By mid-2004, real estate associations and individual agents will have at least three more choices in lockbox solutions than offered by the current leaders in the industry - Supra/Risco, both owned by GE Interlogix. Until now, what many call the "Supra monopoly" has been successful in discouraging competitors through years of market dominance, hundreds of patents, and six-year contracts with associations, but despite these obstacles, some companies have found ways to introduce new products.

As reported, the National Association of Realtors has purchased a majority interest in Sentrilock LLC, and plans on introducing a "middle-ground" solution that employs smart card technology to allow agents quick access, but with chips that hold more information than a typical magnetic strip. Among information that is collected by the smart cards and transmitted to the listing agent via the Internet will be the selling agent's name and time of showing.

In addition, two other solutions are coming to the forefront. One, offered by the North Shore Barrington Association of Realtors through its majority owned subsidiary SeQwill, is deliberately lower-tech, but a significant improvement over the old combination lockboxes, says Terry Penza, AE of the NSBA. The NSBA/SeQwill product is called Sentry System.

"We are planning to sell Sentry System immediately," says Penza. "We started looking at the lockbox thing when Supra wanted to change everyone's contract, and our members wanted to know if there was an alternative. One of our members developed this box 10 or 15 years ago and we resurrected his box."

Penza describes the Sentry System as a "simple box with no keys." "It takes the place of a combination lockbox," she says. "When you want to go in, you have to have a code so you can record who is going through the house. That code is good for two hours. If you try to get in five minutes later, you won't get into the box."

The software concept, she says, is an Internet-based program which the listing agent can log on to, and access box numbers and the 300 numbered codes that selling agents need to access the boxes. "When someone wants to show the home, they call the listing agent," explains Penza, "and the listing agent gives them a code. The code is one of 300 numbers."

The disadvantage of the system is that if you can't get the listing agent on the phone, you can't get in the home, so North Shore and SeQwill are looking at other ways selling and listing agents may work together. Some agents may support a call center which is operated by the board to assign showing codes, some may prefer getting codes from the Internet, and some agents may not want anyone showing their listings without talking to them first.

John Williams is the Realtor who developed the Sentry System, for which he says he has had a patent since 1989.

"My family owns a real estate company," explains Williams. "I started in 1968. In those days we had to call and make appointments with different offices, and we had to go pick up and return keys to show property, so I had the idea in the back of my mind how could we still be professional and eliminate key-chasing and have the lockbox technology and controlled access so that is what my patent dealt with.

"Each lockbox had programmed into the circuit board 300 six-digit combinations that stayed with that box based on that serial number," he continues, "so every box has a different set of 300 six-digit codes and they were programmed to only work one time. We want to know in advance when our listings were going to be shown so you have to call and get a combination, and the combination becomes invalid after you open the box. In the box, you have a sheet of codes and master code that worked every time that you could give to the seller. Once the house is sold you can hit restart, and get all good codes again."

The new, improved version of Williams' lockbox sold by North Shore has a number of new electronic features. "You can create a user master code," says Williams. "The reason for that is if I bought 20 boxes and had a lot of listings, I could create a combination in my boxes for all my boxes. If I have 10 or 15, I can always open them. You can also set the lockbox to work one time only or be a little more forgiving to be used for one or two hours and then it becomes invalid. That way when you show the house, it you left something inside like your pocketbook, you could go back in without having to get another code from the listing agent."

He says, "The main things we have to sell to homeowners are our experience, knowledge and our energy and our MLS and our professionalism in the NAR as a Realtor. With the Sentry System, I can go to you as a seller and if you put this box on your house, we are always going to know who is going to show it, and call them back for feedback and get back to you with a reaction to your house and price. When I first did this, it was so important to be professional to earn a commission. That is a one-time entry, and as the listing agent, we'll know if you go back twice. Going back with the same people is good. If a house were vacant or under construction, I could take all kinds of buyers in and the owner would never know it."

Penza says that North Shore isn't going with the Sentry System as its only system. In fact, the association signed an agreement with Supra and product will ship in a few weeks, she says. Will it be challenging for the association to support more than one lockbox system?

"I guess we are going to find out," she says. "We are selling a lot of combination lockboxes and some of them will use the Sentry System. We also signed a Supra contract, and we are converting to the new Supra system in a couple of weeks. There are different levels of lockbox protection. We are in a metro area, and all the boards around us are with Supra and we had to sign a contract so that our members could be competitive with other associations. If a member wanted to go into the board next door to show a listing, that listing would probably have a Supra lockbox, and they need a Supra key to get into that box because they sell listings from other boards. What could potentially happen is that a lot of members would buy a Supra card (key) but don't have to have lockboxes. Supra knew that when we signed the contract. We have 4,000 to 5,000 of the older boxes in the field now. This just gives our members a choice to have a nice simple box."

Rapattoni

Meanwhile, Rapattoni Corporation is moving toward what it considers to be a high-tech lockbox solution that will compete directly with the data and access products from Supra and the NAR's Sentrilock product.

"We have a prototype," says Andy Rapattoni, president of Rapattoni Corporation, "and we will have full product to demonstrate and show at our booth at the upcoming NAR convention in San Francisco.

"We have kept quiet," he explains, "and we are getting a lot of requests from customers who want it now. We are aware of the NAR commitment to Sentrilock and that will be good competition for us. Our product will be very electronic and secure and it will take the leap into the next generation. It is not mechanical like North Shore's system. Ours has fully downloadable keys that are updated via the Internet and which can be done remotely from any PC, and that is cooler than any smart card. It will be more sophisticated, and it will be far simpler than the Supra key. It will focus on functions. It is not going to be a database, so there's not a Palm pilot with it. It will be simple and record all the information required and do it in a simple and secure way. Our biggest advantage is it will be fully integrated in our MLS systems which is great for MLSs that are Rapattoni customers, and we will have a stand-alone system for non-Rapattoni system users."

The system will report through the MLS and manage boxes through the MLS serial numbers tracked through the MLS, he says, and when an agent has a listing, the agent can go to the screen and click on a button and see who has been showing his/her house. They do it off the listing information that is in the MLS, and only they can look at it. They can also show it to the seller through a user ID. It will indicate what agents have shown the listing.

Promises Rapattoni, "We will be a strong competitor. This isn't short term - it is for the long haul."

As far as competitive issues, Rapattoni says, "We have made it through the intellectual property issues, and we will try to get over Supra signing six-year contracts. Some of those will come up in two or three years, and we'll be waiting.

"We are beta-testing in December or January, and we'll be moving low volume product in March and high volume by June," he says.