they're EBAs BAs SAs TBs or ABCDs. They sell my
listings, my sellers are happy, and I get paid! It's about the desire for
an unconditional right to use my listings to enhance the business of a
competitor."

Greg,

I wouldn't in a million years "advertise" another broker's listings without
permission. However, what riles me is the fact that there are those who
would apparently deny me the right to display other MLS participants'
listings on my website through IDX (or ILD), by means of a selective opt out
or some other mechanism, based on the argument that they, as listing
brokers, have the right to prevent my firm from "advertising" "their"
listings.

The way I see it, this type of thinking is anti-competitive, and could
potentially (and quite possibly) put brokerages such as mine, which do not
list properties (or whose business models, such as discounters, pose a
threat to the status quo), out of business. But, I guess that would be the
goal of such behavior, wouldn't it?

Denying Realtor and MLS members such as my firm the right to display other
members' listings on my website through IDX is an illegal restraint of
trade, in my opinion. Practically speaking, the MLS in my area of practice
is the real estate marketplace, containing the vast majority of properties
offered for sale. When you tell your membership that it is OK to
effectively prohibit firms such as mine from participating in the
marketplace by not allowing us to display MLS listings on our websites, you
are engaging in anti-competitive behavior which is most certainly not in the
best interests of the marketplace or the consumer.

The government exists to protect the integrity of our markets from illegal
and damaging behavior, whether it is the stock market (Enron, Dennis
Koslowski, Martha Stewart, et al.) or the real estate market. The thinking
that we can selectively pick and choose among MLS members who can display
listing information and who can't is exactly the type of thinking that has
led to problems with the DOJ.

As far as MLS non-members, I am certainly not in favor of them having any
rights to display proprietary MLS information whatsoever. Also, I feel that
it is reasonable to place sensible restrictions on the type of listing
information that is displayed through IDX (or ILD).

Greg, I am pleased that you love buyer agents. I love seller agents also.
Their contribution of inventory to the MLS is obviously of critical
importance. I believe that my contribution of buyers is equally important.
Working together, we can make the marketplace work efficiently for ourselves
and the real estate consuming public.

Stefan J. Scholl, J.D., ABR, EBA, e-Pro
Buyer's Broker of Northern Michigan, LLC
scholl@BuyersBroker.biz - E-Mail

Saul's note:

Is IDX a form of advertising? I think it is. Remember, MLS is a vehicle offering participants and subscribers easy access to all the listings and is also a unilateral offer of compenstion and cooperation.

If IDX is a form of advertising, what does your license law say about advertising another broker's listings. Go look at your license law and tell me what you think. Not emotions, but facts.

Now...Should I be able to use the data in the MLS for a purpose other than the purpose for which MLS was created and other than the stated purpose of the MLS I joined? I should be able to if you allow me to use it. If you do not want me to use it, I should not be able to use it and the state should enforce my right not to allow you to advertise my listing.

Saul

From: "Bill" <Bill@BillKeegan.com>

> -----Original Message-----
> From: Thomas A. Early [mailto:TomEarly@BuyersBrokerage.com]
>
> I am an EBA. I have IDX on my web site. Do you consider my having
> YOUR listing on my web site as STOLEN?
>
> Saul's note:
>
> I know you are not asking me Tom Early, but my answer would be that if I am a
> participant in IDX through my MLS, you have my permission to use my listings on
> your website.
>
-------------------------------------------------------------------------------------
As Saul said, Tom, if you are displaying the IDX available through our MLS, and I am also a participant in that IDX, then, no, you are not stealing those listings. And I think every REALTOR should be able to display the listings on the MLS for the purpose of servicing their client, choosing a house for their client, comparing properties with a client, etc. My objection is to the use of listing data & information for the express purpose of attracting new clients. No one should be allowed to do that without the permission of the listing broker. As an EBA, Tom, you sell a service; buyer representation. So your web site & advertising should promote the service you sell. After you've sold it, and the buyer has agreed that they want to buy a house with you as their representative, then go show them all the houses you want. That is the purpose, to my mind, of the MLS. The DOJ, however, wants to take away from me, the right to NOT participate in the IDX. So if you (and I'm
not picking on or accusing you personally, just continuing the example) display that IDX on your website, using the product of my work to attract clients & business for yourself, while you badmouth me & denigrate the way I do business, I should have the right to no longer allow you to display my listings. The DOJ says I shouldn't be allowed to take that stance, and that my listings can be used without my permission. THAT would be stealing.

Bill Keegan

Stephan Scholl wrote:

>>Your comments are very disturbing to me, and I cannot let them go
unchallenged. You firmly believe not only that listings are the property of
the listing broker, but that listing brokers should be allowed to do
whatever they please with "their" listing information, including not
allowing "their" listing information to be shared with cooperating buyer
brokers such as myself, who are both Realtors actively engaged in the
practice of real estate and members of the MLS, by means of IDX or ILD or
whatever. It is precisely this type of thinking that has driven the DOJ to
action.


Art offers:

No, Stephan, it is the attempt by the DOJ to try and micromanage business,
and their general hostility to business people that has driven this action.
You have to remember who the DOJ is: just as many of the Washington
regulatory employees, they are a government-employed group of liberal trial
lawyers who see business people as being "bad," and in need of restriction
in the pursuit of commerce.

What would happen, for example, if the DOJ attorneys, or even attorneys in
general, were told they had to release all of their interview notes, briefs,
and working papers? After, all, the people can't trust a crusading attorney
with their rights, can they? Their work product should therefore be
considered to be "public property," out of "fairness" and "openness."

Yes, I'm using absurdity to illustrate the absurd. The idea that a listing
is some public form of notice is absurd. It just is not true, period.

The fact is that the listing is the work product produced by the listing
agent, or broker, if you prefer. There is no force of law that makes the
listing agent share their work product with ANYONE, save the person that
intends on buying a home. Everything else is a professional courtesy that
could easily evaporate if the DOJ decides to press us on this issue. There
is no law that says that listing information must, or even "should" be
shared with anyone, using any method, MLS or otherwise. The sharing was a
matter of expediency that can easily be taken away by ANY licensee. So the
DOJ, while attempting to help consumers, may end up causing a new set of
difficulties for you and others because they refuse to observe that those
who make out the contracts should retain rights to the intellectual content
of those contracts. Lenn mentioned the law of unintended consequences, and
they are usually fully in play where the government attempts to be wiser
than the people who put it there.

Mark my words, Stephan, individual business people are far more powerful
than any government attorney, and the freedoms granted to us as Americans
make us that way. If they take those freedoms away, we have options to deal
with that, too.

>>Your comments are insulting and a slap in the face to any Realtor that
chooses not to list properties for sale. Like the old saying goes, the pigs
get rich and the hogs get slaughtered. I implore to you keep pursuing your
reactionary agenda. Knowing that there are influential people such as
yourself who continue to hold such anti-competitive, anti-consumer beliefs
will only bolster the DOJ's resolve.

Art opines:

What a bunch of socialist worker's party nonsense. You can't possibly
subscribe to this attitude in real life, can you? Please, say that it's Ted
Kennedy style bluster and anger talking there. Such an intrusion into the
operation of a business would be the biggest mistake since the breakup of
the phone company. Great service, live operators, good jobs, all gone.
Thanks, DOJ.

Wait and see what happens to your access to listings if the DOJ goes ahead,
Stephan. You might have to go out and get some of those listings for
yourself. If I were you, I'd start sending letters right now begging the DOJ
to stop, as this "resolve" you speak of can only hurt everyone.

And none of us wants that.

Art Houston

The Below was written and published on our various list and websites on
January 6, 2003. For more information on IDX and VOW we also created an auto
responder a few years ago <MailTo:IDXandVOW@InternetCrusade.com> or go to
http://BrokerReciprocity.InternetCrusade.com ...we haven't updated this site
in a few years but it is good enough for historical purposes.

Saul

>>
Your Listings on the Internet.For better or worse, they are there.now what?
Understanding IDX and VOW.

Public display of other broker's listings via the Internet has created the
potential for major change in the real estate industry and that is exactly
why we must move forward with our eyes open, going back to the basics and
understanding the fundamentals before we move forward. It is time to
re-evaluate where we have been and then where we want to proceed...or
someone else will do it for us.

