Notorious R.O.B.

This is a quick note.

I found something recently that bears directly on my post on Employer Liability for Employee Social Media, and I’m somewhat hopeful that we’ll see more clarity on this topic.

Michael Yon is an independent journalist who reports from Iraq, Afghanistan, and other parts of the world where the U.S. military (and its allies) are fighting.  I happen to love his work, and believe it points to the future of journalism, but that’s a different story.

He recently posted a report on Facebook about two soldiers who were killed by Taliban attacks.  That in and of itself is not unusual. He does this all the time, doing the job that the national media rarely does.

What is unusual is that in the comments to this report on Facebook, a Mike Garcia attacked Yon for releasing the names of the soldiers before the DoD got around to it.  Scroll down in Michael’s fan page to find this thread, as I couldn’t find a way to link directly to his post and to the comments.

Turns out that Yon had followed all guidelines, directives, and had cleared the release with Army commanders on the ground in Afghanistan.  What followed is where things get interesting for us.

We see that Mike Garcia says that the FB comment is is personal opinion, that he is not representing the US Army or speak in any official capacity, even though he is a Public Affairs Officer.

Michael Yon is having none of it.  He believes that the fact that Mike Garcia is a Public Affairs Officer of the US Army means that he represents the Army even on a Facebook comment.  Which means that Yon believes he can now sue the Army for defamation and libel.

Now while it’s highly unlikely that Yon would actually sue the Army for defamation, I sorta hope he would so we’d get a case directly on point as to when the employer is and is not responsible for the social media actions of an employee, and what the relevant factors might be.  In this case, Major Garcia is a Public Affairs Officer — something close to a PR person — and posting on Facebook is likely in the sphere of his employment.  Respondeat superior ought to follow.

But at a minimum, we might see the Army promulgate specific directives clarifying when a soldier (an employee of the Army) is and is not speaking for the Army when engaging in social media.  That would be helpful for additional clarity.

-rsh

Buried within last week’s firestorm ignited by a couple of posts over at AgentGenius was an actually important issue that all social media practitioners and companies thinking about social media need to think about.

When is a company or an organization responsible for the social media actions of its employees?

Now, while I have gone to law school, and am a member of the Bar, I am not a lawyer, and what follows should not be construed as legal advice or any such thing.  Consult your own attorneys for their take on the issue.

From where I stand, I believe the answer will depend largely on three factors: (a) the employee’s “day job” responsibilities, (b) the “social media act” at issue, and (c) employer’s level of knowledge.  But this is a first stab, and I would love thoughts/comments from the readers, especially from those who are practicing attorneys.

Read the rest of this entry »

According to Joe Ferrara of Sellsius, charity makes you hot:

In three studies involving more than 1,000 people, Dr. Tim Phillips and his research team from the University of Nottingham found that women place significantly greater importance on altruistic traits than anything else (in all three studies). The findings were published in the British Journal of Psychology. And the results may not only apply to women. When questioning couples, there was a correlation indicating both sexes may consider altruistic traits when choosing a mate. [Emphasis mine]

The trouble with this study is that it listened to what the women said, instead of observing what the women did. So according to Dr. Phillips, women place greater importance on altruism than anything else, eh?

How many of these women dated lepers who happened to be really, really altruistic?

How about dirt-poor homeless shelter workers?

Did these women place altruism above intelligence, looks, ambition, personality, humor, and success?

Sorry, Dr. Phillips — you’ve made a critical error by assuming that what people tell random strangers is the same thing as what they would actually do.

Because here’s a true humanitarian: Dr. Rick Hodes

Humanitarian

He’s a doctor; he’s Jewish; he’s charitable. And he’s single:

Hodes’ kids unfailingly lobby guests to help find a wife for him. He dates when he can during visits to Israel and New York, but it’s not easy finding a woman willing to marry this most unorthodox single father.

You don’t say!

In the meantime, here’s a man who is definitely nobody’s idea of charitable:

Not a humanitarian.

He, at the age of 62, has been married three times to women who look like this:

Married a Non-Humanitarian

Doesn't care about charity!

Charity NOT most important to her

So.

The lesson appears to be that (a) never trust what people say without looking at what they actually do; and (b) to attract women, ’tis better to be rich and hated, than to be poor and admired.

-rsh

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings limped up to explain it once more.

- Rudyard Kipling, The Gods of the Copybook Headings

Brian Larson, swiftly becoming one of my must-read bloggers, posts a thoughtful argument that I’m far too cynical. Which is entirely possible.

