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

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

Hi everyone,

If you are looking for comprehensive information regarding recent attacks on the industry including challenges to proposed VOW rules, Realtor.org has a number of insightful articles to read. Simply go to Realtor.org and look under the heading: "Why is the Real Estate Industry Under Attack?"

Under the news and opinion area, the article posted here regarding NAR's VOW policy is available. Go to http://www.realtor.org/realtororg.nsf/pages/KleinVOW?OpenDocument to see the article.

Saul

This is just an example of the campaign by the media, DOJ, and Congressman Oxley (who wants Banks in real estate) to paint the REALTOR as the villain.

There are similar articles in the Wall Street Journal and other publications as well as news and talk shows.

Now...do you really want to give the data you work so hard to gather in the process of winning listings, to your competition who wants to drive you out of business? Do you think the government should have the right to make the fruit of your labor a regulated "public utility?"

Consumers should have this information is the cry...let them all cry. If you think it is in your best interest as a listing agent to let others use your data, then let them use it. If you don't feel that way, you should have the right to say no.

At the very least you should examine what is going on and be ready for any changes that might come.

Saul

>>
By Jayne O'Donnell and Sue Kirchhoff, USA TODAY Thu Jun 9, 8:00 AM ET
 

Manuel Iraola would be one of the National Association of Realtors' worst
nightmares - if it knew he existed.

In March, Iraola, a former president of Phelps Dodge Industries, launched an
Internet-based real estate company that seems designed to drive traditional
Realtors out of business. His Homekeys Web site is a how-to guide to buying
and selling a home in Florida without paying a traditional broker. (Related:
States' efforts to regulate industry raise concerns)

"Technology has influenced the expectations of consumers," Iraola says.
"People don't need to be driven around in a Cadillac to see properties."

That's one of the big worries of the Realtors-with-a-capital-R. Though it's
hard to find evidence they're struggling at a time of dizzying real estate
prices, traditional real estate agents are uneasy about retaining their
longtime lock on the market.

Their trade group has been in talks with antitrust officials about a new
Realtors policy that would limit the home listings that some low-cost online
brokers could show on their Web sites. Under threat of a     Justice
Department lawsuit, the group agreed last month to drop the policy.

It's unclear if that'll be enough to satisfy antitrust officials, who
continue to field complaints from online brokers about other aspects of
Realtors' Internet policies.

The fight about listings is part of a broader effort by the Justice
Department and the Federal Trade Commission to quash what they call Realtor
attempts in several states to prevent online brokers and other discounters
from competing with them. Federal antitrust enforcers want consumers to have
wider access to home listings and an easier time negotiating fees lower than
the typical 6% commission shared by buyer and seller agents.

"What you have is an industry that is using every tool they have to protect
their commission structure and protect their interests," says Van Davis, CEO
of Foxtons Real Estate, a discount firm. Davis formerly headed Century 21
Real Estate, one of the biggest realty firms.

But others say the Realtors' interests also protect consumers. Allyson
Bernard, an NAR vice president who has a real estate firm in Danbury, Conn.,
says many people underestimate the role of Realtors.

"A lot of the work that a Realtor will do, from getting a transaction from
beginning to end, is done behind the scenes, so people don't realize it,"
Bernard says. "When there's nobody there to watch in between, that's when
things fall apart (and) when it gets dangerous for a consumer."

A thriving industry

The rising scrutiny comes as real estate agents are both thriving and
feeling under siege. NAR membership is up to 1.1 million, from nearly
770,000 four years ago. A white-hot housing market and slower growth in
other parts of the economy have lured people into the field.

The Internet hasn't quite ushered in the revolution in sales and pricing
many predicted - or feared. NAR says its research shows, for example, that
the proportion of people who sell their homes by themselves - 15% - is about
the same as it was 25 years ago. But the Web has still been a major
influence.

Three out of four home buyers use the Internet to search for a house, NAR
says. A 2004 survey of nearly 3,000 NAR members found that nearly 90% used
e-mail to communicate with clients and that 52% had Web sites.

Real estate advertising is also gravitating to the Internet. Borrell
Associates, a media research and consulting firm, predicts a 55% increase
this year from 2004, to $1.8 billion.

The struggle with antitrust enforcers shows that many traditional real
estate agents fear the heightened competition from real estate Web sites and
discount brokers.

"He or she who controls the information controls the process," Iraola says.

As home sales and prices shatter records, some consumers are balking at
paying the traditional commission. Clients in sizzling markets, such as in
South Florida, are asking whether brokers should earn twice as much, in
dollar terms, on a sale as they did five years ago for the same job.

Discounters enjoy gains

In the meantime, discount brokerage firms are posting double-digit gains.
Real estate agents, struggling to find houses for their clients in hot
markets, are lowering fees or working with discounters.

Debbie and Robert Viator sold their Fort Lauderdale home last month through
Homekeys, saving $23,000 in commissions on the $575,000 sale price.

They paid $79 for a one-month subscription to Homekeys' "premium" research
and the $99 fee to post their home in Homekeys' "multiple listing service"
data - the listings Realtors pay to receive and have their properties
included in.

Debbie Viator says she found the experience similar to having a real estate
agent. Homekeys helped the Viators prepare their counter-offers. Staff
attorneys with Homekeys' title company went over their contract before the
closing.

Critics say some online brokers are providing only minimal services to
clients - merely posting a house on a Web site for a fee, for example -
while other real estate agents shoulder the work of showing homes,
processing offers, negotiating paperwork, helping find financing and
handling other details needed to close a sale.

"A lot of the discount brokers are just taking a fee ... and listing in the
(Multiple Listing Service used by Realtors) so other licensed brokers can
see it," says Texas House Rep. Joe Pickett, a licensed Realtor who wrote an
amendment that the Texas Legislature passed. His amendment would require
real estate agents to provide a minimum level of services - instead of just
listing a house on a Web site and leaving consumers to seal the deal.

