As one realtor puts it, "The longer you’re on the market, the lower your offers will be, if you get any offers at all. Most Multiple Listing Services (MLSs) keep track of your Cumulative Days on Market (CDOM). Your CDOM stays with your address for 8-10 years. This is why it’s so important to put yourself in the best position possible to create a sale within 30 days.” Stated another way, according to this realtor, the seller has just one 30-day chance to sell his home without interference. After 30 days, the MLS will forever interfere with his sale, calling his home "stigmatized” and "flawed”. After perhaps 60 days, it’s game over. His $1 million in equity is gone.
Question: Why would the MLS, an advertiser legally obligated to the seller, want to be certain that the world knows that his home is a wallflower? Why does the MLS, when he asks it to delete old records, tell him to pound sand? Answer: The MLS assumes obligations in listing contracts in bad faith. For as long as database-driven MLSs have been in existence, realtor associations have used their MLSs to artificially suppress market prices. Realtors maximize their earnings by increasing monthly transactions, which requires "firesales”, which requires transferring wealth from sellers to buyers, which requires some mechanism to force the seller’s hand. For a realtor, on a monthly basis, it’s more lucrative to sell four homes underpriced at $1.3 million than one home fairly priced at $2 million. The realtor gets a pay raise from $30k to $78k.
The MLS provides realtors the convenience of not having to compel their clients to price at FMV-30% for no legitimate reason using false statements. It’s much cleaner to, in the MLS database, run a time clock against the client and showcase his past marketing efforts that failed. 1. Sperry and Hutchinson. Unjustified consumer injury and unethical conduct. 2. Deceptive practices. Misrepresenting the MLS’s authority. 3. Anti-trust. "Tie-in” sales limiting consumer choice. 4. Contract breach. Taking of rights without consent or consideration. 5. Torts. Intentional interference with property rights. 6. Title XVIII. Deprivation of rights.
Interesting, isn’t it? The typical American has $1k invested in a Merrill or Schwab securities account and $200k invested in a home. Yet the Securities & Exchange Commission will sanction a Manhattan stockbroker for taking a 2-hour lunch while nobody bothers to scrutinize the MLS. Some industries do in fact need regulation.
Have a look at this excerpt from an exclusive right to sell listing agreement printed in 2016.
MULTIPLE LISTING SERVICE (MLS). MLS rules require Sponsoring Broker to input Property into the MLS within 72 hours of the execution of this Agreement. If Seller does not want the Property inputted into the MLS within 72 hours, Seller must set forth the date to have the Property inputted into the MLS by adding a date and initialing below. If Seller would like the listing to be exempt from the MLS during the entire listing period provided for in this Agreement, Seller must complete and sign the form provided by —redacted—, "Seller’s Listing Exemption Addendum.” Unless noted otherwise below, Sponsoring Broker will publish the MLS listing of the Property within 72 hours of the full execution of this Agreement in accordance to MLS guidelines.
In general. The typical consumer (seller) is led to believe that the MLS has some governance role in the marketplace. In his mind, he would do well to follow the rules, i.e. consent without opt-out. Otherwise, his home sale might be put in jeopardy. This is in fact an exclusive dealing arrangement a trade association imposes on both the Broker and the consumer. It serves to foreclose upon all competing advertisers of real estate. In U.S. antitrust law, it’s generally unlawful to use a contract to deny a competitor access to a customer.
Sentence 1. The typical consumer interprets "MLS rules” to mean rules enforceable against him. After all, if the Broker is regulated by the MLS, the MLS must have government powers. 18 U.S. Code § 912 doesn’t apply because this is a state matter. Still, it’s the exact same area of law.
Last sentence. Pointing to the words and phrases contained in this sentence, the MLS takes a 99-year license to use, for its own commercial interests, the consumer’s property control and disposition rights guaranteed by his state constitution and 3,000 years of accepted law. Does "in accordance to MLS guidelines” evidence the consumer’s understanding and intent to irrevocably and forever surrender his rights? Was there any consideration paid for this taking of rights? Of course not. Consumers that executed such a contract may have recourse.
Throughout the Internet, you see examples of U.S. real estate professionals asserting with conviction that they own the consumer’s listing data. Not true at all. In the U.S. Code, facts are not copyrightable. In 1991, the U.S. Supreme Court ruled eleven-to-one that "100 un- copyrightable facts gathered in one place do not magically change their status.” Unpack this. You can’t copyright phone numbers, addresses, home facts, marketing facts, pricing facts, relationship facts, and so on in any quantity in any arrangement.