He posits that my observations about what the recent VOW rules mean for an MLS appear correct:

1) An MLS public website is not subject to the VOW signup requirement.

2) An MLS can create truly ridiculous IDX rules, because IDX was not covered by the NAR-DOJ settlement.

3) An MLS cannot not prohibit brokers/agents from sending listings to Trulia/Zillow/etc. as that would violate Sherman Anti-Trust Act. But the MLS is not required to provide Trulia, Zillow with any data either, unless Trulia signs up as a broker subject to VOW rules.

But, Brian goes on to say, the MLSes are not nearly as evil as I presume them to be, nor are the requirements of VOW such a major deal.  His argument (which you should read in full, by the way) is premised upon three assumptions and recent trends:

First, the “VOW signup requirement” is not all that daunting anymore. So many applications folks use online now require registration. The key is to ensure that the consumer trusts you will not bombard her with crap email after she registers. You cannot use Facebook or MySpace without registering…. In the real estate space, I expect we’ll see more applications that rely on registration, or that at least have an “account” mentality. 1000Watt’s post about Dwellicious suggests that it might be an example.

Second, I think the VOW policy gives many MLSs incentives to make their IDX rules more open. By including more fields and statuses in IDX, the MLSs can make it easier for a broker to deliver information through the more-regulated IDX method, rather than encouraging her to use a VOW, which is harder for the MLS to regulate and monitor. I have MLS clients that have already indicated to me their intentions to take this approach. (In fact, I speculate that restrictive IDX rules will actually make it easier for brokers to get consumers to register for their VOWs. “I can show you X more listings if you register….”)

Third, many MLSs have embarked on “listings syndication,” which makes it easy for their brokers to send listings to places like Zillow and Trulia. We did a whitepaper on syndication this last spring (though it seems hopelessly outdated to me now). MLSs recognize the value they can bring to their brokers with syndication. Some still have “protectivist” tendencies, but I think the trend is moving to more syndication.

On this basis, it does indeed appear that I am merely a huge cynic.  Again, I grant the possibility of that.

However, the Gods of the MLS Headings are not so kind.  Thousands of years of human history have taught us not to overestimate the level of charity and goodwill in your average person, nation, or organization.  It is a rare person, and an even rarer company, that forgoes self-interest in the name of community.

Let me delve deeper into each of Brian’s points.

Signup requirement is not daunting

The problem with this analysis, however, is that it takes an objective stance on something that is entirely relative.  While it may be true that the VOW signup requirement is in and of itself not daunting, the real issue is whether it is easier or more difficult relative to other alternatives.

There is no version of Facebook that does not require signup.  There is, however, a version of the VOW website that does not require signup: the one belonging to the MLS.  So faced with two choices — one, a realtor website where I have to signup and provide my email address, and another, a MLS website where I do not — I am going to select the one that puts fewer requirements on me nearly every time.

Furthermore, a requirement’s ease or difficulty stands in relation to the value delivered.  I don’t find it all that daunting that I have to study, take both a written exam and a roadtest, before I am allowed to drive a car.  The value delivered (driving) is sufficient for the requirement.

Facebook and MySpace, in order to deliver its value (personal space to connect with friends) has to have your personal information.  Plus, the value that it delivers is sufficient for consumers to want to signup.

YouTube, on the other hand, will go out of business if it requires signup before a user can view a video — because a competitor will arise (such as Google Vide0) that will drop that requirement.  The personal information is irrelevant to the value delivered: viewing a video.

In real estate web, having to deliver my personal information to a realtor just to view listing information is a pretty large stumbling block.  I know intuitively as a consumer that you don’t need to know my name or my email just to display photos of a house, or show me how many bedrooms and bathrooms it has.  So I deduce (correctly) that the only reason you want my information is to try and sell me something.

Under these factors, I submit to you that the temptation for the MLS to create a public-facing VOW-powered website freed from the signup requirement — that it must place, by law, on every other participant — is rather huge.

Let us not forget that MLS organizations these days are not exactly rollin’ in the cash.  Many of them are facing fundamental questions from their membership about the value being delivered to them for their annual dues.  There is a growing trend of real estate agents electing not to be part of the MLS, or paying absolutely the minimum for access to listings, and complaining bitterly about the dues being charged because the MLS doesn’t “do anything for me”.  And companies like Trulia are only helping to accelerate that trend.  No wonder that MLSes are heavily investigating public-facing websites then — being able to deliver consumer leads to its membership may be essential to the very survival of the MLS.

