TRISHA DALY-KARLSON ‘No problem’ with VOWs

Buyers searching for a new home could have access to less information on the Internet as a result of a new policy that seeks to regulate the use of data online about homes for sale, according to critics of the policy.

Multiple listing services in the Bay State are reviewing their policies about the use of listing information on the Internet, and some will change them to reflect a new policy adopted by the National Association of Realtors. The policy approved by NAR’s board of directors last month is the latest attempt to address concerns in the real estate industry over the use of detailed property listing information – including home addresses – previously available only to Realtors who subscribe to a multiple listing service on the Internet or on so-called virtual office Web sites.

The policy comes after much controversy has surfaced over the control of MLS listing data. Some industry leaders have rallied against the use of MLS listings on virtual office Web sites – or VOWs – without requiring the permission of listing brokers who are trying to sell the homes. Other real estate brokers have been critical of Web site operators that display the MLS listings and then collect referral fees for sending a prospective buyer their way without offering full real estate brokerage services.

But beginning next year, real estate brokers who participate in the nation’s approximately 900 multiple listing services and the home sellers they represent can withhold their listings from VOWs, according to the new NAR policy. Brokers can withhold their listings from display on others’ VOWs either on a blanket or a selective basis even though their properties may be available for sale through the MLS, according to the policy.

“It’s a very effective policy that acknowledges the value of Realtors and serves the public,” said Ron Phipps, a Rhode Island real estate broker who chaired a NAR work group that came up with recommendations for a VOW policy.

“We’re delighted with the approved policy and we’re, frankly, as a work group very proud of the process. It was a very open and deliberative process in which everybody who had an agenda and a perspective on the issue went ahead and engaged in the conversation,” he said.

Phipps said the work group made its recommendations, which were reviewed by the multiple listing policy committee, then by the leadership team and executive committee and finally went to the board of directors to be approved.

“It was about a 15- [or] 16-month process and the bottom conclusion on it is it is a very good, workable policy that acknowledges the value of listings and recognizes the really tremendous asset that the multiple listing service is as an organization for cooperation and compensation among agents and, in turn, [as] a tool that very effectively services the public,” he said.

Listing the Options

However, members of the Real Estate Consumer Alliance, known as RECALL, worry that the new policy hurts consumers.

“NAR’s sales pitch is that this [policy] is consumer-friendly. But if you look closely at what they’re trying to pitch, they’re actually trying to throw three fast balls past the consumer,” said Bill Wendel, a RECALL member and broker-owner of the Real Estate Cafe in Cambridge, a fee-for-service Internet-focused real estate company.

Currently, consumers can search through thousands of VOWs and get access to multiple listings, but under the new policy “that won’t be the case in the future,” explained Wendel. In addition, buyers may be at a disadvantage because they may not realize that their preferred broker cannot access all listings. And sellers will be hurt because their properties won’t get full exposure in the marketplace if their listing agents withhold the listing data from certain companies, he said.

“Clearly NAR’s objective with this rule was to cripple the e-commerce companies that have used technology to empower the real estate consumer and save them time and money,” said Russell Capper, president and CEO of eRealty.com, in a prepared statement. “Our Realtors have a fiduciary responsibility to deliver all available properties to eRealty clients – not just the properties our competitors want them to see.”

Wendel predicts that there will be more real estate firms withholding listings from VOWs in an effort to keep both sides of the transaction in-house if the real estate market weakens. “With the market changing here in Boston and in other parts of the country, this is not the time to play hide-and-go-seek with listings,” said Wendel.

The new policy could also have some “unintended consequences,” including the introduction of new legislation regarding consumer privacy and listing exposure, said Wendel. For example, consumers don’t always know that as they’re searching through listings online a real estate broker can “see” what the prospective homebuyer has searched through, and that may lead to a push for greater disclosure to consumers.

In addition, some may call for some limited-exposure disclosure, which would let sellers know that when they work with a listing agent that agent may not be sharing listings with all companies.

In Massachusetts, the multiple listing services most affected by the new policy are those run by the Cape Cod & Islands Association of Realtors and the Berkshire County Board of Realtors. The majority of Bay State Realtors belong to Multiple Listing Service-Property Information Network (MLS-PIN), the largest MLS in New England. But since MLS-PIN is not owned and operated by a Realtor board, it is not obligated to comply with NAR’s policy.

Last week, officials from the various MLSs were scheduled to meet to discuss the new NAR policy and what changes to adopt.

“Our board will comply with the directive of NAR,” said Mary-Jane Dalmaso, president of the Berkshire County Board of Realtors MLS.

NAR is preparing guidelines for the MLSs trying to implement new VOW policies. “Whatever NAR decides to do, our MLS will certainly abide by it,” said Dalmaso.

The CCIAOR MLS will also be coming up with new rules to reflect NAR’s policy, said Trisha Daly-Karlson, who is on the VOW task force for the CCIAOR.

Daly-Karlson has operated a VOW for some time and knows several others who have had “no problem and wonderful cooperation.”

“We were kind of wondering if it ain’t broke, why fix it? But I guess in other areas of the country there were more problems [with VOWs],” she said.

Daly-Karlson said she personally believes that allowing brokers to selectively withhold their listings is not beneficial for consumers. “I also think it’s [NAR’s VOW policy] not good for consumers,” she said. “When people can pick and choose who they’re going to be cooperative with it becomes an unattractive animal to me … I just think the benefits to the consumer and the real estate agent were more when you couldn’t independently selectively opt out [from VOWs].”

MLS-PIN has had its own rules in place regarding VOWs – or what the service refers to as virtual private networks – for the last two-and-a-half years, according to Kathleen Condon, the service’s president.

Wendel is hoping that MLS-PIN “ignores” the NAR policy and doesn’t allow members to withhold their listings. However, he said, “I think there will be other brokers who will pressure them to follow the association.”

Under MLS-PIN’s policy, a Web site operator using its data must confirm they are sharing listing data with legitimate prospective buyers. In addition, real estate brokers displaying MLS-PIN listings must issue their privacy policy – or at least note it.

Condon said the NAR policy would be discussed by MLS-PIN’s rules and regulations task force.

Under the new NAR policy, a prospective buyer must sign a terms of use agreement in order to access listings on a VOW. Any agreement that imposes a financial obligation between the buyer and the Web site operator must be established separately from the terms of use agreement.

In addition, in order to protect the integrity of the MLS data, the NAR policy prohibits the copying of listings from one Web site to another and requires that data be refreshed at least once every week. VOWs must also display a privacy policy and information about customers registered on the site cannot be sold unless the VOW operator is a real estate broker providing a referral to another brokerage.

Local MLSs can also require VOWs to comply with the same policies and business practices required of more traditional real estate businesses.