This month, I would like to provide you with an update on where we are with the case filed against Realcomp by the FTC and what we can expect next.

The eight (8) day trial concluded on June 29th. At the conclusion of the trial, the court required both sides to file several documents. The Administrative Law Judge also ordered the parties to appear in court on September 6th for closing arguments. From there, an order by the Judge is expected to be delivered in mid-October, 2007.

A summary of the respective positions follows: Realcomp’s rules state that only exclusive right to sell listings will be distributed to public websites and included in the IDX feed. The FTC claims that brokers with exclusive agency listings, along with their sellers and potential buyers, are harmed by limited exposure based on these rules. Realcomp’s position is that an exclusive agency arrangement preserves the right of the seller to procure a buyer for the property, and in doing so, frees the seller from paying any commission. For this reason, we believe that exclusive agency listings can in essence be considered "For Sale by Owner" properties. Therefore, by sending exclusive agency listings to public websites or IDX sites, there is potential for no compensation to an agent representing a buyer if the buyer can negotiate directly with the seller. Further, if the buyer can negotiate directly with the seller, that seller benefits from advertising paid for by Realcomp subscribers. The Administrative Law Judge will determine which position is legally correct.

Also at issue, was the listing type default search criteria included on the Quick Search screen on Realcomp Online^®. Since the Realcomp Board of Governors had previously decided to modify these default settings, this is no longer an issue of contention. You will be receiving information in a separate communication regarding these particular system modifications that Realcomp has scheduled for implementation during the fourth quarter.

The MLS was created with a specific purpose in mind, by REALTORS^® and for REALTORS^®, to facilitate cooperation and compensation between REALTOR^® member participants. Some would like to redefine the purpose of the MLS and dictate how it should operate under the premise of protecting choice for consumers. The Realcomp Board stands firm in the belief that the purpose of the MLS has not changed in all the years of its existence and that consumers have more choices today than ever before. This applies to the buying and selling of goods, including real estate.

We will update you on the results of this landmark trial once a verdict is reached. In the meantime, please let me know if you have any questions or comments. I can be reached by phone at 248-699-9120 or by email.

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