[From the National Association of REALTORS®]

Virtual Office Websites

December, 2001

While the fundamental purpose of MLS is sharing current listing information among participants to enable them to conduct successful, cooperative real estate transactions, technological advances permit that information to be used in new and innovative ways – benefiting consumers as well as participants.

One permissible use is display of aggregated real property advertisements derived from MLS current listings on national sites like realtor.com.

Another permissible use is advertisement of other firms’ listings on participants’ publicly – accessible websites, pursuant to NAR’s Internet Data Exchange (“IDX”) policy. Under IDX, MLS participants are authorized, based on the “opt-out” or “opt-in” consent of other participants, to display other participants’ listings. This is accomplished through a persistent download or through a “smartframing” solution. Detailed information on IDX policy, and on IDX technology solutions, can be found on the Law and Policy site of REALTOR.org.

Another emerging, authorized use of MLS current listing data occurs in the context of participants’ virtual office websites (“VOWs”).

An analogy may be helpful to understand – and to distinguish between – IDX displays and VOWs. IDX might be seen as the electronic equivalent of an MLS participant posting the listings of other firms in the front window of her office where they can be viewed by all passersby – without regard to who they are, or what type of property they are interested in.

A VOW, on the other hand, might be seen as the electronic equivalent of a participant’s brick and mortar office where potential purchasers enter, describe the property being sought, provide contact information, and receive listing information responsive to their stated needs.

Understandably, questions have arisen regarding VOWs. Because VOWs provide targeted listings to specific property seekers, they are subject to existing MLS policies, including those governing reproduction and distribution of MLS information (Section 12 of the model MLS rules in the Handbook on Multiple Listing Policy).

For example, MLS rules generally allow participants and their affiliated licensees to reproduce from MLS compilations and provide to prospective purchasers, a “reasonable” number of listings which, in their judgment, potential purchasers may be interested in. Determinations about which properties may reasonably suit a particular prospective purchaser’s needs are invariably based on criteria detailed by the purchaser – whether voiced in person or communicated electronically.

In the VOW context, instead of walking into participants’ brick and mortar offices, potential purchasers come to their websites.  In some instances, agency disclosures mandated by state law are given, and in some cases potential purchasers agree to be represented for a stated time as a condition of receiving listing information. Then, in a password-protected environment, potential purchasers access the listing section of a participant’s website, where they are asked to describe, in reasonable detail, their property requirements, including price, location, amenities, etc.

Current listings responsive to the prospective purchaser’s stated needs and wants are then provided by e-mail or by fax, either immediately or as they come onto the market – or both.

Following are some commonly asked questions about VOWs and IDX.

Question: Is participation in IDX required to operate a VOW?

Answer: No. It must be understood that IDX is a form of public advertising, while VOWs are a way for participants to provide clients or customers with listing information responding to their stated needs in much the same way as they would give information to a client or customer sitting in their office. Use of current listing information, under IDX, is premised on each participant consenting to public, electronic display of their listings by other participants. If a participant refuses to allow other participants to display his or her listings on their websites, that participant is not eligible to receive current listing information for display under IDX. The rights of MLS participants to submit listing information, and to receive and share it with bona fide prospective purchasers in the ordinary course of business, are not affected whether participants take advantage of IDX or not.

Question: Must MLSs allow participants to download current listing information to enable their VOW?

Answer: No. How current listings are made available to participants is a matter of local determination, and MLSs are not required to provide access to current listing information in any particular way. However, many MLSs have chosen to provide participants with current listing information by downloading and, in such instances, access to downloaded current listing information cannot be denied simply because a participant operates a VOW.

Question: Can an MLS establish reasonable rules and regulations related to Participants’ VOWs?

Answer: Yes. MLSs can establish rules governing use of current listing information in the context of a VOW. For example, an MLS could require that participants make reasonable efforts to identify potential purchasers who will receive current listings through the participant’s VOW; can require that reasonable search criteria be employed (e.g., price, location, amenities) to ensure that listings provided to consumers reasonably relate to their stated interests; can reasonably limit the number of listings that can be retrieved in response to a particular search; and can employ other rules needed to ensure that responsive listing information is being provided to bona fide prospective purchasers, and that the VOW is not misused as a conduit to “siphon off” unlimited amounts of listing information for unauthorized purposes.