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The Zillow.com shake-down: How the other shoe will drop . . .

Lloyd Frink at Zillow.com is playing CYOA games, and Joseph Ferrera at Sellsius&176; is looking for truth from a horse that’s all ass, but here is how the other shoe will drop, in the Zillow.com shake-down, when it does:

Watch for a joint announcement of something that Zillow.com and NCRC will do together. There will be a window-dressing “solution” to the manufactured dispute, perhaps a more robust disclaimer. This, whatever it is, will be nothing but a show horse. The pay-off will be in the joint program, whatever form it takes.

Clint Bollick or someone like that might file a suit solely in pursuit of a policy change. The NCRC will expect to get money or power or both. They’re playing straight out of the Jesse Jackson playbook, and they will not stop maligning Zillow.com until they get what they want or until their tactics are fully exposed.

It would not surprise me if the payoff came from the personal fortunes of Rich Barton and Lloyd Frink, to keep the VCs and the SEC out of it.

When you see a press release like the one I cited yesterday from NRT, you’ll know the deal is done. Read that press release carefully and you should be able to figure out what the payoff is. Learn to read everything that carefully and you will discover how America works.

There is an alternative: They could stand firm. The web has fairly successfully held itself aloof from the way America works for the rest of corporate America. To my knowledge, this is the first time a purely web-based company has been shaken down in this manner. Because of this — because the web has been exempt from this kind of officious thievery so far — it is a matter of particular moment whether Zillow.com is able to hold the line.

I would love it if they did, but I honestly don’t expect it. Except for people like Steve Jobs and Mark Kuban, corporations are run by cowards. Most likely, they’ll try to save face with a seven-figure bribe, then set up a fund to buy off future pirates, who will swarm not just Zillow.com but every set of deep pockets on the net.

All of this should be completely sickening to you, but it is not entirely without benefit: If you should learn to read between the headlines when these kinds of stunts are pulled — dozens of times a year — at least you will know what’s going on around you. Much good may it do you to try to change it, but at least the scales will have fallen from your eyes.

Godspeed, Zillow. Godspeed, Barton and Frink. If you will fight this, I’ll put my shoulder beside yours to the bitter end. This technology we celebrate has made it next to impossible for ordinary thugs to steal anything. Let’s find a way to deploy it against the thugs in the Brooks Brothers suits…

 
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  • 13 comments

    13 Comments so far

    1. jf.sellsius October 28th, 2006 12:36 am

      IMO, you can only successfully shake down someone who has something to hide or fear. Since Zillow has nothing to hide or fear, what reason do they have to pay off anyone, whether they wear Brooks Brothers or black leather? To save face? For whom?

      >>I would love it if they did, but I honestly don’t expect it. Except for people like Steve Jobs and Mark Kuban, corporations are run by cowards. Most likely, they’ll try to save face with a seven-figure bribe….
      >>It would not surprise me if the payoff came from the personal fortunes of Rich Barton and Lloyd Frink

      Sorry, but I don’t see Zillow as run by cowards or bribeable. And I really must be naive to think either Barton or Frink would even consider paying that bribe.

      I may be the horse’s ass in the end & I’ll eat crow but I’ll wait before I judge. Rather than speculate, I picked up the phone and called David Berenbaum (who filed the complaint)& spoke to him at length, as I have engaged David G. to get as much information as I can.

      In the end, I can give a horse or rodent’s ass about NCRC or Barton & Frink Inc. It’s the consumer I have my eyes on & their perception of what real estate professionals do & the expertise they provide over AVM. And I think most real estate professionals are concerned with what consumers (prospective clients) think. They are the ones they engage on this issue, not Rich or Lloyd or the horse NCRC rode in on.

    2. Greg Swann October 28th, 2006 6:49 am

      The Jesse Jackson shakedown in its modern form was perfected by Ralph Nader. Karl Marx used to run the same game against individuals to provide for his own support. Around 40% of the funding of the American left comes from running games like this.

      You could learn a lot by going over past instances of what you thought were “public issues” “brought to light” by “non-profit groups.” I already showed you how NCRC shakes down banks.

      Crucially, the new CRA regulations also instructed bank examiners to take into account how well banks responded to complaints. The old CRA evaluation process had allowed advocacy groups a chance to express their views on individual banks, and publicly available data on the lending patterns of individual banks allowed activist groups to target institutions considered vulnerable to protest. But for advocacy groups that were in the complaint business, the Clinton administration regulations offered a formal invitation. The National Community Reinvestment Coalition—a foundation-funded umbrella group for community activist groups that profit from the CRA—issued a clarion call to its members in a leaflet entitled "The New CRA Regulations: How Community Groups Can Get Involved." "Timely comments," the NCRC observed with a certain understatement, "can have a strong influence on a bank’s CRA rating."