The incentive is large; the tempation is huge.

VOW Improves IDX

Brian’s next point, that the VOW rules may lead MLSes to relax their IDX rules so that their members can manage listings via the controllable IDX feed instead of the uncontrollable (by law) VOW feed simply doesn’t take incentives into account.

The MLS has major incentives to tighten IDX rules (as above) to make it a very unattractive option.

All participants have an incentive to display as much information as possible on their own website, in order to drive leads and conversion.

The listing broker might have incentive to try and control how its listings are displayed on competitor sites via IDX, but no broker is a pure listings broker who doesn’t take buyer inquiries via its own site.  So their incentive to want to control listings is canceled out by their incentive to want not to get controlled by others.

The incentive for brokers is to use IDX as bait to get a consumer to signup, so that they can show them the VOW data.  The trouble is, there’s already a website out there that shows consumers the full VOW data without signup: the MLS public website.  Do brokers truly care, if they are receiving rock-solid leads without charge from the MLS site?  The experience of companies like Houston Association of REALTORS suggests that they do not.

I submit that Brian’s clients who have indicated that they plan to relaxing IDX rules will either (a) swiftly scale back those plans, or (b) go out of business when a competing MLS implements the cash-generating cynical strategy I outline.

Trend is Towards Syndication

I agree with Brian that the trend was towards listings syndication.  It benefited the agents and listings brokers (and their clients) so much to be able to market listings to dozens of websites with the push of a button.  The MLS, in effect, was charging its members dues to provide the syndication service.

However, that was prior to these particular incentives setup by these particular rules.

After these VOW rules are fully implemented, I believe the incentives have changed.  Because now, the MLS can absolutely control third party sites like Trulia, whereas they could not do it effectively beforehand.

First, for third party aggregator sites to take VOW feeds, they have to become a participant in the MLS, subject to all of the rules of that MLS.  This rule now has the force of law.

Second, since the VOW settlement doesn’t address IDX at all, the MLS can provide an incredibly obnoxious IDX feed to the third party syndicators, say they are providing syndication (which is true), but at the same time, really build out its public facing VOW-powered website.

Third, the MLS can simply cease providing syndication to its members.  Instead, it will provide cost-free leads direct from the MLS public site.  Which service is the member more likely to value?  The lead, or the chance to get a lead from a third party aggregator?

Idealism vs. Gods of the MLS Headings

I actually like to think I’m an idealistic fellow.  I care about my fellow man.  I care about this industry.  I care about the many wonderful professionals I’ve had the pleasure and privilege to meet.

But at the same time, I can’t ignore the economic incentives now at play thanks to the DOJ-NAR settlement, which gives the VOW rules the force of law.  I can’t ignore the fact that MLSes are losing membership — partly because of the market, but partly because their value to members has been decreasing for the past several years.

Since MLSes are not government entities run without care for covering costs, but are private companies that must generate enough revenue to pay for its costs, I have to think that making money (through membership or other means) by providing greater value has to take priority over every idealistic principle any MLS executive.

Indeed, even if the MLS executives want desperately not to take advantage of these rules, the economic realities may force them to do so.  It’s hard to be idealistic if you’re dead.  Survival is the first moral principle, after all, and that applies both to individuals and to organizations.

I hope that Brian can continue to be an influence in the industry, and that not all of his clients go down my cynical path.  That would make Brian sad.   Which would make me sad.

On the other hand, is it really such a bad thing for the industry, and for consumers, if there were at least a few websites (all of them owned and operated by MLSes) that provided people with the full VOW listings information without requiring signups, jumping through hoops, and the rest of it?

-rsh

I think I might have fallen in love with Larson/Sobotka.  I haven’t the faintest idea who they are, but it looks like they combine some business consulting with legal work with something else involving MLSes and such.  Bears looking into more.

But they have done a great service for the RE.net by compiling a guide to the new VOW policy.  In fact, they call it a clearinghouse for the new NAR VOW rules, and I think it fits.  There’s a lot of depth here, and a lot of breadth.  Check it out in full.

For myself, I immediately zeroed in on this:

What a VOW is

For purposes of the DOJ/NAR settlement, a VOW is:

A web site, or feature of a web site, operated by a Broker or for a Broker by another Person through which the Broker is capable of providing real estate brokerage services to consumer with whom the Broker has first established a Broker-consumer relationship (as defined by state law) where the consumer has the opportunity to search MLS data, subject to the Broker’s oversight, supervision, and accountability. (See Policy Section I.1.) [Emphasis mine.]

