Much of the focus of the July 24th Special Meeting of NAR’s Board of Directors will be on the Operating Agreement between the REALTORS Information Network (RIN) and RealSelect, Inc (owned by Move, Inc).

RealSelect acquired the rights to operate the Realtor.com asset after the August 26, 1996 Special Meeting of the NAR Board. Negotiations led to formalizing an agreement on November 26, 1996 – what is commonly known as “the thousand page agreement.” Here’s a copy of that initial agreement, without the many pages of Exhibits and Schedules.- Realtor_com_operating_agreement

Among some of the restrictions placed on RealSelect (Homestore) were:

*No “For Sale by Owner” properties may ever appear on REALTOR.com.
*NAR remains the sole owner of the REALTOR.com site and trademark.
*The use and presentation of property listings remain under the control of NAR.
*Homestore cannot market any property data or information derived from the data without NAR approval.
*Advertising on REALTOR.com is strictly controlled. For example, no REALTOR® detailed listing will ever contain a banner from a competitor. Advertisers are limited on the amount of space they can occupy on the site at any given time.
*NAR must approve changes to the design or text of the REALTOR.com home page.
*Homestore must conduct all of its real estate related business in Real Select, where NAR has substantial control. Should Homestore ever be acquired by a real estate related entity, RIN has the ability to terminate its agreement for the operation of REALTOR.com.

When Homestore went public August 1999, they found that the SEC required disclosure of Risk Factors in annual filings.  Of course, the Operating Agreement limitations had to be covered.

“Our operating agreement with NAR contains restrictions on how we can operate the REALTOR.com website. For example, we can only enter into agreements with entities that provide us with real estate listings, such as MLSs, on terms approved by NAR. In addition, NAR can require us to include on REALTOR.com ® real estate related content that it has developed. Our operating agreement with NAR also contains a number of provisions that restrict how we operate our business. For example:
•             we are restricted in the type and subject matter of advertisements on  REALTOR.com ;
•             NAR has the right to approve how we use its trademarks, and we must comply with its quality standards for the use of these marks; and we must meet performance standards relating to the availability time of the REALTOR.com ® web site.”

Fourteen years later on September 10, 2010,  the Operating Agreement was amended  to help “create and produce innovative technologies, and content modification standards that streamline the approval process to drive more rapid and competitive improvements to Realtor.com.” The amendment also gave Move the authority to syndicate listing data to third parties according to each MLS and broker’s permission and instructions. Click here for a copy of the Amendment. – opertaingag

Now we are  seventeen years later and it is time again to look at making the Operating Agreement adapt to the changes in the highly competitive online world. For all but the last few years, realtor.com has ranked #1 in the online real estate space. Today they are #3. The NAR Directors are going to take a look at whatever steps they can take to support efforts to bring Realtor.com back to #1.