Move to restrict online listings put on hold

In a potential victory for discount brokers, a powerful Realtors group is backing away from its plans to let members freeze out competitors seeking access to online property listings.

Facing pressure from federal investigators, the National Association of Realtors announced last week that it's postponing restrictions that would have taken effect in July. Discount brokers feared the new restrictions would make them easy targets for Realtor-led blacklists.

Association leaders "realized they were in an untenable position, to be saying they're supporting this really anticonsumer move," says Patrick Lashinsky, vice president of marketing for ZipRealty, a Web-based brokerage that charges cut-rate commissions.

But while the association on Saturday reaffirmed its willingness to work with the government, the issue of online access to property listings remains unresolved. At issue: How much control does your real estate broker or agent have over information about the home you're trying to sell?

In other words, who gets to know that you're offering three bedrooms, two baths, and a recreation room for $200,000?

Since the 1960s, real estate agents in many communities have created a local resource called a Multiple Listing Service, which compiles details about homes for sale. "The MLS provides the basic glue for information in the market," says Nancy Wallace, professor of real estate at the University of California at Berkeley.

For many years, however, the public couldn't look at the listings unless they visited the offices of agents and brokers.

The Internet has changed all that. Now, details from the listings - sometimes including addresses and photos - are often available on various real estate websites. This means budget-minded consumers can shop around without needing to contact agents or drive through neighborhoods trying to spot "for sale" signs.

The Internet has brought other changes, too. Online discount agencies including ZipRealty are questioning the value of full-service agents and 6 percent commissions in a high-flying market in which homes sell in days, not weeks. These discounters charge less and offer free online access to home listings

"Basically, [the real estate business] is a cartel, and the discount brokers are trying to break it," says Ms. Wallace.

Not surprisingly, traditional agents haven't been thrilled about this course of events. Under the proposal put on hold last week, the 1.1-million-member National Association of Realtors would have allowed members to embargo their online listings and block specific competitors from obtaining access to them. In a statement, the association said it's working with the US Justice Department, which has been investigating the proposed rules, but reserves the right to defend its policies in court.

The access restrictions make sense to Blanche Evans, the associate editor of Realty Times, an online news site in Dallas. According to Ms. Evans, the Multiple Listing Service is designed for agents to use behind the scenes before they go through the process of showing homes and providing other services. To open access to the "bare bones" listings, she says, is akin to "letting people into the stockroom, where things are just sitting on the shelf."

She also questions why brokers should provide online access to their listings to their cut-rate competitors.

"Let's say I have a listing on the very high end. I put it into the MLS. You're a new broker, and the only way you'll get any business is to advertise yourself at a discount. You'll charge less, and say anybody who charges more is cheating you [the customer]. But at the same time, you want my listing. Why would I help you do that?"

Critics of the policy, however, wonder what would prevent major brokerages from restricting access to their smaller competitors while freely opening their listings to each other. "Whether they intentionally sought to form some kind of exclusive club or not, it would gravitate that way," says Steve Murray, a real estate consultant in Littleton, Colo., and editor of REAL Trends, an industry newsletter.

What does this all mean to home buyers and sellers? If you're selling, real estate specialists recommend that you ask questions about where the property will be listed.

"In the typical market, you want to get this property in front of as many people as possible," says Jay Butler, director of the Arizona Real Estate Center at Arizona State University.

If the agent restricts access to the listing, he or she "had better have a good reason," Mr. Butler says.

If you're looking to buy a house, check multiple sources to see what's available. Go online, check the newspaper, visit an agent, and drive around. The perfect home may beckon the old-fashioned way - through a "for sale" sign.