Once Again, Real Estate Professionals Go To War Against The Web

from the gotta-protect-those-margins dept

Last month, popular real estate site Zillow was enjoined from operating in Arizona because the site didn't have an appraiser's license. The action was a pretty bald-faced move by the state's real estate appraisers to keep a potentially disruptive service from messing with their business. It looks like another similarly disruptive real estate service, Redfin (which allows people to buy and sell houses at a fraction of a broker's typical fees), is under attack in Washington. Real estate brokers are upset about a Redfin-sponsored blog that allows non-brokers to post reviews of properties that appear in the area's Multiple Listing Service, a database that brokers use to get information on properties. Access to the database is limited to registered participants, which Redfin is. But one of the rules is that brokers are given the sole right to manage their marketing campaigns, and the brokers aren't happy that Redfin lets outsiders post housing reviews. The situation is a little different than the Zillow case in that it's the MLS that's threatening to revoke Redfin's access to the service rather than an official state agency. However, because the real estate industry operates as a state-blessed oligopoly, the MLS' threat basically carries the full force of the government. Because Redfin can't afford to lose its access to the database, the site has removed the offending blog. Chalk it up as another victory for professional organizations and their constant efforts to keep disruptive tech services at bay.

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  1. identicon
    Bob, 20 May 2007 @ 9:24pm

    It's all good

    As a real estate agent in southern California (talk about a ridiculous market), some comments:
    1. Commissions have inched down, now often 5% or 4% on more expensive properties.
    2. More competition is good for everyone. Personally, I like the idea of people posting comments and think the more feedback, the better. The only concerns I have about this are (a) someone must insure that no personal information is disclosed ("I love original Andy Warhol in the living room" -- bad idea) and (b) there would need to be some contractual protection for the listing broker for the disclosure (a new form perhaps). This is a real issue: A seller could sue the listing broker for information disclosed publicly -- and would win absent contractual protection.
    3. Some people like to use real estate agents and some do not. Fine. For those who want to do the work themselves, great. If you get a better deal by not using an agent, I have no issue with that, but don't blame me if you don't use me.
    4. The internet already has changed the way that agents work and homes are sold. More change is coming. Some agents already are working on a fee basis, versus commission, for example.
    5. While most transactions sail through with minimal issues, this is still a complex and risky business when things get ugly -- and ugly they get when you're talking about assets this big.
    6. While some agents make a lot of money, most toil for very little. We're independent contractors, so we pay self employment taxes, 100% of our health insurance, license fees, MLS fees, association fees, E&O insurance fees, continuing education costs -- all before we make one dime of commission. If we don't sell, we don't get paid. Yes, the industry is a many-tentacled creature that lobbies heavily to protect its position -- like every other one out there. It will resist change but change it will. I believe that the net will continue to foster greater competition and better information for buyers and I welcome it. Way to go Zillow and way to go Redfin for slapping the dinosaur, but don't be surprised that it may bite back.

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