Realtors group threatened with suit

From staff and news service reports

WASHINGTON -- Federal antitrust enforcers are threatening to sue the National Association of Realtors, alleging that proposed policies would illegally restrict discounting of sales commissions and put online competitors at a disadvantage.

The threat by the Justice Department and the Federal Trade Commission comes as the hot national housing market has caused prices to surge, sharply boosting income for brokers and sales agents, whose commissions typically amount to 5 percent to 6 percent of the sale price.

Realtors nationwide, including some from southeastern Minnesota, are gathering in Washington, D.C., this week to decide on how to handle listings by discount and Web-based real estate companies.

The National Association of Realtors, in proposed bylaws to be voted on this week and implemented in July, has moved to give its member groups power to withhold listings coming from Web-based brokerages.


The association is the nation's largest trade group for brokerage firms, agents and others involved in selling real estate.

While riding in a cab on a Washington street Tuesday, Kathy Schwartz, chief executive of Rochester-based Southeast Minnesota Association of Realtors, said the organization supports competition, and she doesn't believe the threat of an antitrust suit will go anywhere.

Winona Realtor Jerry Van Hoof, the 2004-2005 president of the southeastern Minnesota group, agreed, adding that Minnesota would not back any move to block competition.

"Minnesota is absolutely not in favor of any kind of trade restriction that might lead to this type of lawsuit," he said as he rode with Schwartz to the national conference.

Schwartz said that while real estate is a competitive industry, it's not restrictive. "We, as an association, welcome all kinds of business models," she said. "And we have every confidence in our national organization."

Since 2000, most brokers and sales agents in Minnesota have signed reciprocity agreements that give participating companies within the regional Multiple Listing Service permission to share those listings, according to the Star Tribune of Minneapolis. As a result, nearly all houses for sale in the Twin Cities area can be viewed online. Minnesota was only the second state in the nation to adopt such a policy.

Mark Allen, chief executive of the Minneapolis Area Association of Realtors, said the reciprocity agreements have kept Internet-based real estate companies from gaining a foothold in Minnesota. Sharing real estate listing information "has not been an issue in our marketplace," he said.

At issue are complicated copyright issues involving how and where data can be used. Technically, broker/agents own listing data for their listings, but there is growing pressure from consumers to create an online marketplace that allows buyers and sellers to do their homework before calling an agent.

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