In some cases, discounters offer enticements to lure people away from the
traditional commission system; hence the fights raging at the state and
local levels.

Some discount realtors say Pickett's legislation is intended to edge out
Web-based brokers. Pickett says he's protecting consumers.

"I just can't understand the fury" about requiring basic services, such as
answering questions or passing an offer on to sellers, Pickett says.

Realtors insist that when you look at the way their industry is evolving,
theirs is one of the most competitive sectors around.

"It's hard to find a more competitive business than this," says Steve Cook,
the Realtor association's vice president for public affairs. "You will meet
... dozens of highly qualified professionals out there eager to work for
you, and every one of them is willing to negotiate."

Some online brokers say the problem is that agents aren't passing their
gains onto clients. Unlike other businesses that have cut prices as
technology has boosted productivity, many Realtors still demand the standard
6% commission.

Cutting commissions

Douglas Searles, a Michigan life insurance company analyst, listed his Grand
Rapids home on ForSaleByOwner.com because he didn't want to pay nearly
$5,000 - 3% of his home's selling price of $160,000 - to a seller's agent to
do what he and his wife could do themselves. (He did offer to pay a buyer's
agent a 3% commission to boost interest in his home and wound up selling his
house to a Virginia-based buyer with an agent in two months.)

Without having to pay a commission to a selling agent, Searles says he had
more flexibility in the price he could accept.

"If more of us start to list on ForSaleByOwner, we can eliminate the
monopoly Realtors hold on home listings, and it will also lower the amount
of money they receive from their commissions, which are currently too high
for the work that they do," Searles says.

Patrick Lashinsky, a vice president of ZipRealty, a full-service discount
brokerage that charges 20% off the traditional fee, says he feels it's
"wrong" that while home prices are surging, "the commission structure hasn't
changed since Eisenhower was president."

By letting potential home buyers weed out properties on the Internet, his
agents have to personally accompany clients to only half as many houses as
traditional firms, Lashinsky says. The company saw its revenue soar from $4
million in 2001 to $62 million in 2004.

"It's like they (NAR) want to go back to before 1980 and say, 'We're not
going to allow the Internet to be allowed as a tool,' " Lashinsky says,
asking how it serves either buyers or sellers not to have a listing as
widely distributed as possible.

Adapting to the Web

Cook counters with the assertion that the industry has evolved well:

"Name me an industry that adapted to the Internet better than this one ...
an industry where you can look at the inventory 24/7 in your bedroom
slippers. Consumers who shop for homes by the Internet are more likely to
look for a real estate professional than those who don't. The reason is that
there is so much information out there."

Iraola, who moved his family 12 times in his career, had plans to retire in
2003 in South Florida and make money buying and selling homes. He felt that
Realtors had cost his former company a fortune by mispricing his homes and
was certain that he could do it better.

After spending two years investigating what other sites were offering and
how technology could distinguish their business, Iraola and a partner, Mario
Villena, launched their own site in Florida in March. On that site, they
say, people can find everything they need to buy or sell a property.

Homekeys offers sellers the chance to save half or up to all of the typical
6% commission. Those who want to sell their home completely on their own can
post a property listing on the site's free "owner listing service" and can
research other listings in their area for free.

Each weekday morning, the 57-year-old Iraola drives his black Mercedes-Benz
E-Class from his home in Coral Gables - one of four homes he owns - to his
fledgling company's headquarters in downtown Miami. He oversees a staff of
16 - brokers and others who deal with clients online or by phone.

He dreams that Homekeys will become a leader in high-quality real estate
service, just as Phelps-Dodge was a leader in mining and chemical
production. But he says he knows what he's up against with the Realtors.

"We're on the vanguard of a revolution," Iraola says. "But I thought the oil
companies were powerful."
<<

States regulate real estate licensees. DOJ, in the name of consumer protection, is playing the bully role again, or are they just plain stupid...or is it part of a larger power grab?

If you think about it, state license law itself is anti competitive because it restricts the number of people who can sell real estate to only those who meet certain requirements as set by the state and states, by restricting the number of people who sell real estate, limit consumers choice.

But real estate license laws were set up to protect consumers, to set standards and consumer expectations, so what is wrong with license law setting minimum standards to protect consumers. In California, no one in their right mind (or no one who truly understands real estate and the liability that goes with selling it) would attempt to do it on their own. I have been a broker and real estate educator for 30 years and as I have not been actively involved in real estate sales since the mid 1990s, the last few properties of my own that I have sold, I did so with the help of a REALTOR.

We always hear from a certain group that consumers dont understand, that they need to be informed, that agents dont do a good job of informing them of their options. So the efforts by states like Texas and Oklahoma and others make sense...but not to DOJ.

Saul

Following from USA Today (June 9, 2005):

>>
States efforts to regulate industry raise concerns By Sue Kirchhoff and Jayne ODonnell, USA TODAY

While the real estate industry is negotiating with federal antitrust enforcers in Washington about its Internet policies, state measures that would strengthen the industrys hand are also raising antitrust concerns.

The National Association of Realtors does not set national policy on agents

fees or minimum service requirements. (Related: Discounters set sights on traditional real estate market)

But states are stepping in with laws and regulations that supporters say will ensure consumers get the expert advice they need but that detractors say limit competition.

Since late March, the Justice Department has:

• Warned the Texas Real Estate Commission not to pass a regulation that would increase service requirements for real estate agents.

Justice and the Federal Trade Commission said the rule could hurt discounters by forcing consumers to buy services they dont want or need.

 

After receiving a letter from Justice and the FTC, the commission held off on its proposed rule. But the Texas Legislature passed an amendment by Rep.

