By Brian Larson, President of the Regional MLS of Minnesota

Changes to NAR’s Internet Data Exchange (IDX) policy, which allow members to post current listings from Multiple Listing Services on their individual sites, were approved at the Midyear Legislative Meetings and Trade Expo in Washington, D.C. in May.

The changes to IDX—formerly know as IDD (Internet Data Display) and also known as Broker Reciprocity—provide clarity for MLSs seeking to meet the policy’s requirements while reinforcing its flexibility. While this is good news for MLSs seeking to apply the NAR policy to unique local market conditions, it still leaves them with many decisions to make before implementing IDX; your own brokers can help you make these decisions with their needs in mind.

Clarification on Downloading
The issue of downloading versus other options is clarified. The revisions state clearly that: 1) MLSs must allow participants to download IDX data (the term “download” also is further defined); and 2) MLSs do not need to create a Web site to satisfy the policy. The original policy left some question about whether participants had to be able to download IDX data from the MLS directly or just be allowed to frame an MLS Web site on their own site. Some MLSs were also concerned that the policy required them to establish a Web site for the data. Simply allowing participants to frame or link to the MLS’s existing property listing Web site does not meet the policy requirement.

Clarification on Participation
A small but significant change in the policy permits MLSs to choose whether to make their IDX programs “opt-out” or “opt-in.” An “opt-out” program is one where participants’ consent to have their listings displayed by other participants is presumed, but they can opt out by informing the MLS of their desire not to participate, thus withholding their listings from IDX. Conversely, an “opt-in” program is one where consent is not presumed; rather, participants must notify the MLS of their intent to participate before their listings will be included. Previously, the policy was interpreted as permitting opt-out only.

Clarification on Limiting Participation
Seven new clarifications were made to a number of options for MLSs. They include:
1. Allowing MLSs to limit IDX participation to Realtor® participants, meaning that non-members, who in some states like California are allowed to participate in MLSs, can be denied participation in IDX.
2. Permitting MLSs to limit IDX participation to participants licensed as real estate brokers, meaning that participants who are not brokers can be denied IDX privileges.
3. Permitting MLSs to authorize agents to have IDX Web sites subject to the control of their principal brokers.
4. Permitting MLSs to limit the IDX listing database to exclusive right to sell listings.
5. Permitting MLSs to require that their listings be searched separately from listings obtained from other sources, although MLSs cannot prohibit display of any other listing sources on the member’s Web site. This allows MLSs to prohibit their data from being mingled with data from sources such as local rental property databases or data from brokers who choose not to participate in the IDX program.
6. Permitting MLSs to make participation in IDX a prerequisite to transfer a participant’s listings to aggregator Web sites, meaning if a MLS participant wants the MLS to send its listings to an aggregator, the MLS can require IDX participation.
7. Allowing MLSs to charge the reasonable costs of complying with the IDX policy to participants who choose to use IDX. An MLS’s costs may include buying or developing software to allow the downloading of information, developing instructional brochures, or holding classes on how IDX works.

Clarification on Agent IDX Sites
Significant changes include number 3 above, which expressly authorizes MLSs to extend IDX privileges to agents licensed with MLS participants. The original policy did not prohibit this, and many MLSs pursued a strategy that authorized agent Web sites. But some MLSs were concerned that the policy did not expressly permit such an approach. MLSs still are not required to allow agent sites to display MLS data; the language simply enables such an approach.

Clarification on Aggregator Sites
Another significant change, number 6 above, permits the MLS to require participants to permit display of their listings to the IDX program before the MLS will transmit the brokers’ listings to aggregator Web sites. This policy does not prevent participants from submitting their listings separately to an aggregator; it simply conditions the MLS’s involvement in transmitting listings on their behalf. This reinforces IDX because brokers generally prefer to take the least expensive approach to transferring their listings to aggregator sites, namely, by having the MLS do it. In order to receive that service, the broker may be required to participate in IDX.

Clarification on Limiting Participation
Changes number 1, 2, and 4 above permit MLSs to limit participation in IDX to a certain extent, but caution should be used when employing these limitations. IDX benefits from having the highest percentage of listings in the market, and makes broker sites the best places to go for listing information on the Web. If, by excluding non-member participants, your MLS excludes a substantial percentage of listing inventory, the value and utility of IDX will diminish as a result.

The working group that prepared the changes proposed last May will likely be proposing at least one more change to the policy before the annual meetings in November. NAR is also preparing an IDX implementation guide which is expected to be published in August of this year.

Remember, IDX is a mandatory policy for all MLSs by Jan. 1, 2002.

For an introduction to IDX, official policies, and more resources, and the latest changes, go online to:
http://www.realtorae.com/realtorae.nsf/pages/IDX