I don’t like Redfin.com. Its “business” model consists of quietly diverting its agency responsibilities to listing agents while loudly rebating its largely unearned commissions to buyers. My experience of the president of the company, Glenn Kelman, is that he is an oily liar who will say anything to draw the fawning attentions of a gullible mainstream media. I don’t care about discount real estate brokerages in general — let the market sort them out — but Redfin’s modus vivendi is to exploit defects in the real estate industry — that it cannot get along without — while decrying those same defects in its tendentious and mendacious PR.
However: I believe in liberty before everything. Although Redfin will never enter most real estate markets — this being forbidden by a cost-structure that loses money on even the priciest of homes — it nevertheless has a valid complaint when it draws attention to anti-rebating and minimum-service real estate laws. The National Association of Realtors is an anti-capitalist cartel, as are state and local Realtors’ associations and local MLS systems. They are liars just like Kelman, loudly proclaiming their protection of the consumer’s interests while quietly enacting every Rotarian Socialist scheme they can think up.
The Northwest Multiple Listing Service has fined Redfin $50,000 and asked them to stop publishing a popular blog in which contractors for the online real estate brokerage posted reviews of Seattle area homes.
Redfin is appealing the fine, though it took steps this week to shut down the reviews on its “Sweet Digs” blog. With about 3,000 e-mail and online subscribers, the blog was written by 15 freelance reviewers who over the past five months posted reviews on about 1,000 homes in Seattle and San Francisco. The company says it plans to maintain the blog as a source of information on pricing trends and recently sold homes.
Redfin Chief Executive Glenn Kelman said he had no choice but to comply, noting that the NWMLS had threatened to shut off its daily feed of for sale listings.
“Access to listing data is our lifeblood and we just can’t afford to mess around,” said Kelman. “We have gone back and forth with the Northwest Multiple Listing Service and according to their rules you can’t advertise another broker’s listing. We argued that it was in no way an advertisement, it was really a review.”
Kelman said he was disappointed with the disciplinary action, noting that Redfin was trying to disseminate different perspectives on homes from what one might receive from a real estate agent.
This is absurd. Where any thoughtful person would understand advertising to mean that stuff that newspapers and broadcast outlets used to be able to sell before the internet came along, NWMLS seems to be arguing that any public mention of a listed property by a member is advertising. As with the idiot stunt being attempted by the Arizona Board of Appraisal with respect to Zillow.com’s “Zestimates,” the interpretation of the rules is so broad as to forbid free speech.
Presumably the same rule will be brought to bear against any NWMLS members who are using Zillow.com, Trulia.com or other on-line real estate portals to exhibit or discuss listed properties. We seem to be moving, by inches and hours, from the bogus interpretation of the First Amendment that commercial speech is not protected speech to an even more ludicrous idea: All speech is commercial speech.
This is a hideously stupid ruling on the part of NWMLS — not alone because Kelman is so good at milking these contretemps with the press and with the FTC/DOJ gangsters. Gresham might argue that bad local rules are driven out by even worse Federal regulations.
In any case, Kelman has proved himself oily enough to slip around rules before. Perhaps the Sweet Digs site can be spun off to its own separate operating entity, with an ad-supported business model. Amazingly enough, ordinary citizens have the right to free speech in America, provided they are not so foolish as to have joined the Northwest Multiple Listing Service.
Technorati Tags: blogging, disintermediation, real estate, real estate marketing, Redfin.com
Sock Puppet says:
Sweet Digs was always going to get smacked down (as will flagging other agents listings for sale on Zillow I think), I’m surprised it’s taken this long really. Now Kelman gets to claim he was fouled, and pull out the “Sweet Digs Gets Smacked Down” speeches.
Super timing by NWMLS by the way. This is of course in no way retaliation for the 60 Minutes piece.
/rolls eyes
I think the next move is as you say Greg. Just spin Sweet Digs out to a stand a lone and Redfin can just buy advertising on the blog. All the advertising if need be.
