The U.S. Justice Department and National Association of Realtors have at last settled their long-running dispute over the competitiveness of virtual office Web sites. The settlement is good news for real estate, but VOW innovations may yet play out in surprising ways that neither the DOJ or NAR could have anticipated, and the settlement itself still leaves plenty of intriguing questions to ponder.

In case anyone’s still confused, a VOW is a Web site that functions like a "virtual" real estate brokerage office in the narrow sense that registered users can use the Web site to access just about the entire MLS database of for-sale homes. Only selected information that’s protected for business or privacy reasons is excluded. These Web sites enjoyed some popularity as new innovations some years ago. But the extended controversy over their use and allegations of anti-competitive practices stalled the VOW revolution in its early days.

The settlement involves wins, losses and compromises on both sides:

The biggest win for the Justice Department is the demise of NAR’s "opt-out" rule, which would have allowed brokers to withhold some or all of their listings from other brokers’ VOWs. This misguided rule was at the center of the controversy and its demise should be cause for celebration.

The biggest win for NAR was the DOJ’s concession that MLS members must be actively engaged in real estate transactions, though that requirement is defined broadly enough to include brokers who make an effort to be engaged in real estate transactions, but fail to close any deals over an extended period of time. That said, however, anyone who wants to use the MLS for any primary purpose other than brokering real property may be out of luck.

Another NAR win is a registration requirement that will restrict access to VOWs and enable brokers to keep records of VOW-registered e-mail addresses, which must be confirmed before the registrant can access the VOW.

And lastly, here’s one more question:

? How will MLSs survive the onslaught of innovation that, with luck, will take real estate well beyond VOWs, which may seem almost quaint compared with newer business models?

Critics already have suggested that parochial MLSs are themselves outdated or broken. And plans for new national, statewide and broker-owned property information services are already in the works. With those trends on the way, VOWs may be just the beginning.

Marcie Geffner is a freelance real estate reporter in Los Angeles.

Copyright 2008. Marcie Geffner. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission of the author.

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