I started to care about the Real Estate industry and the anti-competitive practices when I wanted to develop web-based real-estate tools for developers.  I had been looking around at what was out there and found that the offerings from the brokers/agents were tough to use, and didn’t tie into the geographic components of the market well enough.  There were no maps, limited pictures, etc.  There wasn’t much else on the market at the time (probably around 2002), and I thought there would be huge consumer demand for good home-buying tools.

What I learned is that it was basically impossible.  The brokers/agents have a strangle-hold on the MLS (Multiple Listing Services) and wouldn’t allow anyone to access or syndicate the data–indeed if I partnered with a member agent they would face heavy fines for sharing the data with me.  I was forced to look at alternative and non-definitive data providers like newspapers, craigslist, which were spotty at best.  I read about a lot of similar stories from other like-minded individuals, discount brokers, FSBO (For Sale By Owner) groups and sellers all of which have butted heads against the industry, who despite supposedly a group of competing independent business acts as one cabal.  The industry as a whole fights anything that make shake up the status quo and encourage competition: discounted listing rates, FSBO listings on the MLS, independent websites, etc.  Despite lawsuits and government investigations, the industry had been able to stay just away from serious legal trouble for anti-competitive practices.

And this is all still true today.  There are some third party websites like Zillow, and the FSBO folks have been making progress, but still face stiffoposition from the real estate industry and MLS folks.

The Federal Trade Comission released a FANTASTIC report about the state of the industry, anti-competitive practices, some proposed solutions, etc.   Despite the dry nature of the content, it is very easy to read and aimed at the average homebuyer or consumer.  Very, very well done.

In any case the Justice Department finally took action and reached a settlement with the industry–hopefully it will shake things up a bit and make buying and selling a home a bit better for the consumer.

Tags: real estate

This entry was posted on Thursday, May 29th, 2008 at 4:19 pm and is filed under Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.