Joe Pickett, a real estate broker, to set tighter requirements for services that real estate professionals must offer.

• Cautioned the Oklahoma Legislature about a similar effort that it considers anti-competitive. The legislation passed anyway in May and was signed this week by Gov. Brad Henry. 
  
•  Sued Kentuckys Real Estate Commission for barring real estate agents from offering inducements such as rebates.
  
• With the FTC, urged the Alabama Senate and the Missouri governor to reject legislation that would restrict real estate agents ability to offer lower-cost services in those states.
  NAR general counsel Laurie Janik says Realtors efforts have consumers best interests at heart.
  The Texas measure requires real estate brokers to deliver offers to their clients and to answer questions about issues related to a transaction, such as possible counteroffers.

In a recent memo to NAR members, Janik defended their right to lobby for legislative and regulatory action they support - even if the effect of such action would be anti-competitive.

If we dont do it before the laws are passed, we cant protect consumers with an antitrust case.

Offer from Realtors
Meanwhile, Realtors have offered to drop a policy that would have let traditional brokers selectively withhold home listings from the Web sites of certain online brokers. That might be enough to end the antitrust dispute.

But the department could insist on a settlement that bars NAR from ever adopting the old policy. Justice could also sue the group if it concludes that other provisions in NARs policies would make it harder for Web-based brokers to compete.

The NARs proposed policy would bar Internet-only brokers from providing the full home-listing information thats available to consumers who meet in person with agents. Online brokers could use only data that could be contained in a classified ad.

That idea is galling to online brokers. It kind of defeats the purpose of having a virtual office, says Robert Butters, an antitrust lawyer at Arnstein & Lehr who represents online brokers.
 
Web brokers have also complained about an NAR provision that would bar Web sites that generate leads for other brokers for a fee from using multiple listing service home information to drum up leads. Realtors rely on this MLS data to sell homes.

Janik says this provision has been placed on the table with Justice.

But Janik says Realtors deserve the right to limit the benefit of the MLS to people who actually list and sell real estate.

It is interesting to read some of the early writings on IDX, commonly called Broker Reciprocity. Try http://BrokerReciprocity.InternetCrusade.com

For example, there is good background information from Brian Larson on the early days of IDX

http://brokerreciprocity.internetcrusade.com/web/BNLCommentaryonNAR.pdf

Brian says: "The telephone metaphor is useful here: When a buyer calls a broker on the phone to look at a listing of another broker, the showing broker does not respond by saying, Sure, I can show you that listing, but first let me tell you a little about the listing broker… Since the showing broker here EARNED the telephone call, she gets the opportunity to sell her services to the buyer, even though she is using inventory of other brokers to sell that service. The same is true in IDX. The site-sponsoring broker earns the consumer contact, either by advertising or relationship-building. Once the consumer gets to the sitesponsoring brokers web site, no one should force the site sponsoring broker to push that consumer away to the listing broker."

Saul

I think folks are still missing the advertising issue. Who says putting listings on a web site is not advertising? Who says that if you make a member of the public give you an e-mail address, any e-mail address, that you can give them access to the MLS information and that doing this on a web site marketing your services is then not advertising? Who says the "client copy" given out in an office and distributing information from a web site are the same thing, therefore not advertising? And who says the client copy itself is not advertising? Just because it has been done for years doesn't mean it is legal...has your (the collective your) licensing regulatory agency looked at this (these) issue(s)?

I will admit that I don't know the answer to the above...do you? If you are making decisions for an organization and are a director with a fiduciary duty to the organization and its members, don't you think you should be sure? This reminds me of something I haven't thought of for a long time, but I believe it is appropriate to discuss. I hope I don't offend anyone with the "salty" language.

In the summer of 1968 as a Fourth Class Midshipman (plebe) at the United States Naval Academy at Annapolis, one of the important lessons we were taught was to never guess (more like NEVER GUESS!!!). It was impressed upon us that as leaders in the future, people's lives could depend upon information provided by us.

"Are they shooting live ammo?"
"Does the aircraft have enough fuel to fly the mission?"

As plebes we were only allowed four "basic responses" when asked a question by an upper classman. They were:

Yes sir
No sir
Aye Aye sir (I understand and will obey)
I'll find out sir.

If you were not 100% sure, then you were guessing and "I think" was not an allowed response...it was a guess. Guessing was absolutely forbidden.

"I believe" was another improper response (as in "I believe the correct answer is...") and beginning the answer to a question with the words "I believe" would result in your standing on your chair in the mess hall in front of 4000 young men singing the song "I Believe."

I believe for every drop of rain that falls

A flower grows.

I believe that somewhere in the darkest night

A candle glows.
I believe for everyone who goes astray

Someone will come to show the way.
I believe,
Oh, I believe)

...yes, I had to sing it a few times before it sunk it. I think we were told that we believed in our country, in the navy, in ourselves and if we chose, in our god. To make sure we were inculcated with this "value"  and to make it a habit never to guess, on many  occasions, after a question was asked and responded to, the upper classman asking the question might ask the following follow up question:

"bet your ass?"

If you weren't willing to "bet your ass," then obviously you weren't sure and if you were not sure and answered anyway, you were guessing. If you didn't know something, the proper response was "I'll find out sir." Whenever an upper classman asked you if you were willing to "bet your ass," it made you think about your response...if you were sure, you would reply affirmatively, "yes sir," If not it was simple, "I'll find out sir." OK...I know you are wondering, what happened if you "bet your ass" and lost?  Simple...You bent over, grabbed your ankles and waited for the upper classman to take the biggest book he could find (usually your book of Navy Fight Songs)...and with a running start down the corridor, swat you smack dab in the fleshy area. It didn't take many times witnessing (or experiencing) this to understand the importance of being sure and the significance of "betting your ass."