Let's start by looking prior to the days of the www (the graphical part of
the Internet), which has been around since 1992 or so with the development
and then commercialization of "browsers" (The Internet has been around in
some form since 1969).

Things were pretty simple in pre 1992 real estate. The two major ways to
make money in real estate sales were:

Listing
Selling

If I took a listing, I could use that listing to help me generate more
listings. "For Sale" signs and "just listed" mailings increased my
"presence" and the chance that other owners would recognize me as a real
estate sales leader in the neighborhood (and hopefully, help me get more
listings). There was a recognized promotional value in the listing. Other
brokers were not allowed to put their signs on my listings...they were not
entitled to the promotional value I gained when I got that owner to sign my
Exclusive Authorization and Right to Sell (listing agreement).

Listings and their promotional value helped me find buyer leads for my
listing, other listings I might have...and...because I was a member of the
MLS ("unilateral offer of compensation"), listings of other broker members
of the MLS.

If I had a listing I could run ads and when calls came in (leads)I could
begin to work with the caller by inviting them into my office to meet and
discuss perhaps other properties in which they might have an Interest. This
might include other broker's listings as well as my own. I had no obligation
to give the name and phone number of the listing broker when I provided
listing information to a prospective buyer who came into my office. When I
took a prospective buyer out to look at property, I had no obligation to
give the prospect the name or phone number of the listing broker. I simply
"showed" the property" and provided information, answered questions, etc. If
the buyer said: This is great, now please give me the name of the listing
broker so I can write an offer," I was under no obligation to do so.

Once again, and this is an important concept, the listing itself had a
promotional value that we all recognized and of which, only the listing
broker, could take advantage. Listing broker's had no obligation to let
competitors benefit from the promotional value of the listings they worked
to obtain (Listings are the property of the broker. We all learn this in pre
license classes and the Internet and web do not, because of their existence,
change this foundational aspect of the business).

As a matter of fact, state real estate laws prohibited the advertising of
another broker's listing without the listing broker's permission (still the
case today).

Now roll forward to 2002:

As many RealTalkers might remember, IC has been putting the IDX/VOW subject
in front of readers for at least the last year...and most REALTORS in the
field are not yet aware of ideas and concepts that have the potential to
change the way many do business.

Today, there are at least 3 identifiable ways to make money in real estate
sales:

Listing
Selling
Lead Generating and Referring

While referring existed prior to 1992, it was not a major part of most real
estate businesses (except for maybe relocation, which was usually done
within the confines of particular companies).

Listing information is content and it still has that promotional value. So
who is entitled to the benefit of the promotional value created by listings?
Many are saying all brokers (and even their agents, without their broker's
permission) have the right to display on their website as information, all
the MLS listings without obtaining permission of the listing broker. While
IDX requires permission, VOWs do not. This is a major distinction and
critical to any discussion on VOWs.

Have you been to http://RealEstate.Yahoo.com? The site indicates: "Search
our COMPLETE data base of MLS Listings"

Where did Yahoo get the COMPLETE MLS data base?

Have you gone to e-Bay lately and clicked on "Real Estate?"
(http://ebay.com)

Did you know that e-Bay is a licensed broker in most states? That means you
could be in direct competition with e-Bay.

"List your home on e-Bay and on the MLS" says e-bay (FSBOs and your listings
in one spot). You can list for a flat rate listing fee on e-bay.

By virtue of VOW concepts, e-bay (as an MLS participant) can access all the
listings of MLSs to which they belong and put the listings on e-Bay as
content (along with FSBOs who post their own listings on e-Bay, which makes
e-Bay a more complete data base and perhaps more appealing to potential
buyers looking for homes).

This content on e-bay...most of it your content (your listings)...draw
buyers...who may then be sold back to you as leads...and e-bay gets the
content FREE (IDX/VOW). And since e-bay is a licensed broker, it may be
difficult to restrict their use of the data...in fact, that might be
dangerous and border on anti trust. For you to survive, you must create a
competitive model yourself.

And then there is REALTOR.com...REALTOR.com pays your MLSs 8 million dollars
a year for the listings...e-Bay and Yahoo pay nothing through IDX/VOW.
REALTOR.com has many restrictions based on a thousand page operating
agreement, Yahoo and e-bay have none. As REALTORS, It is time to seriously
consider what REALTOR.com can become. Give it you attention in addition to
your criticism.

And what about leads from the Internet? If you don't have the means to
generate them yourself, there are companies that will help you with Internet
leads for a fee. Weigh carefully their business proposition to you because
they just might make economic sense.

There is a cost to lead generation and you need to examine your cost and
compare it to some of the new referral programs available online. I
recommend that those who are serious about being competitive in this
business over the next 5 years do some web surfing to see what they might be
up against and how they can best utilize the Internet in the development of
their own business model.

The business has always been about leads. What is one of the biggest time
consumers in a REALTORS day...prospecting, and working on the development of
leads...from cold calls to door hangers to direct mail, to signs on listings
to classified ads...all designed to make the phone ring, leads... Brad Inman
says nothing new when he says the business is all about leads...what is new
is where many of those leads will from, how they will be matched and
distributed, and if there is a more cost effective way to develop leads then
the old ways many agents and brokers are so used to.

What are you paying for your leads right now in your time and
marketing...how can you generate leads from the Internet? What will you (do
you) pay for those leads? Is it less than you are paying now for leads (when
you consider all your marketing, advertising, referral fees, prospecting,
cold calling door knocking, etc)? It is your job to find out what is right
for you and how you fit into a changing real estate industry. Referral
models are proving to be a third major area of revenue in the real estate
sales business.Listings, Sales, Referrals.

Just like many in the industry did not and still do not know about IDX and
VOW...many do not know about some of the new business models that have the
potential to change the business of real estate. And it is everyone's
responsibility to know about the business they are in and know that there is
no substitute for your own due diligence.

>From someone who has observed closely the evolution of listings and
consumers on the Internet since 1993 , from the inside and the outside, I
want to stress to you that IDX and VOW are important pieces of a much
bigger puzzle...who will put the puzzle together first is the question we
are all looking to answer...and by participating with us in our online
discussions, you will have a better chance of learning what you need to know
about industry changes first, and how these changes might affect your
livelihood and your future in real estate.

Saul Klein
President, InternetCrusade.

Is it possible that the "slippery slope" the DOJ is treading on could
eventually lead to some requirement that FSBO's be allowed "space" on our
MLS or web sites? It is really amazing to see what some (especially "Big
Government") refer to as "anti-competitive" behavior: isn't some/ most of
this just being "politically correct" rather than simply stating that some
real estate companies just can't compete with others that are better managed
or more enlightened about where they need to spend $$$?

All this DOJ stuff makes me think that they are applying some type of
"affirmative action" on behalf of smaller companies, many of which are small
and local because they WANT to be. "Survival of the fittest" dictates that
those that cannot compete (or misunderstand the market) "may" perish and
that is life (Intelligent Design?).

A better DOJ focus would be to improve/ implement "disclosure requirements"
("plain language"; "minimum services") so that the public can more readily
understand what services really come with their listing company and how they
would relate to the commission being charged (I think many just look at the
commission and "assume" that we are all the same).

A gigantic leap of faith, albeit very anti-"Big Brother" liberal government,
would be to actually TRUST the public to decide what they want when they
list with someone. If they don't know or understand what their listing
company is doing as far as the Internet or MLS exposure (among other
things), why is that not their problem.

As usual, the "cure" to rescue the mis-informed/ ignorant far outweighs many
better "real" solutions and may have unforeseen costs/ consequences on the
entire market. Perhaps it will even push some of the small and/ or local
companies closer to failure.

Does any Board of Realtors or MLS really have the "right" to tell its
members/ subscribers that they MUST display their listings? I guess that
the Commerce clause will be mis-applied again!

What can be next???


Andrew Wetzel

http://www.realtor.org/law_and_policy/mls/ild/what_it_means.html

No doubt you have read the news about the U.S. Department of Justice's
decision to sue NAR over its new policy governing the display of multiple
listing service data on Internet Web sites.

