PAT RIOUX
Bay State ‘progressive’

The Federal Trade Commission’s recent charges that a policy adopted by the Austin Board of Realtors violated anti-trust laws and hurt consumers drew the attention of Realtors across the country, but local Realtors say such practices aren’t employed in Massachusetts.

The Austin board, which operates its own multiple listing service, restricted some brokers – including discount brokers who offer a limited number of services to home sellers – from advertising for-sale home listings on public Web sites like Realtor.com.

The Austin Realtor association agreed to end the policy in a voluntary settlement that was announced by the FTC July 13. The FTC investigation and action were hailed by many observers who say there have been efforts across the country to stifle competition from companies that offer limited services to buyers and sellers for discounted or flat fees, rather than providing the full range of services that traditional real estate firms offer for a commission.

Local Realtor Pat Rioux, who is president of the recently formed American Real Estate Broker Alliance (AREBA) – a national group representing flat-fee brokers – called the Austin board’s actions “brazen,” but said there are at least 10 other multiple listing services in other parts of the country that are engaging in similar practices.

A spokesman for the FTC said the agency does not confirm or deny whether investigations are pending. However, the FTC’s director of bureau competition, Jeffrey Schmidt, told the Washington Post earlier this month that the agency was investigating several multiple listing services.

In Massachusetts, officials from MLS Property Information Network — the largest listing service in the state – said the company does not treat discount brokers or listing-only agents differently than full-service brokerage firms.

Two years ago after receiving complaints from members, MLS PIN – which is not operated by a Realtor board – issued a statement to members reinforcing its long-standing policy that it would not deny access to MLS PIN to listing-only real estate firms.

“Massachusetts is very progressive,” said Rioux, who operates ListforLess.com in Marlborough, a company that charges home sellers a flat fee to list their properties on MLS PIN.

Rioux explained that MLS PIN has never discriminated against real estate agents offering exclusive agency agreements – which are designed for consumers who do not want to purchase the traditional full range of services.

“I’m proud that they’re not doing what some of the other MLSs are doing,” said Rioux.

State Legislation
Last month, the FTC conducted two informational sessions about anti-trust violations and illegal real estate business practices for MLS PIN members. John Breault, director of customer support for MLS PIN, said the meetings were initiated by the FTC, which contacted the service about conducting the sessions.

At the time, FTC officials indicated they are not allowed to conduct such informational sessions in areas that are under investigations – suggesting that there are no pending cases in Massachusetts, according to Breault and Melissa Lindberg, MLS PIN’s director of marketing and public relations.

There are at least three other multiple listing services operating in Massachusetts, all of which are run by Realtor associations.

The Southeastern Massachusetts Multiple Listing Service, which is operated by the Greater New Bedford Association of Realtors, has a long-standing policy that enables any member to post listings on the MLS, explained Nancy Dunning, the association’s executive vice president.

“We do not have any restriction on agency listings,” said Dunning.

The Cape Cod & Islands Association of Realtors, which has its own MLS, also does not block limited-service agents from posting listings.

“Our MLS welcomes listings from all Realtor members,” said Henry J. DiGiacomo, chief executive officer of the Cape Cod & Islands Association of Realtors. “We disseminate information periodically stating the fact that we encourage and welcome diversity of business models, because diversity in business models provides better quality services to buyer and seller clients and customers.”

DiGiacomo noted that the National Association of Realtors has MLS rules and bylaws that identify entry-only listings and limited-service listings as legal and allowable business models.

The Berkshire County Board of Realtors, which has a multiple listing service, also accepts such listings, but requires agents to disclose that they are limited-service or entry-only listings, explained Sandra J. Carroll, the board’s CEO.

The FTC’s recent action against the Austin Realtor board comes at a time when the agency has scrutinized efforts in several states over the last few years to pass regulations and legislation that require real estate agents to provide a certain level of services to buyers and sellers. The FTC has expressed concerns that such so-called “minimum service” laws are anti-competitive and can be harmful to consumers.

Texas, and at least nine others states, have approved minimum-service rules or legislation, according to Rioux.

Rioux noted that the New Mexico Real Estate Commission recently rescinded a minimum-service rule. The rule, which had been approved in February, required real estate brokers in New Mexico to accept and present all offers and counteroffers to their clients and to help clients in developing, negotiating and presenting offers – effectively blocking businesses from offering listing-only services.

Meanwhile, Virginia recently passed a law that requires real estate licensees to provide certain services in an agency relationship and to disclose which services won’t be provided in a limited-service arrangement. However, unlike other minimum-service laws and rules, the Virginia law enables consumers to “opt out” of the full-service arrangement and doesn’t make flat-fee or fee-for-service business models illegal, said Rioux.

Rioux’s group, AREBA, is keeping a close eye on minimum-service legislation. The organization has 10 charter members from states like New Jersey, Arizona, Texas and Washington.

“We’re not against minimum-service legislation. We’re against minimum-service legislation that includes so many duties that [an agent] has to charge a full-service fee,” Rioux said.