What does this have to do with real estate and VOWs you ask?

Is a VOW advertising (which would require permission of the listing broker), or is it the dissemination of information (which is one of the purposes of an MLS)?Here is how the California Department of Real Estate defines advertising:

>>
"Advertising"--Any written or printed communication, or oral communication made in accordance with a text or outline that has been reduced to written form, which is published for the purpose of inducing persons to purchase or use a product or service. <<

ARELLO (Association of Real Estate License Law Officials) defines advertising as:

>>
"Advertising" means all forms of representation, promotion and solicitation disseminated in any manner and by any means of communication to consumers for any purpose related to licensed real estate activity... Licensed entities should not advertise other licensed entities' listings without written permission, and if given, should not alter the online display or any informational part of the listing without written permission of the listing owner.
<<

So if you think the public exposure of data via a VOW is not advertising but merely dissemination of  information to clients or customers and thus allowed, my question is simple... "bet your ass?"

Doesn't it make sense to make sure before you spend your hard earned money on a web solution by  having the blessing of your governing regulatory authority? If you are a broker, probably. If you are an association, absolutely. While it may be OK for individual brokers to play in "gray areas," I think it is important for associations representing members and associations who members look to for guidance, play on the side of certainty and at least warn of "gray areas" when promulgating "guidelines."

I know there are issues of data security, data currency, copyright and more...but I really am stuck on the issue of advertising another broker's listing without the listing broker's permission and believe that if this is to be allowed, the "display" of that data should have some guidelines.

Should broker's be allowed to promote their services on the same "web page" as the listing data? If they do, is it advertising?

When making decisions upon which the entire membership will rely, it is not a bad idea to know what the regulators might have in mind should an issue be brought to them.

Proponents of VOWs indicate that a VOW is an "alter ego" of a bricks and mortar office.  Consider the following:

One of your competitors sets up a physical office and prints flyers of all your listings (and all  the other listings in the MLS).

The flyers are in color with pictures and all the property data, framed with a border that promotes the services of this broker (your competitor). Reference to you may or may not be included on the flyer but your phone number and e-mail address are excluded. The flyer is a promotional piece for this broker and the property data is included with the promotional material.

He then advertises in all the major newspapers in your city that all the listings in the MLS can be viewed in his office and prospects may take home all property data acquired in his office. Prospects enter his building, sign a guest register (with no verification of identity, just a sign in) and then gather flyers on all the properties they are interested in and leave (some prospects take a flyer of every listing).

Would this be proper use of MLS data in a bricks and mortar environment or would it be a violation of CA DRE or ARELLO definitions of advertising as stated above? "Bet your ass?"

Some final comments on the advertising/information issue:

1. When one examines "client copies" around the country, they are usually just the listing  information and not the marketing and advertising of other services surrounding the listing information.  I am not a regulator, but to market other real estate services around the listing information of another broker's listing(s) makes a web site look too much like advertising imho.
2. Possible consequences of a no "opt out" provision for a VOW could be brokers in some markets opting out of IDX and then displaying all the information via a VOW, creating a disadvantage for brokers who cannot afford a VOW application.
3. The "success" of IDX is somewhat disguised as many brokers are still not familiar with it even though it may be available through their MLS. When I hear comments about the "success" of IDX, it is always in those markets and at those MLSs that chose the "Opt Out" method (your listings are "in" unless you specifically tell us you want out) as opposed to the "Opt In" method (your listings will not be "in" unless you tell the MLS you want them to be in). In the former, the MLS begins with 100% of the listings and "Opt Outs" reduce the participation from there (a small number Opt Out or are even aware of IDX at this point, which indicates "success" in the Opt Out markets). In the latter, the MLS begins with 0% of the inventory and builds from there (these markets are not experiencing the same "success" as the Opt Out MLSs).
4. Listings have "marketing value" and the web is still primarily a marketing vehicle. How many brokers invite their competitors to erect "For Sale" signs on their listings. If I take a listing, I am the one who receives the benefit from the marketing or promotional value of that listing, and rightly so...as part of the reward for the money and effort it takes to get that listing. Allowing competitors to enjoy the marketing benefits of the listing may not sit right with brokers when they finally realize what is happening. This could have many "unforeseen consequences." Would it be proper for me to take a one page ad in a newspaper...put my competitor's listings in the center of that one page ad, and surround those listings (your listings) with information about the real estate services I offer, without permission of my competitor who took the listing and who believes the listing is their property? Would it be proper for me to advertise for prospects to come down to my office to receive all the listings bound in a book with my services advertised all around the listings...all they need to do is sign in, giving me any name they want, and no verification of their identity on my part?

Saul

Saul Klein e-PRO/GRI/CFP
Saul is a California Real Estate Broker of 26 years and the 1993 President of the San Diego Association of REALTORS and the 1999 Designated REALTOR of the Year. He is president of InternetCrusade, an NAR partner in the creation and delivery of NAR's e-PRO Technology Certification Program. To enroll in e-PRO and earn the only technology Certification of NAR go to http://eProNAR.com

It has been said that there are two types of people:

Those who make things happen and those who ask what happened? The Internet and access to listing information, and the thoughts and concepts concerning access to that information will have a lot to do with what the real estate industry of the future will be like, and what the future will be like for brokers, sales licensees, MLSs, MLS vendors, and association executives.

While the information presented here will be helpful to all of the above, it is directed at the broker and the sales licensee who must become conversant in the concepts of IDX and VOW and then go to work at the local level to see that their issues and concerns on the subject are considered, so as not to fall into that second category of people, those who ask…usually when it is too late... what happened? For brokers and sales licensees, this will require involvement now at the local association and MLS level. While it is true that the National Association of REALTORS® can and will develop guidelines for the structure of MLS and Internet display of data, the real decisions will be made at the local level. If you want your voice to be heard, the time for involvement is now.

