Larson/Sobotka's VOW clearinghouse

Breaking down the NAR VOW policy
after the DOJ/NAR lawsuit settlement

On May 27, 2008, the United States Department of Justice (DOJ) and the National Association of REALTORS® (NAR) announced they had reached a settlement of the suit DOJ launched against NAR in September 2005. The final settlement, approved by Judge Kennelly on November 18, 2008, is embodied in a Final Judgment and two exhibits: Exhibit A, containing the text of the policy NAR must adopt, and Exhibit B, which permits NAR to amend its definition of "participant." This VOW Clearinghouse is intended to assist the real estate industry in implementing the new VOW policy.

How can I use this site?

I want an overview of the policy and what it means generally. Read the explanation below of what a VOW is. Then browse through the Policy Outline - Topical, especially its Overview section, which breaks the policy material out based on subject matter. You can focus in on topics that are of most interest to you.

What does the settlement mean to my company? Read the explanation below of what a VOW is. Then browse through the Policy Outline - Topical, which breaks the policy material out based on subject matter. Finally, use the Policy Outline - Checklists to identify the list of things you must/may do to prepare for the policy's implementation.

I just want to know what I need to do to get ready for the policy. Start with the Policy Outline - Checklists. Find the section relating to your company (MLS, broker, or AVP/technology provider).

I want to understand Section x of the policy. Use Policy Outline - Exhibit A to find the policy section in which you are interested. Click on the link to that section and read the policy section, our analysis of it, and questions and suggestions regarding it.

I want to compare the new VOW policy to the 2003 VOW policy or to IDX. Check out the Policy comparison matrix.

I want to discuss or understand a particular provision of the policy better. Visit the MLSTesseract blog for discussions of the policy (and other industry issues). Contact us to pose a question, and we'll add it to the list of those we plan to discuss on the blog.

Note that the settlement applies only to NAR and MLSs affiliated with it, though some broker-owned and independent MLSs are considering adopting at least portions of it to avoid unwanted attention from federal regulators. (For sake of simplicity, references to “MLS” from now on are to those MLSs affiliated with NAR, unless otherwise indicated.) MLSs will have a little over 90 days after November 18, 2008, to implement its provisions. If an MLS fails to implement the settlement, it will be subject to having its NAR insurance pulled, and NAR is required to report the MLS to the Department of Justice.

What a VOW is

For purposes of the DOJ/NAR settlement, a VOW is:

A web site, or feature of a web site, operated by a Broker or for a Broker by another Person through which the Broker is capable of providing real estate brokerage services to consumer with whom the Broker has first established a Broker-consumer relationship (as defined by state law) where the consumer has the opportunity to search MLS data, subject to the Broker’s oversight, supervision, and accountability. (See Policy Section I.1.)

Things that are not VOWs:

• A brokerage firm is not a VOW or vice versa. Any type of real estate firm can operate a VOW, and the fact that a brokerage firm operates a VOW does not indicate anything about the type of brokerage services it offers (other than it offers some of them online).
• An IDX site is not a VOW. IDX is an MLS policy under which a brokerage firm participating in MLS grants permission to other brokers participating in MLS to advertise its listings on their web sites, in return for their permission to advertise their listings on its web site. IDX sites are governed by MLS IDX rules, which are entirely unaffected by the settlement. Note that a brokerage firm can operate both an IDX site and a VOW at the same location on the web. (For example, the brokerage can show the consumer some information on its IDX site but then require her to register to see the information available only through its VOW.)
• Zillow, Trulia, and other national aggregators and commercial distributors of listings are generally not VOWs. (Note that these sites are not IDX sites either, and the data feeds that some MLSs provide to them are not “IDX feeds,” as they are sometimes erroneously labeled.) These companies may receive listing data from brokers or MLSs, but display of those listings is subject to the agreements between the brokers or the MLSs and the aggregators. Neither the settlement, nor any of the policies imposed under it, applies to any of these types of sites. Note that if Zillow or one of these other sites were to become licensed as a brokerage firm, become a participant in an MLS, and actively assist consumers in buying or selling real estate (or both), it would be eligible to operate a VOW.
• MLS public consumer-accessible web sites are not VOWs. (Note that these sites are not IDX sites either, as they are sometimes erroneously labeled.) A VOW is by definition the web site of a real estate broker. An MLS could operate a VOW only if it were acting as a real estate broker – we are aware of no MLS that claims the right to do so.

Thus, the settlement affects only VOWs operated by brokers participating in MLSs affiliated with NAR and not any other type of site, and then only subject to the policies discussed below.