The National Association of Realtors has taken the initiative to resolve a 20-month old dispute with the United States Department of Justice (DOJ) over its Virtual Office Web site (VOW) policy by authorizing its leadership to develop a single, uniform policy governing the display of Multiple Listing Service data on Internet Web sites. It also postponed the implementation of its existing VOW policy until January 1, 2006, to allow time to develop the new policy.

The new policy would blend elements of the VOW policy and the four-year-old Internet Data Exchange (IDX) policy. The policies include differing provisions that allow brokers to “opt out” of allowing the display of their listings on competitors’ Web sites.

Criticism of Realtors came to a head just as some 8,500 Realtors and their guests arrived in Washington for the association’s annual Midyear Legislative Meetings during the second week of May. On the first day of the meetings (May 10), The Wall Street Journal ran a front page story on the review by the  DOJ of an opt-out provision in NAR’s policy on VOWs, which was originally set to take effect in July. The opt-out provision would let brokers choose on which VOWs their listings would appear, an option that DOJ said might raise antitrust issues. VOWs are Web sites that try to create a bricks-and-mortar brokerage experience online by displaying listings of other brokers and requiring visitors to register as customers before they can view them.

NAR’s position is that the opt-out provision is legal and appropriate and that it would fight any lawsuit against it should DOJ decide to file a lawsuit against NAR to stop it, something the agency has said it would consider doing. 

However, attorneys for NAR and the DOJ have since met to discuss the issue and options for reaching a resolution. And NAR’s 800-member Board of Directors gave the association’s leadership the power to explore the possibility of developing a unified rule that will be acceptable to both sides.

NAR leaders stressed that they continue to believe that the association’s current VOW policy is legal and that NAR has not conceded its rights to go to court should discussions with the government fail to result in an acceptable policy. The board passed a resolution affirming that listing brokers own their listings and content.

“We hope we can find a common ground with the Justice Department but we want to make it absolutely clear that we are reserving the right to defend our policy. Today’s board action demonstrates that we are entering these discussions in good faith,” said NAR President Al Mansell.

The NAR Board of Directors passed its VOW policy in May 2003 after more than a year of research and debate within the industry. The action was intended to meet a pressing need at that time for a clearly stated policy governing the display of content carried by the nation’s 800 Realtor-owned Multiple Listing Services (MLS) on VOWs around the country.

Today IDX displays of listings are the dominant method by which brokers share their listings with one another, for advertising purposes over the Internet. A 2004 survey of MLSs by NAR’s Center for Realtor Technology found about 27 percent of brokers used IDX, up from about 25 percent in 2003. By comparison, VOWs appear to comprise a much smaller percentage of the market, according to industry analysts, though exact numbers are hard to determine because not everyone defines a VOW in the same way.

Sandy Krueger, SIBOR CEO, added “The DOJ investigation is a prelude to a developing battle in our industry over who will be the first point of contact with consumers in a real estate transaction.  The combatants include the national banks, companies who want Realtor data so that they can sell leads back to the Realtors, and the Realtor community itself.  The DOJ in what I believe is a misguided effort to protect consumers may be opening them instead to agency and contractual commitments that can easily happen on the internet without people realizing it.  The national association’s efforts to protect it’s internet policies are important to the Realtor community.”