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Hey, @Zillow: Why are you calling the Realtors and lenders you prey upon #racist?

And why on earth do they continue to do business with you?


My client went shopping for houses on, and only 75% of those she found were bogus listings…

My note to her: “Trulia and Zillow both present inactive listings as though they were active to fool the public into thinking that they have more inventory than the agents they exploit for advertising money, even though their listings come straight from the MLS systems. Mere real estate brokers would be fined out of business for pulling these stunts.”

Despair you nothing, though, hard-working dogs. Every time Trulia or Zillow are caught pulling these bait-and-switch stunts, one more active real estate shopper is turned off of their sites forever. Nice going, suits…


Things to do in Denver when all you can say is “SMIE!”

Jay Thompson Earning His Pay

“Please don’t shoot me! I’m your buddy, I swear…”

The Knights Who Say “SMIE!”, spewers of beguiling lies, get their heads handed to them in Denver, but like all good shills, they just keep on spewing.

Don’t say I didn’t warn you

Comments are off for this post

Really, What If He’s Not Wrong?

A follow-up to an article on syndication I wrote just a short time ago.  Keep in mind that I’ve never even met Jim Abbott, and am not promoting his company.  But I’m listening harder now to him, and as he speaks his words continue to etch a path that I really believe warrants all of our attention.

At the end he does make a request.  In San Diego you can actually withhold syndication on a property by property basis.  On the MLS form simply check “No Syndication.”  Try it.  I discussed it yesterday with a client, and I’m listing her home without giving away all the info to you know who.  Oh, and I truly believe if buyers come to my site to learn about this property, even if they don’t want this particular home, it will greatly increase the likelihood of my working with them in the future.

Want to skin some cats, anyone?


Where Is He Wrong?

This was in the San Diego Union Tribune, and references an occurrence at a local real estate meeting here last week.

Wednesday: Jim Abbott, owner of a San Diego real estate brokerage, backed out from appearing on a real estate event’s panel after he was told to refrain from speaking negatively about real estate search sites including Zillow.

Zillow reserved a table at Thursday’s 2012 Real Estate Success Event, held at downtown’s San Diego Convention Center. Abbott is against third-party housing websites because he says they are inaccurate, misleading and take business from listing agents. Leaders from such sites say their platforms are popular with consumers because they’re easy to use and offer lots of information.

Here’s Jim Abbott’s video explaining why Zillow, Trulia and are…well, worthy of having something bad said about them.

Where is he wrong? If Zillow, Trulia or really believe he’s off the rail, then why an effort to keep him down. Seems like a nice enough fellow. Not caustic. Simply telling a story.  Oh, and I know this isn’t “just in” news.  It’s simply news that I believe we as Realtors, actual fiduciaries to our clients, have a duty to take a stand on.

I, for one, think Mr. Jim Abbott is on point, articulate and taking us to an important question all of us should ponder and stand on as well.

Where am I wrong?


Jay Thompson takes leadership role at


Thompson joins Zillow’s growing partner outreach team, which includes Sara Bonert (director of broker services), Brad Andersohn (industry outreach manager), and recent addition Bob Bemis (vice president of partner relations). Together, the team advances Zillow’s goal of helping real estate agents grow and market their business.

Grow and market whose business?

This is precisely the kind of leadership I have come to expect from Jay since 2008 or so: The goat takes a left when the cattle take a right. If you don’t know what that means, you’ll probably be taking the right turn.

I’m killing comments on this post, because I don’t want you to soil yourself in public just because I’m the only person in this benighted industry who will tell you the truth.


Table talk from my email: A Judas Goat- yes? Got it.

Me: What’s the point of having friends if you can’t sell ’em out?

Andersohn = ActiveRainiers

Bemis = MLS systems

Thompson = TwitBook losers

Coming soon: Project FUD at REBarCamp: Can you afford to be WITHOUT Zillow?

