Realty Web Site Probed
- By Jennifer Oldham
- Apr. 27 2000 00:00
LOS ANGELES -- The U.S. Justice Department has formally opened an investigation into possible anti-competitive business practices by the Internet's largest real estate web site.
Antitrust lawyers have asked the homestore.com to provide details about its business strategy, which includes exclusive contracts with many of the largest U.S. residential-property listing services.
The probe strikes at the longstanding real estate industry practice that keeps agents in tight control of residential sales listings. Although the practice was never challenged before, the industry's attempt to continue that control on the Internet has prompted new legal scrutiny.
Homestore officials denied the company has engaged in anti-competitive practices. Homestore has secured 95 percent of the U.S. home listings, or about 1.3 million entries, largely through the industry's largest trade group, the National Association of Realtors.
These listings are available on the realtor.com web site, in which NAR owns a minority stake. The 4-year-old realtor.com site has become the Internet's most popular real estate site largely because of its extensive database of homes.
The Internet has revolutionized the real estate industry by making listings of homes available on a national basis to the general public. Before the net, consumers could only access this information by visiting a local realtor. The realtor would tap into the area's multiple listing service - a nonpublic network - to pull up a list of homes available for sale.
Traditionally, these services have been closely guarded by local realty boards.
Critics allege these boards, and the NAR, remain interested in keeping these listings somewhat exclusive in an effort to protect realtors' 6 percent commissions.