Consumer Alert – Los Angeles consumers

Consumer Alert – Los Angeles Realtors are delaying distribution of sellers’ listing data to online real estate sites.

A Realtor controlled MLS in the Los Angeles area is intentionally delaying data feeds of property listing data to the top buyer frequented websites in the United States. Based on the information that we have reviewed, real estate agents and brokers, through their Realtor Association and MLS have acted in concert to thwart the successful business models of, and by tainting the data they send to them with an intentional 48 hour delay. This practice is harmful to consumers and competition.

InmanNews released a story on this in which we were quoted (click here to read that story).

We have a really hard time with this policy for a number of reasons. First, we really like the business models of (which takes For Sale By Owner listings) and to a lesser degree and (which do not) because they are consumer friendly and help sell homes. The crazy thing is that each of these online businesses actually help Realtors do their job better (many Realtors love these free online services) and they do it for free. Realtors are not out any money if Zillow finds a buyer because the Realtor still gets paid the listing portion of the commission.

So why would some Realtors not like them?   Get ready for this – because many Realtors and brokers want to collect a double fee even if it harms their own clients.  It is not good enough that Zillow gets the house sold, some Realtors and brokers (mostly the mega brokers who control the local Realtor Associations) believe that they are entitled to interfere with their clients’ interests in selling their home in order to improve the chances of collecting both the listing commission and the commission offered to the buyer’s broker (a double fee).

Realtors are conservators of their clients’ data and must serve their clients’ best interest above all others (especially their own). Realtors have exclusive access to client data only because of a state licensing privilege. We believe that violating those client and state duties to collect a double fee may constitute a fraud on both the consumer and the state licensing board. To do so in concert with the entire Realtor Association may be a form of price fixing and anti-competitive activity that would hopefully interest the U.S. Department of Justice, Antitrust Division.

When a Realtor undertakes to sell a client’s home, they pledge to sell that home for the highest price and in the shortest time possible. They do not pledge to manipulate the marketing of their client’s home  in order to pocket a double fee. When the broker collects both fees they also strip both the buyer and seller of their right to the broker’s representation in negotiations (click here to learn more about problems with dual agency).

Unfortunately, brokerage firms and Realtor Associations around the country have engaged in complex manipulations to fix or increase the chances of collecting double fees for years. The Los Angeles Realtors have taken this to a new level by involving the entire Realtor Association to act in concert to undermine online real estate sites. This does not just hurt Zillow, Trulia and, it harms the quality of the data that consumers rely upon to buy homes. Somehow we do not believe that the California Department of Consumer Affairs, Bureau of Real Estate intended brokers to use their state privileges to intentionally taint property data.

For years, Realtors and MLSs all over the country have engaged in another similar anti-consumer and possibly illegal practice of conditioning access to listing data to anti-consumer requirements. For example, most MLSs will only allow access to “their” data (its the sellers’ data) if the online sites agree to steer buyers back to the listing broker of the property. What consumers are not told is that practice improves the chances of a double fee for brokers and the forfeiture of broker representation for both the buyer and seller. That means do it yourself home buyers who click on the listing broker do not save money, but instead forfeit their right to representation without so much as a “disclosure.”  We believe this practice is also a misappropriation of state licensing authority.

Realtors have the opportunity to list in real time their clients’ listings for free on a multitude of websites with very little effort. These sites often have far more technologically advanced software than Realtor Associations and provide a real service to Realtors and sellers. We recommend that all consumers demand that their brokers immediately list their properties (that means no delay) on Zillow, Trulia, and the other major online free real estate portals so that they get great national and local exposure of their properties. 

Here is a video from the Today Show ON HOW NOT TO MARKET YOUR PROPERTY.

Advice for real estate consumers who are victims of this practice:

1. Contact us and tell us your story (especially if you would like to be a plaintiff in a class action lawsuit)

2. File a licensing complaint with California Department of Consumer Affairs (click here to access their webpage)

3. Add language to your listing contract requiring to list your property on Zillow and the other online sites immediately and to provide you with proof that was done.

4. Use this as a negotiating point to negotiate a lower commission.