NAR is disappointed that its multi-year attempt to develop a Web listings
policy that's a win for consumers and also preserves the rights of real
estate brokers will end up in court. We worked long and hard to understand
and accommodate the government's demands. In the end, however, it proved
impossible to do so without fatally compromising our members' interests. We
know we stand on firm ground legally, and we are very confident the issue
will be decided in our favor.

At stake is a principle that's vital to our members and central to the cause
of organized real estate: We believe REALTORSR should be free to market
their customers' properties as they see fit and that consumers who wish to
have their property listed in the MLS should have the right to choose
whether their homes are displayed on the Internet or not. After all, MLSs
are not public utilities; they are private databases created for and
maintained by real estate professionals for real estate professionals.

The government would have NAR restrict how our members do their business.
They believe every property included in the MLS must also be available for
display on hundreds of web sites, even if listing brokers, with the property
owners' consent, choose not to do so.

Despite the points being presented as central in many news reports, this
issue is not fundamentally about discount brokers or new business models.
NAR supports ALL REALTORSR and we have led the way in innovation, including
REALTOR.COM, which continues to set the standard for REALTORSR on line.

Unfortunately, this legal issue will likely take a long time - even years -
to resolve. We are entirely confident we will prevail. We hope that the
government will reconsider its position and save both NAR and the taxpayers
a lot of time and money.

----------------------------------------------------------------------------
----
Copyright NATIONAL ASSOCIATION OF REALTORSR
Headquarters: 430 North Michigan Avenue, Chicago, IL. 60611-4087
DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020
1-800-874-6500

At 08:53 AM 9/12/2005, Maureen wrote:
>Lenn wrote
>
> >I know that many EBAs are rejoicing in the DOJ suit against the NAR.
>I'm not sure why. The DOJ suit, although it addresses now moot NAR
>policies, the old VOW proposed policies, it does nothing to change the
>NAR policies with respect to agency as we know it.
>
>
>Are they? Hathaway seems a little manic doesn't he? I have not
>seen EBAs dancing in the street here. And I believe we have more
>EBA firms here than most parts of the country. Locally they have
>websites with the boards (other RE companies?) listings on them.
>No one is threatening to take the listings back from them...
>
>Pam is no longer an EBA and she has no listings on her website...
>wouldn't she (as an example) as an EBA be one that could benefit
>from the DOJ suit? PFMP especially since I am asking more questions
>and using you as an example.
>
>Is it rejoicing by EBAs in markets like Pam's?

Maureen, we don't have IDX now. I think all brokers can benefit from
IDX, not only buyer's agents. The buyer is more likely to be loyal
and return to an agency's web site if they can find all the property
information in one place. Otherwise they go from one site to another
making contacts with many agents to get information. The seller also
benefits from IDX with greater exposure. There is no EBA in Northern
NJ. No matter what the result is of the DOJ suit I will adjust my
business accordingly.

If we don't have IDX and only the listing agent can
advertise listings, then I don't see any point in there being
buyer's agents. Buyers are only attracted by property information
and listings. If a buyer's agent has no way to attract buyers they
might as well list. If they are listing, they are single agents,
transaction brokers or dual agents. If making money requires that I
take listings and, as a small office I am not likely to have many
listings, why would I share them?

If buyers won't agree to work exclusively with me because I cannot
provide information on all the inventory then my listings might as
well be exclusives. Buyer's have no incentive to sign an Agency
Agreement but sellers DO have an incentive to sign a Listing
Agreement. Unless they are a FSBO they are going to choose an agent
to market the property. If I am a traditional agent, why would the
buyer come to me as opposed to any other agent? If my listings are
all I have to attract the buyer and make money with then why should I
share them?

I mean this seriously. Since agencies do not want to share listing
information (no IDX) and, as many have pointed out, the inventory
that is valuable, I may well decide that I should put my time and
effort into my own exclusive listings. I am not going to be a
taxicab driver showing buyers homes without any commitment from them.

The number of exclusives is growing and the buyer agent commissions
are dropping. If I take my few listings as exclusives I would still
do quite well. The listing agent can show what they do that is done
better than another agent. They can more easily show they are worth
the commission. The seller can see they got a better price for their
property and got it faster and with less inconvenience. You can show
a seller examples of marketing that might be better than another
agents. You can show them their listing on a better website. If you
help a buyer spend 600K for a condo you are taking them through the
homebuying process the same as another agent. You may be doing it
better than another agent but it's not something concrete they can
see like getting a higher price for their property. If they are
first time buyers they have no idea how bad other agents can be.

If I am concentrating on making my income exclusively from my own
listings I am not going to care that the builders are offering
zero! Today we got a notice from a new condo complex. These are
condos from 300K+ to 1.3 million dollars.

NOTE REGARDING BROKERS:
Currently, the Shore Club Sales Team is not entertaining
outside brokers. If you are a broker, we are sorry but we
cannot offer you participation in a commission at this
time. If you are prospective buyer who is working with a
broker, please be sure to inform your broker that we are
not able to accommodate him/her at this point in the sales
process.


>Is it just a historical grudge... like Hathaways litany:
>

Except possibly in your area, I don't think there are enough EBAs
anywhere for there to be a grudge against them. . Maybe only on Real
Talk by some. No one in my market had any reason to think of not
liking EBAs. If there is a grudge against anyone it is against
discounters, who are universally disliked.....at least
here. Commissions dropped primarily because of competition and
discounters.

Pam Bell

Think about it the government went after napster for distributing the = works of musical artists saying they couldn't share someone else's work for = free.
Now here we are having the Feds tell us we HAVE to share our work for = free.
The product that we place on the MLS is our creative work, we go out and measure the property based on our expertise when take photos or hire photographers and or videographers to enhance our creative work, we take time walking through the home to develop a creative and descriptive definition of the property, we organize all of the information we gather = and develop it into our creative product. How does that differ from a = musician's creative work? I do understand that the music is most likely = copyrighted, (just a thought-maybe that is the answer we should start to copyright = all of our work before it goes on the market I wonder how the Fed copyright = dept would like that) but look at the similarity of the work effort, = shouldn't our work product be given the same consideration.
This just all goes to the real issue of competition, the DOJ is looking = at this purely form the standpoint of money and ignoring the concept of professionalism, they say this restricts trade which doesn't make sense = to me. It seems that if you look at the state license laws, and study the concept of independent contractors and the fact that the LAW dictates = that commissions ARE negotiable, everyone has a chance to compete on a level playing field, if I want to try and build a RE business based on a very = low commission rate that=92s my business model and it is my risk, if I have developed a good budget, marketing, plan and financial breakeven = analysis then I have the opportunity at being successful. It is my responsibility = to make my business or break my business. Does the DOJ not get this, do = they understand the concept of Free enterprise.
It seems to me like a better solution would be to establish royalty fees = for our work product. We would be required to submit to the local MLS and to Realtor.com, this info is free to the consumer, from there we would = either opt in or opt out of putting our work product up for royalty fees. It = could be similar to pay per click the royalty user would have to agree to the terms of my royalty agreement, and then they would have to pay me a = royalty fee or pay per click for every time my work product is looked at on = their site, one of my stipulations would be that they could not turn around = and charge me for leads they generated from my work product.=20 This concept allows us to consider different rates charged to the = seller, NEGOTIABLE COMMISSIONS (it=92s the law DOJ) where we can consider part = of our income will be generated by the royalty fees or pay per click concept.


Dan A. Corsair

I had my staff submit my name as a potential panelist...I don't think the
DOJ will go for it...I have too much background on the Internet and the real
estate business :-)

Saul

-----Original Message-----
From: Sally Hardman [mailto:Sally@SallyHardman.com]

-
Check this out:
http://www.scanusa.com/a/ftc/index.php?id=121126&my_tz=eastern

In case you have difficulty opening the link, it begins:
"Federal Trade Commission/Justice Department to Host Joint Workshop on
Competition Policy and the Real Estate Industry One-day Public Event
Scheduled for October 25, 2005, in Washington, D.C.