As Shakespeare said (Julius Caesar. Act iv. Sc. 3.):

There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves, or lose our ventures.
 
When a residential real estate licensee is asked what they consider to be the most important business tool in their business, almost exclusively the answer you will hear is MLS. MLS data was for years protected by the industry and coveted by the rest of the world. In the mid-1990s, limited amounts of listing information became available through national aggregators such as REALTOR.com. It is now being assumed by many that all the data should be made available to all consumers and what was once considered national electronic (Internet) advertising is drifting slowly towards national electronic (Internet) access by the public. What was unthinkable 6 years ago is now being touted as the future and woe to any one who tries to stand in the way of progress.

The Internet has created a Paradigm Shift in MLS and as such it is instructive to remember that when a paradigm shifts, everyone goes back to zero...your past success guarantees nothing when a paradigm shifts. As a matter of fact, your past success can block you from seeing the future. The question is whether that future includes unfettered consumer access to all the MLS data (on all brokers web sites) or subsets of data as agreed upon by local brokers in local market areas. The Internet has resulted in once-dominant MLS vendors now fighting for market share and a transition from legacy to browser-based Internet systems with Internet access for agents and access and dissemination of listing (and sold) information to consumers.

Parties with an interest in IDX/VOW

When examining IDX/VOW, it is important to consider the ramifications from the perspectives of different interested parties. Those parties being:

• MLSs
• Brokers
• Sales Licensees
• Vendors
• Regulators
• Consumers
• Perspectives of the MLS Players

MLS must be concerned with:
 Data integrity
 Currency
 Security of Data
 Copyright
Brokers must be concerned with:

Marketing Value of Listings
Offering of other brokerage services
Offering FSBOs
Promoting reduction of fees
Sales Licensees:
May want listing content for their web sites. May be allowed, with their brokers permission only. Brokers are responsible for the supervision of their sales licensees.

From California real estate law:
A broker shall exercise reasonable supervision over the activities of his or her salespersons.  Reasonable supervision includes, as appropriate, the establishment of policies, rules, procedures and systems to review, oversee, inspect and manage:

Agent Web Sites
(a) Transactions requiring a real estate license.
(b) Documents which may have a material effect upon the rights or obligations of a party to the

transaction.
(c) Filing, storage and maintenance of such documents.
(d) The handling of trust funds.
(e) Advertising of any service for which a license is required.

Vendors - IDX/VOW Solution Providers

How is IDX/VOW viewed by the license regulators in your state? Make sure your solutions comply

Regulators:

Must insure compliance with existing laws and may determine that what some consider the providing of information is in fact advertising, subject to current advertising rules which includes the requirement of permission from listing broker

Consumer:

Entitled to only what brokers want to provide. They have no automatic right to information just because there is an Internet.

Major areas of impact of IDX/VOW are:

Legal
Privacy
Marketing
Technology

How Does IDX Differ from VOW (and should it?)

The distinction has been made by some in the industry that IDX is advertising and  that VOW is dissemination of information. The drawing of that line between advertising and information is not as easy as many in the industry would have us believe.

The following two definitions make this point, both defining advertising (and leaving little to the imagination about what might not be advertising and merely the dissemination of information). Keep these definitions in mind when examining arguments for VOW as the dissemination of information, not requiring permission of the listing broker.

• California DRE Commissioner Regulations

"Advertising"
Any written or printed communication or oral communication made in accordance with a text or outline that has been reduced to written form, which is published for the purpose of inducing persons to purchase or use a product or service.

• Association of Real Estate License Law Officials (ARELLO)
Advertising
All forms of representation, promotion, and solicitation disseminated in any manner and by any means of communication to consumers for any purpose related to licensed real estate activity

Definition of Internet Data Exchange (IDX)

Web sites offering IDX give the public the ability to conduct searches of listings, displaying data fields agreed upon at the local MLS level by MLS Participants. Participants can only display listings allowed by other participants (opt in or opt out).  IDX is the web site advertising of another brokers listings with the permission of the listing broker.

• Displayed fields are limited (decision made by each MLS)
• Participants (Brokers) have the right to opt in or out. Participation is not mandatory
• Data displayed is considered to be advertising.

Definition of Virtual Office Web Site (VOW)

Virtual Office Web Sites can be used for providing real estate transaction services to clients, as well as listing information. This discussion will focus on VOWs providing customers the ability to search the MLS for listing information and then display that listing information to the searching customer. The information provided need not be a subset of the data as is the case with IDX, but may be all the data contained in the MLS on the selected properties, including comment sections never intended for public display in any manner. No permission is required of the listing broker to display the listing brokers listings as it is not considered advertising by the web site owner, but merely the dissemination of information. There is an analogy to the client copy of an MLS which may be given to prospective buyers when they walk in to a brokers bricks and mortar office. To receive the information, the prospective buyer requires some relationship be established, usually by some sort of online registration process.

VOWs :

Are subject to the same MLS Rules as a bricks and mortar office  (Rules for VOWs have yet to be written)
Proponents state that a VOW is the same as a Bricks and Mortar office (theory)
The visitor, by virtue of onsite registration, becomes a customer or client
Allow the public, by providing contact information (non-standardized as to amount and type), to conduct searches of all MLS listings and obtain all the information contained in the MLS.
VOW Participant can (arguably) display all MLS listings without permission of listing broker as VOW is the distribution of information (much like faxing information to someone or providing a client copy of MLS data so the theory goes), and it is not advertising (see regulations on definitions of advertising above, which seem to refute this theory and would thus require the listing brokers permission to be included in another brokers VOW).
All listing information details can be displayed, including comments (theory and practice at this point with few regulations written on VOWs)

VOW Issues for consideration

• Permission of seller

Should sellers have the right to withhold their properties from exposure on the Internet? The opinion of this author is yes, absolutely.