There is no way to police anyone going home and blogging about any home they saw. I mean what the hell can NWMLS do… ban the public from Open Houses? Strip searches for cell phones with a camera? :-/
-Athol
May 17, 2007 — 4:11 pm
T.R.E.G. says:
All the $10 words about MLS, DOJ, yadda yadda yadda aside,
I’ll just say I agree that private opinions on a privately owned site might be ok… maybe. But another Brokerage criticizing homeowner’s homes is pretty damn low if you ask me. How do they go about not insulting their OWN listings, much less another Brokers? I can’t see what was pulled down, but I can only imagine the reaction from a Seller if I promised to advocate for them and someone in my employ was publically critical of their home… online… subjectively. I don’t know that I disagree with the complaining Brokers on this one. Further, if you were in my home for no other purpose than to purchase it, I think I would file a criminal complaint. This is just bad bad bad business.
I read the full complaint yesterday without all of the other stuff thrown in about how bad NWMLS might be, so I am only speaking to the actual complaint.
May 17, 2007 — 4:51 pm
Tim says:
“Presumably the same rule will be brought to bear against any NWMLS members who are using Zillow.com, Trulia.com or other on-line real estate portals to exhibit or discuss listed properties”
I did not know that Trulia was involved in this practice. Last I checked they allowed for commentary on communities and such, but not on individual listings. If I’m wrong let me know–and show me where.
May 17, 2007 — 5:01 pm
Spencer Barron says:
They had this coming. The way they are reviewing these properties and posting them on the blog does make it look like it is their listings. That’s misleading and frankly a little unfair. I don’t think misrepresentation of any type should be a protected right. Especially if they already agreed in writing to respect the rights of other agents. If they don’t want to agree to how the MLS/IDX info should be used they shouldn’t have agreed to the rules regarding the information just to get access. Maybe they should try driving and collating their own database.
The biggest mistake they are making is not mentioning the brokerage then tying in the IDX data. In addition, they should take their own pictures instead of using what they took from the MLS/IDX.
I agree with the spinning of a seperate entity that you could represent as your client would probably get around much of this. That way it would just be your client being sued for copyright violation.
May 17, 2007 — 5:39 pm
Greg Swann says:
> In addition, they should take their own pictures instead of using what they took from the MLS/IDX.
My understanding from Kris Berg’s podcast interview with Redfin’s Glenn Kelman is that the photos on Sweet Digs were taken by the reviewer/employees when they visited the homes, not cribbed from the MLS/IDX system. Am I mistaken?
May 17, 2007 — 5:46 pm
Spencer Barron says:
>Am I mistaken?
It might of been their intent originally but when I cross reference their posts with a local agents IDX search, they have the same pictures. Maybe the writers got lazy.
May 17, 2007 — 6:22 pm
Marlow Harris says:
Greg,
I don’t like anyone to change the rules in the middle of the game, but these have always been the rules at our MLS, for at least 30 years.
You’re falling for Redfin’s PR if you believe that they are being selectively singled out for this infraction. They are not. As a matter of fact, they’ve been allowed to do this when other brokers have been getting fined left and right for just this type of thing.
The timing is unfortunate that this all came down this last week, however as mentioned, they were put on notice last year to take down that website and they haven’t complied.
The MLS is for Buyers agents but it’s also for Sellers agents and these kind of rules exist for a reason.
Personally, I’m GLAD that other agents and brokerages must contact me to advertise or even “discuss” my listings. It’s just a courtesy, if nothing else.
It’s a slippery slope to allow “reviews” of other agents listings… it IS like advertising, but wrapped in the cloak of blogging. Again, indicative of a certain CEO’s dishonest and rule-breaking nature.
Thanks for bringing this issue up for debate and discussion!
May 17, 2007 — 7:10 pm
Doug Lindstrom says:
Who Cares & Why All the Name Calling? Yes, Redfin(ito)blew a tremendous amount of smoke on 60 Minutes but does anyone really care? None of my clients have come bangin’ on my door since Sunday. How can we blame Redfin when they were given the opportunity by 60 Minutes to propogandize the real estate industry? In the end, all that really matters is value. If you want to give your clients back 2/3 of the commission, go for it. They will/should expect like for like. Discounted commissions equals discounted service. So who really cares?
Gregg, I respect your blog and your amazing ability to create a written picture but why all the name calling? Calling Redfin’s President an oily liar is like saying we are only in Iraq for oil. Many people really believe what they hear/say without having formed their own opinion/thought. Kelman is just severally mis-informed and saying that “the real estate industry is the most screwed up in the country” is just not true. Take his comments for what they are worth……. not much.
Be cool!