The Federal Trade Commission and the Department of Justice's (DOJ) Antitrust
Division today announced that they will host a joint workshop entitled
"Competition Policy and the Real Estate Industry." Prompted by the
substantial changes in the real estate brokerage marketplace and consumers'
interest in a competitive real estate brokerage industry, the workshop will
cover such topics as new and innovative brokerage business models, multiple
listing services, and the implications of state-imposed minimum-service
requirements."

Should we attend in mass?

Sally Hardman

tOMe wrote:

>>So what your saying is they should be able to see properties on your
web site but not my web site. Thanks, but no thanks. That cow is
out of the barn never to returen.


Art explains:

As a guy that grew up in dairy and horse country, I can tell you it is very
easy to get a cow into a barn. Just put the food in there.

If the DOJ forces us to put the food in there (into our barns) that listing
info could conceivably only be seen on MY website.

I think you guys need to tell them to stop this ill-conceived action. They
haven't thought it through. They are assuming that we won't give up the MLS
and the sharing of data. They are oh, so wrong.



Art Houston

New Business Model

OK...let's tweak this a little:

A newly licensed broker sets up shop in AnyTown USA. Our new broker has no
listings and no buyers and comes up with an ingenious new business model.

1. He joins his local association of REALTORS and also the MLS so he has
access to the MLS for buyer leads he intends to generate.

2. He buys the Friday newspaper and selects the 250 most attractive
properties offered for sale in the newspaper (listings of other brokers) in
a number of different price ranges.

3. He runs a full page ad in the Sunday Newspaper (and he does this every
Sunday), showcasing 250 properties. He adds and removes listings every
Sunday based on properties advertised in the paper on the Friday preceding
his Sunday Ad.

4. Under each listing in his ad he states that the listing was provided
courtesy of the listing broker, with no contact information for the listing
broker.

5. He puts his web site address in the ad and states:

Search the MLS. All the Listings available to REALTORS in the MLS are
Available at www.AnyBrokerAnyTown.com.

6. In his ad he also states:

Sellers: "Why pay 5% to 6% to sell your home? List with me and I will place
your property in the MLS and on the Internet for $99 Flat Fee."

Buyer: "Buyer Rebates available, up to 1% of the purchase price of the home
goes to the buyer."

His theory is that interested buyers will call him and he can represent them
in a purchase, . He also believes that some people may not realize that he
is not the listing broker of all these properties and it may bring him
listing appointments. In addition, he'll get those home owners interested in
discounted services and he will list their properties for a flat fee of $99
and place the listing in the MLS.

He will also have more leads than he can handle (some are not really leads
but just "interested parties") and he plans to offer some of these extra
leads to brokers and agents he solicits through an e-mail campaign, for a
referral fee.

Comments?

Saul

My Comment is that it is UNETHICAL at least for me. I am one of those who
came into an area went into real estate and opened my own office. Never
would I have used someone else's work to promote myself or my office. I may
be a small fish but my personal code of ethics is at a higher standard than
the REALTORSR code of ethics. The only time I have used any listing other
than my own in a ad was a listing a fellow small fish broker had and I
needed to fill a full page ( I only had 5 homes and wanted to make the ad
symmetrical) I asked her for written permission from her and her client,
and put her company name and phone number under the section for that home
saying "this home is listed with ABC Realty 555-555-5555"

Donna Slemp

"Saul Klein" <Saul@InternetCrusade.com> wrote:
>2. He buys the Friday newspaper and selects the 250 most attractive
>properties offered for sale in the newspaper (listings of other brokers) in
>a number of different price ranges.
>
>3. He runs a full page ad in the Sunday Newspaper (and he does this every
>Sunday), showcasing 250 properties. He adds and removes listings every
>Sunday based on properties advertised in the paper on the Friday preceding
>his Sunday Ad.

Where does he get the right to reproduce the photos for these showcase listings? That's a direct copyright violation.

Robert Helmbrecht

So what's the point of idx in the first place? It either brings you buyer
leads or it gives listing agents the bragging rights saying they've got the
listings. I've never understood what's in it for dominant broker A to allow
her listings to be seen on little guy broker B's website. What's in it for
broker A?

'Splain...

Ivan Ramos

Saul's note:

Dominant Brokers in a market who participate in IDX do so because they believe it is in their best interest to do so.

Saul

Dominant agent A sells the home, and gets the sales commission.
I say, go for it!

Laniah McMillan

At 04:03 PM 9/12/2005, you wrote:
>So what's the point of idx in the first place? It either brings you buyer
>leads or it gives listing agents the bragging rights saying they've got the
>listings. I've never understood what's in it for dominant broker A to allow
>her listings to be seen on little guy broker B's website. What's in it for
>broker A?
>
>'Splain...
>
>Ivan Ramos

It's called placing your seller clients interest before your
own. Who will argue that the more exposure the seller has the
better deal they can expect.

Thomas A. Early

Saul's note:

Lots of people would argue that point Tom. How does allowing people who do not qualify to buy the property benefit the seller? Might that not cause a security issue?

Do you only serve your client as a buyer broker if you show them every single property that is on the market. The argument about maximum exposure to the world being the only way to serve a seller client is ridiculous and unfounded. (Notice I didn't say you are ridiculous).

Do brokers who do not advertise in all the newspapers in the country fail to serve their clients? Do brokers who are fortunate enough to live in a market with 2 newspapers fail to serve their client if they only advertise in one of those newspapers?

Brokers are hired to market the property, which includes deciding the best places to advertise and how to expose the property. If the broker doesn't do their job, they are replace or sued.

Saul

Can I, as a listing broker, allow another broker the right to advertise my
listings in the local paper, and deny another broker the right to advertise
those same listings in the same newspaper?

Why would I give one permission and not another? Maybe I trust one and not
the other. Maybe I believe one is ethical, and not the other. Forget the
"why" for a moment, just think about the question and give me your answer.

Saul

Yes! Since I am ultimately responsible for all disseminated information,
regarding the property, I should be able to choose whether or not I want to
give permission and to whom, with the owners permission also. Why can't we
have marketing partners?

Kathy Skrzypiec

What's wrong with this picture? Let me count the ways...

it depends on if you mean from a legal point (which varies from state to
state) or the COE or just from an ethical point of view.

Personally, I abhor Brokers who get their business by touting the fact that
they are being ripped off by other Brokers. You see it on web sites
everywhere. . . I've got a lot of canned content on mine, but have been
trying to go through it page by page to make sure it doesn't diss our
Industry.

If you have to talk bad about someone to get business, then you have
violated the COE and every Mother's wisdom in the world: "If you can't say
something nice, don't say anything at all".

Paula Bean

In the soon to be abandoned IDX model this type of advertising would be
allowed on the Internet although I think that the pitch for business
(especially the part about being "ripped off") is over the top (I am not
sure if it violates the COE but I would not run such an ad). However, I do
not think that this display of other Broker's listings is acceptable for use
in a newspaper: what do you think?

For me, the bigger concern is allowing a Broker to charge a flat fee to
place listings on the MLS. I am not sure how the DOJ would view this but I
think that all MLS-listed properties (if not all Realtor-listed or real
estate-listed) should be subject to some clear standards as far as minimum
delivery of service. To be truly competitive, let's put what we do for our
fees before the public so that they can make an informed "apples to apples"
decision rather than potentially falling into the trap of assuming that we
are all alike and using the difference in commission as the sole
differentiator.

I have no problem with different business delivery/ service models but I
have a big problem with any type of discount being offered where the public
is not CLEARLY made aware of how and why that discount is being offered.

Andrew Wetzel

I actually see this as no different than the agent who sends out a whole
slew of sold properties under their own banner and they were neither a buyer's
or a listing broker for any. Yet it appears to the general public that they
have been very successful in this area.

In Colorado, it is clearly a violation if they don't not include language
that clearly indicates these were not listed, nor sold by the advertising
company. Our IDX also mandates the listing company and contact information be on
the front page of the IDX listing in the MLS. When it is in the paper as
you suggested Saul, there is no agreement from the listing agent allowing him
to advertise other's listings. Unless this new broker doesn't care about his
ethics and fellow agents, he should get permission from each agent and
include language that his company is not the listing company. Since that is not the
way it was advertised, and there was no permission (presummably), IMHO, he
is in violation. At the very least, he has shown his true colors and I would
certainly use that against him sitting in front of my potential clients, "If
he violates other peoples trust, how will you be able to trust him?"

