From the Federal Trade Commission:
The Federal Trade Commission today charged two real estate groups operating multiple listing services in the Detroit, Michigan, area with illegally restraining competition by limiting consumers’ ability to obtain low-cost real estate brokerage services. The Commission also announced consent agreements with five other groups operating multiple listing services in parts of Colorado, New Hampshire, New Jersey, Virginia, and Wisconsin, that have discontinued the challenged conduct.
According to the FTC, all seven groups adopted rules that withheld valuable benefits of the Multiple Listing Services (MLSs) they control from consumers who chose to enter into non-traditional listing contracts with real estate brokers. Six of the seven blocked non-traditional, less-than-full-service listings from being transmitted by the MLS to popular Internet Web sites. The seventh went further, adopting policies that include blocking such non-traditional brokerage contracts from the MLS entirely. Such policies limit home sellers’ ability to choose a listing type that best serves their specific needs. While five of the groups have entered into consent orders barring such conduct in the future, the two in Michigan have not, and the FTC has issued administrative complaints against them.
“Buying or selling a home is one of the biggest financial transactions most consumers will ever make,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition. “The rules these brokers made drove up costs and reduced choice for consumers, and they violated federal law.” The two Michigan complaints will be heard by one or more Administrative Law Judges at the Commission, unless the charges are settled before the cases go to trial. The consent orders settle the FTC’s complaints against the other five associations, and will be subject to a 30-day public comment period before the Commission decides whether to make them final.
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The Real Estate Groups: The FTC today announced seven law enforcement actions against real estate groups in various places across the nation. Two were administrative complaints issued against the following: 1) Realcomp II, Ltd., a corporation owned by several realtor boards and associations, which provides services to more than 2,100 real estate brokerage offices in southeastern Michigan, and has more than 14,800 members; and 2) MIRealSource, Inc., which is owned by the real estate professionals it serves, and provides services to more than 840 real estate brokerage offices in southeastern Michigan and has more than 7,000 members.The Commission also announced complaints and consent orders against the following five groups: 1) Information and Real Estate Services, LLC, based in Loveland, Colorado, which operates a regional MLS for northern Colorado, that is used by more than 5,000 real estate professionals; 2) Northern New England Real Estate Network, Inc., which is based in Concord, New Hampshire, and operates an MLS for the state that is used by several thousand real estate professionals; 3) Williamsburg Area Association of Realtors, Inc., which is based in Williamsburg, Virginia, and operates an MLS for that area and surrounding counties that is used by approximately 650 real estate brokers; 4) Realtors Association of Northeast Wisconsin, Inc., which is based in Appleton, Wisconsin, and operates an MLS for areas including Green Bay, Appleton, Oshkosh, and Fond du Lac, Wisconsin, and surrounding counties, and is used by more than 1,500 real estate brokers; and 5) Monmouth County Association of Realtors, Inc., which is based in Tinton Falls, New Jersey, and operates an MLS for Monmouth and Ocean counties and the surrounding areas of the state that is used by several thousand real estate professionals.
From the AP:
FTC takes action against 7 real estate firms, accusing them of competition restraint
The Federal Trade Commission on Thursday announced enforcement actions against seven real estate property listing services in six states, claiming the groups froze out their discount rivals.
The enforcement actions accuse the listing services of illegally restraining competition by denying home sellers who use discount brokerage services access to regional real estate listings controlled by major real estate companies. The FTC said that while the agency was announcing actions targeted at regional brokerage practices, it wants the national real estate industry to alter anti-competitive practices regarding the listing services.
”The rules these brokers made drove up costs and reduced choice for consumers, and they violated federal law,” said FTC Competition Director Jeffrey Schmidt, who added he wants to see nationwide industry steps on listing services. ”The problem is the traditional brokerages trying to find ways to disadvantage new competition.”
The FTC said it reached consent agreements with multiple listing services (MLS) in Colorado, New Hampshire, New Jersey, Virginia and Wisconsin. Two additional real estate groups in Michigan also were charged but didn’t settle with the agency. Multiple listing services are made up of groups of real estate brokers who agree to post their homes for sale to a common list.
I think this was about Foxton’s pushing their 1 or 2% commissions to get your house onto the MLS. I’ve read the complaint and the consent order, but I’m still a little unsure if that is exactly what it was about.
If anyone can confirm that or knows anything different, I’d appreciate the info.
Thanks
“The FTC … wants the national real estate industry to alter anti-competitive practices regarding the listing services.”
The unethical/deceptive behavior should also be addressed (e.g., realtors relisting the same property under a new MLS ID to hide price history, etc).