May 17, 2007 — 8:29 pm
Galen says:
Greg, the MLS rules have a slight bit of very twisted logic to them, given past complaints and lawsuits. In the Northwest MLS, you have to display all the homes in the MLS feed or none of the homes. This rule, in a sense, protects discounters whose properties might otherwise “slip through the cracks” on competitors websites or just be outright banned (similar to other mlses where you can opt not to share with discounters). The posts probably would have been fine if they just linked to the home, but they foolishly printed lots of MLS-derived details about each home in the blog posts.
I’m all for knocking down rules, but this one shouldn’t be that hard to get around. The MLS is serious about their rules up here, but my impression is that they don’t fine you until you’ve ignored their warnings for a while.
May 17, 2007 — 8:43 pm
Spencer Barron says:
From the posts I read, it certainly looks like they don’t visit the listings before posting. Early on it may not have been like this but now it appears they are merely commenting on listings they observe online.
It’s like having a food critic who comments on the food by looking at the menu. It doesn’t seem fair to the reader or the cook.
I think they have a right to do this if it is done right. But on the other hand can you imagine if Re/max, Coldwell Banker and all the other big brokerages started doing the same thing. They could have their agents submit posts dogging the listings their clients don’t like. That could stigmatize a property quickly if enough eyes were on it. Maybe it should be legal but perhaps not an advisable business practice. If anything, a reviews section of a blog might best kept to a “Clients Only” portion of a website. Especially if you are planning on being in business for a while.
May 17, 2007 — 9:28 pm
Brian Brady says:
Greg:
I love the libertarian bent but I think you’re wrong this time. Glenn can’t break the rules after signing on the dotted line that he promises to uphold them.
Intentionally doing what you know to be wrong is…well…(that word just gets us in trouble.)
Your solution of a “spin-off” to an advertising-based model is brilliant. Thank Greg, Glenn.
May 17, 2007 — 11:32 pm
Cathleen Collins says:
It seems to me that the industry finds it acceptable when agents who are farming areas send the neighbors what are essentially Hot Sheets, showing Just Listed and Just Sold houses. We all understand the implication is that the agent is somehow responsible for those transactions, thus representing himself as the neighborhood expert. I don’t understand how blogging about a house that’s listed by another agent steps over this line.
I have, in fact, blogged locally about a house I like, which is represented by another agent. As a courtesy, I asked for and received permission, but is there anything in the rules that say we can’t talk about other agents’ listings unless the other agents give permission? The thing that “nice” agents need to protect against is the prohibition of free speech by not-so-nice agents, because when we support coercion that favors a point of view we’re in agreement with, that empowers the authorities to take away rights that we believe we are due.
May 18, 2007 — 12:27 am
Greg Swann says:
> Glenn can’t break the rules after signing on the dotted line that he promises to uphold them.
Kelman manages to muddy the waters as only a moral idiot can, but I don’t believe the kind of content we call real estate porn constitutes advertising. In other words, while promoting days on market is a clear violation of MLS rules — even if the rule is stupid and anti-consumer — I think there is a bright-line distinction between advertising a property and talking about it publicly. I’ll probably write more about this tomorrow, because I think real estate porn is a vital component of the praxis of Realtor 2.0.
May 18, 2007 — 12:53 am
Steve Berg says:
My only question is – If the Redfin people can spend so much time going to other listings to review and critique them, why can’t they take their buyers with them?
May 18, 2007 — 6:44 am
Franz @ Blue Collar Agents says:
Greg, I like your idea of spinning it off into a separate entity. It would seem NWMLS would have no recourse in that case.
May 18, 2007 — 7:00 am
Reuben Moore says:
Steve – Don’t be silly, that’s what you’re for!
May 18, 2007 — 8:46 am
T.R.E.G. says:
This is an actual quote from a review.
“Forget about having guests over unless they are willing to sit in the oven, in which case you had best order in.”
Someone please explain to me why this particular policy does not protect the seller- the buyer has the right to go there and formulate their own opinion. This is just a non-starter for me, please tell me what I am missing that none of you seem to be outraged that anyone would even think this was good business practice.
May 18, 2007 — 9:05 am
Brian Brady says:
“I think there is a bright-line distinction between advertising a property and talking about it publicly. I’ll probably write more about this tomorrow”
It will make for a great weekend discussion.
May 18, 2007 — 10:01 am
Cynthia Pang says:
Sweet Digs is comprised of a few different kinds of posts, including in-person property reviews and daily updates. The pictures you may be comparing are for the latter.