I also think it would be different if he had the listing agents permission,
advertised they were not his listings and then ran the ad as potential Buyer's
Agent for any of these listings. "Call for your free representation..."
But since he is also including the language about selling your home for
discount commissions, he's really cutting off his nose despite his face.

Cheri A. Long

Lenn Harley writes:

>Saul's note:
>DOJ in its lawsuit against NAR is suggesting there be no opt out for
>Internet Display. Isn't that the same thing as advertising another
>broker's listing without the listing broker's permission?
>Saul

I believe that brokers give permission for IDX display when they enter a
listing, unless they have opted out of the system, which few have.
I don't believe that broker (1) would give permission for broker (2) to lift
their newspaper ads and use them to advertise the other, broker (2)
services.

IDX is unique as a database.

Lenn Harley
Homefinders.com
Serving home buyers in Maryland and Virginia

Saul's note:

A couple of clarifying points Lenn...IDX had an Opt In and an Opt Out
Method. MLSs could choose how they set up IDX.

Opt Out was the model where the MLS would assume all brokers granted
permission to all the other brokers and if a broker did not want their
listings displayed on other broker's web sites, the dissenting broker had to
"Opt Out." Those MLSs that began with this method started their IDX with
100% of the listings in the IDX system and IDX has worked well in those
markets with few brokers "Opting Out."

Opt In was the model where the MLS assumed all brokers did not want to grant
permission and if brokers wanted to grant permission, the broker needed to
"Opt In." Those MLSs that began with this method started their IDX with 0%
of the listings in the IDX system and had a hard time getting participation
and IDX has been much less successful in those markets.

Question: If a broker would not give permission for broker (2) to lift their
newspaper ads and use them to advertise the other, broker (2) services, why
would they allow a broker to do it on the Internet?

And that is were we get into the discussion of how listings should be
allowed to be used on the Internet...no different than they would be allowed
in the newspaper maybe?

Saul

May be no sharing of the listings in the news paper and no sharing of the listings on the internet to make it fair. WOW let's go one step further and not allow another broker to use any of our data/listings and go back being like UK estate agents and each office handle its own listings and the public will have to go to each of the hundereds of offices to find the house that is best for them or cruise neighborhoods to find signs and call on each and every sign. Brokers might like it with double dip on every listing and minimal newspaper or magazine ads.

I am not sure this would serve the public in todays fast electronic world. Sure would bring back the neighborhood specialist. May be it would increase FSBO percentage and FSBO web sites would rule. Now who needs a real estate broker when the best exposure is on the FSBO web site? Next we will all go back and live in caves or mud huts and not worry about all this.

Next question!!!

Bob MacCuspie e-PRO

New Business Model - Response, not my proposal just some food for thought on Saul's question.

1. As always "we" (all of us in NAR) have a problem of difining what our services are and what one gets for what we do. In the listing model where the ad says $99 the listing must carry a selling side fee to get sold or the likelyhood of a sale is close to nil unless an EBA with a buyer willing to pay the selling side fee comes along. Just how many buyers are ready to pay the selling side fee? Yes the selling side sales person could negotitate al lower price to reflect the fee, but in this market not a likely outcome. So again we face a situation of comparing apples and oranges.

2. As to the 1% rebate to sellers it is a viable model in a market where the main body of real estate brokers put in 3% to the selling side. We have a rebate half the commission broker here so at 1 1/2 % he is surviving in this hot market based on the main body of brokers and builders feeding him the 3% to selling side opportunities and a hot market. What happens if the feed stream of 3% co-op fees stops? This model becomes obsolete.

3. What if the market divided into two groups of exclusive listing agents (ELS's) and EBA's and each had to charge their own fee either as a % or flat fee? All cooperating fees would be zero and buyers and sellers would pay for what they want and get. May be the "ala carte" model would make a real appearance and rather than negotitate fee one would negotitate what services one needs in a transaction. May be in this new world wide market we are offering more than the marketplace wants. May be the sellers want to hire lawyers when the deals go south to solve the problems we currently solve or better yet prevent from happening.

4. Sure Mr Seller you can have a listing in the MLS for $XX and a multilock for $AAA and a sign for $BBB etc,, but NO agency, NO representation, negotitation for a fee or an hourly rate like other professional services. No more commissions only if we succeed in a sale, we now get paid by the hour or service provided. Does the seller really want a flyer or home brochure at a real $ cost to him/her? No newspaper ads, no magazine ads, just a sign and the MLS via the internet and that's it. No more CMA's let the appraiser do it for $300 or so, or let the seller pick any price they want because as a ELA services provider we are paid up front and if the home sits unsold because of over pricing all the ELA does is offer more paid up front services. Now the EBA's job just got a bit harder in trying to negotitate with a seller direct about getting down to a reasonable selling price.

>From here it looks like with the scene Saul put forth we could see some interesting changes in our industry with or without the DOJ situation. May be we need to consider changing the real estate model as it has been for decades and offer what the public wants, a choice such as the "ala carte," stop feeding the other models the easy life, and let the public find out what the real value of an experienced real estate professional is worth.

Bob MacCuspie e-PRO

If two brokers make an agreement to cooperate and share listing advertising rights then it could be acceptable. On the other hand when "several" brokers make an agreement to share information and exclude the "not up to standards" broker(s) it could be looked at by DOJ as anti competitive action vs the excluded broker(s). To solve this problem we made the MLS operations separate from the board and allowed membership in MLS to anyone who is willing to pay the fee, basically.

Today we have REALTOR.com which is available to everyone to look at and choose the REALTOR(R) of choice or even a non REALTOR(R) broker.

Bob MacCuspie e-PRO

Stefon,

You are being inconsistent. Why wouldn't you advertise another broker's
listings? Is it because the listing doesn't belong to you and because =
the
listing broker has exclusive rights to profit from the fruits of his =
labor
on in obtaining that listing? Advertising on the web is exactly the =
same.
Why should a broker lose his rights to his listings just because he put =
it
on the MLS? The MLS is a means to offer compensation to other brokers =
to
ask for their assistance in selling a property, it's not a release of =
that
listing to all of the MLS members for the advancement of their business.

Can an opt-out provision be used by an entity anti-competitively?
Probably. And that's when the DOJ should step in. Not before. The
listings either belong to the broker or they don't. The DOJ is asking =
the
courts to use the offer of cooperation in the MLS as a blanket mechanism =
to
take ownership away from the listing brokers. That's wrong.

> offered for sale. When you tell your membership that it is OK to
> effectively prohibit firms such as mine from participating in the=20
> marketplace by not allowing us to display MLS listings on our=20
> websites, you=20
> are engaging in anti-competitive behavior which is most=20
> certainly not in the=20
> best interests of the marketplace or the consumer.

Nobody is asking you (or me) not to participate in the market. They're
just saying that you have to find your customers without using their =
hard
work.

What about a company that takes hundreds of listings and does not put =
them
on the MLS at all, but puts them on their own web site? I think we can =
all
agree that it's probably not in the best interest of the consumer, =
right?
And if it is anti-competitive, then someone better tell that 2.5% =
company
with green and purple signs and a huge marketing budget that the DOJ =
might
be coming after them next!

