Realtors in N.H. file complaint over website

As the Internet rewrites the rules for buying and selling homes, the New Hampshire Association of Realtors has filed a complaint with the state against the real estate website ISoldMyHouse.com for allegedly acting as an unlicensed broker.

Officials at ISoldMyHouse.com, based in Danvers, denied the allegations, saying their website is similar to a newspaper that advertises homes for sale. It charges for ads but doesn't get sales commissions.

General manager John F. Gallagher said the complaint was motivated by realtors' fears of losing commissions as Internet rivals of traditional brokerages offer consumers more choices. The Internet, he said, has made realtors ''superfluous" in many cases.

''This is a restraint of trade," Gallagher said of the complaint. ''It's sour grapes. It's totally frivolous."

ISoldMyHouse.com, according to realtors, is not just about advertising; it also charges fees, offers advice, and matches sellers to buyers. Such activities fall within New Hampshire's definition of a broker, realtors said.

''Their website describes them as a 'virtual real estate agent,' " said John M. Sullivan of Preti Flaherty, the realtors' law firm. ''What ISoldMyHouse.com does is end up misleading consumers by telling them that the process of selling a house is a lot simpler than it really is."

In their complaint to the New Hampshire Real Estate Commission, realtors asked the commission to ''protect the public" by requiring ISoldMyHouse.com to repay fees collected from New Hampshire residents and by imposing sanctions ''commensurate with the scope of violations."

The Massachusetts Association of Realtors is not contemplating legal action against ISoldMyHouse.com, said its president, Judy Moore.

''It's kind of surprising it's New Hampshire, the Live Free or Die state where capitalism supposedly flourishes," Gallagher said.

Sullivan said realtors decided to take action after hearing complaints from customers who said they had bad experiences with ISoldMyHouse.com.

When ISoldMyHouse.com was launched in 2000, it was a free service; about a year ago, it began charging $95 to sellers wanting to advertise on the site. Advertising packages, which can include ads in The Boston Globe, cost $295 and up. Charging a fee underscores the case that ISoldMyHouse.com acted as a broker, Sullivan said. If ISoldMyHouse.com had continued to be free, he said, ''It might have been a different analysis."

ISoldMyHouse.com is a sister company of 1-800 East/West Mortgage Co. House-hunters who see an ad on Isoldmyhouse.com and contact the site are told they need to be preapproved for a mortgage by a lender before they can talk to the seller. If the buyer is not preapproved, they're encouraged to contact East/West for mortgage services.

In their complaint, the New Hampshire realtors noted that East/West has ''a significant track record of consumer complaints."

In June, East/West agreed to revise its procedures for fee disclosures after federal and Massachusetts regulators determined its practices violated regulatory guidelines. As part of the agreement, East/West's parent company neither admitted nor denied any wrongdoing. It paid no fines. Gallagher said East/West does a huge volume of business and that complaints represent only a tiny percentage of transactions.

Typically, realtors offer consumers a wide range of services in return for a commission. Because a home transaction is such an important financial decision, consumers need guidance from trained professionals, realtors argue. But with the Internet, which makes it easier to gather information and market homes, some consumers have opted to set their own sales prices, buy ads, and host open houses.

Some sellers are also looking for new kinds of firms that offer a menu of real-estate services on a fee basis as an alternative to a realtor who charges a commission.

Traditional real estate firms are ''seeing their margins eaten away by these new business models," said Bill Wendel, a licensed real estate broker and founder of the Real Estate Cafe in Cambridge, which offers ''a la carte" real estate services.

Moore disputed that. Though she declined to give specifics, she said new business models account for only a fraction of transactions. Meanwhile, traditional realtors are embracing the Internet as a way to offer their customers better service, she said.

Chris Reidy can be reached at reidy@globe.com.