Given what we know about listing contracts—specifically, the permissions they do not give, and copyright law, and the troubling actions and public statements of real estate professionals, there’s work to be done on the part of regulators. If every property owner must go to court to obtain the rights he is entitled to receive, and every service provider must go to court to gain market entry, ultimately, the stakeholders the marketplace desperately needs to thrive will skedaddle. Who wants this non-sense? Better to invest in municipal bonds. Better to start a business in some other industry.
As the real estate industry tries to make U.S. property owners subject to Switzerland law—this one is priceless, the Securities & Exchange Commission continues to exemplify best practices in market regulation. Equal application and enforcement. Swift action. As a result, U.S. financial markets continue on the path of "trustworthy”. Status quo, this cannot be said about real estate markets.
A quick search of the Internet reveals more than a few property owners complaining about the MLSs and realty websites. They object to two things: property scores and marketing histories. It seems odd that the argument continues when the Statute of Frauds resolves the issue. This common law rule prevents nonexistent agreements in real estate brokerage from being proved.
The MLSs and realty sites identify themselves as “service providers” or “media companies” protected by 47 U.S. Code § 230. It’s their best bad argument. In reality, they’re brokers’ assignees bound to the terms of listing contracts. They assume the role (and liability) of an assignee every time they expressly or impliedly assume a broker’s contractual obligations to an owner.
The listing contract constitutes the entire agreement between i) an owner and his broker and ii) an owner and his broker’s assigns. It’s a work contract. Fee for obligations. The owner expects his broker and assigns to perform work as described in the contract while the contract is in force. On the day the contract terminates, the owner expects his broker and assigns to stop work. No circulating or publishing.
For an assignee to use an owner’s inactive marketing data for the assignee’s own profiteering, exposing the owner to financial loss, the assignee needs a “fee for rights” agreement. He needs a writing signed by the owner proving the owner’s relinquishment of state rights and acceptance of risk in exchange for legally sufficient consideration, i.e. cash.
While it may be “standard practice”, “transparent”, and “social” for the MLSs and websites to circulate an owner’s inactive marketing data, and spin up faux appraisals, it’s still a breach of contract. The owner is entitled to a remedy.
Multiple Listing Service Reviews
As one realtor puts it, "The longer you’re on the market, the lower your offers will be, if you get any offers at all. Most Multiple Listing Services (MLSs) keep track of your Cumulative Days on Market (CDOM). Your CDOM stays with your address for 8-10 years. This is why it’s so important to put yourself in the best position possible to create a sale within 30 days.” Stated another way, according to this realtor, the seller has just one 30-day chance to sell his home without interference. After 30 days, the MLS will forever interfere with his sale, calling his home "stigmatized” and "flawed”. After perhaps 60 days, it’s game over. His $1 million in equity is gone.
Question: Why would the MLS, an advertiser legally obligated to the seller, want to be certain that the world knows that his home is a wallflower? Why does the MLS, when he asks it to delete old records, tell him to pound sand? Answer: The MLS assumes obligations in listing contracts in bad faith. For as long as database-driven MLSs have been in existence, realtor associations have used their MLSs to artificially suppress market prices. Realtors maximize their earnings by increasing monthly transactions, which requires "firesales”, which requires transferring wealth from sellers to buyers, which requires some mechanism to force the seller’s hand. For a realtor, on a monthly basis, it’s more lucrative to sell four homes underpriced at $1.3 million than one home fairly priced at $2 million. The realtor gets a pay raise from $30k to $78k.
The MLS provides realtors the convenience of not having to compel their clients to price at FMV-30% for no legitimate reason using false statements. It’s much cleaner to, in the MLS database, run a time clock against the client and showcase his past marketing efforts that failed. 1. Sperry and Hutchinson. Unjustified consumer injury and unethical conduct. 2. Deceptive practices. Misrepresenting the MLS’s authority. 3. Anti-trust. "Tie-in” sales limiting consumer choice. 4. Contract breach. Taking of rights without consent or consideration. 5. Torts. Intentional interference with property rights. 6. Title XVIII. Deprivation of rights.
Interesting, isn’t it? The typical American has $1k invested in a Merrill or Schwab securities account and $200k invested in a home. Yet the Securities & Exchange Commission will sanction a Manhattan stockbroker for taking a 2-hour lunch while nobody bothers to scrutinize the MLS. Some industries do in fact need regulation.
Have a look at this excerpt from an exclusive right to sell listing agreement printed in 2016.