Greg

> -----Original Message-----=0A=
> =0A=
> ". . . I can see how someone with no listings would like to use the =0A=
> listing information to draw buyers for themselves, but why should =0A=
> listing brokers be forced to allow competitors to use the fruit of =0A=
> their business model to enhance a competitors. I say they should not, =0A=
> unless the listing broker consents. License law in all states I know =0A=
> of recognizes the value of listing data and forbids other brokers from =0A=
> advertising the listing of another broker without the listing broker's =0A=
> permission (all the states should be lining up with NAR against the =
DOJ on this)."=0A=
> =0A=
> Saul,=0A=
=0A=
Just a small point here: =0A=
=0A=
Isn't the ida of an MLS to help a listing broker sell their listings =
through the *cooperation* of other brokers? I wonder how many listings =
that are put on MLS are sold by the listing agent? 30%, 20%, 10% or LESS =
perhaps? The bottom line is that by utilizing the *Networking* model of =
the MLS, a broker is asking other brokers to sell their listings for =
them, and as such, the cooperating brokers are in effect in a =
partnership with the listing broker and as such should be able to =
advertise, market and do anything necessary to bring a qualified buyer =
to the listing broker. Let's face it, most listing agents depend on =
other agents from other offices to show and sell their properties. What =
would we do (cooperating agents, EBA's) without the ability to =
*Advertise* MLS listings. =0A=
=0A=
Maybe I should dust off my golf clubs :-)=0A=
=0A=
"Some people are very generous. They are constantly giving away their =
friends".=0A=
If any of your friends need real estate assistance you can give them to =
me with confidence they will receive the highest degree of professional =
service.=0A=
I love referrals,=0A=
Lou Sansevero

Saul suggests:A newly licensed broker sets up shop in AnyTown USA. Our new broker has no listings and no buyers and comes up with an ingenious new business model.

You asked for comments, Saul.

You are obviously drawing an analogy with what goes on in some company websites.

I'll agree that there are some inequities that result, whether the advertising
is in the newspaper (which in the Denver area would be illegal with specific
permission from the listing broker) or on the internet, where there is a blanket permission through IDx or such.)

I'm a one person company, a part of an organization of small brokerages. As
such, my job as a listing agent is to get as many people interested in my
seller's properties, whether or not they come from Joe Smith real estate down the street, or clientaggregator.com. I'll still get paid for my services, and the more people I have "out there" beating the drum for my listings, the happier I am.

Anne

Excerpted from Saul's post:

"He joins his local association of REALTORS and also the MLS...He runs a
full page ad in the Newspaper...showcasing properties...Under each listing
in his ad he states that the listing was provided courtesy of the listing
broker, with no contact information for the listing broker...In his ad he
also states:

"Why pay full fare to sell your home? Massive commission discounts
available. If you are not listed with me, YOU ARE PAYING TOO MUCH and BEING
RIPPED OFF BY YOUR BROKER."

His theory is that interested buyers will call him and he can represent them
in the purchase. What's wrong with this picture?"

***
The challenge of this industry is to find the correct resolution to "What's
wrong with this picture?" From the DOJ and the consumer standpoint, what's
RIGHT with this picture is the opportunity for Joe Public to pay less than
the rate Realtor's dictate is correct and appropriate. What resolution
resolves the issue for both Realtors and the public's right to competition
in the marketplace with regard to cost of service?

Secondly, if you insert the EBA model into the above excerpt with all facts
the same except "Why would you want to call the "Seller's Broker" when you
can have separate and full representation at the same price?" you have
another question to answer. What "boycotts" the discounter also "boycotts"
the EBA, as they both use other Broker's listings to promote a model that
urges you not to use the company who listed the property.

Is there an answer that is fair to the listing company/agent, provides an
open marketplace with regard to commissions charged consumers, and allows
the Exclusive Buyer Agent to promote the benefits of separate
representation? Is your response part of the solution or simply an attempt
to keep your finger in the hole in the dike for as long as you can.

Ardell DellaLoggia

>Do you consider my having YOUR listing on my web site as STOLEN? tOMe<

To date, the Realtor organization has considered it a courtesy or "by
permission of" the listing company for one to advertise oneself by using
another company's listings. Those outside of the Realtor organization have
not considered this internal courtesy arrangement, and so are confused by
the Realtor argument against anyone using listing info as they choose
without approval. Even within the industry there are discrepancies as
listing "agents" give permission when, in fact, the Broker should be, and
usually is not, consulted.

The house of cards is toppling. We created a system that supported the
traditional business model and frankly, "set" fees nationally. The DOJ is
not incorrect in seeing a problem with the system from the consumers'
perspective. It is incumbent upon the movers and shakers of this industry
to promote a solution that is fair to all. To date, our systems have only
supported the full service, traditional, full fee business model.

I once suggested to Early (maybe twice ;-) that he not be a Realtor as his
business model does not "fit" with the Realtor organization's objectives. I
put my money where my mouth is in that I have followed my own advice. I set
my fees on a case by case basis and I am very cognizant of the consumers'
right to choose their form of representation among the various options
available to them. I am not a "discounter" or "single agency shop" by
definition, I simply allow the possibility for the consumer to choose from
all options. That is really all the public wants and deserves. The DOJ
will come up with the wrong answer...can we come up with the right one?

Ardell DellaLoggia

Thank you, Pam.

I know this is sort of changing the subject a little, and I should start a different thread, but it's very related, so I'll leave it here for now.

An ad (web page, e-mail, newspaper ad, postcard, whatever) features a picture of a nice house. Maybe a happy family standing in front of it. (Many of us agree that, since it's all about the real estate, we need to feature real estate to get them to even look at the ad.)

What do you think?

Bill Keegan

Saul, Saul , Saul, you silly man....The point is he doesn't have permission
to advertise those properties. In the IDX model, the listing agent name and
contact information is a part of the information given when the public looks
at the listings. In the paper or other media forms, that information should
be printed for EACH and EVERY listing he was NOT a part of. Just like when
someone else does an Open House on one of my listings. They HOST the Open
House. I share my listings and encourage others to expose my listing if they
would like to do an OH. Several actually have sold from the OH.

But the point is that "Mr. I got my License and Need an Ingenious [but in no
way is this a new idea] Business Model" is going to need to get clients
without slamming other agents, stealing their listings without permission and
then leading people to believe a listing can go in the MLS for $99. Paying out
other agent commissions may make him leave the industry sooner than his model
provided....Hey, maybe that's not such a bad idea afterall! AND if he
rebates 1% back to clients, he better darn well disclose that to the lender,
agents and seller and get it in writing. Better be on the HUD.

When I taught Real Estate School, I always taught the newbies to picture
themselves standing in front of the judge and finish this sentence..."Your
Honor, I just ..."

Cheri A. Long

In our area, I have never seen an EBA send a flyer, postcard, publish an ad,
etc., that published properties. Their ads promote their niche: exclusive
buyer representation. The only place I have seen other agent's listings on
an EBA site is through the Broker Reciprocity program which allows the buyer
client to use an EBA site to access the MLS. That is no different than any
of the other brokerages which pay their annual fee to participate in the
same service thereby giving permission to have their listings shown on all
broker reciprocity sites. In our area again, it is a breach of the MLS
regulations to publish someone else's listing under your company name either
on a flyer, newspaper ad, postcard, etc., and is enforced by the MLS "Nazis"
(That's what he called himself!).

Bonnie Erickson

Excerpted from Saul's post:

"He joins his local association of REALTORS and also the MLS...He runs a
full page ad in the Newspaper...showcasing properties...Under each listing
in his ad he states that the listing was provided courtesy of the listing
broker, with no contact information for the listing broker...In his ad he
also states:

"Why pay full fare to sell your home? Massive commission discounts
available. If you are not listed with me, YOU ARE PAYING TOO MUCH and BEING
RIPPED OFF BY YOUR BROKER."

His theory is that interested buyers will call him and he can represent them
in the purchase. What's wrong with this picture?"
***
>From Ardell:

Secondly, if you insert the EBA model into the above excerpt with all facts
the same except "Why would you want to call the "Seller's Broker" when you
can have separate and full representation at the same price?" you have
another question to answer. What "boycotts" the discounter also "boycotts"
the EBA, as they both use other Broker's listings to promote a model that
urges you not to use the company who listed the property.

Is there an answer that is fair to the listing company/agent, provides an
open marketplace with regard to commissions charged consumers, and allows
the Exclusive Buyer Agent to promote the benefits of separate
representation? Is your response part of the solution or simply an attempt
to keep your finger in the hole in the dike for as long as you can.

Ardell DellaLoggia

------------------------------------------------------------------------
Bonnie,

In the nearly 18 years my EBA company has been in operations, just as you
mentioned, we to have NEVER put a photo of a home for sale in any of our
marketing materials or ads. That also includes no FSBOs, or HUD repos for sale..

