A new front has opened up in the portal wars – and some Massachusetts listings are caught in the crossfire.

The controversy has to do with the well-known web domain RealEstate.com. Formerly owned by internet lender LendingTree.com, the domain (and 400 others) was purchased by real estate tech firm Market Leader last fall in an $8.25 million deal.

Market Leader, an established provider of lead generation and marketing technology for brokers and agents, has re-launched RealEstate.com as a listings portal, aiming to compete with sites like Zillow, Trulia and Realtor.com.

But it’s doing so with a twist, setting up relationships with a network of local brokers and charging them "referral fees" for a chunk of the commission on a closed deal, instead of simply soliciting agents to advertise on the site. The group has joined 150 multiple listing services (MLS) across the country – including Shrewsbury-based MLS-PIN, the largest MLS in Massachusetts. And that’s ruffling brokers’ feathers.

RealEstate.com will "serve up any zip code paying agent as the contact, whether [or not] they are even in the listing’s MLS," complained Mark Holt, an agent at Braemore Realty in Boston. "This is yet another example of how the 99 percent [of brokers] are going to continue suffering" without a national policy on who gets to display listings.

In Control

By joining MLSs as a broker, RealEstate.com is able to get its listings from broker-only "IDX feeds" rather than though syndication, the method used by Trulia and Zillow. Brokers have a copyright on their listings, and in order for them to be republished on third party sites like Zillow and Trulia, brokers have to give those sites permission. If a broker is unhappy about having his or her listings displayed on a given syndicator site, they can have them removed.

Not so with IDX. IDX feeds were developed as a service for members of an MLS, intended to help broker-owned websites compete with third-party sites by making sure that the brokers’ sites had the best, most comprehensive listing info for the areas they serve. Every broker who is a member of an MLS can have access to its IDX feed, allowing all the listings for that MLS to be displayed on his or her site. In exchange, the broker must permit his or her own listings to be displayed on other members’ sites.

By tapping into IDX feeds, RealEstate.com is able to pull listings from all over the country onto one easily searchable website the way syndicators do. But unlike with syndicators, brokers can’t opt out.

RealEstate.com’s business model isn’t entirely new. Under LendingTree’s ownership, RealEstate.com operated a broker referral network and maintained broker licenses in several states as far back as 2003. Sites like Roost.com have also used connections with local brokers to put up national websites with IDX data.

But the issue of who gets to control and profit from listings information has become steadily more controversial in recent months, as internet lead generation becomes ever-more important to brokers’ bottom lines.

Last year, a ruling by the National Association of Realtors that would have allowed large franchisors like Coldwell Banker and RE/MAX to aggregate nationwide listings on their sites was rescinded after fierce pushback from independent brokers. Earlier this year, brokers in California and Minnesota pulled their listings from Zillow and Trulia and called on other brokers to do the same, in an effort to push consumers toward brokers’ own sites.

Free Ride

The re-launch of RealEstate.com has already prompted a round of criticism from industry figures. Craig Cheatham, CEO and president of The Realty Alliance, recently told Inman News that he believes the model violates MLS rules, and if so, he will be encouraging his members to protest and demand the feeds be revoked.

That may well be enough to gum up the works for RealEstate.com: Critics have suggested that merely providing a referral to another broker isn’t enough to meet the requirements for MLS membership. NAR’s guidelines, which govern a large swath of the country’s 900 MLSs, say MLS participants must be able to provide "brokerage services" and not merely be licensed.

"If I’m never accepting an offer, or enabling someone else to accept an offer by being the procuring cause of the sale, [if] I’m merely free-riding on the efforts of the local brokers who have some kind of boots on the ground," it seems clear than an MLS could deny membership, said Brian Larson, a lawyer and MLS consultant based in Minneapolis who helped invent IDX.

But since Market Leader is already a member of many MLSs, things might be trickier. An anti-trust lawsuit settlement reached between NAR and the Department of Justice several years ago says that Realtors can’t use MLS rules to favor brick-and-mortar brokerages over online ones. As a result, MLSs will have to tread carefully if they decide to pull RealEstate.com’s IDX privileges.

Kathy Condon, CEO of MLS PIN, said she has received one complaint from a member about RealEstate.com since its re-launch, but that MLS PIN’s board has not had any discussions about the firm and it is currently a member in good standing.