By Sam DeBord
The National Association of REALTORS® recently voted to approve updates to its operating agreement with realtor.com® and allow more flexibility for the Web site. There has been a wide range of reactions from REALTORS®. This blog is part one of my five-part series in which I will discuss the propriety of the agreement.
Let’s start with some background: NAR does not own the Web site. It merely owns the domain name, realtor.com®, which it has licensed to Move, Inc. to operate. Many discussions center on this issue still today. This agreement started in the mid-90s. Whether or not some members liked it, it is a 20-year old moot issue. NAR only owns about 2.5 percent of Move, Inc. They are merely a marketing partner with whom REALTORS® have regulatory clout because of our ownership of the domain name.
The new agreement between NAR and realtor.com® approves four major changes:
- Display unlisted new homes and new-home communities.
- Display unlisted rentals.
- Obtain listings from entities that are not REALTOR®-owned and controlled, as well as from brokers who are not REALTORS®.
- Identify properties where a notice of default has been recorded, auctions of distressed properties, short sales, foreclosures, and bank-owned properties. (Listing brokers will have the option to opt out by calling the realtor.com® customer care center.)
Individual consumer FSBOs remain precluded from the site, and the changes will be implemented in a way that preserves realtor.com®’s accuracy advantage, according to Move executives.
NAR directors are members—not some faraway body of executives. The directors who I know are just brokers and agents trying to make the best decisions for our industry. Arguing about all of these issues at once ensures that confusion and disagreement will be the end result. Broken down one at a time, there are some very interesting issues for many different stakeholders that help to explain why the decisions were made. I will look at each issue one-by-one, starting with…
Displaying Unlisted New Homes and New Home Communities
This item flies under the radar of many, but has also drawn some of the sharpest criticism from those who really dug into the meaning of the agreement. The display of new construction homes often means that “model homes” or “home styles” are being advertised, which draw consumers out to the construction site and, theoretically, directly to the builder. New construction property ads are often thought of more as just advertising for a community, since the majority of buyers who inquire on that property will actually be sold a different model, different location, etc. when they actually arrive at the community. The attorneys get concerned about the way some people throw around the word listing. An ad on realtor.com® isn’t a listing. It’s a listing if it’s represented by a practitioner and placed in the MLS.
Some members have objected, with the reasoning that new home developers will try to keep REALTORS® out of the process by luring buyers directly to themselves and cutting out the buyer’s representative. This is certainly a valid concern. Most builders are happy to engage a buyer’s representative, but there are also some who strategically try to reduce the buyer’s agent’s ability to earn a commission. By advertising unlisted properties, it has been said that builders and developers take on a role similar to a FSBO.
In the end, the NAR Board of Directors felt that the overall exposure to the marketplace and broader appeal to consumers outweighed those concerns. I imagine this was one of the toughest points for the REALTOR® members voting. Consumers want a site that shows them the entire market of available homes. The upside is the increased exposure to a larger inventory of homes for realtor.com® visitors.
Realtor.com® is a marketplace. REALTORS® are a brand of professionals. To have the opportunity to spread knowledge about the REALTOR® brand, we need to create the broadest, most consumer-friendly marketplace possible. Within that marketplace, we can display the great things that REALTORS® do for consumers to a much wider audience. In our fast-paced, limited-attention-span world, we need to grow our reach, not constrict it.
The REALTOR® brand is better served by allowing more consumers to be informed about their real estate professionals. The more we limit that exposure, the faster consumers flock to other Web sites, which is far more damaging to the brand.
Check back later this week for Part II: Displaying Unlisted Rentals.