The window on integrity in real estate seems to be closing…

Still more…

Our business is corrupt, so it’s no surprise that this is the only place on the net where you can find the other side of this story. This is me from a comment at Real Estate Industry Watch:

Whatever job they end up giving him, Jay Thompson has already delivered everything Zillow is paying for: His endorsement of their brand. Now they get to make the fallacious “Even-Jay-Thompson” appeal: Even Jay Thompson thinks you should piss away your money on Zillow’s advertising. Jay has yearned to be the Head Lemming of the since the passing of Joe Ferrara, but, as we saw in the Denise Lones fiasco, he lacked that sad little man’s taste for blood. Luckily, Zillow has provided him with an even better cliff off of which to drive his credulous “followers.” It’s sad to say, but they deserve each other.

We’ve seen this kind of self-dealing posturing from Jay Thompson before — and not just from him, alas. But eighteen months from now — when you finally wake up and say, “Wuh happened?!?” — this post will still be here, one of many warnings you chose to ignore.

And still more…

These are two comments I posted in response to a comment from Jeff Brown in his post on social media in real estate marketing:

Wow. I can’t think of a single observation in this comment that I can endorse as bearing some relation to fact. As we discussed in November of 2010, Jay Thompson tells some pretty big whoppers about his brokerage.

> a 1% conversion rate via their IDX leads

Those aren’t leads. Those are names — a lot of them fake names, I expect. Decent inquiries should convert at 50% eventually.

> 2011 produced around 7,000 leads

Somewhere a nose is growing.

> That’s around 70-75 closed sides

That is, two per head per year.

> I do suspect that in his market, Phoenix, a full time agent would probably need to close a side a month.

Because Starbucks only pays minimum wage.

Seriously, an agent closing fewer than 20 houses a year, on average, should find another job. He can do a lot better, hour for hour.

> I’m assuming a $150,000 price at 3% commission.

Much more likely to be quite a bit lower on price, with a sales commission of 2.5% being very common, often less. Most of Thompson Realty’s listings are short sales, so I would expect 2.5% to the listing broker to be very common.

> 34 X 12 = 408 closed transactions

237 for 2011, split across 31 licensees as of today. Shar Rundio, the pick of the litter by far, accounted for 55 of those. For the rest, that leaves about 6 closings per head, on average, half your estimate — but a 150% improvement over 2010. Why isn’t someone telling cloying lies about this remarkable growth in productivity?

(Nota bene: There may be some transactions closed outside the MLS. I do a few that way now. Note also that the Phoenix real estate market is 100% a Federated Govco basket case. These agents might do better in a market with actual real estate fundamentals in play.)

> Jay and the exceedingly high quality of agents he hires

Jay has one good agent — and it ain’t him.

> I’d love to know what they’re doing on SM

Schmoozing, like everyone else on TwitBook. They’re not making money.

> Russ Shaw closed 401 sides last year[….] I strongly suspect most of those were generated by sources other than SM.

Certainly not much more than 99%.

> I may be seeing Jay in Georgia next month[….] I bet he’ll have plenty to say.

No doubt. It will just be the product of elaborate fantasies.

Here’s my take, an impression that hasn’t changed much in a long while:

1. Jay Thompson is all hat an no cattle. He doesn’t know much, and much of what he claims to know is undefended gibberish.

2. TwitBook schmoozing is a terrible real estate marketing strategy. Anyone who says otherwise needs to post real numbers, not impressive-sounding bullshit.

3. By leading so many agents down the TwitBook path, Jay Thompson has contributed to the destruction of hundreds or thousands of real estate careers.

And, of course, that’s why he’s bailing on real estate sales.

As icing on the cake, he can come back to screw up the careers of the lingering survivors with a big Z on his chest.

The second comment:

I’m coming back to this, Jeff, because I think it’s important.

