Debate brewing over non-Realtor usage of MLS GAINING ACCESS

THE BALTIMORE SUN

For decades, competing real estate companies have shared what amounts to their customer lists. Brokers in Baltimore met to swap descriptions of properties long before the Greater Baltimore Board of Realtors created what has evolved into a state-of-the-art, electronic home-sales listing.

Now, a debate is brewing in Baltimore and elsewhere over non-Realtor access to multiple listing services -- agents' main tool for linking buyers and sellers.

The notion of any licensed broker or agent using the valuable systems -- other than the members of Realtor boards or associations that maintain them -- remains radical to many in the industry, who say trade associations should limit their services to dues payers.

But some brokers have argued such arrangements restrict competition and do no more than preserve trade associations' membership rosters. Court cases have given non-Realtors access to home sales listings in four states.

Baltimore has become one of the latest arenas in which the controversy is playing out. Earlier this month, a group of black real estate agents and brokers sued the Baltimore board, charging it with antitrust violations and racial discrimination for limiting access.

Many in real estate say they'll closely watch the outcome. Some consider the challenge an early step in an inevitable information revolution that someday will open multiple listings to the public.

In its lawsuit in U.S. District Court in Baltimore, the Real Estate Brokers of Baltimore Inc. accused the board of monopolizing real estate sales and discriminating against black real estate brokers, agents and sellers. Because the group is affiliated with the National Association of Real Estate Brokers and not the National Association of Realtors, its members are not eligible to use the local board's multiple listing service.

Many Realtists, as members of the predominantly black association call themselves, are forced to pay more than three times as much in fees -- in order to join both groups -- or face putting themselves at a competitive disadvantage, said an attorney for the group and four real estate brokers who joined the suit as plaintiffs.

The lawsuit stemmed from a failed attempt by a member of Real Estate Brokers to pay a fee to use multiple listing services of Mid-Atlantic Real Estate Information Technologies Inc. (MARIT), which is partially owned by the Baltimore board, without joining the board.

Officials at the board have denied the charges, countering that they offer membership to all licensed real estate brokers and agents in the state and actively encourage minorities to join. Board President David W. Baird said last week that the trade association expects to respond in court within the next week.

In April, the National Association of Realtors adopted a policy giving individual boards the option of opening multiple listing access to non-Realtor members, said Laurene Janik, general counsel for NAR. The new policy came about in part because of a request from a board in Maine, she said. But most boards have not moved to open access, she said.

"The boards are saying, 'We're creating a valuable service for our members,' " she said. "Our dues paid to create the system, and we ought to not give free riders the benefits of our labor. Why give it to people who don't want to pay the dues but want the benefits?"

Open access could mean agents outside the board's jurisdiction won't be held to the same professional standards as board members, she cautioned.

"If you say you get access but don't have to play by the rules, a lot of brokers would walk away from the multiple listing service," Ms. Janik said, noting that the Realtors code of ethics, for example, prohibits brokers from soliciting each others' listings. "Brokers are sharing their customer lists. You want to make sure a nonmember broker is bound by the rules, or why share listings?"

That particular rule raises the ire of Frank W. Soltis, a Realtor and owner of Consumer Real Estate Services in Bel Air. He argues such restrictions hinder competition, to the detriment of buyers and sellers.

"I don't know of any other industry that controls the business by saying you can't tell a consumer about a better product or better price," he said. "It protects the big guy so he can stay large and forces the little companies to stay small."

Opening access would open the market to brokers who can't afford to pay board membership dues, stimulate competition among brokers and lead to more negotiations on commissions, he said. But doing so also would threaten the existence of boards and associations.

"They would go away overnight if they had voluntary membership," he said. "They could not survive."

Other brokers said they believed some would decide not to join, given the option, especially smaller companies that don't want to pay dues. Others said they would retain their membership and continue to require their agents to join.

"I would still belong to the board even if I could have access to the multiple list because I believe in what the board stands for and feel you're more professional when you have a professional group behind you," said Joan Ryder, owner of Joan Ryder & Associates in Bel Air. "It gives you information, education, and keeps you thinking twice about things you wouldn't do if not a member."

Officials of the state and local association said they believed that would be the dominant thinking among agents and brokers, if joining were not tied to listing access.

"We're comfortable that the services of the GBBR are significant enough for the members to retain their membership," said Christine Vasiliou, executive vice president of the Baltimore board.

J. Nicholas D'Ambrosia, president of the Maryland Association of Realtors, said he doesn't believe membership dues deter brokers from joining.

"California hasn't had [a requirement to join a board] for years, and it hasn't affected the association. Members still see the benefits of the association. They want to show they subscribe to a higher code of ethics. You belong to an organization to show a level of commitment to the industry."

In California, the courts opened access to non-Realtors during the 1970s. In an out-of-court settlement in an Atlanta case, non-Realtors gained access to home-sales data in Georgia, Florida and Alabama.

Given the effects in those states, Steve Murray, co-editor of the Denver-based Real Trends industry newsletter, said boards that resist opening access to licensed agents and brokers are making a fuss over nothing.

"There has been no real change at all in Realtor membership in those member markets or in the practice of real estate," Mr. Murray said. "It has been a big yawn. In California, for many, many years it has been no problem and in Georgia and Florida no increase in unethical agents operating and no significant decrease in Realtor membership. All those worries are without basis."

He added that he considers requests for access as intermediate steps toward the day when real estate listings become open to public.

Even if the public could retrieve listings from personal computers at home, real estate companies wouldn't find themselves cut from transactions that have become increasingly complicated, said D. R. Grempler, president of Coldwell Banker Grempler Realty Inc.

"As long as whoever gets access pays their fair share, I don't see where it would hurt anybody," Mr. Grempler said.

1989: In Mississippi, Pope v. Mississippi Real Estate Commission upheld practice of excluding non-Realtors from using multiple listing services of Realtor boards. The suit charged a Realtor board with violating antitrust laws by raising its multiple listing fees.

1991: In Thompson v. Metropolitan Multi-List Inc. in Atlanta, the 11th Circuit Court of Appeals ruled most multiple listing service data must be available for sale to non-Realtor brokers. The decision was appealed and finally settled, giving non-Realtors access to home-sales data in Georgia, Florida and Alabama.

July 1994: Three of Massachusetts' largest real estate firms, Hunneman and Co.-Coldwell Banker of Boston, Carlson Real Estate of Wakefield and DeWolfe New England of Lexington filed separate lawsuits against three regional real estate boards in Suffolk Superior Court -- the Greater Lowell Association of Realtors, the Greater Salem Association and the Eastern Middlesex Association. The Bay State Multiple Listing Service -- a statewide computerized data base -- was named in all three suits, charged with monopolizing home-sale lists.

November: The Cleveland Area Board of Realtors and the leadership of four other local boards of Realtors plan to consider the Ohio Association of Real Estate Brokers' request for 17,000 non-Realtor agents to use the listing service. The group of mostly black brokers has said the data gives Realtors control of the market.

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