Interesting.  The law-school training kicks in and I see at least three questions to be resolved, probably through litigation:

1.  What does “providing” mean?

2.  What sorts of activities constitute “real estate brokerage services”?  Is this governed by state regulations?  Or is this to be under some common law agency theories?

3.  If state law defines “Broker-consumer relationship”, then what to make of provisions like this one from Delaware?:

Entering a name and email address on an Internet or World Wide Web site is sufficient to establish a broker-consumer relationship for the use of that system, but does not in of itself create a broker-customer or client relationship for any other purpose.

Especially in light of the clause that reads, “capable of providing real estate services” in the NAR DOJ settlement, under Delaware law, there may be enough of a relationship created by entering a name and email address to use a VOW but not to take advantage of any of the real estate services provided.  Does that even make any sense?  Isn’t the display of property information itself a “provision of real estate services”?

Or does the NAR-DOJ settlement override Delaware law by operation of the Supremacy Clause?  Even when it specifically says state law controls definition of “Broker-consumer relationship”?

Heh.  I love regulations written by lawyers, don’t you?

But Larson/Sobotka has more riches in store for us:

• An IDX site is not a VOW. IDX is an MLS policy under which a brokerage firm participating in MLS grants permission to other brokers participating in MLS to advertise its listings on their web sites, in return for their permission to advertise their listings on its web site. IDX sites are governed by MLS IDX rules, which are entirely unaffected by the settlement. Note that a brokerage firm can operate both an IDX site and a VOW at the same location on the web. (For example, the brokerage can show the consumer some information on its IDX site but then require her to register to see the information available only through its VOW.)
• Zillow, Trulia, and other national aggregators and commercial distributors of listings are generally not VOWs. (Note that these sites are not IDX sites either, and the data feeds that some MLSs provide to them are not “IDX feeds,” as they are sometimes erroneously labeled.) These companies may receive listing data from brokers or MLSs, but display of those listings is subject to the agreements between the brokers or the MLSs and the aggregators. Neither the settlement, nor any of the policies imposed under it, applies to any of these types of sites. Note that if Zillow or one of these other sites were to become licensed as a brokerage firm, become a participant in an MLS, and actively assist consumers in buying or selling real estate (or both), it would be eligible to operate a VOW.
• MLS public consumer-accessible web sites are not VOWs. (Note that these sites are not IDX sites either, as they are sometimes erroneously labeled.) A VOW is by definition the web site of a real estate broker. An MLS could operate a VOW only if it were acting as a real estate broker – we are aware of no MLS that claims the right to do so.

If for nothing else, Larson/Sobotka deserves some sort of award for spelling these things out so clearly.  Now, to be sure, these should be construed as opinions of one law firm until litigation gives us definitive court rulings, but they strike me as being largely correct.

Assuming that Larson/Sobotka’s interpretations are correct, there are many implications that flow from the above three observations.

One, if IDX is entirely ungoverned by the settlement, then as Brian Larson points out, one can expect that the industry will begin to move towards VOW websites and away from IDX sites.  That could, in theory, be a Very Bad Thing for brokers and agents, however, as the plain fact is that imposing a “signup requirement” to consumers (especially if defined under state law, and that state law is onerous) will drive consumers away from such websites to those that are far more user-friendly.  How that will play out is wholly unknown.  Perhaps MLSes start relaxing IDX rules in response; perhaps brokers start working through their Real Estate Boards to change state regulations; perhaps something else altogether.  But this could be huge.

Two, if Zillow, et. al. are not VOW sites, then they do not fall under the protections (if that’s what they are) of the NAR-DOJ settlement.  So brokers or MLSes can explicitly prohibit its agents or members from giving data to these national aggregators without running afoul of the Settlement. Now, before you shrug, I happen to think there’s a fairly high likelihood of this happening.  Why?  Because of #3 –>

Three, if public-facing MLS websites (such as www.har.com) are not covered under the Settlement in any way, then they also don’t have to follow the “Broker-consumer relationship” rule either.  Which means that of all of the possible websites out there, only the MLS or Realtor Association websites can have all of the property info on every single listing without being subject to IDX rules, and without having to share any of those privileges with anyone else.

In other words, unless I’m totally misreading this, it seems to me that we now have a situation in which HAR (just to use an example; not that they would do this) could

1. display all of the listings info on HAR.com without limitation, and without the “signup” requirement;
2. prohibit all members of HAR from sending any data to Trulia, Zillow, or any national aggregator; and
3. force brokerages to use either shut-from-the-public VOW requirements, or ass-backwards IDX rules filled with purposely inane requirements to discourage the use of IDX.