      The Clinton administration’s get-tough regulatory regime mattered so crucially because bank deregulation had set off a wave of mega-mergers, including the acquisition of the Bank of America by NationsBank, BankBoston by Fleet Financial, and Bankers Trust by Deutsche Bank. Regulatory approval of such mergers depended, in part, on positive CRA ratings. "To avoid the possibility of a denied or delayed application," advises the NCRC in its deadpan tone, "lending institutions have an incentive to make formal agreements with community organizations." By intervening—even just threatening to intervene—in the CRA review process, left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers. A radical group called ACORN Housing has a $760 million commitment from the Bank of New York; the Boston-based Neighborhood Assistance Corporation of America has a $3-billion agreement with the Bank of America; a coalition of groups headed by New Jersey Citizen Action has a five-year, $13-billion agreement with First Union Corporation. Similar deals operate in almost every major U.S. city. Observes Tom Callahan, executive director of the Massachusetts Affordable Housing Alliance, which has $220 million in bank mortgage money to parcel out, "CRA is the backbone of everything we do."

      In addition to providing the nonprofits with mortgage money to disburse, CRA allows those organizations to collect a fee from the banks for their services in marketing the loans. The Senate Banking Committee has estimated that, as a result of CRA, $9.5 billion so far has gone to pay for services and salaries of the nonprofit groups involved. To deal with such groups and to produce CRA compliance data for regulators, banks routinely establish separate CRA departments. A CRA consultant industry has sprung up to assist them. New financial-services firms offer to help banks that think they have a CRA problem make quick "investments" in packaged portfolios of CRA loans to get into compliance.

      Your naivete is as American as apple pie.

      Zillow will pay — if it does — to make the bad publicity stop. If it doesn’t, NCRC will ratchet up the racism charge to hysteria. The price will go up in lockstep.

      I would be delighted to be wrong about this. I don’t think I am.

    3. [...] Sellsius, Bloodhound, and Future of Real Estate blogs follow the trials and tribulations of Zillow (wonderfull, the one week I go away is the one week of the year that I would have had the opportunity to bash on both REALTOR AND Zillow, good timing Jon) [...]

    4. REBlogGirl October 29th, 2006 10:51 am

      Excellent observations. I completely agree that a deal must be in the works to put this thing to bed. Here’s my $.02: I was agast as I watched Dalton berate Zillow. How unprofessional can you get, then the follow-up law suit is just too much. All new technologies have their growing pains. Zillow will improve if given time and competition for Realtor.com and others isn’t a bad thing, it should be good for Realtors and consumers alike. Competition is what makes companies produce better technologies… otherwise you have a monopoly.

    5. [...] I’m in agreement with Greg and Joel on this one – this is a big time shakedown. Greg summed up the repercussions of this best on the BloodHound Blog: To my knowledge, this is the first time a purely web-based company has been shaken down in this manner. Because of this — because the web has been exempt from this kind of officious thievery so far — it is a matter of particular moment whether Zillow.com is able to hold the line. [...]

    6. [...] The Zillow.com shake-down: How the other shoe will drop… [...]

    7. Beach City Real Estate Info October 30th, 2006 6:21 pm

      As much as I’m not fond of Zillow… after reading more articles on the suit against them I must agree.. this is a shakedown. I’m tired of real estate being viewed as the universal “deep pocket”.
      That said..Sorry REBlogGirl… I think Dalton was dead on about Zillow and similar companies. It’s hard to get the public to repect REALTORS and value what we offer if we don’t project ourselves as more then “order takers”. An experienced agent knows the local market. Agents know why homes sell for more on the south side of the street then the north side. They know why one neighborhood sells for four times more then another.
      I was at EXPO when Dalton spoke and that is my take on what he was saying. It isn’t so much that Zillow is terrible as it is that an online service can’t give a seller a true market value. Unfortunately many sellers don’t realize that and think that a “Zestimate” is the same as market value.

    8. [...] The Zillow.com shake-down: How the other shoe will drop… [...]

    9. [...] The Zillow.com shake-down: How the other shoe will drop… [...]

    10. [...] The Zillow.com shake-down: How the other shoe will drop… [...]

    11. [...] The Zillow.com shake-down: How the other shoe will drop… [...]

    12. [...] “They could stand firm…I would love it if they did, but I honestly don’t expect it. Except for people like Steve Jobs and Mark Kuban, corporations are run by cowards. Most likely, they’ll try to save face with a seven figure bribe, then set up a fund to buy off future pirates…It would not surprise me if the payoff came from the personal fortunes of Rich Barton and Lloyd Frink… Greg Swan – Bloodhound Blog (Emphasis added) [...]

    13. [...] “They could stand firm…I would love it if they did, but I honestly don’t expect it. Except for people like Steve Jobs and Mark Kuban, corporations are run by cowards. Most likely, they’ll try to save face with a seven figure bribe, then set up a fund to buy off future pirates…It would not surprise me if the payoff came from the personal fortunes of Rich Barton and Lloyd Frink… Greg Swan – Bloodhound Blog (Emphasis added) [...]