• Name and contact information of Listing Broker

This decision should be left to local broker MLS Participants

• Search Criteria or limitations

This decision should be left to local broker MLS Participants

• Status or types eligible for display
ʉۢ Active Listings
ʉۢ PendingSold

This decision should be left to local broker MLS Participants

Property Addresses
This decision should be left to local broker MLS Participants

Procuring Cause

Who starts that unbroken chain of events that ultimately leads to a sale?
Does IDX or VOW create new scenarios?

Searches

MLS - Agents Search
VOW/IDX – Consumer Search

If all the MLS data is to be made available to the public, why not just give consumers a public MLS User Name and Password?

No business is required to provide their competition a marketing advantage. Brokers should have the right to opt out of VOW participation.

A Question for Listing Brokers:

What do the following have in common?
• e-BAY
• Yahoo
• e-REALTY
• Zip Realty

Could it be…Your Listings

What is the marketing value of a listing? Should your listings be used to:
• Sell someone elses real estate services
• Be used to promote another business model offering the same services you offer for lower fees than you charge?

Possible Scenario

• Company obtains license in majority of states
• Company joins major MLSs in states licensed
• Company advertises listing info available on site
• Possible Scenarios
• Company has prospects go through registration process
• Company allows FSBO to list properties on site
• Company refers out leads
• Company makes sold data available to prospect...online CMAs

That company could be:
• Yahoo
• e-BAY
• Costco
• Cendant

Thoughts on Public Access to MLS

MLS was not created with the intent that consumers should have access to all the content The first wave of public display required fields to be agreed upon by participating brokers. The argument centered on who owned the data Justification for Unfettered Public Access by Web Surfers

• Client copy does not contain name of listing broker

• Internet is just a new way to provide information and is no different than having someone come into your office for information

Justification for Limiting Access by web surfers

• When someone comes into your office, do you give them your user name and password to the MLS. If not in your office, why would you on the Internet?
• Justification for Limiting Access by web surfers
• Too many properties to choose from is confusing
• Certain information contained in an MLS is confidential and compromising - it could put the seller at a negotiating disadvantage, violate privacy, put people at risk (physical)

Below are sample VOW comments which promote discount services, other services of VOW provider, and potential confidential remarks which could put the seller at a negotiating disadvantage and could also violate fair housing and possibly put homeowners at risk.

-------------------

First line relates to discount if customer works with VOW provider:

http://sd.yahoo.erealty.com/rebate.html$3,500* rebate when you buy this property through eRealty.

MLS Comments: Exceptional Large Corner Lot. Great Location Near Schools & Easy Freeway Access. Huge Parking Space In Rear. Rv/Boat/ Ok? Lots Of Upgrades. Custom Drapes, Nice Floor Plan, Jack & Jill Bathroom. Nice Cozy Home. Large Living Room.Show & Submit All Offers, Owner Anxious!

Last statement may or may not be intended for public display as it hints to the owners motivation
-----------------------------------------------

$3,150* rebate when you buy this property through eRealty.
MLS Comments: Hurry-Won'T Last! Well-Cared For Family Home. Walk To Park And Award Winning Elem School. Flooring, Roof,Fence, & Roll Up Garage Door W/ Opener 3 Yrs New. Dishwasher, Water Heater, Stove, Garbage Disposal & Wood Patio Deck Replaced W/In Past 2 Yrs. Large, Private Back Yard. Must Call 1St--Small Children.

The mention of small children could be seen as a potential fair housing violation not to mention the security issue. As a parent, would you really want the world to know (via the Internet) that you have small children in your home?

--------------------------------------------

Conclusions:

• A VOW is not the same as a Bricks and Mortar Office so different rules are necessary

• MLS allows for agent search, not consumer search; certain MLS information is confidential and should remain confidential.

• Listings have marketing value and brokers should have the ability to opt in or out when it comes to the display of their listings on another brokers web site. Brokers do not allow other brokers to place for sale signs on their listings so they should be able to decide if they want the marketing power of their listings to help their competition market and sell current and future services

• Listing information is valuable and brokers can still be in control...just because there is an Internet does not mean brokers have to give up control of listing data.

• Sellers should have the right to opt out of Internet display of their property.

• There is no evidence that the property the buyer finds in an Internet search is the property the buyer purchases...in fact, the property purchased is probably the property found by the agent in an agent search.

• Surveys are often suspect and often reflect the wishes and/or bias of the surveyor than the surveyed. Have you ever seen the results of a survey and wondered who in the world was surveyed?

• Agents should only be allowed VOW or IDX sites if their brokers approve.

• Comments section of MLS should not be made public and any comments should be examined.

There is much to consider by all interested in MLS and the time to participate is now at your local association and MLS...this is not a drill.

Once again, as Shakespeare said:

There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves, or lose our ventures.
------------------------------------------------

Saul Klein is President of InternetCrusade, a pioneer in web and e-mail solutions for the real estate industry. http://InternetCrusade.com Saul was the first national advocate and evangelist for listings on the Internet and was personally responsible for the signing of contracts with MLSs across the country back when MLSs paid $1.00 per listing per month to put their listings on REALTOR.com, which at the time, was a wholly owned subsidiary of the National Association of REALTORS. Saul is a sought after lecturer and consultant and travels the country speaking to REALTORS, Associations, and MLSs about leadership, strategic planning, and InternetCrusade's latest project, e-PRO, NAR's online Technology Certification Program which was created and now delivered to the Industry by InternetCrusade. Saul has been a California real estate broker since 1975 and he was the 1993 president of the San Diego Association of REALTORS and their 1999 REALTOR of the Year.

