Feedburner's move to Google

This should have literally no effect on readers of this blog, but starting today and over the next couple days, MLSTesseract is underoing a behind-the-scenes change. Our feed publisher, Feedburner.com, is being rolled into Google.

We've been promised that users of the blog and those who have subscribed (either in their feed readers or via email) should not perceive any changes in their service. If you do, however, contact me at "blarson at larsonsobotka dot com". (Replace the "at" and "dot" with "@" and ".")

Comments regarding optional provisions of VOW rules II – “VOW Only Options”

As MLS boards of directors consider which optional VOW rules to adopt, here are our thoughts on them.

There are two groups of optional rules (references here are to the model VOW rules published on NAR's site). The first group, Sections 19.15 – 19.19, consists of rules that MLSs may impose on VOWs, but if it imposes them on VOWs, it must also impose them on all other disclosures of listing information by brokers to consumers, even oral disclosure. We call these "Parity Options," because if adopted, they impose parity on traditional and VOW disclosures of data. The second group, consisting of Sections 19.20-19.25, provides options that MLSs may adopt that apply only to VOWs. We call these "VOW Only Options." We addressed Parity Options in a previous post and are addressing VOW Only Options in this post.

Here then are the VOW Only Options.

Password expiration

Section 19.20: A Participant shall require that Registrants' passwords be reconfirmed or changed every ___ days.

(Note: The number of days passwords remain valid before being changed or reconfirmed must be specified by the MLS in the context of this rule and cannot be shorter than 90 days. Participants may, at their option, require Registrants to reconfirm or change passwords more frequently.)

(See Section IV.2 of the VOW Policy for the foundation of this rule.) Generally, password expiration policies provide some small assistance in maintaining system security. They do not constitute a major impediment to data pirates, however. And as this rule requires only a reconfirmation, it does not offer even the meager security benefits that a password change requirement would. We see no major factors that speak for adopting this provision.

Advertising and co-branding

Section 19.21: A Participant may display advertising and the identification of other entities ("co-branding') on any VOW the Participant operates or that is operated on his or her behalf. However, a Participant may not display on any such VOW deceptive or misleading advertising or co-branding. For purposes of this Section, co-branding will be presumed not to be deceptive or misleading if the Participant's logo and contact information (or that of at least one Participant, in the case of a VOW established and operated on behalf of more than one Participant) is displayed in immediate conjunction with that of every other party, and the logo and contact information of all Participants displayed on the VOW is as large as the logo of the AVP and larger than that of any third party.

We're a bit perplexed that NAR has classified this provision as optional. The VOW Policy provides the following requirement in Section III.7: "An MLS may not prohibit or regulate display of advertising or the identification of entities on VOWs ("branding" or "co-branding"), except to prohibit deceptive or misleading advertising or co-branding." Section III.7 of the Policy goes on to provide for the same "safe-harbor" that Section 19.21 of the model rules does. In other words, it seems MLSs are bound by this provision whether they adopt it or not. If that is true, we recommend that MLSs adopt this provision just for the sake of clarity. I'm interested whether folks have other views, though.

Identifying listings from other sources

Section 19.22: A Participant shall cause any listing displayed on his or her VOW that is obtained from other sources, including from another MLS or from a broker not participating in the MLS, to identify the source of the listing.

(See Section IV.2 and Section IV.3 of the VOW Policy for the foundation of this rule.) This provision may prove helpful on a couple of fronts. First, if several different MLSs provide data that appears on a broker's VOW, it may be helpful to identify the source of each listing. This is especially true if the MLSs overlap; showing sources will help consumers understand when the same listing appears twice. It will also be useful if the MLSs have different disclosure and notice requirements. The broker displaying listings from multiple sources can identify the source of each listing next to the listing on the page and then "key" notices and disclosures at the bottom of the page to each source.

I'm not aware of any other basis upon which this provision would be dramatically useful. I'm interested if you have other views.

Searching listings from other sources

Section 19.23: A Participant shall cause any listing displayed on his or her VOW obtained from other sources, including from another MLS or from a broker not participating in the MLS, to be searched separately from listings in the MLS.

