Real estate multiple-listing services in five states, including Colorado, agreed to drop rules that the U.S. Federal Trade Commission charged hurt competition from discount brokers.
The FTC announced the settlements as it accused two Detroit-area multiple-listing services of breaking antitrust law by barring sellers who hire discount brokers from advertising their homes on popular Web sites.
“The rules these brokers made drove up costs and reduced choice for consumers, and they violated federal law,” Jeffrey Schmidt, head of the FTC’s Bureau of Competition, said in a statement.
Discount brokers charge a fee for listing a property with a local multiple-listing service and may not offer the full range of services that traditional brokers provide home sellers. Full- service brokers show homes to prospective buyers and negotiate the sale with the buyer’s broker.
Traditional brokers require clients to sign an agreement that authorizes them to be the exclusive agent to sell the property. Agreements with discount brokers give homeowners the ability to sell the home without help from the listing agent, the FTC said.
Internet advertising of homes “has blossomed since 2000,” Schmidt said, citing a National Association of Realtors survey that found that 77 percent of home buyers used the Web to search for new homes.
The FTC brought administrative complaints against two multiple-listing services in southeastern Michigan that together serve almost 22,000 member brokers. The cases will be tried before an administrative law judge.
“What we are talking about is a group of competitors getting together, creating a rule that harms rivals and harms consumers in the process,” Schmidt told reporters in Washington.
The FTC negotiated settlements, identical to one it reached in July with a multiple-listing service in Austin, Texas, with listing services based in Loveland, Colorado; Williamsburg, Virginia; Concord, New Hampshire; Tinton Falls, New Jersey, and Appleton, Wisconsin.
Schmidt said the FTC was seeking an agreement with the National Association of Realtors to get its member brokers to lift such restrictions. Not all multiple-listing services are associated with the realtors’ trade group, he said.
One of the two Detroit-area multiple-listing services is not affiliated with the trade group, he said. That service barred any multiple listings by clients of discount brokers, in addition to barring them from being posted on Web sites.
