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Realty Alliance delivers power message to NAR

September 13, 2002

Give us clout on Internet, broker lobby argues


Inman News Features

The Realty Alliance has weighed in on the National Association of Realtor's electronic data display (EDD) policy debate as it relates to virtual office Web sites (VOWs) and has concluded that the policy should undergo "substantial changes" before it is approved.

In March NAR created an Internet Marketing Workgroup to review the association's Internet Data Exchange (IDX) policies as they relate to VOWs and in June the group came forward with an EDD proposal that more tightly defines how listings data should be displayed on the Internet. Through August NAR was accepting comments from its members about its EDD proposal and the association said it would consider the input before it made its final decision. More decisions about VOW regulation may be acted upon at the NAR's board of directors meeting in November in New Orleans.

IDX enables brokers to display one another's multiple listing service listings on their own Web sites. The system is regulated by rules implemented at the local MLS level and guidelines set forth by NAR, including a broker reciprocity agreement and parameters on the type of listing information that can be displayed. Brokers may choose whether or not they would like to participate in broker reciprocity.

VOWs are not regulated and are based on a system that potentially grants home buyers access to a region's entire MLS. The virtual offices are accessible to customers who register online and provide such information as an e-mail address, telephone number and postal address. Listings of brokers who have opted-out of broker reciprocity may be publicly displayed in a VOW.

The influential Realty Alliance, an association of 45 residential real estate firms representing more than 60,000 Realtors, commissioned an approximately 70-page report in an attempt to analyze the potential impacts NAR's EDD proposal will have on its members, gather its members views on the issues addressed by the proposal and assist the Realty Alliance in developing its own position.

The study, "Electronic Data Display: Real-world impacts of NAR's proposed virtual brokerage policy," concluded that the policy attempts to simplify VOW regulation by applying standards formulated to regulate IDX and argues that the result would stunt the growth of VOWs, would force VOWs to obtain permission to display another's listings and it risks decreasing the amount of listings data in IDX.

"Central to our thinking is the belief that real estate brokerage firms must be able to deliver via electronic means any brokerage service that can now be delivered via traditional means," reads the cover letter addressed to NAR's President Martin Edwards and signed by Realty Alliance President and CEO Charles McKee.

Based on the report, McKee concluded that VOWs have been insufficiently regulated and do not yet live up to their namesake and deliver virtually what is now available in the broker's physical office. The result, he said, is an environment where in some cases VOWs are indistinguishable from IDX, yet they can display the listings of some brokers who have opted out of IDX.

McKee stated that requiring a broker to first obtain permission before displaying another broker's listing would hinder the growth of virtual brokerages and is inconsistent with decades of established multiple listing service practice.

He also stated that, "the Realty Alliance recognizes the need for meaningful and reasonable regulation of virtual brokerages, taking into consideration the special problems and risks associated with electronic delivery of data."

McKee outlined the alliance's position on IDX and VOWs and said that the NAR should distinguish between IDX and VOWs and regulate each according to the issues associated with it. He reiterated that brokers should be permitted to disclose to consumers through VOWs all the same data fields and listing statuses they can disclose through a traditional brokerage, under the same terms; and that MLSs should not impose limitations on VOWs or IDX unless they have first been approved by NAR.

The alliance further stated that NAR leave current IDX policy essentially intact and that NAR encourage brokers to explore virtual brokerage responsibly.

McKee added that brokers must innovate in order to survive and said that efforts to create a "simple" approach would result in suppressing innovation and growth in the industry.

Copyright: Inman News Service



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