From the Daily Record:
Monmouth MLS open to discount brokers
The Federal Trade Commission has settled a complaint against the Monmouth County Association of Realtors that said the group’s anti-competitive actions drove up costs and reduced choices for consumers, officials said Thursday.
The government said the association used control of its multiple listing service to reward home sellers who chose the most expensive type of listing agreement. The multiple listing service is a centralized inventory of homes for sale in a geographic market.
“It’s a way of retaliating against brokers … who decide they want to match consumer needs in a way that (diverts from the traditional agreement),” said Patrick Roach, deputy assistant director for the FTC’s bureau of competition in Washington, D.C.
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The issue has to do with the intricate world of listing agreements. Sellers can sign an “Exclusive Right to Sell” agreement in which a broker lists the home on a multiple listing service and is paid a commission when the home sells.Or they can choose an option called “Exclusive Agency” in which the broker may receive a flat fee to put the home on the multiple listing service but gets less commission if the owner sells the home without the broker’s help.
At one point, all of the homes on the multiple listing service were put on popular Internet Web sites, such as Realtor.com.
But the Monmouth County Realtors in October 2004 adopted a rule in which the homes of sellers with traditional listing agreements were put on Web sites, but the homes of sellers with no-frills agreements weren’t.
As a result, sellers who wanted to sell their homes online had little choice but to use a traditional agreement, the government said.