There is nothing personal about this for me. This is business, and this particular item of business — vendors and their shills deliberately leading the grunts on the ground into error — has always been the business of this blog. It’s been your shining grace here, and Russell’s when he wrote here, and it shows up everywhere in our archives.

Agents and brokers have always told bullshit stories about their results — always. But the impact of their fabrications were limited, both because the meme-stream was local and ephemeral and because any claims that mattered could be easily checked.

This is what the internet has changed — particularly TwitBook. All the vendorsluts are having a heyday, of course, buying virtual cocktails and signing ironclad contracts. But by now water-cooler exaggerations are turned into Holy Writ by the amplifying power of the echo chamber.

That much is very bad just by itself, but the whole point of this exercise, from the very beginning, has been to DISINTERMEDIATE THE BEE-HOTCHES!

I wish Jay and Francy nothing but the best as people, but becoming an old-school Big Promises broker, becoming the NAR’s technology shill, and now selling out his TwitBook following to Zillow — these are all the polar opposite of the kinds of actions we should be taking, encouraging or applauding.

And with that I move on. I feel like the get of Sisyphus and Cassandra, and I’ve got better things to do with my time. This is my argument to the Jay Thompson is now beyond all doubt a vendor. If schmoozing with him puts a warm place in your heart, I hope you don’t come to discover a corresponding empty place in your wallet.

By now I think I might be beating a dead horse. My objective is to have everything I have written on this topic in one place. Among the many ugly side-effects of the TwitBook phenomenon are back-biting, back-stabbing, clique warfare and broadcast whispering campaigns. I stand, not high it may be, but alone. There is nothing I have to say about anything that I am not willing to say in public, in full view, at full voice — and then stand behind forever. I am sick to death of all of these smarmy games, but I am also more than happy to show you how to oppose them.


Regarding the IPO: “Since when is a seven year old company with really no large scale growth prospects that has lost money every single year on revenue less than $45 million/year worth half a billion dollars? Am I missing something?”

The question comes from a comment to a post at Seattle-based start-up blog, GeekWire. The news? is bumping the per-share price on its forthcoming IPO to as high as $18, up from the $12-$14 range it started with when the public offering was announced.

I like that question, because it parallels one of my own: What, precisely, can Zillow hope to do — other than provide big paydays for its VCs and founders — with $71 million in new funding? Which parts of the site will require that much build-out?

My take: The web-tech IPO craze that’s going on right now is just the next phase in the rape-the-rubes strategy Wall Street has pursued since internet start-ups came on the scene in the late ’90s. There is plenty of money to be made churning the stock of “businesses” that, in the end, all amount to — all hype, no actual value.

What’s the name for that phenomenon…? Oh, yes — a bubble.

The good news: Cynthia Pang Nowak, formerly’s queen-bee PR geek, is now signed on with Zillow. While she may be both the smartest and most breathtakingly beautiful woman on the Puget Sound, it remains to be seen if she can answer the BloodhoundBlog question: What would David Gibbons do?

Meanwhile, deserves your daily attention. Run by Todd Bishop and John Cook, formerly the start-up reporter for the Seattle Post-Intelligencer and a long-time friend of BloodhoundBlog, it’s kind of like TechCruch in the rain — but without the bluster and hyperbole. The daily email digest is quick way to keep up with the wired side of our world.

But: Am I all wet? Does look like a buy to you at $18? Can it go to $36? To $180? To $0.01? I like the people who work there, and the founders have been very good to us from the beginning. But I’ve never seen the value of, except as an advertising play, and I still don’t. As with the comment quoted above, am I missing something?


Brett Arends from the Wall Street Journal on Zillow’s morning gloom report: “All this bearish news makes me bullish.”

Our friends at have figured out the secret to getting news coverage: Bad news:

Home values in the United States fell faster in the first quarter of 2011 than they have in any quarter since 2008, when the housing market experienced its worst performance, according to Zillow’s first quarter Real Estate Market Reports(1). The Zillow Home Value Index(2) fell 3 percent from the fourth quarter of 2010 to the first quarter of 2011, and declined 8.2 percent year-over-year to $169,600. Home values have fallen 29.5 percent since they peaked in June 2006.