Is this a DOJ conspiracy against the real estate industry or just poorly informed government employees with nothing better to do...or both?

The current proposed (and well thought out) NAR VOW Policy has been under review by DOJ for the past 18 months and DOJ has found the following objectionable:

1. Selective Opt out provision (there are 2 types of Opt Out provisions in the NAR proposal, Blanket and Selective Opt Out)
2. Restrictions or limitations on use of VOWs to generate referral business by companies not involved in the actual listing and selling of real estate.

Bring yourself up to date on IDX and VOW by going to http://IDXandVOW.RealTown.com and http://www.realtor.org/realtororg.nsf/pages/VOWPolicyDOJ?OpenDocument

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, popularized by 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 both buyers and more listings. "For Sale" signs and "just listed" mailings increased my "presence" and the chance that other home owners would recognize me as a real estate sales leader in the neighborhood (and that would, hopefully, help me get more listings). There was a recognized promotional value in the listing. Other brokers were not allowed to put their "For Sale" 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). It cost money to generate listings and as the listing broker, I was entitled to the benefits of my (or my agents) listings.

Listings and their promotional value helped me find buyer leads for any listings I might have...and...because I was a member of the MLS (which was once a unilateral offer of sub agency, and since the late 1980s a "unilateral offer of compensation"), buyers for listings of other broker members of the MLS.

If I had a listing, I could advertise the listing (when and where I deemed appropriate) and when calls came in (leads) I could begin to work with the caller by inviting them into my office to meet and discuss the listing they called on or 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 have another broker write an offer," I was under no obligation to provide that information to the buyer.

Once again, and this is an important concept, the listing itself has a promotional value that we all recognized and of which, only the listing broker could take advantage. Listing brokers 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. Licensees learn this fundamental concept in pre-license classes and the Internet and web do not, because of their existence, change this very foundational aspect of the real estate business, regardless of what supposed consumer advocates, technology pundits, or other special interest groups might tell us. As a matter of fact, advertising another broker's listing without the listing broker's permission was and still is a violation of law and/or regulations in most jurisdictions. Some now say that not to promote listings on as many web sites as possible could somehow be interpreted as a breach of fiduciary duty to the seller.

Prior to the WWW, when you took a listing, did you advertise it in every newspaper, every magazine? If you did not advertise a listing in every known publication were you (and are you today) breaching your fiduciary duty to the seller? When a broker takes a listing, the seller usually agrees to allow the broker to determine the method and means of marketing. If a breach of fiduciary duty occurs, sellers have the right to sue. Not advertising everywhere has never been considered a breach of fiduciary duty. Brokers choose where and how to effectively market a listing. That is how the business works. Advertising a listing so 1,000,000 people in India see it does not mean that the seller will receive more for the property because more people saw the property offered for sale. This argument does not work.

How many properties, in a hot market, have sold before the listing gets into the MLS or is advertised in the local newspaper? If you take a listing today, and price the property based on all available data...and as soon as the For Sale sign goes in the ground, you have 5 offers for full price or better...do you advise the seller to wait and not accept the offers because the ads have not hit the paper yet? Most brokers and licensees would not advise a seller to wait, but to act on the offers on the table.

Now roll forward to today:

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

• Listing
• Selling

Lead Generating and Referring (assisted greatly today by the Internet and the promotional value of listings). 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 of listing brokers, VOWs do not. This is a major distinction and critical to any discussion on VOWs. Should listing brokers have the right to "opt out" (either blanket opt out or selective opt out) and not permit their listings and the corresponding promotional value of their listings to flow to all their competitors. The Department of Justice is saying brokers should not have this right to control the benefits developed by their labor and capital...and this prohibition and business restraint will benefit the consumer. The Department of Justice does not "get it" and/or the DOJ has some other agenda (maybe DOJ is frustrated by actions in Texas, Oklahoma, and Kentucky). The new DOJ position makes no sense when carefully examined and yet the DOJ will intimidate and threaten legal action...anti trust legal action, which strikes fear into the hearts of REALTORS. It is nothing more than bullying, but is anyone willing to stand up to the biggest bully in the school yard? That is the current 64 Billion Dollar Question.

As stated, listings generate leads for the listing broker and the real estate business has always been about leads. What is one of the biggest time-consumers in a REALTOR'S 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, to open houses...all designed to make the phone ring or get prospects to show up. The question now is who is entitled to the leads generated by listings?

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 leads, in time, effort and cash? Are you paying online referral companies such as Homegain, Housevalues, Lending Tree and others? If so, is what you are paying less or more than you are paying for "conventional" 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. How do many of these third party referral companies acquire the leads? Using listing data as content on their web sites? Is this inherently good or bad for the industry? The government is now trying to push the peanut down a particular road, for a yet to be determined reason, cloaked in the veil of "consumer protection," tampering with the engine that has helped create such a good economy. The brightest spot in the economy for a number of years now has been real estate. Why the government hostility? Is anyone willing to stand up to the bully? It is time to study the issues and "Take Back Your Future."

As someone who has observed closely the evolution of listings and consumers on the Internet since 1993, from the inside and the outside (I was instrumental, as an evangelist and then as part of a sales force of four (Carl DeMusz, Roy Rainey, Derry Davison, and myself) in first bringing those listings to the Internet). I want to stress that VOWs are an important piece of a much bigger puzzle...who will put the puzzle together first is the question we are all looking to answer.

It makes no sense to compel brokers to share listing data if it would be detrimental to their survival as a business. If they want to, that is fine, but to force it by government mandate or threat is wrong.

Knowledge is Power, and knowledge is a differentiator...in a business where success constantly requires differentiation.

---------------

Q and A:

Q: Why should brokers be allowed to selectively opt out of participation for VOWs?

