The Hamptons are one of the last hold-outs in the US for instituting a marketwide Multiple Listing Service (MLS) for the purpose of sharing and marketing listings.
In recent years, MLS systems nationwide have not only been used for sharing listings among brokers, but the real estate industry itself, through Realtor.com and many outside vendors, such as Streeteasy, Trulia and others, have built marketing systems around the MLS data feeds that give MLS listings wide exposure to many potential buyers.
You’ll note that Realtor.com, the countries top visited real estate website, only has 122 listings for Southampton because so few Hamptons brokers are members.
Trulia has 1126 Listings for Southampton and Streeteasy has 614. So, who’s to know exactly how many listings there really are? This has maintained the status-quo that keeps buyers on a tight leash and competition out.
Also, through what is called an Internet Data Exchange (IDX), brokers in MLS’s are permitted to put each others listings on their own sites, making it easier for buyers to look for listings using the agent or agency they wish to work with.
Then to top it all off, there are Virtual Office Websites (VOW’s). On May 27, 2008, NAR and the U.S. Department of Justice reached a favorable settlement, concluding a two-year DOJ investigation (followed by two and a half years of litigation) regarding NAR’s multiple listing policy as it pertained to the display of listings from the MLS on brokers’ virtual office Web sites, or VOWs.
With no MLS, there is no IDX and there is no public data sharing, so here, each brokerage is limited to haing their own listings on their sites. This encourages buyers to go to their websites and get locked in to getting information from that brokerage, increasing the chance that they will sell their own listings and get both sides of the commission. It also favors the big brokerages, some of whom have gotten there by simply buying up other smaller brokerages, because they have the most listings on their sites. Even Manhattan has a listings sharing service through the Real Estate Board of New York that has resulted in VOW’s
If this sounds complicated, it really is. You see, real estate brokers, like most business owners, like to have control of their inventory. And even while setting up rules and systems to promote their listings widely, they still hope to protect the goose and keep as much of the potential earnings on each sale for themselves. That’s human nature, but it may not be legal.
see the NYPost piece below…
The US Justice Department has launched a preliminary probe into the business practices of top Hamptons real-estate brokerage houses, including their use of an expensive listing system that may block smaller companies’ access to high-end properties, The Post has learned.
List Service for Properties in the Hamptons Is Scrutinized
New York Times
By CHRISTINE HAUGHNEY Several Hamptons real estate executives said Tuesday that they had been contacted by Justice Department officials seeking information …