Negative equity reached a new high mark with 28.4 percent of single-family homeowners with mortgages underwater at the end of the first quarter, up from 27 percent in the fourth quarter of 2010. A homeowner is in negative equity when they owe more on their mortgage than their home is worth.

Meanwhile, foreclosures(3) rose throughout the first quarter as banks unfroze moratoriums and allowed foreclosures to resume. Foreclosures had fallen in late 2010 due to the slew of moratoriums brought about by the “robo-signing” controversy. In March, one out of every 1,000 homes in the country was lost to foreclosure.

With substantial home value declines, as well as increasing negative equity and foreclosures, Zillow forecasts show it is unlikely that home values will reach a bottom in 2011. First quarter data has prompted Zillow to revise its forecast, now predicting a bottom in 2012, at the earliest.

“Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011,” said Zillow Chief Economist Dr. Stan Humphries. “We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won’t see a bottom in home values until 2012 or later.”

My own take is that we are at or near the knee in the curve: While supplies of fire-sale-priced homes may be abundant, resale prices are by now so low as to make cash-rich investors completely nuts. In Phoenix in April, our values were up for the homes we track. Doesn’t mean we’ve turned the corner, but big drops from here seem unlikely to me.

Meanwhile, here’s a bullish rejoinder to Zillow from the Wall Street Journal:

Remember Japan’s “zombie banks”? These were the financial institutions that haunted that country’s economic recovery after the 1990 crash. They staggered on with huge losses they could never repay — the walking dead.

Here in America we have “zombie homeowners.” Millions of them. According to Zillow, a record 16.3 million families are upside-down on their home loans. Sixteen million! And many are a long way upside-down. Their homes may never be worth as much as their mortgage. But they are hemorrhaging cash to pay the nut every month.

Recovery? What recovery? This looks a bit like a depression to me.

What does this mean?

All the misery makes me think of a great French general, Ferdinand Foch. He’s the one who defended Paris at the Battle of the Marne in World War I. During the darkest hour of the fighting, he is supposed to have looked around him and said:

“Hard pressed on my right. My center is yielding. Impossible to maneuver. Situation excellent — I attack!”

In other words, when it comes to distressed housing, I’m finding it hard not to be a contrarian bull.

Why? Am I crazy?

Well, maybe. But I’m a medium-bull for all the reasons everyone else is gloomy.

First, prices in many areas are now cheap. They have corrected a long way since the bubble began to burst five years ago. Of course, it depends on where you are. I’m still skeptical of the real-estate markets that have held up best — prime stuff like Manhattan, San Francisco or Beverly Hills. It’s hard to get a deal there.

But in the places that have fallen the furthest, there are deals aplenty. Zillow found only four metro areas in America that have leveled out, or risen, lately. Notably, two of those are in stricken Florida — Fort Myers and Sarasota. Have they fallen so far they’ve hit bottom? Maybe.

Look at this chart. It shows Miami real-estate prices, adjusted for inflation, over the past quarter-century, using Case-Shiller data. The picture is pretty remarkable. The gigantic bubble has been completely wiped out. We’re back to prices seen in the 1980s — when “Miami Vice” was on the air.

The second reason: There are tons of foreclosures and short sales on the market. And there are plenty more sitting in the wings. Banks are holding back big shadow inventories of homes. And that means you can get a great deal. They have to sell. You don’t have to buy. You hold all the cards. Remember, the name of the game isn’t “let’s make a deal.” It’s “take it or leave it.”

Third, in many places rental yields are terrific. It’s cheaper to own than to rent. There have been some forced sales in my building in Miami. Based on my math, the latest buyers have bought condominium units for six times gross annual rents, and maybe 12 times net rents. We’re talking net yields of 7% or more. And rents are rising, because so many former owners are now renters.