Wow.  Just wow.

If this is a correct reading, then I differ with Brian Larson only in that even if there are 10,000 VOW’s by 2010, there will only be 50 websites by 2010 that any consumer goes to.

And how does this impact Realtor.com?  As Brian points out, nothing in the Settlement even mentions Realtor.com at all:

The settlement between DOJ and NAR makes no reference whatsoever to Realtor.com, either in the settlement agreement, in the attached VOW policy, or in the attached policy regarding the definition of “participant” in MLS. (In fact, the DOJ press release makes no mention of Realtor.com, either.) The DOJ lawsuit, and its settlement, deal almost exclusively with “virtual office web sites” which are by definition web sites of brokers participating in MLS offering brokerage services to their customers/clients. Realtor.com is not a VOW.

So Realtor.com is not a VOW.  Does its special relationship with NAR give it the same access that all of the local associations and MLSes now have? Will it be the sole national real estate website that can offer all of the information on a listing without requiring a consumer-broker relationship?

I’m thinking the answer might be Yes.

Talk about a seismic shift in the online real estate world.

Am I missing something crucial here?  Am I misinterpreting things?

-rsh

PS: I’m definitely adding the MLSTesseract to the blogroll.  A great site if you’re into some of the details of this stuff.

Joe Ferrara asks whether listings are like airline tickets in his post about American Airlines pulling its ticket listings from Kayak:

Are home listings like airline tickets to be freely given by listing brokers and agents to any and all third party listing sites? Do listing brokers have any reason to complain so long as they get exposure of home listings to consumers and a link to their websites?

My take is that home listings are completely unlike airline ticket listings for one very important reason: the listing broker does not own the underlying property.

For American Airlines, who provides the actual service of transportation, to get pissy with Kayak is its decision.  If the decision to pull its ticket listings from Kayak results in fewer sales of American’s seats, that only affects American Airlines and its shareholders.

In contrast, a listing broker who pulls listings from TruZillia or some other online aggregator has to answer to the ultimate client: the home seller who has engaged the listing broker to represent his property.  If pulling listings results in fewer leads and fewer inquiries and therefore a lower sale price than might have been possible, I’m 99.99% certain that any court anywhere in the United States would be finding for the homeseller plaintiff against his “fiduciary” broker.

I note that there is a difference between failing to list on some website (which could theoretically be justified as there are a plethora of websites out there, and the broker might not have heard of XYZ listing aggregator) and pulling listings off of a site.  I would think that the broker would have to show that the listing aggregator was 100% ineffective at generating additional leads, so that pulling listings from it had no impact whatsoever on the exposure (and ultimately the offer) that his client received on his house.  And how in the world do you show that?

In short, pull listings off of aggregators at your own peril, brokers.

-rsh

Georg Wilhelm Friedrich Hegel

It must be zeitgeist, a change in the real estate weltanschauung. I wrote a long post back in March of 2008 having a conversation with Mike Farmer on his original Biz 2.0 post on the Bloodhound Blog. He then responded with some additional thoughts. I had a 1500 word draft that wasn’t even halfway finished, then life got really busy.

Fast forward to Inman Connect SF. I’m having lunch with Joseph Ferrara of Sellsius fame, who is also an attorney, and I say to him, “You know, Joe, I’ve been thinking alot about brokerage business models — why couldn’t it replicate how law firms work?” Joe and I talk about this for a pleasant half hour or so. I end up talking to people about the idea of the “Bill Belichick Brokerage” (more on that later). Then I get back home and I see these two great posts by Sean Purcell on Bloodhound Blog on this very topic: Disbrokeration and Super-Teams.

There’s something in the air.

In any case, Sean’s posts are worth reading in full. Disbrokeration strikes me as a decent review of what’s wrong with the brokerage industry today — some of those weaknesses are being revealed by the impact of technology. In Super-Teams, Sean lays out his vision:

Our Goal Model Defined
Yes, greed must be accounted for if we are to design a blueprint for the industry as a whole. Even more importantly, we must acknowledge the premier ingredient in creating real estate success: lead generation. The broker is no longer germane. The ability to create leads is THE most important factor and defines the primary actors in the model that will take us forward. But we are looking for more. If we wish to create a model for the future, let’s charge it with an even higher level of responsibility. Let’s create a model that also rids the industry of loafers and under performing “shoe salesmen“. Let’s create a model that sustains its growth by success rather than law. Let’s create a model that generates its own need and reward for education. Let’s create a model that allows any to enter, but demands dedication and professionalism for success. Let’s create a model without help from rigged tax laws and a “loose” interpretation of independent contractors. Finally, and most important to universal portability, let’s create a model that is achievable now and with our current skill sets. The Basic Real Estate Team model fails right from the beginning. It takes into account almost none of our needs and few of our desires. What about Super Teams?

