The residential real estate and home loan mortgage market has been going through changes in recent months. The online realtors or real estate agents got a huge boost last week as the Justice Department forced traditional real estate brokers to share their multiple listing services (MLS) with Internet real estate agents.
The MLS is a database of real estate properties for sale. This database is the lifeline of the real estate industry without it real estate agents cannot transact business successfully. Herein, the 800 MLS nationally affiliated with the National Association of Realtors (NAR) was denied to online estate agents, inhibiting their ability to transact business.
The Justice Department has reached a tentative settlement with the NAR which still requires court approval. Ultimately, the home buying public could save thousands of dollars when buying a home. Online real estate agents permit home buyers to review listings at their own pace and buy homes with discounted commissions.
In a clear case of discrimination, the government filed a lawsuit in September 2005, stating that NAR policies discriminated against online real estate brokers. A recent settlement filed in the U.S. District Court in Chicago, gives unfettered access of the MLS databases to online and traditional residential real estate agents.
The settlement gives estate agents an effective and efficient way to compete. In 2006, home buyers saved up to 1% on their home’s price by using an online real estate agent. Also that same year, real estate agents received $93 billion in commissions.
A 2007 report by the Federal Trade Commission and Justice Department found that limits on real estate discount brokers' access to national MLS databases of homes for sale prevented consumers from getting the same cost savings and other rewards that internet competition brought to other industries.
The report also found that home buyers were relying on the internet for finding homes for sale. More and more consumers rely on the internet to seek out products and services. For example, consumers get mortgage loans, payday loans, student loans, banking services, car insurance, life insurance, electronics, and more from online.
Last week’s settlement will not take effect till the end of summer, or sixty days after it wins court approval. The settlement will stay in force for 10 years. However, the settlement allows the National Association of Realtors to escape fines and acknowledgement of any liability.
The government’s action has led to greater competition and transparency in real estate markets with the consumer the ultimate benefactor.