Granting home buyers and sellers access to real estate multiple listings-listings of property for sale that are currently the exclusive province of the real estate industry - would increase competition among realtors, but it is not the most desirable way to do so, a panel of realty experts concluded in a recent report to the Federal Trade Commission.
The experts, drawn from trade association, government, universities, research organizations and the real estate industry, were asked by the FTC to assess the consequences of the increased competition in the field. The study, which has not yet been made public, was undertaken in part because of complaints by small firms and brokers who offer lower "discount" rates about the dominance of larger firms and state real estate commissions.
FTC policy planner Thomas Stanton emphasized that the report is just one of many attempts to come up with remedies for the lack of competition and does not represent FTC recommendations.
The experts were asked to rate 65 potential actions on the basis of their impact on the real estate industry and effectiveness on the prices of houses, quantity and quality of service, profitability of firms and entry of new firms into the industry.
The experts indicated that open access to multiple listing services - for a "reasonable" fee - would have a moderately enduring effect on the industry.
"It would be a total disaster for the real estate industry, but it would be great for buyers and sellers," one participant said. "Remember that if newspaper advertising worked, there wouldn't be any real estate agents." On the other hand, another participant predicted that open access to such listings would mean the end of the parttime agents.
It would be most effective, the experts indicated, to prohibit real estate boards or multiple listing services from suggesting commission splits between cooperating firms. There was widespread disagreement among the experts as to how prevalent the practice still is.
One person commented, "To the extent the practice extists, the (proposed) action is perfectly acceptable. Multiple listing services shouldn't be in the pricing business.
"But note that boards and listing services are scrupulous about staying out of pricing. After recent anti-trust action, locals are staying out, and the National Association of Realtors urges locals to stay out."
One FTC official said that multiple listing services can be used to help keep discount firms from doing business when other brokers take not of their low commissions and shy away handling their listings.
The Federal Trade Commission has no jurisdication over multiple listing services, which are usually administered by boards of realtors in counties or cities. But the official said that if other investigations show that denial of membership in these listing services has resulted in price fixing, the FTC could try to issue a rule that memberships be expanded on the grounds that denial is an unfair trade practice. The real estate industry could be expected to challenge such a regulation in the courts.