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The Empire Strikes Back

Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. ()

May 17th, 2007 · 10 Comments

It was inevitable. First this, and now word from the Seattle Post Intelligencer is that the NWMLS is fining Redfin $50,000 because its “Sweet Digs” property review blog apparently breaks “rule 190″ — you know, the one that says you can’t “advertise” another agent’s listing without their express permission.

It was only a matter of time before the old guard found something else with which to get back at Redfin. The timing of this announcement, coming on the heels of Redfin’s 60 Minutes coup, may be coincidental — though we’ll never know for sure. I’m sure the NWMLS has been on Redfin’s case for a while, but it’s not hard to imagine some cigar-chomping good ol’ boys from the Realtor association getting together right after the 60 Minutes segment and chortling to themselves, “Ok, enough is enough. Let’s see…how about rule 190?”

And we wonder why the real estate biz has such a bad rap? How about because instead of competing with different business models in the open marketplace, we try to shut them down with stunts like this?

Defenders of the NWMLS’s action will say, “But they were putting inaccurate information up! They were advertising others’ listings! They were panning some homes!”

But here’s the real point: many of the ridiculous MLS rules are based on what you might call the mushroom theory of consumers: the notion that it’s best for us in the industry if we keep ‘em in the dark and feed ‘em crap. Rule 190 is no exception. Another common ridiculous rule — which apparently has also led to Redfin wrist-slap — is the prohibition on displaying “Days on Market” figures. The only possible reason for that rule is to maintain Realtor hegemony over critical pieces of data.

The irony is that public Realtor-affiliated sites themselves sometimes break these rules as well, but with no consequence. Example: well before our local MLS finally allowed displaying sold listings on web sites, Realtor.com was doing exactly that. I called our MLS to “report” Realtor.com and was basically told “Well, they’re not in violation because they get their sold data from a non-MLS source, so they’re not really displaying sold listings, they’re displaying sold homes!” Huh?

So what options does Redfin now have? I see several:

  • Continue with Sweet Digs in its current form, but explicitly ask each agent for permission to showcase their listing. This probably won’t work, as 99% of agents probably won’t give permission.
  • Change Sweet Digs into a subscription-only model.
  • Set up a separate entity to host the content, with very little reference to Redfin.

This raises some issue for this blog as well, since I often do property reviews. I do typically — but not 100% of the time — get permission from the listing agent before mentioning a home, and I’m careful to attribute the listing agent, and provide a link to the property’s web site and/or the MLS listing.

To agents here in Silicon Valley: If I’ve mentioned one of your listings without your permission on this blog, please let me know and I’ll modify the offending article. I completely understand that you don’t want your listing exposed to as many potential buyers as possible.
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Tags: Real estate · Redfin

10 responses so far ↓

  • 1 Ben K // May 17, 2007 at 11:21 pm

    Rule 190 is very contentious up here. Many, many agents violate Rule 190. Some get caught and pay thousands of dollars in fines, as much as $7,500 for a single agent, so $50K for a brokerage isn’t necessarily out of whack.

    Every month Rule 190 violations/fines are mentioned in the MLS disciplinary report, though most agents get away with it. This isn’t about Redfin…it’s about the widespread violation of Rule 190. Look at Craigslist. A very high percentage of listings are posted by buyers agents looking to lure a buyer, not by the listing agent.

    But, Redfin being Redfin, gets the PI to report about it. They’re not the only one who got caught (e.g. singled out), they just get press coverage.

    FYI - NWMLS is broker owned, not Realtor owned.

  • 2 Glenn Kelman // May 18, 2007 at 4:18 am

    Hey Kevin,
    Nice post, as always. You took the title for the blog post we were going to write. As for the cigar-chomping folks at the NWMLS, this really wasn’t a reaction to the “60 Minutes” piece, as they had been on our case for a year and things had come to a head a week or so ago…

  • 3 Redfin Fined 50 Large (Seattle) at Condo Blog // May 18, 2007 at 4:45 am

    [...] TransparentRE, 3Oceans and I am sure many more today - try a Google Blog Search for Redfin. Permalink   by Anthony Longo   May 18th, 2007 in Condo News, Real Estate &Technology. [...]

  • 4 Al Iance // May 18, 2007 at 8:09 am

    Rule 190. Order 66. Empire, indeed. :-/

  • 5 Real Central VA - Tracking the Charlottesville and Central VA real estate market and more » What are the limits of the MLS? // May 18, 2007 at 10:30 am

    [...] Kevin has even more here. The more Realtors hold fast to their archaic practices, the more it will appear that they are tilting at windmills from times past.  [...]

  • 6 Sinster Sock Puppet // May 18, 2007 at 3:33 pm

    Actually Kevin you reviewed one of my properties a couple months back. The listing expired and another agent got it. The good news is that one of your readers called me about it because they googled the address and I managed to work the buyside plus we hammered the seller on price!

    Thanks Kevin!

    -Athol (okay a little evil I know, but you get the point)

  • 7 RE Agent in CT » Sweet Digs, Sour Grapes and Compost. // May 18, 2007 at 4:08 pm

    [...] It was always going to happen. Greg, Kevin  and Inman have covered it well enough, so I’ll skip the rehash. [...]

  • 8 RE Agent in CT » Sweet Digs, Sour Grapes and Compost. // May 18, 2007 at 4:08 pm

    [...] It was always going to happen. Greg, Kevin  and Inman have covered it well enough, so I’ll skip the rehash. [...]

  • 9 Tony May // May 20, 2007 at 6:28 pm

    Well, it’s one thing to run a business model like theirs - but to call-out the industry on national TV is simply going to get you in trouble. Doesn’t matter what industry you do that in. There are cigar-chomping “good ‘ol boys” in every single industry.

    There are certain things in each industry - specifically referencing real estate here - that the big players will let slide even if it (technically) violates a legitimate rule. Generally speaking, it’s a “no harm, no foul” approach to doing business. Does a Rule 190 violation generally hurt anyone? Nope. It gets a listing more exposure.

    Go on national TV and blab about what you’re doing…and a small Rule 190 violation is gonna get you. Remember, Al Capone wasn’t busted on murder charges - it was tax evasion.

  • 10 Kevin Boer ~ return of the Jedi at Real Estate Logic // May 21, 2007 at 8:04 am

    [...] Kevin over at 3 Oceans has posted another great article regarding the real estate business as usual model vs. high tech information. There is no doubt that the business as usual WILL lose. And we will all be better off. If your a consumer, buyer, seller or agent click on over and read his full post “The Empire Strikes Back” [...]

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