A: IDX allows brokers to opt out, VOW does not if DOJ has their way. IDX allows for limited data fields, VOW feeds must allow all the MLS data and not selected fields, or at least more fields, if DOJ has their way. So if you opt out of IDX and I can't put your listings on my site, you can still create a VOW and put all the listings (including mine) on your site. Your site has all the listings. I can't afford a VOW so my IDX site has only some of the listings because you opted out of IDX. Your site has more content than mine. I am at a competitive disadvantage because you have my listings to display and I don't have yours to display. To level the playing field, I should have the right to opt out of VOW participation selectively, and participate in VOW with other brokers who share their listing data.

What if a particular broker has no ethics and misuses the data. You should have the right as a listing broker not to deal with that broker professionally. Should you not have the right to make that type of business determination? Opting In or Out, blanket or selectively, has its place. If the reason a broker opts out is to force a competitor out of business, then DOJ should go after that broker, but to say all brokers will misuse an opt out when sellers and the government have recourse for misuse is inappropriate.

Q: If in the traditional world I can invite a consumer to my office to look at ALL the listings in the market area (via my access to the MLS) and not be obliged to reveal the listing agent's name or contact information, for the purpose of representing them on the buy side of the transaction, why not on the Internet once I have established a 'relationship'? The point being, in my office I have the 'right' to provide ALL the local listings to them. The listing broker cannot opt-out to allow my particular company from having this right, if they have opted to post their listing on the MLS.

A: The Internet is NOT the conventional or traditional world. Your ability to benefit from the promotional value of my listing is limited in a traditional world. People must physically make it to your office and this really does limit your ability to use my listing data for marketing benefit.

The Internet is a much different place than the traditional world and allows for leverage never contemplated when brokers, as competitors, agreed to cooperate and share listing inventory when MLSs were created. I should have the right to limit your ability to use my data and hard earned listings to your marketing advantage at my expense.

Simple answer...the Internet is not the traditional world. It is not the same. Anybody who thinks so doesn't understand the power of the Internet. It is a charade to hint otherwise.

Q: I would also question the statement, "As stated, listings generate leads for the listing broker." Do not all REALTORS have the right to generate leads from those listings once the listing is on the MLS and cooperation is now offered?

A: No, No, No. That makes no sense at all. You can show my listing to your client, but you cannot use it to generate leads, that was not and is not the reason I cooperate with you, my competitor. It never was the intention of MLS and never will be.

Q: Whereas I would agree with your sentiment that some have used the 'consumers' interest in this debate to bolster their argument, the consumer's thoughts, opinions and concerns on this issue should not be ignored. As an industry we would ignore their interests at our peril. In 2005, to argue that the Internet is still just an advertising medium as Blanche of Realty Times insists, is to totally misunderstand what the consumer thinks on that issue. We talk to 300-400 consumers a day on behalf of our REALTOR members and I can tell you that they think that the agent's website they are visiting should be doing exactly what a visit to their office would be able to do and more. It is why they are using the Internet.

They do not want to go to the office. That was yesterday.

A: The consumer does not always get what the consumer wants, nor should they. I am a consumer of computers and I think IBM should give laptops to my staff for free. That is an obvious unrealistic "want" and easy to understand how IBM would be under no obligation to give me (the consumer) what I want. While it is a little more subtle in the areas we are discussing, it is still the case. The consumer does not always get what they want. Consumers want all brokers to provide full service including fiduciary responsibilities and not charge more than $500 to list and sell a home. They can "want" all they want. If consumers want advanced technology available at web sites, then let brokers offer it and they will prosper and those who do not offer it will perish...let the market take care of itself...but this strays from the listing question. If I take the listing, pay for pictures and virtual tours, advertise in newspapers, put up signs, etc...all on a contingency of payment (commission), I should have the right to decide if I want my competitors to use my "capital" to their advantage. If I want to fine, if I don't want to, that should be fine as well and if consumers don't like it, they can list somewhere else...it is a free country...or at least it should be.

Q: In an MLS, are we not cooperating to bring buyers to the seller?

You have the listing and I have my source of clients. I will show them what listings I want to, and if you and I have been cooperating with each other and you are offering a reasonable split on the transaction, I will bring the buyer and my work will be equal to your work by potentially attracting the buyer. You win and I win - real cooperation.

A: No, I am going to work to sell the listing myself, or have an agent from my office or branch office sell it. You are an agent of "last resort." I have selling clients as well...and I want more selling clients and my listings allow me to attract selling clients. I am in the "selling client"

business as well as the listing business. Also, everyone knows I work much harder than you so I will end up doing a lot of your work. Cooperation does not mean compensation - we need to make sure we are clear about that. As a member of the MLS, I agree to making you an offer of compensation.

Q: You and I have often had a coffee together and visited each other's open house walk-throughs and my understanding was that you wanted me to bring my buyers to the table. Why do you now want to make it so difficult for me to do that? If what you are saying is that you are only doing all of this so that you can have me do all the work with the buyer, but in the end they ditch me and call you, well, I don't know if I find that very cooperative?

A: Don't mistake my good nature for charity. This is a fiercely competitive business. I can be competitive and drink coffee at the same time. Also don't mistake cooperation with friendly. I can be cooperative in the transaction and not be friendly.

Q: If I take the listing, pay for pictures and virtual tours, advertise in newspapers, put up signs, etc...all on a contingency of payment (commission), should I have the right to decide if I want my competitors to use my capital to their advantage?

A: Yes you should.

Final note:

Real estate compensation is "contingency based." Brokers and Agents "work for free" most of the time.

Brokers only get paid if the listing sells. If it does not sell, they have invested not only time but cash. When brokers list, they work on a contingency. Most other occupations that work on contingencies charge a lot more than 6%. Attorneys charge 30% to 50% when they work on a contingency fee arrangement.

Saul