The government is rooting about in the online world again.
The target is California-based Homestore.com, the country’s biggest residential property-listings service.
A spokesperson for the Justice Department’s antitrust division yesterday said it was “conducting an investigation into potentially anticompetitive conduct involving the online realty listings industry.”
Controversy has been brewing since Homestore negotiated exclusive deals with the brokers who provide real estate listings.
In a marketing scheme called the “Gold Alliance,” its board offered warrants at $1.60 each to real estate brokers to list homes for sales exclusively on Homestore’s realtor.com site.
Homestore went public last August at $20 a share and peaked in January at $138. Many brokers cashed in their warrants at a handsome profit.
Members of the National Association of Realtors list homes for sale in MLSs (Multiple Listing Services). These used to be printed monthly in large books like phone directories and were the bible of the residential realty industry. While the Internet has made viewing listings easier, the market for the information is still settling.
“Any company that caters to a policy of exclusion in the New Economy is doomed,” said Jim Kim, CEO of New York’s luxury property site, corcoran.com.
When agents get a listing from someone selling a home, they are supposed to help the seller advertise their homes as widely as possible. In some cases, they may not have been aware that the MLS limited where listings could be seen on the Web.
“This kind of government probe hurts the whole industry,” said Blanche Evans, publisher of Agent News, a Web-based news service for realtors. “But it hurts the everyday agent most – the person on the front line with the public. If they did a deal with Homestore, they have to explain why the listing is only on one Web site when they may not even have known what was going on.”
Homestore’s CEO, Stuart Wolff, denied the company had anything to worry about. “We are cooperating fully,” he told The Post. “They asked for broad-based information. We don’t really know what they are interested in.”