Realtors group settles with Justice Department
(Crain's) — The National Assn. of Realtors settled a three-year Justice Department antitrust case, with both sides declaring victory over a new set of rules governing how homes are listed for sale on the Internet.
The Chicago-based parent organization for about 1.3 million Realtors nationwide agreed to drop rules that allowed its members to block Web sites from listing certain homes for sale. That rule and another one that didn't allow Web sites to sell referrals to other brokers were put on hold when the Justice Department filed a complaint against NAR in 2005.
The previous rules inhibited competition and discouraged discounting of commissions, the department said. The settlement will mean "better service" and "lower rates" on commissions, Deputy Assistant Attorney General Deborah A. Garza said in a teleconference with reporters. "Consumers will now benefit from unfettered competition."
The Realtors will establish a new Internet policy, which has been vetted by the Justice Department. The settlement was to be presented Tuesday to the federal district court in Chicago, which is to oversee the 10-year consent decree to enforce the terms of the settlement. The case had been scheduled to go to trial in July.
The settlement was not a compromise, Ms. Garza said. "I would call it a full success."
But NAR President Richard F. Gaylord said in a statement: "This is clearly a win-win for the real estate industry and the consumers we serve. Today I can say with clear knowledge, underscored by DOJ's settlement compromise, that the real estate industry is dynamic, entrepreneurial and fiercely competitive."
The trade association noted that it was not required to admit any wrongdoing or liability, nor was any monetary penalty involved.
Although brokers will not be able to keep homes they are selling from being listed on the Internet, sellers will still be able to block their own homes from being listed on the Web or restrict how they are displayed, according to an NAR spokesman.
The settlement may not lead to greater use of the Internet, or lower commissions, he added.
"They say use of the Internet will bring down commissions, but everybody is using the Internet. Competition is what's bringing down commissions."