Super Teams
They look like this: one or possibly two agents are the Team Leaders; they are the Rain Makers (RMs). Beyond the RMs there may be nothing more than a part time administrator; or there may be multiple buyers’ agents, listing agents, lead coordinators, customer service managers, marketing directors and so on. What makes them unique is the fact that they all work on the RMs’ team and directly for the RMs. They may bring in some business of their own (and the splits on that business may be higher) but the primary responsibility of those that work on the Super Team is to benefit the RMs. The entire team exists to enrich the RMs; to help them in their mayoral marketing – to help them become mayor for life. Super Teams do allow for change. If someone on the team decides they can be an RM too, they are free to start their own team (and well trained for it too). But for a great many, the idea of enjoying the profession of real estate without all the messy marketing and concerns over a commission lifestyle makes the Super Team a cozy home.

This model certainly accounts for the greed aspect and literally defines the importance of lead generation. It also quite adequately rids us of loafers and water cooler whiners (RM’s would have short patience for someone not pulling their weight). After that though, this model begins to fall off.

My initial thought was, “Didn’t I write something that is directly on point to this already?” My second thought was, “Oh yeah, but I never published it, did I?”

So here it is, the 1,500-word essay that is swiftly heading towards like 3,000 words. Read more at your peril. You have been warned. Read the rest of this entry »

The NAR-DOJ settlement is the gift that keeps on giving.  To a blogger at least.  Well, to a blogger that happens to be interested in such an obscure and unimportant topic.

The latest piece of information is throwing me from confusion directly into bizarro-land.  NAR released a “Special Report” in which it announced that it and the DOJ has agreed on MLS policy.  The relevant part is this:

NAR has reached a favorable settlement with the U.S. Department of Justice, resolving the litigation between them over the display of listings from the MLS on brokers’ virtual office Web (VOW) sites. The final order, to be filed with the federal district court in Chicago today, validates NAR’s long-standing Internet data exchange (IDX) policy and strengthens the membership rules governing multiple listing services.

Say what now?

Here’s section (V) of the Proposed Final Order, entitled “Required Conduct”:

A.  Within five business days after entry of this Final Judgment, NAR shall repeal the ILD Policy and direct each Member Board that adopted Rules implementing the ILD Policy to repeal such Rules at the next meeting of the Member Board’s decisionmaking body that occurs more than ten days after receipt of the directive, but no later than ninety days after entry of this Final Judgment.

Section V goes on to talk about implementing the new Modified VOW Policy (which was attached, and described as a Revised VOW Policy), setting up an Antitrust Compliance Officer at NAR, etc.  It never mentions ILD or IDX ever again in the document.

The Revised VOW Policy mentions the term IDX exactly once, under section I. Definitions and Scope of Policy:

Participants’ Internet websites, including those operated for Participants by AVP’s [Affiliate VOW Partner], may also provide other features, information, or services in addition to VOWs (including the Internet Data Exchange (“IDX”) function). Section I(a)(3), Revised VOW Policy.

Nowhere else is “IDX” mentioned.

Now… about NAR’s “longstanding Internet data exchange (IDX) policy”… here’s NAR in 2005:

NAR has adopted a new policy to govern the display of MLS listings on the Internet. This new policy, Internet Listing Display (ILD),replaces NAR’s Internet Data Exchange (IDX) and Virtual Office Website (VOW) policies, and is effective immediately. MLSs have until July 1, 2006, to adopt the new policy.

This Internet Listing Display policy was specifically repealed by the Final Order.

So… NAR’s “Special Report” basically says this:

The Final Order validates NAR’s longstanding IDX policies by repealing them specifically, by name.

Lest anyone thinks this is just an unimportant little piece of legal trivia, we’re already hearing very confused things at OnBoard (my employer).  While I don’t like to mix the day job and blogging, in this case, it’s extremely relevant.  We’re hearing from clients that they believe this settlement affects them, despite the fact that they do not operate a VOW.  We’re getting questions on whether this settlement affects them, and in one case, we have a client who believes he is now completely freed of all IDX rules.

