Turning Lawsuits Into Gold

Jun 20, 2007  |  Michael Wurzer

The Real Estate Alchemy blog is well-named today, suggesting that their (Point2’s) “NLS” (national listing system) software is the solution to the DOJ lawsuit against the NAR. The only reason Point2’s software would solve the DOJ lawsuit is because the listings would no longer be aggregated, instead they would be here and there but all of them would not be anywhere. Of course, if the listings are no longer aggregated, searching wouldn’t be very effective, but at least the DOJ lawsuit would be resolved. On the other hand, if the listings are all aggregated somewhere, the DOJ’s complaints would resurface with Point2 and its members as the target instead of the NAR.

nicholas_flamelThe DOJ lawsuit exists because MLS members have agreed to share listings with each other on certain terms, and the DOJ objects to those terms. However, the terms of that agreement are what allow for the aggregation in the first instance. You cannot have one without the other. It isn’t by magic or alchemy that competing brokers have agreed to share their listings, but rather through the process that is the MLS. As I’ve written before, MLS is much more than technology and understanding that just might be the difference between your being sold lead when you think you’re getting gold.

Follow-up: related link from FoREM.

Update:  Jay Thompson weighs in, too.

4 Responses to “Turning Lawsuits Into Gold”

  1. [[ However, the terms of that agreement are what allow for the aggregation in the first instance. You cannot have one without the other. ]]

    I don’t think all of those terms are what allow for aggregation; in fact, I do think that the DoJ’s focal point in the policy truly does harm the consumer. Specifically, the “selective opt-out” provision (which is a fluffed-up moniker for “blackball provision”) allows a broker — or, more egregiously, a franchise — to deny another competing-but-cooperating broker access to their listings.

    For companies that succeed based on access to data, such an embargo effectively sounds a death knell for their business.

    Also realizing that such a move doesn’t happen in a vacuum and some competitors are more cooperative than others, a handful of people can eradicate a newfound threat to the status quo.

    And the election of board members may not be democratic… in our case, an oligarchy of top brokers (who own the majority of the listings in the marketplace) have taken, without election, seats on the board. This disconnect between representing the majority of Realtors versus representing the majority of listings creates a lopsided power structure that favors the largest organizations.

    I agree that technology does not define an MLS, but some simple technological policies (i.e., dissolution of the opt-out provision) can go a long way to keeping the MLS a pro-consumer organization.

    -Matt

  2. Opt-in/opt-out isn’t a technological policy. My original post on this topic contains a more thorough analysis but suffice to say that the debacle that is MLSNI proves my point — MLSs provide the framework for cooperation through representative democracy and, when that trust is broken, cooperation ends. Point2’s solution of having listings go here and there but not all anywhere most definitely is NOT a pro-consumer approach. What needs to be better understood by all participants and entrants to the industry is that building cooperation among competitors is not easy, and, if that ends, the aggregated data ends, too. The MLS is the most pro-consumer industry effort I’ve ever seen and it is only through distorted lenses that it becomes somehow anti-consumer.

  3. How is opt-in/out-out not a technological policy when it only affects web sites? Those same members have realtime access to the MLS (pro-consumer), while being banned from providing that same service in a different medium (the web) (anti-consumer).

    For that reason I do like the cut-off-your-nose-to-spite-your-face clause of the DoJ’s proposed policy, which states that if you deny someone else your listings, you cannot have a web-based listing search yourself.

    NAR is a monopoly at the market level, just not nationally. It is only because of its fiefdom structure that it cannot be more vigorously monitored as they would a private corporation in a similar situation (read:Microsoft).

    I could go on and on about the NAR nationalization efforts, but there’s so much at stake in virtually every direction that it’s prone to paralysis. The standing “Lion over the hill” analogy exemplifies just how paranoid the market is, and I can only compare it to the 10-year shakeup the music and movie industries have experienced with the disruptive power of the web.

    -Matt

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