MULTIPLE LISTING SERVICE (MLS). MLS rules require Sponsoring Broker to input Property into the MLS within 72 hours of the execution of this Agreement. If Seller does not want the Property inputted into the MLS within 72 hours, Seller must set forth the date to have the Property inputted into the MLS by adding a date and initialing below. If Seller would like the listing to be exempt from the MLS during the entire listing period provided for in this Agreement, Seller must complete and sign the form provided by —redacted—, "Seller’s Listing Exemption Addendum.” Unless noted otherwise below, Sponsoring Broker will publish the MLS listing of the Property within 72 hours of the full execution of this Agreement in accordance to MLS guidelines.
In general. The typical consumer (seller) is led to believe that the MLS has some governance role in the marketplace. In his mind, he would do well to follow the rules, i.e. consent without opt-out. Otherwise, his home sale might be put in jeopardy. This is in fact an exclusive dealing arrangement a trade association imposes on both the Broker and the consumer. It serves to foreclose upon all competing advertisers of real estate. In U.S. antitrust law, it’s generally unlawful to use a contract to deny a competitor access to a customer.
Sentence 1. The typical consumer interprets "MLS rules” to mean rules enforceable against him. After all, if the Broker is regulated by the MLS, the MLS must have government powers. 18 U.S. Code § 912 doesn’t apply because this is a state matter. Still, it’s the exact same area of law.
Last sentence. Pointing to the words and phrases contained in this sentence, the MLS takes a 99-year license to use, for its own commercial interests, the consumer’s property control and disposition rights guaranteed by his state constitution and 3,000 years of accepted law. Does "in accordance to MLS guidelines” evidence the consumer’s understanding and intent to irrevocably and forever surrender his rights? Was there any consideration paid for this taking of rights? Of course not. Consumers that executed such a contract may have recourse.
Throughout the Internet, you see examples of U.S. real estate professionals asserting with conviction that they own the consumer’s listing data. Not true at all. In the U.S. Code, facts are not copyrightable. In 1991, the U.S. Supreme Court ruled eleven-to-one that "100 un- copyrightable facts gathered in one place do not magically change their status.” Unpack this. You can’t copyright phone numbers, addresses, home facts, marketing facts, pricing facts, relationship facts, and so on in any quantity in any arrangement.
Given what we know about listing contracts—specifically, the permissions they do not give, and copyright law, and the troubling actions and public statements of real estate professionals, there’s work to be done on the part of regulators. If every property owner must go to court to obtain the rights he is entitled to receive, and every service provider must go to court to gain market entry, ultimately, the stakeholders the marketplace desperately needs to thrive will skedaddle. Who wants this non-sense? Better to invest in municipal bonds. Better to start a business in some other industry.
As the real estate industry tries to make U.S. property owners subject to Switzerland law—this one is priceless, the Securities & Exchange Commission continues to exemplify best practices in market regulation. Equal application and enforcement. Swift action. As a result, U.S. financial markets continue on the path of "trustworthy”. Status quo, this cannot be said about real estate markets.
A quick search of the Internet reveals more than a few property owners complaining about the MLSs and realty websites. They object to two things: property scores and marketing histories. It seems odd that the argument continues when the Statute of Frauds resolves the issue. This common law rule prevents nonexistent agreements in real estate brokerage from being proved.
The MLSs and realty sites identify themselves as “service providers” or “media companies” protected by 47 U.S. Code § 230. It’s their best bad argument. In reality, they’re brokers’ assignees bound to the terms of listing contracts. They assume the role (and liability) of an assignee every time they expressly or impliedly assume a broker’s contractual obligations to an owner.
The listing contract constitutes the entire agreement between i) an owner and his broker and ii) an owner and his broker’s assigns. It’s a work contract. Fee for obligations. The owner expects his broker and assigns to perform work as described in the contract while the contract is in force. On the day the contract terminates, the owner expects his broker and assigns to stop work. No circulating or publishing.
For an assignee to use an owner’s inactive marketing data for the assignee’s own profiteering, exposing the owner to financial loss, the assignee needs a “fee for rights” agreement. He needs a writing signed by the owner proving the owner’s relinquishment of state rights and acceptance of risk in exchange for legally sufficient consideration, i.e. cash.
While it may be “standard practice”, “transparent”, and “social” for the MLSs and websites to circulate an owner’s inactive marketing data, and spin up faux appraisals, it’s still a breach of contract. The owner is entitled to a remedy.