Tuesday, June 19, 2007

Point2 NLS - DOJ v. NAR: A Third Way

The DOJ crusade against NAR and its members has far-reaching implications. Below is the executive summary from a Point2 NLS White Paper called DOJ v. NAR: A Third Way. It explores the issues and potential outcomes of the case. Correspondingly, it explains how Point2 NLS can be utilized by the MLS and real estate franchise to mitigate the impact and derive a net benefit regardless of the outcome.

Point2’s patent pending Handshake™ technology provides real estate professionals with opt in / opt out ability to market listings based on personal business decisions, thus transcending the DOJ anti-competition allegations against NAR and its members. As the use of the technology becomes more widespread by the real estate industry, the issue may become moot for such users.


Executive Summary - DOJ v NAR: A Third Way

Limited service brokers, 60 Minutes, the financial press, the US Federal Trade Commission and the U.S. Department of Justice (“DOJ”) have joined together to take aim at the REALTOR® commission. Specifically, the DOJ has filed suit against the National Association of REALTOR®s (“NAR”) alleging policies they have established are potentially anti-competitive. If the relief requested is granted, listings entered into the MLS may no longer be a marketing asset owned by the listing broker, but rather a public asset accessible by anyone who wants to use it as a marketing tool.

DOJ success may have a number of implications for the industry including the following:
a) The withdrawal of brokers from MLS;
b) Disintermediation of consumers by users of the public asset listings; and/or
c) A reduced incentive for brokers to produce and enter rich listing data into the MLS.

This white paper aims to simplify and help readers to more quickly understand the single fundamental legal issue behind the DOJ case against NAR, which seems to get lost in the myriad of documents that have been published on the subject.

Point2 National Listing Service (“Point2 NLS”) is available to NAR and/or its members regardless of the outcome. Point2 NLS preserves the listing as a marketing asset of the listing broker. Members of Point2 NLS have complete choice and control of exactly where their listing is advertised on the Internet.

If NAR is successful in its defense, MLSs and/or Franchises will continue to use Point2 NLS to facilitate the distribution of listings as determined by each broker. It also establishes a real-time communication tool between the MLS/Franchise and its members/brokers/agents. MLSs or Franchises can use Point2 NLS at no cost.

If the DOJ is successful, Point2 NLS can serve to connect brokers, agents, and their listings without regulatory interference.

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3 comments:

jay thompson said...

Great summary in the White Paper Jason. Thanks for sharing.

If you were a betting man, what odds would you put onthe DOJ being successful?

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Anonymous said...

I was very surprised by the white paper. I am a technologist, property owner, investor and landlord. I am generally sympathetic to brokers and realize that they provide a valuable service. I learned a lot from the detailed unpicking of the issues.

In section 2.3 things turned downhill. The commentary points seemed contrived, defensive even, and didn't make sense. I can understand the concern that DOJ and other changes will reduce margins. This trend towards greater efficiency has transformed the financial services markets, and they are a good guide for what might happen to realtors.
But the fact that it sucks to see margins sink doesn't imply that the DOJ points are invalid.

How does the fact that there is innovation on the real estate industry indicate that innovation isn't suppressed? Cartels engage in anticompetitive behavior. This is human nature, or call it economics. It isn't a moral question but certainly it impacts consumers.
I hope to see a more even-handed discussion of the issues at some point.