We have put photos of lots of homes we have successfully helped our clients
buy, and we included with those photos the total amount of documented savings
we were able to help our clients achieve, on each particular home purchase.

I have never felt that I needed to have photos of homes being offered for
sale in any of my marketing materials and I don't intend to ever use listed
homes in my marketing. But, I do feel I have as much right to display the MLS
listings on my web site as anyone else. I need this ability in order to have a
level playing field which will allow me to offer my help to prospects and
clients, just like everyone else.

It is obvious that our entire society is moving in the direction of the
Internet more and more very year with no end in sight. It is obvious to me that
the real estate industry, always looking for ways to increase profits, will
continue to cut the overhead of the traditional brick and mortar office, and
will do more and more business on the web as time rolls on. To be able to
compete I need to be able to offer my prospects and clients the ability to meet
with me on the web and do the same things we have done previously in the
traditional office setting. That includes sharing information about listed
homes for sale. Any attempt to limit who can and can not offer this new way of
doing business over the Internet, either directly or indirectly, restrains
trade and presents harm to the consumer.

And that in part is where the DOJ must be coming from.

Tom Hathaway

Is there an answer that is fair to the listing company/agent, provides an
open marketplace with regard to commissions charged consumers, and allows
the Exclusive Buyer Agent to promote the benefits of separate
representation? Is your response part of the solution or simply an attempt
to keep your finger in the hole in the dike for as long as you can.

Ardell,

Tom Hathaway

Ardell wrote:

>>The DOJ
will come up with the wrong answer...can we come up with the right one?

Art offers:

I think we already have. We come up with what the consumer-buyer needs: a
home listed for sale. We create that work product, and we are wise to not
give it away to just anyone to use to enhance their own business,
particularly a business that may use a hostility to our own business as a
raison detre, or make use of our work product to attract people to their own
business, without compensation to the creators of the work product.

The consumer wants to buy and sell homes, and we have expertise in that
area. We bring buyers and sellers together. When we publish our work
product, we are advertising our work product. Companies control their work
product AND their advertising.

It's really that simple.

Art Houston

What REALTORS Need to Know about the DOJ Lawsuit Against NAR

-
http://www.realtor.org/law_and_policy/mls/ild/what_it_means.html
 
No doubt you have read the news about the U.S. Department of Justice's decision to sue NAR over its new policy governing the display of multiple listing service data on Internet Web sites.

NAR is disappointed that its multi-year attempt to develop a Web listings policy that's a win for consumers and also preserves the rights of real estate brokers will end up in court. We worked long and hard to understand and accommodate the government's demands. In the end, however, it proved impossible to do so without fatally compromising our members' interests. We know we stand on firm ground legally, and we are very confident the issue will be decided in our favor.

At stake is a principle that's vital to our members and central to the cause of organized real estate: We believe REALTORS should be free to market their customers' properties as they see fit and that consumers who wish to have their property listed in the MLS should have the right to choose whether their homes are displayed on the Internet or not. After all, MLSs are not public utilities; they are private databases created for and maintained by real estate professionals for real estate professionals.

The government would have NAR restrict how our members do their business.
They believe every property included in the MLS must also be available for display on hundreds of web sites, even if listing brokers, with the property owners' consent, choose not to do so.

Despite the points being presented as central in many news reports, this issue is not fundamentally about discount brokers or new business models.

NAR supports ALL REALTORS and we have led the way in innovation, including REALTOR.COM, which continues to set the standard for REALTORS on line.

Unfortunately, this legal issue will likely take a long time - even years - to resolve. We are entirely confident we will prevail. We hope that the government will reconsider its position and save both NAR and the taxpayers a lot of time and money.
 
----------------------------------------------------------------------------
----
Copyright NATIONAL ASSOCIATION OF REALTORSR
Headquarters: 430 North Michigan Avenue, Chicago, IL. 60611-4087 DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020 1-800-874-6500 

Your listings are my listings...What's wrong with this picture?

A newly licensed broker sets up shop in AnyTown USA. Our new broker has no listings and no buyers and comes up with an ingenious new business model.

1. He joins his local association of REALTORS and also the MLS.

2. He buys the Sunday newspaper and selects the 250 most attractive properties offered for sale in the newspaper (listings of other brokers) in a number of different price ranges.

3. He runs a full page ad in the Newspaper for the next 60 days, showcasing 250 properties. If one sells, he replaces it with another (he calls the listing brokers daily to inquire of the availability of the listings).

4. Under each listing in his ad he states that the listing was provided courtesy of the listing broker, with no contact information for the listing broker.

5. In his ad he also states: "Why pay full fare to sell your home? Massive commission discounts available. If you are not listed with me, YOU ARE PAYING TOO MUCH and BEING RIPPED OFF BY YOUR BROKER."

His theory is that interested buyers will call him and he can represent them in the purchase. He also believes that some people may not realize that he is not the listing broker of all these properties and it may bring him listing appointments. In addition, he'll get those home owners interested in discounted services and he will list their properties for a flat fee of $100 and place the listing in the MLS.

What's wrong with this picture?

I'd like to hear your feedback. Click the POST COMMENT link below.

Saul

Click here to view full complaint.

Saul

RealTalk had its genesis on Labor Day Weekend, 1995.

I was consulting with the REALTORS Information Network, a wholly owned subsidiary of NAR and was tasked with creating the online community component for the "RIN Network Desktop," a proprietary online service for REALTORS...what we referred to as the "private side of RIN." (REALTOR.com was referred to as the "public side of RIN").

On that Labor Day Weekend, I was able to assemble some of the best online real estate minds in the country in San Diego for a "working weekend."

In attendance were:

Myself

John Reilly, who I had only met in person one time prior to that weekend.

Mike Barnett, who I had not met in person until that weekend...having had "online conversations" with him on AOL (MBBarnett@AOL.com).

Jack Harper, who I had not met in person until that weekend...having known him online (WinPower@AOL.com) Richard Janssen - President of HomeSelect and the company that morphed into REALTOR.com Becky Swann - who I had met in person at a buyer broker conference in Boston a few years earlier, and who went on to create IRED.

Julie Garton Good - Author, trainer, and friend of John Reilly Ron Rothenberg - our online community guru and wealth of knowledge, who I only knew in an online environment prior to that weekend Linda Yakker - Tech consultant from Booz Allen Hamilton, the Technology Partner of RIN

From the meeting that weekend, The Real Estate Electronic Publishing

Company (now known as InternetCrusade, which is our DBA) presented to the REALTORS Information Network (RIN) a 90 page document and plan for publishing and training.

It was the blueprint for what we envisioned would become the online community for RIN (and NAR). We called the community RealTalk. The plan also included a training component or technology certification (The forerunner of e-PRO dubbed RCR, which stood for RIN Certified REALTOR and RCB, RIN Certified Broker). By August of 1996, NAR decided to scale down RIN and give the management contract for REALTOR.com to RealSelect (which evolved into HomeStore).

By October of 1995 we had the RealTalk "boards" up and running and a prominent list of moderators and topics of interest...The formal launch was at the NAR Convention and Trade Show in Atlanta.

The technology delivery vehicle for the original RealTalk was an online service that could be accessed over telephone lines (typically 9600

Baud) and the software was referred to as the "RIN Network Desktop (RND)". It was similar to a scaled down version of AOL...proprietary in nature, with six separate areas...e-Mail, Library, Geodata, Internet, Mall, and RealTalk.

When the RIN scale back occurred and the RIN Network Desktop was discontinued, Real Estate Electronic Publishing Company (now doing business as InternetCrusade) decided to fund and continue to create what we believed would become the number one online real estate community.

Most of the funding would be our time and expertise. Online training and community had become our passion... but we had lost our source of funding and needed a low cost technology alternative to the RIN Network Desktop. The technology we turned to on our restricted budget was the listserv. As it turned out, since most people check their e-mail multiple times a day, it was the perfect way to grow this community and encourage broad participation. We also had to grow the population which we did by going on a "Crusade," speaking at state and local associations across the country and at all the major meetings of the National Association of REALTORS.

Many of you on this list will remember the original RealTalk and its concept. It was well on its way to success when the plan was presented formally in our document entitled "Training and Publishing Plan."

