<HTML> <HEAD> <title>WebForm1</title> <meta name="GENERATOR" content="Microsoft Visual Studio .NET 7.1"> <meta name="CODE_LANGUAGE" content="Visual Basic .NET 7.1"> <meta name="vs_defaultClientScript" content="JavaScript"> <meta name="vs_targetSchema" content="http://schemas.microsoft.com/intellisense/ie5"> <META http-equiv=Content-Type content='text/html; charset=UTF-8'> </HEAD> <body > <TABLE id="Table1" cellSpacing="1" cellPadding="1" width="100%" border="0"> <TR> <TD><b>Comment Number:</b></TD> <TD>518795-00014</TD> </TR> <TR> <TD><b>Received Date:</b></TD> <TD>10/10/2005 6:13:57 PM</TD> </TR> <TR> <TD><b>Organization:</b></TD> <TD>SELLSIUS LLC</TD> </TR> <TR> <TD><b>Commenter:</b></TD> <TD>Ferrara, J.</TD> </TR> <TR> <TD><b>State:</b></TD> <TD>DE</TD> </TR> <TR> <TD><b>Agency:</b></TD> <TD>Federal Trade Commission</TD> </TR> <TR> <TD><b>Rule:</b></TD> <TD>Competition Policy and the Real Estate Industry</TD> </TR> <TR> <TD><b>Docket ID:</b></TD> <TD>To Be Added</TD> </TR> <TR> <td colspan='2'>No Attachments</td> </TR> </TABLE> <hr/> <b>Comments:</b><br/><br/> Subject: Ancillary income generated to brokers from obtaining a property listing &amp; the Broker's Code of Ethics A selller who gives a broker a listing to sell his asset does so for these purposes only: (1) to sell (2) for the best price/terms (3) to a qualified buyer (4) as quickly as possible. It is also understood that the broker will use its best efforts to advertise &amp; show the property The Code of Ethics, whether by state law or member organization, states that a listing broker owes a "fiduciary duty" to the client centered around the above principles, as well as full disclosure of information. In practice, the listing is used not only for the above purposes BUT ALSO for the broker's purpose in getting leads for future business- i.e. more listings, which results in income to the BROKER only. If a broker (read MLS) so desires, he might charge a fee to a contracted third party eg. Lender, for the leads the listing has produced. All this ancillary income goes to the broker or MLS &amp; not to the seller. In fact, the seller is not infomed of this ancillary income his or her property has generated &amp; probably has not consented to it under most contracts. The problem is not that brokers/MLS get the incillary income per se. The problem results when the ancillary income purpose conflicts with the Code of Ethics fiduciary duty &amp; the seller's purposes for giving the property to list (to sell). In other words, if the listing is not fully disseminated to parties who will facilitate sale of the property (or restricted only to desired recipients) because it will affect this ancillary income, the broker may not be acting in accordance with his fiduciary duty to the client. The broker (MLS) can then be said to be putting its own interest in this income ahead of its client's interest in wider exposure for sale. The debate should not be centered around who "owns" the listing because that translates into who owns the right to the ancillary income--which for some reason is never argued to be the sellers---and diverts attention from what truly ought to be the debate, how to facilitate sale of property through the free dissemination of factual (copyright free) listing data with truthful disclosure of the listing broker source to insure that the listing broker is properly compensated. </body> </HTML>