COLUMBIA, S.C. - The federal government and a property-listing service in South Carolina's capital city area have agreed to change how real estate brokers do business, which should lead to more choices and lower fees for consumers, government attorneys said Monday.
The U.S. Department of Justice filed a lawsuit a year ago, saying Columbia-area Consolidated Multiple Listing Service Inc. illegally stifled competition and prevented fees for home buyers and sellers from going down.
The settlement goes out to public comment before a judge can approve it. The agreement "will remove unlawful impediments to competition for real estate brokerage services in the Columbia area and will lead to more choices and lower brokerage fees for South Carolina consumers," said Christine A. Varney, the assistant attorney general in charge of the agency's antitrust division.
Real estate agents and others groups operate similar services around the nation that offer key information about homes on the market. The listing service's database in Columbia was open to the public, but people had to become members to access enhanced information - such as whether a household pet was prone to biting, when a home should be shown and what time children might be at home from school.
The Justice Department's antitrust division said in order to use the Consolidated Multiple Listing Service Inc., brokers were required to offer identical services, couldn't operate from home offices and had to pay $5,000 initiation fees that far exceed the costs entailed in becoming members.
It forced members to use one form for their services, barred home sellers from saving money by doing some of the work traditionally done by brokers and disclosure of details of their own business.
The agreement was announced as the National Association of Realtors reported sales of previously occupied homes were rising faster than expected and the Commerce Department said construction spending posted its best gain since September instead of an expected decline.
The settlement forces major rule changes. For instance, the service has to allow membership for any broker in charge and can't exclude members based on their business models; it must repeal rules that let home sellers choose which services a broker performs to save money and drop the practice of requiring a single contract form. The Justice Department can review and enforce the settlement for 10 years.
Consolidated Multiple Listing Service lawyer Ed Woodward said that some of the changes brought up in the original lawsuit already have been made. For instance, the service now allows members to work from their homes instead of standalone offices.
And two rounds of mediation also kept the requirement that members use its key boxes. "We kept the mandatory use of our state-of-the-art lock boxes," Woodward said. They tell when and who had access to a property so "you know who's been in your house."
Woodward said the changes will allow members from other areas to use the service. But he doesn't expect much in the way of fee reductions. The settlement should be final this summer, Woodward said.
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