On November 4, 2004, Congressman Mike Oxley, chairman of the House Committee on Financial Services, wrote to David. M. Walker, Comptroller General of the United States, outlining the Committee's "responsibility and authority" to continue oversight of "the Nation's housing market and potential barriers to home ownership."

Specifically, Oxley was interested in how electronic commerce could offer new tools to "both consumers and real estate professionals, and bring greater transparency to the residential real estate transaction..."

Seeking "better understanding," Oxley wrote a request to the Government Accountability Office, formerly known as the General Accounting Office (GAO) to assess and report on:

• how the residential real estate transaction is evolving as a result of electronic commerce

• any barriers to greater use of electronic commerce in residential real estate transactions

• how removal of those barriers could benefit both consumers and real estate professionals

• how those changes may affect homeownership

He asks the GAO to seek the answers to nine questions. "In particular, please review the role of multiple listings services (MLSs)," writes Oxley. "The MLSs effectively, are the residential real estate marketplaces -- where home sellers provide information about homes to buyers." He goes on to note that "virtually all MLSs appear to provide information about homes for sale in electronic form, yet there appear to be significant limitations on the accessibility of this information. Please review and explain any rules for Internet display of MLS information, and any other relevant regulatory structure. Please determine whether these relationships and regulations are promoting, or limiting transparency, competition, and homeownership."

The nine questions are:

1. How does consumer and industry use of information technology, in residential real estate, compare to the use in other areas of commerce?

2. How could greater use of information technology benefit consumers and residential real estate professionals? Among other things, could it help increase homeownership among lower income or non-English speaking consumers? If it is possible to quantify potential savings to consumers from removing barriers to greater use of electronic commerce in real estate transactions, please do so.

3. What legal or regulatory barriers or, self-regulatory practices hinder greater innovation and modernization of residential real estate transactions?

4. Do the MLSs in effect, function as the marketplaces for residential real estate?

5. What is the general governance structure, including any governmental oversight or regulation, of MLSs?

6. What are the legal and practical effects of the "IDX" and "VOW" rules adopted by the National Association of Realtors for Internet display of MLS information, and what purpose do they serve? Could these rules result in the blocking of legitimate commerce, particularly against certain licensed real estate brokers?

7. What is "Realtor.com" and how does this company generally promote the use of technology by consumers and real estate agents? Is this an IDX or a VOW site subject to the NAR rules?

8. What are the state law obligations of real estate agents and brokers to consumers to promote homes for sale, and how, if at all, are these obligations consistent with restrictions on display of information over the Internet?

9. Has the Internet facilitated the custom of agents representing both the buyer and the seller in the same transaction and, if so, is this good for the consumer? (Italics by editor)

Oxley, along with Ranking Member Barney Frank (D-MA), then requested the GAO to study competition in the real estate industry in March, 2005. Specifically, they asked the GAO to "report on the size of the U.S. residential real estate market; the number of closed transactions and total value of property sold last year; on the current number of licensed real estate agents; to compare the increase in housing prices with the rate of inflation over the past five years; and how, and whether, consumers benefit from competition in the residential real estate brokerage market. Additionally, they asked whether state-chartered depository institutions that engage in real estate brokerage and settlement services, "have any negative effects on competition or consumers," according to a National Association of Realtors' report on the matter.

That investigation puts the spotlight of federal government interest squarely on the rules and laws under consideration in Texas and Oklahoma respectively, where efforts are underway to strengthen or clarify the duties of real estate brokers in those states with regard to limited service and the impact on consumers and real estate professionals.

At issue, is whether limited service brokers, by putting so-called MLS-entry-only listings into the cooperative MLS without providing fiduciary services such as assistance with negotiation and other forms of representation are a help or hindrance to homeowners. Also under consideration is the fact that brokers are prohibited from negotiating with other brokers' clients directly, which puts the industry in a stranglehold of confusion over duties when consumers are allowed such access to the advertising benefits of the MLS without representation. However, other forms of representation exist which allow brokers and non-brokers to advertise listings without an exclusive agency relationship.

"The existing statutory provision is section 1101.652(b)(22), Texas Occupations Code," explains Loretta Hay, general counsel to the Texas Real Estate Commission. "I do not know what the GAO will say regarding the DOJ/FTC comments, or the effect of federal and state anti-trust laws on the proposed rule. Under the existing statutory provision, the other broker would not be prohibited from contacting the represented client in any other type of agency relationship, such as an open listing, or a non-agency agreement for advertising only with an up-front fee. Mere advertising for an up-front fee does not require a real estate license in Texas."

If unrepresented sellers are allowed into Texas MLSs, it could undermine the licensing requirements of all brokers and agents, giving entree to any broker to advertise listings without attendant duties to the client. The rule is being forwarded to the Texas Attorney General for comment.

The Oklahoma Association of Realtors (OAR) has sponsored an amendment to statutes SB6673, that is on its way into being enacted into law. The bill outlines a clarification of brokers' duties to consumers, specifically that brokers are to be on hand in the writtenpresentation of offers, counteroffers, and other communications concerning a transaction..."

SB673 passed out of the Oklahoma House of Representatives yesterday with a 92-5 vote, and has been forwarded to the Conference Committee, made up of Senate and House representatives, where it will be reviewed and possibly modified before being returned to the Oklahoma Senate and House for vote.

"We appreciate the opportunity to take this bill to Conference Committee. This gives us more time to work with those concerned with certain aspects of the bill. While we are hopeful that a consensus will be reached, we continue to support the original intent of the bill and aim to move forward with our goal of protecting consumers while upholding the original legislative intent of Oklahoma's Broker Relationships Law," said Lisa Yates, CEO of OAR.

"Legislative support for this bill has been strong to date, and we expect that support to continue," Yates said.

Meanwhile, Paul Anderson, Managing Director, Office of Public Affairs U.S. Government Accountability Office (GAO) tells Realty Times, "That request (Oxley's) has been assigned to a team of analysts that is currently engaged in designing the study, including data collection, in consultation with Rep. Oxley's office. We have not yet established an estimated delivery date."

Published: April 29, 2005

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.