Online real estate agents get equality with traditional brokers
— -- In a win for online discount real estate brokers, the Justice Department and the National Association of Realtors announced a settlement Tuesday that will let Internet brokers use the same for-sale home listings used by traditional bricks-and-mortar brokers.
The Justice Department says the proposed antitrust settlement will create more competition among traditional and discount brokers, while giving consumers more choices.
"Today's settlement prevents traditional brokers from deliberately impeding competition," says Deborah Garza, deputy assistant attorney general in the Justice Department's antitrust division.
The settlement is encouraging to online real estate firms such as Redfin, a Seattle-based start-up that CEO Glenn Kelman calls "the E-Trade of real estate brokers." Before the settlement, Kelman says he wasn't even sure that Redfin would continue to exist. Now, though, there's potential for growth for his firm and others, he predicts.
"We're relieved — we've been thirsting for this data for a decade," Kelman says. "If this lawsuit had gone the wrong way, we wouldn't get the data we need, and that data is our lifeblood."
The Justice Department filed a civil lawsuit in 2005 against the NAR, alleging that the trade group prevented online brokers from offering lower costs and better services to consumers.
Under NAR policies, online brokers could not gain access to home sale listings offered by the more than 800 NAR-affiliated "multiple listing services" around the country. Some consumers prefer online and discount brokers, who may charge less than the 5% or 6% commission of traditional brokers.
In one undisclosed market, an online firm was forced to close its popular website after all of the traditional brokers followed a questionable NAR policy and withheld their house listings from the site, according to prosecutors.
The NAR does not admit or deny liability in the settlement, which must be approved by a federal judge in Chicago and would be in effect for 10 years.
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