The fourth reason I’m bullish is that you can get a very cheap mortgage. Thirty-year conforming loans are going as low as 4.3%. Throw in the tax break on the interest, and you are talking cheap finance. See latest weekly mortgage-rate update.

The fifth reason is that, as painful as this collapse has been, real estate has historically proven to offer very good long-term protection against inflation. Returns have typically averaged about 1% or 2% above inflation. At a time when everyone has been piling into gold, commodities and TIPS bonds to protect themselves against the possibility of inflation, it seems odd that the most popular and successful hedge, namely real estate, goes a-begging.

Thirty-year TIPS bonds are yielding just 1.6% over inflation, and shorter-term bonds offer even lower returns. Short-term TIPS are actually offering negative real yields. How holding TIPS may actually make you poorer.

The sixth reason I’m bullish is perverse, but I’m sticking by it. Everyone else is bearish. You cannot find a real-estate bull anywhere. No one wants to own this asset. No one wants to talk about it. No one wants to hear about it. Everyone seems to agree it’s just going down, down, down — forever.

They said much the same about stocks in 1987, 2002 and 2009; Treasury bonds in 1982; and gold in 2000. I cannot prove this is capitulation, but it sure smells something like it.

As ever, if you aren’t disciplined and patient, this probably isn’t for you.

I have absolutely no idea when real estate is going to hit rock bottom. It may take several years. I suspect it will do so in different markets at different times. But there are good homes out there going really cheap. If you hunt down the bargains, you’re disciplined about price, you get the right financing, and you hold on for five years or more, you’ll probably do pretty well from here.


Zillow says, “If you will send us your clients as web traffic, we’ll be pleased to sell them back to you, again and again, from now on.”

Q: What do you do when your massive web site, target-marketed to equity-rich home-sellers, finds itself in a real estate market where most sellers are upside down and do not give a rat’s ass what their homes might sell for?

A: Punt.

This is an eyeball play, up front, just pure traffic-baiting. But the genius of it is that it turns into FUD for the agents in the long run: A million necks, one noose.

These sites are just noise, by now, just more “media” — uninformed opinions from people who make their living doing something other than selling real estate. Delivering your clients to them strikes me as a poor idea.


A David Gibbons send off dance

Dear David Gibbons: Around here we dance on bridges.
I rejoice that you are seeking splendor!
Someday, please teach us all to Diski Dance on a bridge!


Where Would David Gibbons Go?

Home, of course.

Anybody who followed his World Cup trip to South Africa saw the glow on his face, in his Facebook pictures, and the longing in his heart, on his Facebook status updates.  Social media are interesting platforms.  They have the power to bring you much closer to people you’ve met or allow you to learn more about those you’ve yet to meet.   I “met” David on Active Rain, was drawn to the Zillow brand because of him (and Drew Meyers), and am grateful to him for supporting  the inaugural real estate social media marketing conference.

I’ve battled with, yelled at, drank beer with, collaborated with, and tried to support David Gibbons for a number of reasons but, in the end, it’s all about mentschkeit.  David G from Zillow is the type of guy you want on your team….and you want to play on his team, too.

I”m not going to cry about his departure because between  Skype and Facebook, Seattle is not much farther than Jo-Berg.  My goal today is to remind you of the single most important lesson we learned, from David G:  What Would David Gibbons Do?

The WWDGD lesson is to represent yourself  positively online and always sell your brand.  The trick is in the delivery.  David G. never skulked and pounced, like a sleazy corporate pitchman.  David G. was always part of the conversation, offering ideas, debating, and developing best practices.  If there was ever a spokesman for the ”“, Davig G would be that guy.  Why?  He lives in our world.

So I’ll just say “Hamba Kahle” to David G.  I’d say I’ll miss him but I doubt I’ll notice he’s moved.


