Yesterday, an editorial called Realtors to Internet: Drop dead was published on the Internet by ZDNet AnchorDesk executive editor David Coursey. As a potential homebuyer, Coursey is upset with the NAR's consideration of a rule that might limit the amount of information buyers can find on the Internet. He doesn't name the "rule," nor does he describe exactly what information would be restricted to buyers. Instead, he refers to a story that he found written by another journalist as the basis for his information. Unfortunately, the story in question is missing some key facts which may affect how consumers such as Coursey view the real estate industry and their entitlement to view online listings.

Coursey's story

In his column, Coursey makes the following points:

• that limiting the amount of information potential home buyers would be able to find on the Internet is a bad idea
• that what is at issue is how much access potential home buyers should have to the information contained in the MLSs
• that Realtors shouldn't be exempt from the democratization of information that has changed other industries from healthcare to finance
• that consumers still need people to help them with the intricacies of the transaction; they need dealmakers not gatekeepers
• that NAR's consideration of a rule that would allow brokers to withhold listings from Web sites is swimming against the tide
• that good agents have nothing to fear from the Internet because buyers can do much of the legwork themselves online
• that instead of limiting the information, the NAR should be working on improving the quality of sites that provide access to the information
• that agents who attempt to sell homes without photos and a full description deserve to go out of business
• that Realtors should be pushing for a rule that requires all listings to be posted online, complete with multiple photos, a floor plan and full descriptions
• that pushing listings online may enable buyers to shop online, which in turn would help reduce transaction costs
• that if the consumer can find homes on his own, what is he paying an agent for? Experience - about the market, pricing history, values, pitfalls and paperwork of the purchase, and potential problems.
• that the Internet doesn't threaten the real estate business, only people who aren't good at it.
• that everyone else will adjust to a marketplace where real estate agents are hired for their expertise at handling transactions, rather than their lists of homes for sale.

Mr. Coursey is dead-on right - according to the facts at his disposal. But is there more to the story that he wasn't informed about?

The USA Today story

For his reference point, aside from his personal experiences with Realtors who are helping him buy a home, Coursey cites a USA Today article.

'Realtors debate how much info to put on Net' by Thomas A. Fogarty outlines what appears to be a fair pro and con on the NAR debate about whether brokers should or should not "withhold property information from Internet sites that give access to multiple listing services."

"Nobody is talking about zapping all property information from the Web," writes Fogarty, "just limiting the kind of detail-rich listings that helped the Asbachers (tech-savvy homebuyers) to whittle their shopping list to about 10 homes before hiring an agent."

Fogarty writes, "Opponents say the rule would delay an overdue adjustment: Real estate agents must sell themselves more as deal managers and less as information gatekeepers. The rule's supporters say multiple listing data is valuable property maintained by and for brokers."

"The NAR proposal appears to take aim at marketing deals such as that between Internet portal Yahoo and Houston-based eRealty, a discount brokerage that operates in 11 large cities. Russell Capper, eRealty CEO, says the timing is probably no accident. The deal links users of Yahoo Real Estate to eRealty for home searches in several markets," explains Fogarty.

When presented with the opportunity to interview NAR general counsel Laurie Janik, Fogarty asks about the "timing" of the debate.

"NAR general counsel Laurie Janik says the eRealty-Yahoo deal has nothing to do with the timing. Multiple listing services have been pressing NAR for guidance. A multiple listing service "is a broker-to-broker tool. It's never been open to the consumer," writes Fogarty.

"Janik says Internet shoppers are able to check available homes at the NAR-sponsored Web site, Realtor.com, which would be unaffected by the rule," writes Fogarty. "But Martin Plack, executive at Emeryville, Cal.-based ZipRealty and opponent of the proposed rule, says Realtor.com is designed to produce customer leads, not to give a shopper sufficient information for decision-making."