All in-person property review pictures are taken by the reviewer. Often the reviewer photo and the MLS photo look very similar, if you look closely you might notice a car missing from the driveway or the shot was taken from a slightly different angle. Here’s an example (you can see the open house sign with balloons in the reviewer photo): from the Redfin reviewer; from the MLS.
Also, the reviewers are contractors, not Redfin employees.
I hope this clears up your questions.
Regards,
Cynthia Pang
Redfin
May 18, 2007 — 10:28 am
Greg Swann says:
> I hope this clears up your questions.
It doesn’t for me, at least.
Categorically, has Sweet Digs ever used a photo copied from an MLS listing without the expressed consent of the copyright holder?
It doesn’t go to the main issue — whether or not Sweet Digs is advertising — but it would muddy the waters of propriety if Redfin is stealing photos.
May 18, 2007 — 10:38 am
Sock Puppet says:
How does the reviewers being contractors not employees change anything? The blog is run and owned by the brokerage.
Unrelated: I’m sure this is just a coincidence of names, but I’m making note that the comments left by “T.R.E.G.” are not left by me. My old blog is called The Real Estate Guide, occasionally shortened to TREG.
I comment as “Sock Puppet” due to my continuing spam status on my actual name across WordPress blogs.
-Athol
May 18, 2007 — 10:47 am
Spencer Barron says:
Obviously they have used pictures from the MLS in some cases, otherwise Cythia wouldn’t have made the distinction.
Are the reviewers licensed or unlicensed? That would be my next question. Where I’m at (Colorado), a non-licensed person can’t offer “offer opinions, advice or interpretations, in addition, they should not distribute information on listed properties other than that prepared by a broker”. Now that might seem like a restriction on 1st amendment rights but it is definately a protection for the public. This includes the sellers, buyers and the agents. I wonder if it’s the same in Washington?
At a minimum they should make some sort of disclosure regarding their qualifications. That seems to be noticeably absent from the site.
May 18, 2007 — 11:19 am
Cynthia Pang says:
Greg,
In-person property reviews use reviewer photos (FYI – they always ask permission when taking internal shots), the others use MLS photos. Our legal counsel advised us in this direction. This isn’t what you are asking, but the NWMLS complaints were about the reviews, not the use of photos.
Athol,
I was answering Steve’s question, “why can’t they [reviewers] take buyers with them?” In addition to not being Redfin employees, they are not licensed real estate agents. The reviewers are real estate fanatics that live in the areas they review.
Regards,
Cynthia Pang
Redfin
May 18, 2007 — 11:25 am
Greg Swann says:
> the others use MLS photos. Our legal counsel advised us in this direction
Your legal counsel is an ass. The photos are certainly the copyrighted work product of the listing brokerage. Even if you want to claim that this is a colorable proposition, it’s foolish to try to take a stand on principle at the same time you look like thieves.
> the NWMLS complaints were about the reviews, not the use of photos
And, as you can see here, Redfin’s larceny gives your opponents a pretext to change the subject. I can’t imagine an advocate for reform in real estate more strategicaly inept than Glenn Kelman.
May 18, 2007 — 11:34 am
Greg Swann says:
> Where I’m at (Colorado), a non-licensed person can’t offer “offer opinions, advice or interpretations, in addition, they should not distribute information on listed properties other than that prepared by a broker”.
Surely the law you are citing says “for compensation.” In other words, an unlicensed employee or independent contractor for a real estate brokerage cannot do those things. Unlicensed people who don’t work for real estate brokers can say whatever they want, I’m sure, even in Colorado.
May 18, 2007 — 11:38 am
Sock Puppet says:
I think Steve is well aware the Sweet Digs bloggers aren’t licensed and that he was referring to Redfin buyer agents.
My point remains. Wether the bloggers are licensed or not, contractors or employees, the blog is clearly Redfin. The solution is as Greg stated orginially simply to spin it off as it’s own entity and buy advertising.
If your bloggers are actual real estate blogging fanatics they are already plotting this move anyway. 😀
May 18, 2007 — 11:39 am
Sock Puppet says:
I believe the Sweet Digs bloggers do get paid Greg, unlikely it’s great buckets of money, but it is “for compensation”.