Who’s Afraid of

Bob Haywood, an Owasso, OK real estate agent makes a case for why you should be aware of  Bob articulates, from behind the cloaked wall on Active Rain, why is the REAL agent of change in the real estate industry.  Read what Bob has to say:

You should pay as much or more attention to Redfin and what they are doing than you do to Zillow. Am I saying we should ignore Zillow?  No!  But the group who has the potential to really change real estate is Redfin, not Zillow.  And here’s why…Zillow is just an information source.  So they give lots of information.  Yippee.  The information real estate vault is now open to the public.  Zillow is just one of many players in the information delivery game.  And guess what?  Zillow exists at the 20,000 foot level.  Their information is not very accurate.  You and I exist on the ground level.  We know our local real estate market in ways that Zillow will never know.  We know what actually sold.  What it sold for.  What it is actually worth and often, what is about to come onto the market.

Fear  “Not so much”, says Bob and I agree with him.  Zillow introduced the  Zillow Mortgage Marketplace and it has had no impact on my business these past 18 months.  Only one consumer has referenced Zillow’s mortgage rate quotes in their negotiation with me.   That consumer did speak a lot about the Zestimate and its inaccuracy; that inaccuracy actually helped me in the negotiation with the consumer because it threw a shadow of doubt upon the accuracy of the mortgage quotes they offer.

And that is why you should watch Redfin. Redfin is a ground level company.  They are attempting to take the information and link it to agents on the ground.  That’s what makes them dangerous.  If they ever get their feet under them and decide that they actually want to be a player nationwide, they could just change the way real estate is bought and sold.  And if they do, they could end up owning (many of) us.  Already, there are agents becoming Redfin agents in the markets they serve.  And as I understand it, when you work for Redfin, they set your commission.  Their marketing pushes out the idea that the consumer saves a ton of money by NOT having to pay the standard commission to agents. is a completely different story.  They have built an incredibly strong following among tech-savvy, do-it-yourself types.  Moreover, they set expectations of and limits to their service offering and (here’s the important part)… Redfin sticks to them. Consumers fully understand those limitations and expectations and understand the trade-off between perceived service levels, performance, and price.

I can think of a hundred things Redfin could do better.   I could think of a thousand things full-service real estate agents could do better and a million things lenders could do better.  What Redfin does very well is define what it will and won’t do for the money it charges a customer and that appears to be what consumers really want today.


PS:  Republishing content without permission, from behind the Active Rain “Members Only” wall is a violation of its terms of service.  I’ve secured permission from the author,  Bob Haywood to republish his parsed commentary here in Bloodhound Blog.

9 comments jumps the shark, makes a big splash in the dead pool

Cathleen just discovered the hard way that now expects us to pay them $9.95 per listing to populate their database.

So long, Zillovians. It’s been good to know you.

(News at Inman. An obvious workaround at AG.)


Why Web 2.0 Still Hasn’t Mastered the Real Estate Mantra: LOCATION, LOCATION, LOCATION

So Goggle thinks it’s going to win the real estate search game.  As far as I’m concerned, there is no more meaningless a result in an online property search than a red pin designating the location of a property on a map.  Take the map above in the example – a snapshot of the the greater New York City area with little red dots designating search results.  New York’s a big city with alot of little neighborhoods.  Help me understand how this solution is any better than any of the others? How has Google upped the ante in providing a better solution?

They haven’t.

What I find interesting about the online search game is how many players fail to understand what makes a particular property unique – desirable – a one of a kind.  How does a little red dot convey the weighty significance of LOCATION, LOCATION, LOCATION?  I just read Joe Burslem’s post over at FOREM, regarding how Google is now getting serious about real estate.

Should Zillow and Trulia be worried?  Not if they view search as a value added activity.  SEO juice isn’t necessarily the fuel that runs an effective or valuable search.  The content around the search is key.  What makes a location important?  When consumers seek a home – not a house – what evokes the emotional response?  A view?  The possibility of walking to a farmer’s market on Sunday, while passing a Starbucks?

