Real Estate Gotterdammerung

Redfin is going to Washington tomorrow, to testify before the Congressional Subcommittee on Housing and Community about how MLS rules and minimum-service laws gum up Internet businesses. Michael Oxley, who came up with the post-Enron Sarbanes-Oxley bill that made executives accountable for their financial statements, is leading the charge against the realtors. So the guy on our side has taken down some major scores.
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After a year of DoJ lawsuits, FTC hearings and GAO reports, it seems possible Congress might be ready to make a few simple changes that could revolutionize U.S. real estate: give all brokerages fair and equal access to listing services so the MLS can’t exert monopoly power, and regulate state minimum-service and anti-rebate laws so consumers can choose the level of service for which they want to pay.

With the National Association of Realtors President-Elect scheduled to speak alongside Redfin, the hearings should feature plenty of action. It hadn’t even occurred to us to talk to Congress until we read about the hearings in a New York Times editorial. When we started cold-calling Congress, it felt a bit like petitioning Kafka’s Castle, a hopeful, hopeless, absurd feeling, until a staffer said “You really don’t know what you’re doing, do you?” Then she lowered her voice and explained to us that we were “calling the wrong side” — it seemed very odd at the time for someone to be so open and matter-of-fact about her partisanship — and provided the names and numbers of her opponents.

When we finally latched onto the right person, he wrote back by BlackBerry that he was on the floor pushing a bill to a vote at that very moment, and we felt a little School-House-Rock-style wonder. Today we had to submit our written testimony, which we worked on the night before like it was a high-school term paper. A Congressional staff-member made 75 photocopies so that all the staffers could tee up questions for the Congresspeople to ask us, which isn’t a pleasant thought.
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And now I’m about to get on a red-eye for Charlotte, and from there to Dulles with its 1960′s alien buses, and then a nap on a friend’s couch, and from there to the Halls of Power. Like every craven businessperson trying to get what’s coming to him from the government, I feel a sudden surge of patriotism, self-righteousness and idealism, tinged only a little by regret about the crazy quotes captured today by John Cook in his excellent blog for the Seattle PI.

Some days, most days, I believe that if we just stopped trying to win an argument with the traditional real estate industry and instead looked for a solution, we’d all be better off. Tomorrow probably isn’t going to be one of those days.

If you have any messages that you’d like Redfin to pass onto Congress, just leave a comment. Otherwise, tune in to read how the hearings turn out, and to get a copy of our oral testimony.

Discussion

  • Mary Ann Osborne

    Glenn,
    Good luck with your testimony. Thank you for taking this message to our congress.

    John’s Mom

  • Al Temple

    I read tne article in the Feb addition of Reader’s Digest and the mention of you and your knees at the end of it. Do you do business in Ma.? I have plans to sell my house and downsize.

  • Justin Davis

    Good luck with that, but who are we to determine what a consumer wants to pay in commissions to sell or buy a house? I Redfins should be free to make an attempt, but selling a home is too important to be left in the hands of a stranger, which is why we’re independent contractors in the first place, which is why we develop and maintain social networks. You’re not “innovating” the industry unless you plan on making it much more difficult to obtain a real estate license. You might be better off urging Congress to mandate a bachelor’s degree is necessary to sell/buy real estate. Your only problem is the National Association of Realtors, which is the #3 largest donator to campaign contributions, only behind AFSCMW and AT&T, at $30,290,000.

    Bottom Line: If people wanted to pay less, discount brokers would flourish.