"Addresses are often omitted, making it necessary to contact an agent just to drive by a listed home. "Its purpose is to make the phone ring," says Plack, whose firm recently struck a deal with Yahoo to display multiple listing information for selected cities," writes Fogarty.

Do Coursey and Fogarty have all the facts?

Since Coursey's story was based in part on information gleaned from the USA Today story, it makes sense to start there.

The USA Today story appears to show both sides of a debate - that of three e-brokers who feel that the NAR proposal would hurt their business models and the NAR. The problem is that the NAR is not the opponent, and that skews an otherwise fair story into a chain of misinformation. So let's fix it - link by link.

First, the NAR is not into restricting consumer access to listings. In fact, the NAR has been instrumental in getting listing information to the Internet. As an organization, it lost over $50 million in this effort back in the mid-90s. An agreement with Homestore enabled the NAR to recoup its losses and create a popular portal for its members listings called Realtor.com. While Realtor.com has competed aggressively with other sites, and sometimes unfairly, some say, it does promote agents' listings for free, giving consumers the largest number of listings to view anywhere online.

The listing information is complete or incomplete depending on the individual brokers, their MLSs, the brokers and agents' access to technologies, the Web sites on which the listings are being displayed, and the agents' willingness to spend money on lead generation tools such as Web sites, virtual tours, school reports and other technologies.

The NAR is made up of members which are independent contractors or business owners, including the three e-brokers cited in the USA Today story. It is other members who are questioning the use of MLS listings by some members. What's missing from the USA Today story are the points of view of those brokers.

Why is there a debate, and what is the debate about?

What these brokers would say is that the debate isn't over limiting consumer access to listings at all. It's over how the listings are used by other member brokers.

Some brokers want to use the MLS repository of listings to get consumers because everyone knows consumers want to look at listings. How the brokers use these eyeballs varies. Some want to serve buyers and sellers directly. Some want to refer buyers and sellers to other member brokers. All want to use the listings for gain. But some brokers do not want the listings used to enable certain members to exclude other members from advertising opportunities.

All of the three e-brokers quoted in the story - HomeGain, eRealty and zipRealty - have exclusive advertising deals with consumer portals that make them or their partner agents the sole gateway to viewing listings.

And the story makes it appear that if these brokers aren't allowed to have their listings, that consumers would be denied access to the listings. But, where is the opposing view?

There isn't one, and that's the problem.

The reason these portal deals are being reconsidered by NAR member debate is that they prevent equal access to the same advertising opportunities by the very brokers who provide the listings that the three e-brokers want to use to promote their services. The article doesn't mention that HomeGain, for example, is a referral company, and while licensed as a broker so it can collect its referral fees, it does not provide brokerage services in the industry's traditional sense. It uses listings to attract consumers and then refers those consumers to agent members. If the brokers provided the listings for HomeGain's use, would they want to pay HomeGain a referral fee, too?

To put it another way, what if a local newspaper entered into a deal with a local broker which allowed that broker to advertise other brokers listings, but did not allow the other brokers to advertise in the paper? This would give the first broker almost complete access to the newspapers' buyers and potential sellers, while preventing the brokers who supply the listings from having the same access.

But this scenario doesn't happen in newspapers, but it does happen on the Internet; hence, the reason for the debate. The Internet and its technologies have changed the paradigm of what used to be simple quid pro quo. That's what the MLS is - a repository of listings so that brokers can sell each other's inventories.

Current rules state that brokers can't advertise other brokers' listings without permission. The debate is now over whether automatic inclusion in the MLS should allow listings to be used by any and all members as advertising lures. The reason for the debate is so brokers won't pay referral fees related to their own listings or lose opportunities to serve buyers that they otherwise would have had an equal opportunity to serve.

That puts the whole discussion in a different light. Most of the reasons Coursey has for being upset don't exist - Realtors aren't trying to restrict information to consumers.

The point is that no one wants restrictions, but some brokers do want to control how their competitors use the listings they provide.