No One's Going to Take Away Our Data, But What Can We Do With It?

In September 2005, just as Redfin was raising its first round of funding, the Department of Justice sued the National Association of Realtors for developing a policy that allowed its members to share listing information with some brokers but not others.

The policy was suspended while the lawsuit lumbered through federal court. And in the interim, Redfin was able to cite the lawsuit in convincing investors that we could compete straight up, broker to broker, without losing access to all the listing data controlled by other brokers.

And it’s still why Redfin, alone among the major new websites, has had all the broker-listed homes for sale: we’ve been able to become members of the Multiple Listing Services (MLSs) that Realtors use to share data, and have made our peace with its other rules.

But plenty of folks wondered what would happen to Redfin when the NAR suit settled. We wondered too. Well, today the suit settled. When I first read the NAR press release, I suddenly remembered what Billy told his platoon of mercenaries at the beginning of “Predator”: “We’re all gonna die.”

The National Association of Realtors proclaimed a stunning victory, first because it didn’t have to admit to any wrongdoing, though this is a standard feature of many settlement agreements; and second because the NAR also said that it didn’t hbilly5.jpgave to pay any money, though this is hardly what the Department of Justice was after.

Greg Swann at Bloodhound, quoting Hamlet Macbeth, rightly said so what.

But the proposed settlement agreement did result in a major change, the permanent repeal of the Internet Listings Display policy that would have allowed brokers to selectively withhold listing data.

So for the consumer (and for Redfin too), the settlement is good news: an MLS can’t discriminate against Redfin or any other broker because of our business model or our technology. Any information that can be whispered by a real estate agent to his client — such as how long a home has been on the market, or how its price has changed over time — can be distributed by Redfin through its site. Hooray!

But the NAR wasn’t about to set the data free willy-nilly, especially when its member Realtors are accountable to home-sellers who want to see their homes marketed, not discussed or criticized. For one thing, the DoJ protections only apply if we ask site visitors to register, which turns off about 90% of the people who visit a real estate site (how would Google have grown if it required registration to search?).

Beyond that the NAR claims that “the new policy protects sellers from having false or other unwanted information about their listings appear” on sites like ours. We wondered what that meant. According to the exhibits in the settlement agreement, a seller can opt out of:

“1. allow[ing] third-parties to write comments or reviews about particular listings or displays a hyperlink to such comments or reviews in immediate conjunction with particular istings, or
2. display[ing] an automated estimate of the market value of the listing (or hyperlink to such estimate) in immediate conjunction with the listing.”

The automated estimate mentioned in the exhibits is exactly what we’ve integrated from Zillow, eppraisal and Cyberhomes. And the online discussions are something we’ve tried to host before, too. We suspect that some brokers will include such prohibitions in their standard listing agreements, so that many sellers will opt out.

Ultimately, we think that ducking a conversation like this is just sticking our heads in the sand. We can understand why the NAR took the position it did, but in the final analysis it marginalizes Realtors, and limits our ability to connect buyers and sellers.

People will talk about homes online, and they’d rather do it on brokers’ sites, where all the listings are available. But if they can’t talk here, they’ll go somewhere else.

So all in all, we were glad to see that the settlement protected all brokers’ access to data. We just want to make sure we can still do something meaningful with the data, too.

Bonus link: The NYT gets snarky about Paris Hilton, AGAIN…

Discussion

  • http://www.bloodhoundrealty.com/BloodhoundBlog/ Greg Swann

    > We suspect that some brokers will include such prohibitions in their standard listing agreements, so that many sellers will opt out.

    I would argue that this is not a true election. At a minimum, I would want to see a check box or initials, but even then it’s pushing things.

    > “the new policy protects sellers”

    And that language completely puts the lie to the idea of buyer agency. If buyers are forbidden access to other buyers’ or third party opinions, then Realtors represent sellers only. This is the lawsuit that will blow up the whole stinking cartel.

  • http://blog.redfin.com/blog/author/glenn%20kelman Glenn Kelman

    Excellent points Greg, and sorry to get the Shakespeare reference wrong. Very embarrassing!

  • Sean

    Wait, I’m not sure I understand. Are you saying that you’ll now have to make everyone register before they can even do a search?

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  • http://blog.sellsiusrealestate.com Joseph Ferrara.sellsius

    There is a Seller opt out form with check boxes and initials. Read Appendix A.

  • http://blog.redfin.com/blog/author/glenn%20kelman Glenn Kelman

    Sean, In Boston, we already require registration due to MLS rules. Other MLSs may become more aggressive about requiring it, because of the proposed settlement.

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  • http://www.openthehome.com Josh Harris

    So is this a 3 steps forward, 1 step back kind of settlement for us online companies??? Meaning, online companies are treated no differently than the traditionals when it comes to accessing MLS data (this would be the 3 steps forward), however consumers now have to be registered with the online companies website in order to view data. (this of course is the 1 step back)

  • BlogReader

    Josh,
    I would say it is 3 huge steps forward versus 1 small step backwards.

  • http://condodomain.com A. Longo

    Yes 3 HUGE steps forward…and a small step back!

    Anyone have any idea on the timing…how long it will take MLS’s to implement an opt-out feature for AVM. I am assuming this will be a pretty robust system upgrade for the MLS’s as they will have to throw a trigger out to all the VOW’s.

  • http://www.openthehome.com Josh Harris

    Consumers use online real estate companies and their websites because they are openly available and unobtrusive, UNLIKE the traditional alternatives, consumers can remain anonymous as they conduct their research online. How much of this feeling is taken away when the consumer is required provide information (we don’t know exactly what will be req.) before viewing any homes.

    I will agree “4 huge steps forward”, but the last thing I want to tamper with to get 3 steps ahead is the consumers feeling about my service.

    (FYI) Will this registration step be required for third party sites. (Trulia, Dot Homes, etc.) As it stands right now on a search in Boston on Redfin I am hit up for my e-mail, password, first and last name. Meanwhile, over on Trulia I can dive right into searching Boston homes without anything required.

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  • http://activerain.com/blogs/richd Rich Dansereau

    I think that the monopoly that NAR has enjoyed is nearing an end. I also think that this may be welcomed by many members who remain silent out of fear of punitive retribution. NAR has held a position of strength that could have actually allowed them to assist their members through collective bargaining for group health insurance benefits and numerous other issues that membership in large groups generally conveys. Shame on NAR.

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