(See Section IV.3 of the VOW Policy for the foundation of this rule.) This kind of rule provides a lot of grief for brokers and consumers attempting to use a web site. Assuming that a brokerage office participates in two MLSs, if the consumer asks to search listings in Middletown (roughly half way between the two MLSs), the broker's site must either choose arbitrarily which MLS the consumer will search, or it must ask the consumer to choose. Consumers have no sense of the boundaries of MLSs (and really should need to be concerned about that issue). There are numerous workarounds for this problem (developed over many years in the IDX context); but it is a hassle nonetheless. I have yet to hear even a moderately compelling rationale for this approach. But I'm open to ideas if you want to share.

License agreement

Section 19.24: Participants and the AVPs operating VOWs on their behalf must execute the license agreement required by the MLS.

(See Section III.10.g of the VOW Policy for the foundation of this rule.) We think this is a no-brainer; adopt it. We recommend that MLSs always make access to MLS data subject to a written agreement. I have posted elsewhere on what the agreement should look like.

Copies of documentation to MLS

Section 19.25: Where a seller affirmatively directs their listing broker to withhold either the seller's listing or the address of the seller's listing from display on the Internet, a copy of the seller's affirmative direction shall be provided to the MLS within 48 hours.

(I think Section II.5.a-b of the VOW Policy provides the foundation of this rule.) One client pointed out to us that the model rule says "shall be provided to the MLS within 48 hours," but it doesn't indicate within 48 hours of what. (I'd say that was bad drafting if I hadn't missed it myself.) Because the only other event referred to in the section is the seller's giving of the "affirmative direction," I'd say that starts the 48-hour clock ticking. In other words, the listing broker must provide a copy each and every written instruction from the seller to the MLS, which would then presumably file them and retain them. I'm not sure why an MLS would want copies of these documents unless it was auditing brokers or investigating a complaint. But Sections 19.6(b) and (c) of the NAR model rules already require that the listing broker obtain and retain the seller's written instructions on this matter. Our view has always been that MLSs can demand copies of such documentation from the listing broker in cases where the MLS is auditing broker performance or investigating a complaint and that brokers must provide the requested documentation promptly.

If your MLS is one of the few that requires every broker to provide a copy of every listing agreement to the MLS, then you are already handling the filing, etc.; adding this rule might make sense. For everyone else, we'd skip it, unless someone can offer a justification for including it.

So – there are the options under the VOW policy. What do you think?

Comments regarding optional provisions of VOW rules I – “Parity Options”

As MLS boards of directors consider which optional VOW rules to adopt, here are our thoughts on them.

There are two groups of optional rules (references here are to the model VOW rules published on NAR's site). The first group, Sections 19.15 – 19.19, consists of rules that MLSs may impose on VOWs, but if it imposes them on VOWs, it must also impose them on all other disclosures of listing information by brokers to consumers, even oral disclosure. We'll call these "Parity Options," because if adopted, they impose parity on traditional and VOW disclosures of data. The second group, consisting of Sections 19.20-19.25, provides options that MLSs may adopt that apply only to VOWs. We'll call these "VOW Only Options." I'll address Parity Options in this post and VOW Only Options in the next.

Parity Options

The note relating to Sections 19.15-19.19 states "if any of the following sections are adopted, an equivalent requirement must be imposed on Participants' use of MLS Listing Information in providing brokerage service through all other delivery mechanisms." (See Section IV of the VOW Policy for the basis for this requirement.)

We think it's confusing even to include these sections in part 19 of the model rules. Our recommendation is to put these sections, if any are adopted, in the section of MLS rules relating to distribution and reproduction of listing data (Section 12 in the NAR general model rules (see the NAR Handbook on Multiple Listing Policy for details)). That requires slight tweaking of the language – we've helped several MLSs do this – contact me if you have questions. MLSs taking this step make it clear to everyone that these rules apply to all brokers in all circumstances.

Here then are the Parity Options.

