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06/20/2003
| An Introduction to Virtual office Web sites Virtual office Web sites. What are they, and why must the National Association of Realtors establish a policy for MLSs to regulate them? These are among the key questions NAR answers in this special section of REALTOR Magazine, prepared by the national association's Legal Affairs and Board Policy and Programs divisions in May, 2003. In May of 2000, NAR's Board of Directors adopted a policy enabling MLS participants to advertise other brokers' listings on their Web sites, with the consent of the other brokers. This policy, known as Internet Data Exchange ("IDX") or Broker Reciprocity, has been widely adopted and implemented by MLSs across the nation. At the same time, some MLS participants have developed a business model that they've labeled a virtual office Web site (VOW) in an effort to distinguish their displays of real property listings on the Internet from the displays governed by the IDX policies. 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. In large measure, VOWs have emerged in response to changing real estate business models, driven in part by the industry's embrace of the Internet as a business tool. VOW operators describe virtual office Web sites as vehicles for conducting online brokerage, allowing a company to establish and work with clients and customers in cyberspace in a way that's similar to how a brokerage interacts with its clients and customers in a bricks-and-mortar office. Viewers of MLS data on a VOW must register and, in return, typically receive more robust information on listings. In contrast, IDX allows brokers to "advertise" each others' listings; the MLS data presented on an IDX Web site is typically less detailed, and viewers of the data remain anonymous. Realtors who operate VOWs maintain that the registration process, coupled with the requirement that visitors agree by mouse click with the VOW operator's terms of use, take such Web sites outside the realm of an MLS's IDX rules. In fact, VOW operators maintain that by registering and agreeing to terms of use, consumers aren't simply site visitors who view real estate advertisements. Instead, they become clients or customers of the company that displays MLS listing information via the Internet. Because clients and customers in a bricks-and-mortar office could be provided with information that includes all listings available in the MLS, including those of sellers who have prohibited Internet or other electronic display of their property as a term of their listing agreement, as well as the listings of participants who have opted out of IDX, such information is often displayed by VOW operators on their virtual office Web sites. Additionally, some VOW operators display all MLS data fields, including information intended only for other brokers, such as showing instructions and broker-to-broker offers of compensation. Some VOWs also include listings that have been sold, expired, or withdrawn. The display of MLS data on VOWs currently occurs in an unregulated environment since MLSs have no specific rules addressing the display of MLS content on VOWs. There has been a pressing need for NAR to adopt a policy governing the display of MLS content on VOWs to provide guidance both to VOW operators and to MLSs. The approved policy provides answers to these critical issues * Is there a meaningful distinction between the display of other participants' listings on an IDX site versus on a VOW? * What minimum criteria can be required of consumers before they access MLS content via a VOW? * May an MLS prohibit VOWs from displaying certain listings, such as those for which the seller has withheld consent for display on the Internet? * May an MLS prohibit VOWs from displaying certain data fields, such as the showing instructions, property security information, and type of listing agreement, i.e., exclusive agency or exclusive right to sell? * May an MLS require that listings displayed on a VOW include the name of the listing broker? * May an MLS establish reasonable limits on the number of listings a consumer may view, retrieve, or download from a VOW? The NAR Board of Directors passed the VOW policy on May 17, 2003. The policy and the model bylaws for MLSs are provided at the VOW Education Center online. Stay tuned to the education center for more information and updated resources. |
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