patrick.net

Justme Says
"The reason MLS should be made public and open is that it constitutes a de-facto monopoly. Another part of the monopoly is the “standard” contracts that realtors use, which are not freely available."

First, it is not a monopoly, and second even if it were, monopolies are not automatically illegal. In this country we don't smash proprietary barriers simply because we think it didn't cost that much or because we want access. That is something that goes on in parts of the world that we are trying to liberate.

BTW, a contract can be written on a napkin. To say their forms are a monopoly is just not cogent. Stop throwing around hot button words like monopoly. You sound like some news person throwing around terms like victim, or forced into this or that.

Why should MLS be open?

The current manner in which MLS is operated constitutes a de facto collusive monopoly. Monopolies are fine. Collusion to the end of stifling competition is not, and is supposed to be illegal in the US. Unless the trade groups representing the integrated MLS system are placed under specifically regulated monopoly protection, ala the telecoms or energy companies prior to 1980s, then they are in violation of US antitrust rules.

The only reason no one has prosecuted this successfully yet is that every time the Justice Department starts an action -- and they have one underway right now I might add -- Congress steps in and derails it. But Congress also refuses to establish any meaningful regulatory regime for real estate either.

The MLS "agreement" which members are forced to accept to participate in the system is itself a case study in anti-competitive behaviors.

Is the MLS cartel responsible for the fact that real estate transaction costs have failed to narrow over a period when all other financial transaction costs have dropped by an order of magnitude? The MLS reduces one of the larger cost components of the real estate transaction -- economic search costs. With those costs removed, were real estate competitive, transaction costs would have shrunk significantly. Instead we see the MLS used as a barrier allowing the real estate industry to capture economic benefit away from the consumer. That type of action is illegal in the US if it involves collusion, or various other anti competitive behaviors.

Finally, arguments appealing to "free markets" supporting the MLS status quo are nefarious. Free markets do not mean that companies and their trade organizations are free to manipulate and control markets to their own benefit. Free markets mean companies and their trade organizations are free to compete within markets. By this logic at&t should be allowed to tell half the country which web sites they can go to, and they should be allowed to force companies wishing to participate on their web to sign big nasty agreements to become "members" of their club in order to have a chance to sell their services to consumers.

Monopolies are not illegal in the US. They are legal so long as they are:

a) regulated.
b) natural and do not use their market power to the detriment of consumers.

The current MLS cartel fails both points.

*either a or b

Malcom,

Oh I CAN and I WILL use the term "monopoly" (as applied to the REIC) all I WANT!

If you don't think it's a monopoly, just try setting up shop as a "discount" RE firm and tell me about all the love you're gettin'!

I object to their "cartel" practices as much if not MORE than the prices that result from "agents", brokers, appraise-whores, lenders (and the title companies that sell your name) ALL sleeping in the same bed! You from this planet, or just visiting?

Person,

Hopefully the savings flow, not just the interest earned, would get one out of the rental trap.

What is low yield? 12 week Treasuries are around 5%. Is this what you consider low?

How does the MLS collude to keep you from reading Home Trader, or opening your newspaper? It is a tool, and most all of your points are unsupported. Again, you throw around terms like collusive monopoly or a cartel for the emotional aspect and don't support it. You then let you argument completely slide off the scale when you assert that they control the market, and have prevented discount brokers. Discount brokers like Ipay1 have literally entrenched themselves as a new standard, and if you think the MLS players can 'control' the market, then why are prices falling?

Randy H,

GREAT post. Your post should be included as evidence for these congressional hearings. I'd only add that the probable reason Congress has derailed any MLS cartel-breaking plans is that the NAR is one of the largest political donors in the US.

Randy H,

GREAT post. Your post should be included as evidence for these congressional hearings. I'd only add that the probable reason Congress has derailed any MLS cartel-breaking plans is that the NAR is one of the largest political donors in the US.

Malcom,

Did you read the part about "being from this planet"?

NFW discount brokers are getting so much as a toe hold against the 6% Cartel (TM). Not even close! They are black-balled, have their signs torn down, get threatening phone calls and are met with legislative stone walling like "minimum standard services". (All for the "benefit" of the consumer of course). Seriously, you just visiting?

You then lay down your choice of criteria for a monopoly to then shoot down to make an incorrect point. Yes, monopolies can exist if they are natural so why didn't you stop there. The MLS is not propped up in an unatural state. A company operating off of a patented or licensed technology is NOT regulated so your point fails entirely there. I still don't see a bunch of independent businesses being a cartel for using a database, and furthermore the free market has given you access through Realtor.com, hardly seems like a colluded cartel to me, but I guess if you assign a shocking term even something as benign as a lockbox seems like oppression.

DINO, you are falling into that trap as well. Now you are talking about specific illegal actions to then make it seem like it is industry practice to tear down signs, or blacklist people. Prove it in court and walk away rich, but at least argue your point honestly.

skibum,

Along with the NAHB, building suppliers, lenders etc. all working to make sure you and I "get the best possible products and services" naturally.

Btw, I know the moon walk was faked b/c the earth shown in the background was round *not square. I'm done, it's a monopoly.

DINO
"If you don’t think it’s a monopoly, just try setting up shop as a “discount” RE firm and tell me about all the love you’re gettin’!"

In this market, are you kidding me? But your key word is try. You have no guarantees, only the right to try. It's a scary world in business, and you don't succeed always trying to get the rules rewritten because you don't like something someone else has.

Malcom,

I used to go to school with a guy that made his arguments this way. Everyone would utterly decimate his flimsy and half-baked position and yet, the guy would walk away smug! I guess as long as you can walk away with your head held high you were right!?