I went searching for the old IDX Policy, circa 2000, and couldn’t locate it.  But I did find ARMLS (Arizona MLS) IDX Policy of 2006 online, and there are provisions like these:
 

11.  The name of the real estate brokerage that has the property listed must be displayed on the screen and in printed reports for each property where the property information is presented in a “Full View.” The real estate brokerage name must be displayed in the same font size as the listing information. For purposes of this policy, “Full View” means the display of listing information that includes seven or more data fields.

12. An IDX Broker may not modify, enhance or manipulate a Shared Listing. In addition, listing information from other sources may not be combined with IDX Listings. For instance, property listings from other multiple listing services, for sale by owner properties and properties not in the MLS may not be combined with the IDX Database.

Right now, it is not at all clear to me that someone taking an IDX feed from ARMLS has to obey these rules.  Maybe I can decide not to display the name of the listing brokerage.  Maybe I can modify or enhance a Shared Listing, and mix FSBO listings with the IDX listings.  Even if the Revised VOW Policy says I can’t do those things, that only covers VOW’s, not IDX websites.

Here’s hoping that NAR acts swiftly to correct this serious gap in policy, because I can nearly guarantee that our client who thinks he is no longer bound by IDX rules is NOT alone.

-rsh

The NAR-DOJ Settlement is news outside of our little RE.net corner of the blogosphere.  One of the grand poobahs of the blogosphere, Jeff Jarvis of Buzzmachine, exults in a post entitled, “Take That, 6 Percenters!”.  Why, he’s positively leaping with joy:

The monopolistic hold big real estate agents have had on information — on access to use multiple listings services — has been blown open at last thanks to the Justice Department’s antitrust settlement with the National Association of Realtors.

Kiss your 6 percent commission good-bye, Ms. Agent! Competition is on the way.

The only reason — only reason — that Realtors could hold onto their high commission for such little value and work is that they kept information away from the marketplace, making it inefficient.

Yeah… about that whole “competition has been blown open at last” thing….

The rest of his post makes clear that it is more of a statement of hope rather than a sober analysis of the impact of the NAR-DOJ settlement.  For that matter, Jarvis really seems to know very little about how our industry actually functions.

That is to say, the control of information leads to inefficient marketplaces. But in the long run, Zillow is becoming far smarter than the smartest agent because it knows more thanks to the aggregation of our data about sales.

Is this the same Zillow that is taking feeds from the hated MLSes?  The same Zillow that is desperately trying to convince agents that it is not their enemy, because it realizes that the dumbest agent knows more about her local market than the supra-geniuses at Zillow ever could?  I say again, real estate agents have nothing to fear from Zillow; real estate brokerage companies, on the other hand, should worry.

His post quotes the New York Times story in which the general counsel of NAR says the settlement is no big deal:

Laurie Janik, the [National Association of Realtors] general counsel, said in a telephone interview that the settlement would have no real impact on home buyers or sellers.

“I don’t think they’ll see anything different,” she said. “This lawsuit never had anything to do with commission rates, or discount brokerages.”

To which Jarvis responds:

Bullshit. Competition is coming. Information will get freer. Rates will decline. Homes will be worth more. A more efficient marketplace is good for buyer and seller but not middleman. We’re finally headed in the right direction.

I suspect Jeff Jarvis hasn’t yet read the Proposed Final Order of settlement.  Or the Revised VOW Policy.  Or the original ILD Policy, which replaced the old VOW and IDX rules.  I wrote about this already so I don’t want to go into too much depth.

Nonetheless, suffice to say that I believe Mr. Jarvis and others currently enjoying the schadenfreude are in for a disappointing shock.

The settlement does not “free information”.  It does not create competition.  Rates will not decline as a result of this settlement.  The settlement covers only the minutest corner of the Real Estate Internet — the Virtual Office Website, a creature whose birth may have been accompanied by much crying and pain but whose death is going completely unnoticed.  Nothing in the settlement prevents NAR or individual MLS or even individual brokerages from telling Zillow and Trulias of the world to go take a flying leap off the stack of invoices from the lawyers involved in this ridiculous waste of time and money.

In fact, that this settlement will change absolutely nothing for buyers and sellers is evidence in and of itself of the strength of competition in the real estate industry.  MLSes and brokers aren’t sending their listings to Trulia and Google and Zillow because of a DOJ decree — they’ve been doing it for years now because it’s in their competitive best interest to do so.