Restricted fields and statuses

Section 19.15: A Participant's VOW may not make available for search by, or display to, Registrants any of the following information:

a. Expired, withdrawn, or pending ("under contract") listings.

b. The compensation offered to other MLS Participants.

c. The type of listing agreement, i.e., exclusive right to sell or exclusive agency.

d. The seller's and occupant's name(s), phone number(s), or e-mail address(es).

e. Instructions or remarks intended for cooperating brokers only, such as those regarding showings or security of listed property.

f. Sold information

(Important Note: If sold information is publicly accessible in the jurisdiction of the MLS, Subsection19.15 (f) must be omitted.)

(See Section IV.1.a of the VOW Policy for the foundation of this rule.) How many of these statuses and fields can actually be prohibited from disclosure to consumers in general, even orally? (See my earlier post on this issue.) The MLS may be able to fashion general rules regarding disclosure circumstances. For example, MLS might permit disclosure of off-market listings only for purposes of supporting the valuation of a subject property (CMA, BPO, or appraisal). MLSs should think carefully before imposing any of these requirements, because they impact all brokers and all media.

Any fields or statuses designated as restricted here should not be available on the MLS system in "customer report" formats, and agents should not be able to email them out of the MLS system to their customers/clients.

No changing other broker's content

Section 19.16: A Participant shall not change the content of any MLS Listing Information that is displayed on a VOW from the content as it is provided in the MLS. The Participant may, however, augment MLS Listing Information with additional information not otherwise prohibited by these Rules or by other applicable MLS rules or policies as long as the source of such other information is clearly identified. This rule does not restrict the format of display of MLS Listing Information on VOWs or the display on VOWs of fewer than all of the listings or fewer than all of the authorized information fields

(See Section IV.1.b of the VOW Policy for the foundation of this rule.) This seems like a no-brainer. I guess I always assumed this was at least implied, if not overtly stated, in every MLS's rules. I can't think of a down-side to adopting.

Accuracy disclaimer

Section 19.17: A Participant shall cause to be placed on his or her VOW a notice indicating that the MLS Listing Information displayed on the VOW is deemed reliable but is not guaranteed accurate by the MLS. A Participant's VOW may include other appropriate disclaimers necessary to protect the Participant and/or the MLS from liability.

(See Section IV.1.c of the VOW Policy for the foundation of this rule.) We cannot think of a down-side to adopting this requirement. We have advised clients that there may be better disclaimers than "deemed reliable but not guaranteed," and I expect NAR would not object to different wording that was substantially equivalent. MLS should make sure that the legend it requires also appears on any customer handout formats from MLS and on emails that agents can send out of the MLS to customers/clients. (Remember the parity requirement.)

Listing broker and agent identification

Section 19.18: A Participant shall cause any listing that is displayed on his or her VOW to identify the name of the listing firm and the listing broker or agent in a readily visible color, in a reasonably prominent location, and in typeface not smaller than the median typeface used in the display of listing data.

I read the policy as permitting the MLS to require display of the listing brokerage name, require display of the listing salesperson's name, or both. The model rules collapse them into the same paragraph, but I think the MLS could strike the references to "or agent" and have this provision require only that the listing broker be identified. (The VOW Policy treats listing broker in Section IV.1.d and listing agent in Section IV.1.f.) MLS should make sure that it employs the approach it selects on any customer handout formats from MLS and on emails that agents can send out of the MLS to customers/clients. (Remember the parity requirement.)

Limit on number of listings displayed

Section 19.19: A Participant shall limit the number of listings that a Registrant may view, retrieve, or download to not more than ___ current listings and not more than ___ sold listings in response to any inquiry.

(Note: The number of listings that may be viewed, retrieved, or downloaded should be specified by the MLS in the context of this rule but may not be fewer than 100 listings or 5% of the listings in the MLS, whichever is less.)