It's a little bit late in the game to be debating this, and counter productive. The "debate" should be about how do we dismantle it and put something resembling sanity in it's place. I'm done now. It's a monopoly.

The word of the day is innovation, that's how you do it.

You don't even know the meaning of the word.

And no, the debate isn't what you think it should be. I see a pattern in your thought process, you remind me of many people I see who think life is about accomodating your needs.

Different Sean-

In the eyes of the IRS it would be taxable. Since no after the fact transaction of sale by buyer has occured, 'constructive rect' would quaility income and not quaility for any exclusion. I IRS would see this unearned income... someone giving you money under the table... Thats what Al Capone went to jail for, unreported income. Its that simple.

Dismantle it, who the hell are you?

Malcom

US Antitrust Law specifically prohibits any use of market power (which is a legally defined and quantifiable term*) to the detriment of consumers.

Natural monopoly, collusive monopoly, oligopoly, even monospony all are subject to this test.

Does the existence of MLS serve to harm consumers by keeping transaction costs high?

Does the MLS "cartel" (group of cooperating entities, if you wish) represent significant market power? What does MLS rank in the HSR index for its industry? This work has been done, and it is available.

Don't just cry "shocking terms", or "you're as bad as the media". Why don't you demonstrate to me to whom the economic benefits of reduced search costs have accrued. The consumer or entities colluding within the MLS system?

Or more simply, answer me this. Why do so many MLS member agreements requires specifically that the member *not* participate in any competitive networks or systems? Justify that for me and you'll be a long way towards convincing me the MLS is benign.

"you don't succeed always trying to get the rules rewritten"

What rules? Who exactly "wrote" these rules? You may be right, (especially when they're written in STONE) and kept that way by special int. groups. NAR Rulez, and there's not a thing anyone can do about it.

Enjoy your visit! :)

Randy, what's your source on the definition?
At least you lay out some tests, other people just throw the terms around like a profanity.

If your definition were true we would not have patents because those keep prices high, so I don't follow your definition out of the gate, but your point has structure so I'll follow along if you can establish a baseline.

By the way, Malcom. The US and Canadian paper industries had a very similar "trade organization" in the 60s and 70s. It served a different purpose, but it sought to create a sort of market clearinghouse for paper, timber and other related products. Members were required to abide by the trade organization's rules in order to participate in the system/market's use. And all the system/market was really was a big marketing machine, not unlike a manual MLS.

That system didn't even directly harm consumers, it only harmed downstream manufacturers who used paper products.

A number of people went to jail over that cartel because they were found to have colluded in the market's creation.

Companies are not allowed to work with each other to the end of controlling or manipulating a market if their goal is erection of barriers to entry.

"Dismantle it, who the hell are you?"

I'm the guy with the f@cking sledge hammer and crow bar! That's who!

Get to work boys!

The rules Dino, that you want rewritten are basically the foundations of the entire free market because someone has come up with something proprietary that doesn't suit your needs so you want to take it away under some very flimsey assertions.

No room for debate, DINO doesn't like it so there is no debate, the point of discussion starts with, how are we going to dismantle this thing?

Malcom

http://www.ftc.gov/bc/hsr/hsr.shtm

The Hart Scott Rodino Act. Originally applied to merger tests (and still mainly used for that), it also is considered by courts as an objective measure of market power.

No, patents are not the same. They are a specifically created form of market barrier by Congressional legislation. Patents are *not* a free market device. They are a *regulatory* device.

What I think you're missing is *innovation* is embraced, protected, and accommodated. Companies can "collude" to innovate. But, once that innovation has been widely adopted, and various patents have wound down, then the game changes. Beyond that point those companies can *not* continue to "collude" to prop up that old "innovation" as a barrier. At that point, it is no longer an innovation at all, but a barrier to entry and a means of keeping the benefits of that innovation from flowing economically to consumers.

Randy, you're dangerous. You actually know some things, but specifically how is a paper mill which is clearly violating antitrust, and an industry 'legally' using a tradegroup resource the same thing?

"foundations of the entire free market"

Oh that's a freaking laugh. If everyone "operated" like NAR you'd have to get pre-qualified and go through a "listing auto agent" before being able to shop for a car. Like Randy H said, show us how members can function within MLS AND use other resources or just give it a rest and come over to the dark side.

Some good research was done in the past couple years by the proponents of the CA Open MLS Act, which has been blocked by the CAR for the past couple years.

Section 2 of the last filing summarize the research well:

http://ag.ca.gov/initiatives/pdf/sa2005rf0145.pdf

-flimsey
+flimsy

Randy? Dangerous?

I've heard enough. Not so much as a "tweaking" needed here boys! Pack up and go home. 6% commission is fine.

Sorry Randy, I'm reading the act right now, and it has nothing to do with your original definition, though your point it taken on patents since I can see your perspective that they are established in regulation.

Are you currently working with an auto agent?

6% is fine as long as the market will bear it. Prices are higher now, 6% is not the norm anymore. MLS had nothing to do with 6%, was around way before and it used to be higher.

Malcom

I already answered that question, once theoretically and once with examples.

You're turn to respond to my points. Otherwise I'm happy to be dangerous if that means discrediting your unsubstantiated arguments. All you keep doing is saying "it's legal". I've given you the framework and tests used to determine that.

Show me.

Hint: You might want to check a 1976 CA Supreme Court ruling vis-a-vis MLS before continuing.

*Your

No... really I'm only too happy to pay it. You're right, we should ALL be glad it isn't higher.