No-call legislation is either pending or in place in at least 38 states, according to the NAR. While most states impose their own guidelines, many have adopted the Federal Trade Commission’s standard for interstate telemarketing which went into effect December 19, 2002. However, funding for a national no-call directory has yet to be funded by Congress, and many say it never will happen

Meanwhile, the damage has already been done to the real estate industry which uses the phone, among other means, to market services and listings. Many Realtors feel the new FTC rules, which have adopted as is by some states, unfairly account for the way the real estate industry does business, and they’d like to have certain exemptions.

That’s why the National Association of Realtors is going to build a case to take before the FTC in a hearing in a few months, says Jeanne Delgado, managing director for regulatory and industry relations.

”The new FTC ruling eliminated an exemption that benefited Realtors, commonly known as the face-to-face exemption,” says Delgado.

The face-to-face exemption means that the telemarketer may contact a consumer who has placed his or her name on a no-call list, if the call is meant to set an appointment for a face-to-face meeting, and a sale may take place at a later time, rather than on the phone.

”When I talk to Realtors, they are consumers too,” explains Delgado. “This has been played as such a consumer issue, that no one wants to be called during dinner, but there are calls I might get that are welcome, and one of them might be to learn that the house next door just sold for 50 percent more than I just paid for my home. That’s something I would want to know. When Realtors call people and tell them something like that, the reaction is so favorable, they might think about selling their house. It’s information that is at the beginning of a relationship.”

But regulators see the issue as more black and white. Most no-call exclusions, depending on the state, allow companies to contact consumers with solicitations when they have had a previous business relationship so they can offer additional products and services. However, preexisting relationships are not always protected. In some states like Colorado, if the consumer and real estate professional have not had any business dealings for 18 months, then the real estate professional may not contact his or her former client or prospect with a solicitation call.

And that raises significant marketing questions for Realtors. Consumers change homes anywhere from every four to eleven years, typically, making the continuation of a business relationship up to the agent.

What the new FTC rules do not address, and where the NAR hopes to find a loophole, is what constitutes a preexisting relationship? A purchase by the consumer in the last 12-18 months? Or is an ongoing friendly dialog sufficient to continue the relationship?

As a Realtor, what if you have been mailing this consumer Just Listed cards for the past four years? Is the relationship continuing or is it only a relationship if the consumer has purchased a service or product? What if you have been sending this person your e-newsletter? Does marketing to this customer constitute a continuation of the business relationship, or does the consumer need to say ‘no’ to cards and e-mail, too?

Delgado has other questions she would like to put before a FTC hearing.

” There is another interesting situation that I don’t know the answer to,” says Delgado. “Is a sign in front of a for-sale-by-owner home an invitation to call them? Is it for the public only, or are professionals allowed to call them?”

What if a Realtor would like to preview the home before showing it to a client? Can it be assumed from the sign that Realtors are not welcome to bring a buyer?

“A lot of folks convert FSBOs into clients,” points out Delgado, “but what if the FSBO is on a do-not-call list? We’ll pose that question and others, and look for guidance from the FTC.”

There is also the issue of public awareness of which calls are acceptable and which are not allowed by the no-call rules. And it can't be assumed that consumers will know which calls are which. Many people mistakenly believe that all unwanted e-mail is spam, for example. While many people get unwanted e-mail, they are also contacted by companies with whom they have had a previous relationship. Spamming can be an inexpensive and effective technique for contacting previous subscribers. Yet the outcry against all unwanted contact has gotten many companies innocently reported to ISPs.

What if certain rules allow contact by Realtors, but they get reported to the FTC or the state anyway? One thousand to twenty-five thousand dollar fines are hard to swallow if you're innocent.

To bolster the case of Realtors, Delgado says she is going to survey NAR members to find out to what extent no-call lists are a burden to the real estate industry.

“These no-call rules were put into effect to prohibit deceptive, abusive, and fraudulent behaviors, and the consumer doesn’t face those dangers in a phone call from a Realtor,” defends Delgado. “You aren’t going to sell a house over a phone call, you’re going to share information and meet the client later and the sale results much later.”

The results of the survey should be interesting. What kinds of calls do Realtors make? Do they tend to call strangers, or people they know? How often do they cold call, and what do they say on the phone when they do? What percentage of the time do Realtors call to promote a new listing, promote a Just Sold, or to offer a CMA? What percentage of time do Realtors spend cold-calling? How effective are calls to the bottom line? What percentage of calls are converted into additional sales? For Realtors who have abandoned cold calls, what methods are they using to market listings and services instead? How much more or less are they spending, and are the costs more or less easy to bear?

The answers to these questions and more may provide more than guidance to the FTC, it could also provide guidance to the real estate community at large.

Editor's note: Since publication of this article, The NAR has informed Realty Times that people who have requested not to be called have to be taken off of the company "do-not-call" list. Under this new rule, most real estate professionals will have to comply with this federal rule if they are calling across state lines. "NAR is not looking for loopholes in the rule, certainly not in the context of the pre-existing relationship provision," says Steve Cook, vice president of public affairs. "There will be no hearing before the FTC on this rule."