If information becomes freer, if rates decline, that will be the natural result of competition within the real estate industry that remains pretty competitive despite being still too protected (by legislation and governmental action, not by NAR and broker action).  The Internet is a big part of that competition, and the future of real estate marketing is interactive at heart.  But DOJ, NAR, VOW — these are just mirages of a red herring in the dusty smoke.

The real action will unfold once the industry, DOJ, and others start to think really hard about IDX, about listings exchange, about data standardization, and ownership of listings data.

-rsh

I’m seriously up to my eyeballs in my dayjob (plus, I have to go to my second job of raising two little boys under the age of three after my dayjob — this second job is a LOT HARDER than my dayjob, I have to say…) but I had to emerge and say a word about the recently announced settlement between the DOJ and NAR.

Where’s the beef?

From the NAR website, I get this:

The final order expressly provides that NAR does not admit any liability or wrongdoing, and NAR will make no payments in connection with the settlement. The terms of the agreement preserve and strengthen the MLS as a means for broker-to-broker cooperation intended to serve real estate professionals who list or sell property in that MLS. “This will ensure that MLSs are used for what they were originally intended to do, which is help real estate professionals find buyers for people who want to sell their homes,” said Laurie Janik, NAR general counsel.

NAR will be reinstating an updated version of its VOW policy, which governs the use of MLS data for brokers who offer brokerage services online by requiring customers to register with the brokerage before they can search for homes. That policy was rescinded in 2005 when certain provisions were challenged by DOJ. The revised policy continues to protect the rights of sellers who do not want their property or their property’s address displayed on the Internet, and also protects sellers from having false information about their listings appear on the VOWs of a member of the MLS. Among other things, the revised policy requires brokers hosting others’ MLS data on their site to turn off features–such as home value estimates and blogs–surrounding a listing at the request of the seller.

The agreement requires MLSs and local associations that operate MLSs to pass and implement the amended VOW policy within 90 days of the court’s approval of the final order.

The revised policy comes at a time when brokers appear to be moving away from the VOW business model. “The response to VOWs hasn’t been great because consumers can find sites throughout the Internet on which to gather information without having to register their name and contact information,” said Mark Lesswing, NAR chief technology officer.

Okay. So basically, after three years, hundreds of thousands (possibly millions) of dollars in legal fees, and spending thousands upon thousands of taxpayer dollars on DOJ employees… we get… this pale imitation of reform?

Fact is, VOW’s suck for the consumer.  The user is required to register to use a VOW website.  From the NAR website:

The primary distinguishing feature of a VOW is the requirement that visitors register by entering an e-mail address and receive a password prior to accessing MLS listing data. Some MLS participants also post terms of use on their VOWs and require visitors to agree to those terms.

Um, big deal?  Consumers don’t care to use a VOW for the most part, because of the registration requirement.  This might be of some huge importance to the boys and girls at the DOJ, but as Brian Boero writes, “No one cares. The DOJ and NAR “settled” a dispute today that had pretty much resolved itself by 2005.”

Far worse, we have traveled from chaos — when individual rules for VOW’s by MLS created different regimes and different rulesets — to utter confusion.

The rules that were important to the industry was the Internet Listing Display (ILD) Policy that NAR itself said in 2005 replaced the old VOW and IDX policies.  The Proposed Final Order (PDF) of the settlement between DOJ and NAR gets rid of the ILD entirely in Section V(A), and replaces that with the Revised VOW Policy (PDF).  I guess that’s cool, but… where the heck are the rules for IDX display?  All that the Revised VOW Policy says is that “Participants” may use IDX on their websites.

The ILD, whatever its flaws, covered both VOW’s (where the user must register) and plain old websites without registration (where IDX rules governed).  The new Revised VOW Policy only covers VOW’s, which is not exactly where the industry is going.

Unless I’m very mistaken (entirely possible), this means that we are now entirely without direction as to IDX rules and policies.  The ILD replaced the old IDX policies; the new Revised VOW Policy specifically gets rid of the ILD entirely.  There is no Revised IDX policy (yet).  Therefore, we have traveled from chaos to confusion.

Thanks, DOJ!  Our public servants hard at work serving the public.  Sa-weet.

Presumably, NAR will promulgate a new IDX policy soon.  I can tell you the industry will need one in a hurry.  Presumably, that policy will need DOJ and/or court review to ensure that it does not stifle competition.  That’s a lot of presumptions and assumptions, and I am now thinking the medicine is worse than the cure.

More later, as time and duties permit.

-rsh