Maine May Blaze Trail with 'Open Multiple Listing Service' for Home Sellers Service would let homeowners and developers list homes for a small monthly fee and make all the information available for free to anyone with a computer
RISMEDIA, July 28, 2006—Maine could become the first state to let home sellers bypass real estate agents and place their properties online in a statewide multiple listing service, if supporters of an upcoming petition drive succeed.
The proposed service would compete with the proprietary database owned by the Maine Association of Realtors, the Multiple Listing Service. It would let homeowners and developers list homes for a small monthly fee and make all the information available for free to anyone with a computer.
In addition, a real estate agent selling a home would be required to list the property with the new service, if a homeowner requested that placement.
The intent of the so-called "open multiple listing service" -- or open MLS -- is to spark more competition in residential real estate markets, supporters say. Internet competition for travel listings and stock trading has cut commissions for travel agents and stock brokers and saved consumers money, they say, and it can do the same for home buyers and sellers.
Supporters say they need to make the listing legally binding, to compel all real estate agents to include their properties on the Web site if requested by their homeowner clients. If the measure is adopted in Maine, supporters want to use it as a model for open MLS campaigns in other states.
The campaign is being watched closely by the trade group that represents most of the state's real estate agents, the Maine Association of Realtors.
Linda Gifford, the group's legal counsel, said she wanted to learn more about the pending petition drive before commenting on its details. But Gifford said Realtors already have plenty of competition -- from newspapers, online listings and other real estate agents -- and she didn't sense any public demand for the open MLS concept.
"The system we have is working just fine," Gifford said.
Details of the initiative are still being drafted and some of the finer points are unclear. But two former Republican lawmakers -- Stavros Mendros of Lewiston and Adam Mack of Standish -- say they are preparing a petition drive this fall to collect the 51,519 signatures needed to place the idea before Maine voters in November 2007. They are putting together ballot language to file with the state, with an eye toward circulating petitions starting in September.
"The goal is to help the little guy save money and make the marketplace more efficient," said Mack, who develops apartment projects. Brokers, he said, "control a monopoly."
Multiple Listing Service is a database operated by real estate agents that compiles thousands of property listings into a single source. Only real estate agents are permitted to either view the listings or enter properties for sale into the database; the MLS isn't open to the public.
The dominant MLS in Maine is run by the Maine Real Estate Information System Inc., a wholly owned subsidiary of the Maine Association of Realtors. The Maine group, in turn, is affiliated with the National Association of Realtors.
The industry group and its business practices have come under fire by Dave Barry, a San Francisco trail lawyer who is the catalyst for the Maine petition drive.
Barry has a long-simmering dispute with Realtors. He submitted a report last year to the Federal Trade Commission accusing the industry of price fixing and other practices that he said cost consumers billions of dollars and limits competition.
Barry tried to get a similar open MLS ballot initiative before voters in California last year, but said running the campaign in such a large state was too expensive. He became aware of Maine's history of voter referendums and contacted Mendros, who agreed to work on the measure.
In Barry's view, the country has too many real estate agents who spend most of their time hunting for new business, rather than marketing their listings. They also charge too much in commissions, typically around 6 percent of the sales price, he said.
An open MLS system, Barry said, will make the industry more efficient, cutting average commissions to roughly 2.5 percent. The best agents will survive and make money through increased volume, he said.
But commissions already are negotiable, Gifford said. And the growth of member agents in Maine -- up from 2,000 five years ago to nearly 5,000 today -- creates a competitive environment for sellers looking to list a property.
Other Maine Realtors who are just learning of the open MLS proposal said they don't think it would have much impact on commissions for experienced agents. In today's buyer's market, they said, it's easy to get listings, but harder to sell homes. Just because an owner can negotiate a discount commission doesn't mean their home will sell.
"You can get a real estate agent to work for next to nothing," said Cathy Manchester, a Keller Williams Realty agent in Gray. "But like all businesses, you get what you pay for."
Both Manchester and Jim McFarlane of McFarlane and Field Associates in Portland say access to the MLS listings isn't as crucial as it was before the Internet, when the information was compiled in books. Most people now do initial research on various Internet listing sites, they say. Then they contact a Realtor to help them negotiate and close the deal.
In the coming months, supporters of an open MLS in Maine will make their case for putting the measure before voters. More details of their campaign will be included on a Web site currently under construction: www.openmlsinstitute.org |
