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Proposed Policy Governing Use of MLS Data in Connection with Internet Brokerage Services Offered by MLS Participants V

Purpose of Multiple Listing Service. Broker to Broker System

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Proposed Policy Governing Use of MLS Data in Connection with Internet Brokerage Services Offered by MLS Participants V

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    1. Proposed Policy Governing Use of MLS Data in Connection with Internet Brokerage Services Offered by MLS Participants (“Virtual Office Websites”) May 15, 2003 Washington D.C.

    2. Purpose of Multiple Listing Service Broker to Broker System “Offer compensation and cooperation” “To invite other participants to participate in the sale of property”

    3. The Prerequisites The following proposal is, at this point only a proposal, it is not yet policy. The proposal is an effort to respond to a need identified by our REALTOR® membership: how can each participant use other participants listing data in an online environment? Not an effort to “create” or “endorse” a particular business model.

    10. Concern Some see VOWs as little more than advertising and a way around the opt out rights afforded under IDX. Others assert that VOWs are a new way of providing brokerage services responsive to the changing needs and wants of consumers, with potentially lower costs and more effectiveness.

    11. VOW Work Group MLSs asked NAR for guidance. What rules applied to MLS Participants operating VOWs? The VOW Work Group was established.

    12. Work Group Issues Are VOWs just advertising? Can, and when, do brokers truly provide online brokerage services? What are the differences between advertising and online brokerage services? Should the MLS and/or sellers be able to prohibit the display of certain MLS property information on a VOW? Can MLS Participants “opt out”?

    13. At the 2002 Midyear Meetings, the Work Group distributed a proposed policy covering all electronic display of MLS information including IDX, VOWs, and other “next-generation technologies.” Action on the policy was deferred until the 2002 Annual Convention to allow NAR to solicit comments on the policy for further consideration by the Work Group.

    14. Based on the comments received from over one hundred REALTORS®, MLSs and associations of REALTORS®, the Work Group modified its original proposal. The new proposal (November, 2002) dealt only with VOWs, and authorized Participants to use MLS data on a VOW that satisfied specific criteria. The current IDX policy was left unchanged.

    15. November 2002 The NAR Multiple Listing Issues and Policy Committee approved the policy, but the Board of Directors deferred action on it. Board approved $200,000 for educating the membership about the proposal. The LT appointed a new Work Group to consider further policy modifications. The reconstituted Work Group met in January and February, 2003 and teleconferenced in April, 2003.

    16. Why Regulate VOWs? Why Now? VOWs are in operation today. VOWs are not subject to any specific rules other than the general MLS rules. Absent a VOW policy, the ability of NAR and MLSs to prevent or terminate Internet misuses of MLS data is seriously compromised.

    18. Preliminary Matters A consumer’s search for property on a VOW must be subject to the Participant’s “oversight, supervision and accountability.” Each office of a real estate firm may operate a VOW using only listing data of the MLS(s) in which it participates. State law governs, particularly as to whether VOWs are “advertising.”

    19. “Opt Out” Participants can opt-out of all VOW websites---Blanket opt-out. Participants can “selectively” opt-out of another participant’s VOW. Unless a listing broker exercises the right to “opt-out, consent to the use of his/her MLS listings on other participants’ VOWs is presumed.

    20. VOW Criteria A VOW must satisfy criteria related to three issues Creation of a broker-consumer relationship. Protection of MLS data. Information that may be provided on the VOW. A VOW must also satisfy certain other operational requirements.

    21. VOW Criteria Establish a lawful consumer-broker relationship before accessing MLS data: Satisfy all applicable state legal requirements such as agency, non-agency and other disclosure obligations. Identify “Registrants” by obtaining name and e-mail address.

    22. VOW Criteria Establish a lawful consumer-broker relationship before accessing MLS data: Establish a unique user name and password combination for each Registrant, and maintain (for 180 days) a record of that registration information for each Registrant. Validate the e-mail address by return e-mail to Registrant.

    24. Terms of Use Agreement The Registrant must acknowledge at a minimum that she or he: has entered into a lawful consumer-broker relationship with the Participant, intends to use the data only for personal/non-commercial use, has a bona fide interest in purchase/sale/lease of property, will not copy or redistribute the MLS data, and recognizes the MLS’s copyright in and ownership of the listing database. (Participants are allowed to go into each others’ VOWs to confirm compliance with applicable rules.

    25. Consumer Representation and Financial Obligations Agreements May not be established in Terms of Use. May not be accepted solely by a “mouse click”.

    26. VOW Criteria Security Measures: The VOW must protect MLS data by employing reasonable efforts to monitor for and prevent “scraping” or other unauthorized accessing, reproduction or use of MLS data. If data is obtained through a persistent download, MLS may require the VOW to use appropriate security protection, such as firewalls, not greater than those employed by the MLS.

    27. VOW Criteria Security Measures: MLS’s may require Participants to maintain an “audit trail” of Registrants’ activity on a VOW, and make that audit trail available to the MLS in the event of a suspected security breach or violation of MLS rules.

    28. VOW Criteria MLS may prohibit display of: Expired, withdrawn, pending and “sold” listings. Cooperative compensation information. Type of listing agreement. Seller/occupant name, phone or e-mail. Remarks intended exclusively for cooperating brokers. Only if equivalent requirements are imposed on all other delivery mechanisms.

    29. Additional VOW Requirements (if equivalent requirements govern other delivery mechanisms No advertising visible when displaying listings of other Participants, (“Clean copy”), but VOW Participant ID permissible. MLS data fields may not be changed. MLS data may be augmented with additional data if the source is clearly identified.

    30. Additional VOW Requirements Sellers may withhold their listings or their property addresses from display or distribution on Internet sites (“Seller opt out.”) BUT such listings may be displayed on the listing broker’s own VOW or website, with seller’s consent. Participants must refresh data at least once every seven days.

    31. Additional VOW Requirements MLS may require: Notice must be posted on all MLS data displayed that it is deemed reliable but not guaranteed by MLS. With the permission of the local MLS, non-principal brokers and sales licensees may operate their own VOWs, subject to control of their Participant and the Participant’s accountability for compliance.

    32. Additional VOW Requirements Participants’ VOWs may not distribute any portion of the MLS database to another person or entity except as provided for in the rules. VOWs must display a privacy policy advising Registrants how their information will be used. Participants may exclude MLS listings from the VOW on an objective (price, property type, geography) basis.

    33. Additional VOW Requirements Listings must identify the listing firm if required with respect to other delivery mechanisms. No referrals based on Registrant-provided information, except for “legitimate” referrals of customers seeking property/services that the Participant does not provide. MLSs may require identification of the source of listings if other than the MLS.

    34. Optional VOW Provisions that MLSs May Adopt May establish reasonable limits on the number of listings available to Registrants in response to a search if applicable to other delivery mechanisms. May assess to VOW operators fees related to actual cost of adding downloading capacity.

    35. VOW Requirements Must establish a maximum time after which Registrant passwords must be renewed.

    36. MLSs May Not Adopt restrictions in addition to those allowed by the policy. Refuse a Participant’s request for basic downloading of active listing information sufficient to operate a VOW.

    37. Proposed VOW Time Line … Policies to become effective upon adoption by NAR Board of Directors. Policies must be adopted and implemented by MLSs no later than Jan. 1, 2004. Participants have up to an additional 180 days from date of MLS adoption to bring existing VOWs into compliance.

    39. Note: Images in this presentation are provided courtesy of aviewoncities.com

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