-Athol
May 18, 2007 — 11:56 am
Greg Swann says:
> but it is “for compensation”
Yes, you’re right. I was conflating two distinct issues. FWIW, as always I think licensing laws are anti-consumer, but this is another good reason to spin off the site. Unlicensed real estate reviewers working on an ad-supported business model would be no different, in law, from the “Cool Homes” feature in the Arizona Republic.
May 18, 2007 — 12:04 pm
Spencer Barron says:
>Surely the law you are citing says “for compensation.”
Yes, unlicensed individuals could say whatever they want as long as it’s not for compensation. But they are receiving compensation since they were hired by Redfin. I think that makes the unlicensed assistants if it were Colorado. Even a separate entity may need to be licensed if they were driving business somewhere in exchange for compensation. Could be considered a referral fee in exchange for activities restricted to the often broadly defined definition of a ‘broker’. I’m not a lawyer but it seems plausible.
I had a similar idea to theirs but nixed it for a time to see how this panned out for them. Sweet Digs could have been done right without stepping on everyone’s toes. What a shame…but I love the topic.
May 18, 2007 — 12:32 pm
Kevin Boer says:
Am I seeing a pattern:
1) Industry resists technology-driven change.
2) Outsiders innovate and attract eyeballs and leads.
3) Outsiders sell eyeballs and leads to the industry, making a handsome profit.
4) Insiders complain about outsiders being interlopers
5) Go back to step 1.
This happened with online listings. It happened with displaying solds. Now it’s happening with blogging about properties. Socketsite, Curbed, and other well-written property review sites done by non-MLS members will end up attracting eyeballs and leads…which they’ll then promptly sell back to us.
Once again, we’ll be reaping the seeds of our own near-sightedness and paranoia about technology.
When are we going to learn?
May 20, 2007 — 10:18 am
San Diego Realtor says:
Greg,
First, I think Sweet Diggs is a great idea, it was just implemented Wrong.
I remember looking at it several months ago and seeing several issues.
1. As mentioned above, Redfin is Stealing other agents photo’s. Copy Right laws do not allow this, DMCA rules can have that site taken down.
2. Redfin IS advertising these listings without posting the Broker of Record information (a rules violation in probably EVER MLS). This gives the consumer a FALSE impression that these listings are actually Redfin’s listings and only after the consumer actually clicks thru to the Redfin site can they find the REAL listing agents info.
3. Redfin KNOWS the IDX Rules and Willfully Violated them. Let’s be real here. Redfin Knows that they were bending the rules. They know they were ripping off images. They Know they were advertising these listings without giving the Broker of Record information. AND they Choose to continue doing so to get some MORE FREE advertising.
4. The in-person property reviews are basically done under false Pretenses. IF these REVIEWERS entered during an open house (it is more likely that they called the listing agents and told them they were buyers interested in potentially buying the home), then they are actually even more annoying then lookie lou’s! The purpose of an open house is to have potential buyers view the home. How many Sellers would want to have a “REVIEWER” come in un-announced, take photo’s, and then write a blog article about their home. My guess most would NOT.
Some may argue that this is Free advertising for that seller, but is the seller given a choice? They should be, even if Sweet Diggs spins off the sellers should be given an opportunity to review the article before it is published.
Just my $0.02
Bob C.
May 30, 2007 — 12:21 pm
Frank Borges LL0SA- BLOG.FranklyRealty.com says:
I was kicking around the idea of allowing my clients and the general public to give commentary on listings in the Virginia Real Estate market.
I don’t get it. Why can a Realtor have an IDX website that showcases themselves as the recommended buyer agent, with a disclaimer “This listing is courtesy of XYZ agency” yet they can’t post comments about that house??
So a buyer agent can verbally tell somebody “don’t buy this house it is a dump”, but they can’t post that on the website? And taking it further, they can’t allow an open discussion on houses? That seems unreal.
Frank
July 23, 2007 — 4:02 pm
Dennis Blackmore says:
The whole MLS system is becoming absurb. They do everything possible to hinder technology advancement with their rediculous charges for feeds, etc. We need Reagan back to end this communist cold war.
May 23, 2008 — 3:12 pm
San Diego MLS says:
There is a huge difference between telling your client that vs telling the world that with the intent of poisoning the jury pool. Why would you feel the need to rip a seller’s property in such a way as to diminish their ability to sell it?
September 5, 2008 — 9:25 am