A street view is a “window” into a location, but it doesn’t define it’s personality.  Location has an identity.  Zillow has already done the homework to identify the boundaries to neighborhoods.  Perhaps a valuable next step may be to better identify a neighborhood’s identity – its personality – or maybe link the characteristics of a location to the attributes of a property.

If a search result can personify a property’s location, consistent with how a consumer lives, the red pin comes alive.  Search is meaningful.

Google – you’ve got your work cut out for you.


Is Web Technology Squashing the Little Guy in Real Estate?

About once a week, someone asks Redfin who built our real estate search site (sometimes they don’t ask, they just take). Since we built our site on our own, we can’t recommend a development partner, but we can offer advice to other brokers building MLS-powered sites.

And our first suggestion would be to bring your wallet. If you include all the employee salaries, benefits, hardware, online services, data costs and hosting costs, Redfin will probably spend $4+ million on research and development in 2009.

Is Technology Tilting the Playing Field Toward Large Brokers?

Is Technology Tilting the Playing Field Toward Large Brokers?

That may sound like an imposing number but we have costs you can avoid. We spend at least $1 million on commerce tools for tracking offers and listings, so we can give customers the same 24-hour web support you expect from a bank, limiting the administrative burdens on our agents. A traditional brokerage doesn’t have to invest in this area.

We probably spend another $1 million making mistakes you could easily duck by following us at a safe distance of, say, six months. We try to avoid mistakes, but a mistake is often just a good decision outpaced by circumstances.

For example, when we had no money — scratch that, (thanks David Selinger) when no mapping technology existed that supported user-controlled panning and satellite imagery — it made sense to build our own map. Later, Virtual Earth was the best choice because Google was slow to draw hundreds of property outlines on its map. Now the best choice for us is Google Maps because we figured out how to outline all the properties at once. We just switched to GMaps today, and now it’s on the front page of TechMeme.

I think we’re the only folks in real estate who have used Virtual Earth, Google Maps and a proprietary map, so if you have questions on the relative merits of each service, please just drop us a line.

That leaves the cost at around a few million dollars per year to build a real estate search site with national scale, which is still too expensive. While hardware costs decrease every year, and other websites have undoubtedly achieved more with less — often by out-sourcing, sometimes no doubt by just being smarter and faster — it is still true that small brokers are struggling to pay for competitive search sites.

This is a change. Marketing, which used to be the large brokers’s primary advantage, is actually getting cheaper — if Bloodhound has proved anything, it’s that the web has made marketing a question of what you have to say not how much you have to spend.

But the cost of running a real estate search site is rising fast. Large brokers throw money (if not always expertise) at the problem, while small brokers struggle to compete. The small brokers ask MLSs to provide a common set of services, like listing alerts, but the large brokers sometimes block these efforts as being beyond the MLSs’ charter.

And expectations are rising. Consumers now want tax records, bank records, property outlines, school data and neighborhood outlines, all of which are expensive.

The sites a Realtor could work with aren’t always attractive., the site funded by Realtor dues, is losing market-share. Sites like HouseValues, Trulia and Zillow are gunning to replace, but not all agents who want to be featured on those sites can afford the up-front costs .

It would be a shame if technology — which is supposed to lower the barriers to entry — actually made real estate less of a mom-and-pop industry. I know Redfin is part of that trend, but it wasn’t what we had in mind when we started. Our focus was on competing with Century 21 and RE/MAX, and benefiting the consumer — not hurting the little guy.

What do you think? Is technology creating new economies of scale in real estate? Are small brokerages able to compete just using the public sites provided by the MLS? Will large brokerages be able to use better data access to build the market-leading real estate search sites?

And is it the role of the MLS or of the National Association of Realtors to create a level technology playing field? Will the small brokers get priced out of the technology wars? I don’t pretend to know, but it would be great to hear your thoughts.


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