(See Section IV.1.e of the VOW Policy for the foundation of this rule.) I can't really think of any major downside to imposing this provision. If your MLS has at least 2,000 listings in it, the smallest number you can impose is 100. Note that if your system allows agents to set up a "prospect search" or similar function that keeps consumers updated about listings that match their criteria, that function should never deliver a single report to the consumer consisting of a larger number of listings than is permitted in your rule. (I suspect it would be permissible for the consumer to have a cumulative "favorites" or "listings viewed" list that exceeded this maximum number, but if it's ok for the MLS system to do that, then it's ok for VOWs to do it, too. (Remember the parity requirement.))

Comments invited

I invite readers to contribute their own comments. The more the merrier!

License agreements for VOWS

We always advise MLS clients that they should never provide access to listing data unless the access is subject to a written agreement. Data access for VOWs is no exception.

I've written a summary of issues to consider when drafting a data license agreement for VOWs, which appears on the RealTown website. The article is titled (not surprisingly) "Written Agreements for MLSs Providing Data to VOW Operators." I welcome your comments on the post both there and here, whichever is more convenient for you.

As I point out in the article, our firm has a model document for this purpose that we can customize for clients. Contact me if you want to discuss that as a project.

Triage for VOW implementation

I posted previously with things I suggested that MLSs do in order to implement the new VOW policy. Unfortunately, time is so short that many MLSs will find it difficult to do all, or even many, of the things we advise.

Consequently, I'm revising my approach. In this post, I'll provide a summary of things that MLSs really must get done before the NAR-imposed deadline of February 15, 2009. In the next day or so, I'll ID things MLSs must do, but could postpone for a couple weeks after February 15. In a later post, I'll discuss things that we advise MLSs to do if they want to be strategic about the VOW policy.

What's on the triage list?

MLSs affiliated with NAR are required to provide NAR a written certification by February 15, 2009, that they have completed a small set of steps. NAR has provided a form for this purpose on the page where it has provided its implementation materials for MLSs. These then are the things MLSs must get done by February 15.

1. Rescind the 2003 VOW policy, if your MLS is one of the couple hundred that adopted it. If your MLS adopted the 2005 ILD policy, it must rescind that, too. (I know of no MLS that adopted it, because it only existed for a couple weeks before the DOJ lawsuit and NAR suspended its application.) You can accomplish these tasks with a resolution of your MLS committee or board of directors, whichever is authorized to make MLS policies, unless you have provisions in your bylaws that require a membership, shareholder, or other confirmatory meeting.
   
2. Adopt the new VOW policy verbatim. You can accomplish this task with a resolution of your MLS committee or board of directors, whichever is authorized to make MLS policies, unless you have provisions in your bylaws that require a membership, shareholder, or other confirmatory meeting.
   
3. Adopt the model VOW rules that NAR has provided. We recommend tidying some of the language in the model rules to clarify it; but if your MLS does not have time, it can adopt all the sections through 19.14 verbatim and do the cleanup later. You can accomplish this task with a resolution of your MLS committee or board of directors, whichever is authorized to make MLS policies, unless you have provisions in your bylaws that require a membership, shareholder, or other confirmatory meeting.
   
4. Identify optional rules that your MLS has adopted. Rules 19.15 through 19.25 in the NAR model VOW rules are optional. If your MLS adopts any of them before it provides the certification form to NAR, however, it must indicate on the certification form which of these optional requirements it adopted. Your MLS does not need to adopt any of these provisions, and it may chose to adopt some or all of them later, after the February 15, 2009, implementation deadline. If your group is short of time, skip the options and give your leaders time to consider them strategically. Note that if your MLS adopts any of the Sections 19.15 through 19.19, you will need to draft rules applicable to other delivery media to appear in your general rules; NAR has not provided model language for this.
   

If your MLS performs these four tasks by February 15, 2009, it can in good faith provide to NAR the certification of compliance. Next, we'll look at things your MLS will have to do but may be able to put off until after February 15.

My GeekEstate post regarding MLSs of the future

I posted today over on GeekEstateBlog with my ideas about what MLSs of the future need to be doing to stay strategically relevant. I'm on a panel at Inman's RE Connect this week in NYC on the subject. I hope to see you there. If you can't make it, read the blog post. It covers much the same material, and you don't have to put up with my dorky facial expressions and speech mannerisms.

-Brian