Here is an excerpt from that document:

RealTalk

When it comes to online services, content is king. At the heart of this plan to provide top quality content to RIN's business and communication network are the National Electronic Publishers, a team of whom are arguably considered the most highly qualified individuals serving in this capacity on any online service in the world. RIN's Electronic Publishing Team of Saul Klein, John Reilly, Jack Harper and Mike Barnett have over 100 years experience in the fields of real estate, communication, law, and technology (see resumes in Supporting Documents Section). Together they lead a group of nationally known real estate personalities and subject area experts, who serve as Moderators, or discussion group leaders. In order to insure that content is current, accurate, and responsive to the immediate needs of the user, procedures have been set up to evaluate existing discussion corners, create new ones, and stimulate increased participation.

The current structure of RealTalk is as follows:

16 "Corners" (technically these are known as banners)

26 "Discussion areas" (technically known as books) 160 "Discussions (threads)"

What makes RealTalk different from most bulletin boards is that each area is monitored by an appropriate subject area expert, and the overall content is reviewed numerous times daily by the publishing staff.

In addition to the on going discussions, action plans have been drafted to create and implement a series of online seminars using expert panelists on hot topics and forums on "hot products".

A rich feature of these seminars is the ability to tap the wealth of knowledge of the audience, many of whom add a fresh perspective to the expert's discussions. Rarely is there time in live presentations to respond to audience questions and entertain comments. Because the online seminars are open for a two week period, there is ample time for all to participate.

Many authors/panelists are excited about the opportunity to obtain immediate feedback from the audience. In some cases, this direct contact with the end user motivates the experts to redirect their thinking about key issues. Transcripts from these seminars will be archived in the library for later review or downloading.

These online seminars can vary between open posting and narrow cast postings. This presents an opportunity to charge a fee for participation, which fee can partly be used to attract some of the more visible "for hire"

industry celebrities.

Also planned are online interviews with top industry personalities, including authors of leading edge books (e.g., John Tucillo). In some cases, technology vendors will pay a fee to be interviewed online and have the ability to explain the advantages of their products in direct dialogue with the consumer. Further content is made available by maintaining a software library for downloading helpful shareware and freeware, with the Publishers making certain the files are tested and scanned for virus prior to being made available in this forum. There is a RealTalk library to archive files and articles by Moderators and other contributors (including downloadable pass alongs, like checklists and forms that users can give to clients and prospects).

Recognizing that content is only valuable if it is easy to find and use, RealTalk will develop online features to facilitate the task of filtering down the information relevant to individual users; for example, use of the ticker tape screen; a splash screen for highlights; a "personal alert"

system. The most important user tool will be an efficient Search function, to identify by key words those topics appearing throughout the RealTalk discussions, library, and even RINmall. As a supplement to the RIN Training program, RealTalk will encourage online discussion of user problems, issues and shortcuts demonstrating how to use RealTalk to solve a problem and obtain free advice.

The original plan is closer to reality today than ever. Our blogs and new community tools, coupled with our continuing list servs will help us move online community in the real estate industry to the next level.

Thanks to all of you who have played and continue to play a part in this vision.

Saul

Saul Klein

CEO, InternetCrusade

Saul:

Our MLS is a Broker owned MLS and has been since 1991. I have been the Corporate Secretary for them since 2001, therefore, broker owned is all I know. But, in attending meetings at the state and national level and seeing what they go through, I can tell you I can't think of a better way to go.

First of all, we are NOT mandated/recognized by NAR, we do try to follow their rules and guidelines but are not required to do so. This is handy when NAR requires new VOW and IDX policies BEFORE they even get the kinks worked out. I know our neighboring boards have had to change their policies several times because of this. We were in a position to wait it out until NAR finally got it workable and then we implemented it without even breaking a sweat.

Enough of that, here are the answers to your questions in the order they were posted.

1. Generally, what is the Upside/Downside of Privatization of an MLS?

Answer: The upside is among too many to mention no NAR mandates/interference. Recently our MLS purchased a building. I know from experience that our neighboring boards had to go to the membership for a vote of approval for them to do the same, and it got ugly. We did not have that worry. The brokers found what they wanted, bought it and now they rent it back to the board of realtors thereby earning income. We are also able to grant "limited" access to non-REALTOR licensees/appraisers. This also generates extra income. These are just a very few examples of the advantages.

The downside is that we are not recognized by NAR therefore our MLS is not insured under them. Our Board of REALTORS is but not our MLS. Our brokers didn't see that as a huge risk in 1991 and they don't now. Suing an MLS is extremely difficult to do unless that MLS blatantly denies access to someone for all the wrong reasons. In that case, that MLS should be sued, broker owned or not.

2. What MLSs in the country are "private" and what form of "private" (based on 1 to 3 above) are they?

Answer: Our Brokers own our MLS. It is a for profit corporation, with equity and non-equity shareholders. The shareholders elect their own directors at the annual meeting and those directors HAVE to be shareholders as well. They do, for consistency usually ratify the Board of Realtors president.

3. Where are we seeing or have we seen "privatization" movements and what factors are driving factors towards privatization in these specific cases?

Feel free to e-mail me on or off list (Saul@InternetCrusade.com).

Answer: I haven't seen a movement of privatization here, I do know that we are the only MLS in our state that is broker owned. I do know the reason our brokers decided to own and operate their own MLS is because the Board of Realtors ran it into the ground. The MLS was constantly in the red and there was no excuse for it. 14 years later, we have funds in reserves and CD's, a building, a full time employee with benefits, current office equipment and supplies,such as computers, copiers etc and over 200 users.

4. What has happened to MLS' in markets that have privatized? (Historical

Review)

Answer: I honestly don't have an answer for you here.

5. What has been the impact on MLS participants and subscribers?

Answer: The impact on our users is, we are currently one of the least expensive MLS's to be a member of in our state. We do not charge an annual fee to our users only a monthly fee. And the "broker fee" is a one time charge to purchase stock. (I will not get into exact amounts here). One thing I have noticed in my monthly meetings is, the directors of the MLS being brokers have an incredible ability to see the big picture and make intelligent, comprehensive decisions based on that picture. Mix that with their extreme forward thinking and they have put our MLS ahead in many ways of our larger neighboring boards. Our little board (approximately 120

members) has been ahead of the curve and our neighboring boards for years. I think that is due to the vision brokers tend to have. (But that is just my

opinion)

6. What has been the impact on both costs to run the MLS and on MLS fees)?

Answer: Please refer to questions 3 & 5

7. Has the MLS' become more competitive and able to offer lower fees or increased services for MLS participants?

Answer: YES we are extremely competitive in our fees, and the ability to not require REALTOR membership for certain "limited" levels of access has been a financial advantage.

8. What are the liability issues?

Answer: Is there a fear of not being covered by NAR's E&O for MLSs? We are not covered by NAR E&O but I explained our reasons above.

9. Any/all other questions or observations that you deem appropriate or that I missed in the above?

Answer: I am not a anti-NAR person. I think the organization does wonderful things for our members and the public and I would recommend anyone thinking of getting licensed that they join the organization as soon as possible. On that note, with my 4 years experience with a broker owned MLS and in dealing with other board owned MLS's I honestly don't see why anyone would want a board owned MLS. I just don't see the advantages other than insurance. If there are others, please fill me in I never said there weren't any, I just don't know what they are.

Contributors Name Withheld.

Saul

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Saul

> Section 18.3.13 - Listings obtained through IDX must be displayed

> separately from listings obtained from other sources, including

> information provided by other MLSs.

>

> Doesn't this "nix" the idea of having all the IDX solutions displayed

> from one web site?

>

> Saul

Not if the site is a portal to local IDX sites. Such as www.plsnow.com

Karen Rhodes, ABR, e-PRO Certified

Saul's note:

PLSNow is not, I say again, is NOT a portal to IDX sites. It is a portal to MLS public sites. BIG DIFFERENCE.

Go to http://PublicListings.RealTown.com

It is also an aggregation of Public MLS sites, not IDX sites...Not IDX sites...not IDX sites...not IDX sites...not IDX sites.

I hope y'all are listening...NOT IDX Sites...

Saul