Realtors Settle Listings Battle

The National Association of Realtors has agreed to change its policies on Internet home-sale listings to settle a long legal battle with federal regulators who have accused the group of anti-competitive behavior that harms consumers.

(Washington Post) -- The settlement, which awaits court approval, would resolve a 2005 Justice Department lawsuit that accused the association of undermining newer, lower-priced rivals by hampering their ability to post home-sale listings online. The Realtors association, which did not admit liability or wrongdoing and faces no fines, agreed not to treat Internet-based brokerages differently than traditional ones.

The dispute underscores the dramatic changes the Internet has forced on traditional brokerages, which once had a lock on the business of buying and selling houses.

Justice Department officials and others who have tracked the case said the agreement will result in more choices and better service for consumers, as well as lower costs because of competition over commissions. Many online firms offer savings because they provide limited services.

"It's a win for consumers because it's going to eliminate impediments to competition caused by the policies [the Realtors group] had in place, which we were ready to prove would have locked in an outmoded way of doing business," said Deborah A. Garza, deputy assistant attorney general in the Justice Department's antitrust division.

Mike Cowie, an antitrust lawyer at the firm Howrey who was not involved in the case, said the settlement probably will not force commissions down immediately, "but it should contribute to downward price pressures on commissions."

"The settlement advances the Justice Department's objectives," he said.

At issue are multiple-listing services, local cooperatives formed by real estate brokers in which all their properties for sale are lumped together in one database. Most of the nation's roughly 900 multiple-listing services display members' listings on Internet sites.

But a policy adopted by the Realtors association in 2003 would have required the multiple-listing services to allow their members to withhold their listings from the Internet sites of other brokers.

Another policy would have prevented a broker from presenting listings of homes for sale and then referring those customers for a fee to other brokers, who would help customers view homes in person and negotiate contracts for them.

The Realtors group reworked those policies just before the government sued, but Justice Department lawyers said the changes did not go far enough.