“Strap in Team Redfin. We’re in for a wild ride.”

No truer statement has ever been made about Redfin’s journey, which took another turn last week when we launched Redfin Scouting Report. We made big mistakes. And we heard from some data providers that we couldn’t access their data.

First, I want to apologize for our mistakes and explain what we’ve been doing about them.

Days on Market: Immediately Fixed (But That Was Really Bad)
Our most egregious mistake was miscalculating how long many agents took to sell their listings. It was a bug that crawled into the code right before we launched, and we corrected it on the same day. Many thanks to Holly Weatherwax in Northern Virginia for being the first to identify the error.

Wrong Brokerage for Some Phoenix Agents: Fixed Today!
For about 10% of Portland, Phoenix and Las Vegas agents, we showed the wrong brokerage, saying for example that the agent worked for Coldwell Banker when he or she worked for Century 21. We fixed Vegas and Portland on Friday, and Phoenix this afternoon.

Only Two Years of Past Sales in Denver and San Diego: Fixed Today!
In Denver, we claimed to show sales going back to January 1, 2008, but for the most part we only had data going back to October 1, 2008 and in Boulder we had less than that. So that our data are complete and reliable for the entire Denver area, we are only going to show one year of sales there. We had the same issue in San Diego and Long Island, but will be able to show sales going back two years, to October 3, 2009. These changes will be complete this afternoon. Thanks to Bob Connors for first noticing the problem.

Dual Agency and Self-Represented Buyers: Fixed Today!
We described some agents as having represented both buyers and sellers on one deal, a controversial practice known as dual agency, when in some cases the buyer was unrepresented by an agent. This is a problem in the source data we get from Multiple Listing Services, so we can only provide a more nuanced description of dual agency, which includes the possibility of unrepresented buyers. This description will be posted throughout the site this afternoon.

Dual Agency on Phoenix REOs: The MLS Can Help!
Our old, good friend Greg Swann in Phoenix has told us that many Phoenix listing agents don’t give the buyer’s agent credit on a deal, especially when the listing is a foreclosure being sold by a bank. This is a problem in the source data maintained by the Multiple Listing Services (MLSs) used by real estate agents to share listings and record deals, so we asked two MLSs today for their guidance on the issue. Both recommended that the buyer’s agent contact the MLS compliance department to get credit for representing the buyer in that sale. These MLSs have a process for this type of issue and will work with both agents to get it fixed.

Sales Withheld from our Feed: Fixed Today!
We have also found that some agents sell a property but don’t get credit for it in Scouting Report, because they withhold a record of the sale from our data feed, known in the industry as a Virtual Office Website (VOW) feed. Sometimes, the agent allowed the sale to be included in the feed, but it disappeared due to a bug in the feed. Without that record, we can’t locate the deal on our map, determine its price or show its pictures — but we can include it in the agent’s total deal count, with a note explaining the discrepancy. We’ll do that later today. We would also encourage agents to include every sale in the VOW feed; it’s good for you, and good for every agent’s customers to see all the sale records.

Teams Where a Team-Member Is Not Listed as a Co-Agent: Email Us
We also have had agents such as Carol Carnevale contact us because deals completed by a member of their teams, under a different license number, did not show up in the team leader’s profile. When two agents list one property as co-agents, the original Scouting Report handled this well, but when an agent doesn’t do it that way, we have no other way of knowing when two agents work together as a team.  We are handling this on a case-by-case basis; if you as an agent would like your deals combined with that of another agent, contact data-issue (at) redfin (dot) com.

Data Licensing Problems: Washington DC Area & the East Bay of the San Francisco Bay Area
We also have data-licensing problems. In Washington DC and the East Bay of San Francisco, our data partners have asked for a more careful review process. We are suspending access to the Scouting Report in these areas until we can complete that review. In neither case have we discussed a specific rules violation, so we shouldn’t jump to any conclusions yet about what this means or where it’ll end up.

Sayonara Sacramento
In Sacramento, we have come to our own conclusion that Scouting Report violates data-sharing rules. We’re contacting our data partner there to confirm this, but expect to remove Sacramento access to the Scouting Report later today.

Half the Data Isn’t Good Enough: We Should Never Have Launched Atlanta Scouting Report
In Atlanta, we have become more pessimistic about the possibility of getting complete data on every agent there, so we are disabling the Atlanta Scouting Report. We should have waited to publish the Scouting Report in Atlanta until we were ready to jump through all the hoops — from both providers, not just one.

Southern California, Denver and Portland: Registration Now Required
To comply with rules from our Southern California, Denver and Portland data providers, we are requiring consumers there to register before seeing Scouting Report.

Three Data Providers Affirm that Redfin Scouting Report is Within the Rules
And the good news is that in three major areas we have heard from our data providers that Scouting Report is within the rules, which bodes well for the many other areas that have similar data licensing contracts.

Here’s a summary of how everything has ended up, in every area that Redfin serves:

What’s Next?
Who knows! Surfacing millions of records that have never seen the light of day before is always a bit like opening Pandora’s Box. But it’s worth it in the end if you can get it right. That’s what we’re trying very, very hard to do, working late in the night and through the weekends. Again, we are sorry for all the ways we screwed up in presenting data from dozens of feeds, based on thousands of rules.

Though we will not shy away from our responsibility to be authoritative and reliable, we also think it’s a mistake to set ourselves up as the sole authority on an agent’s performance. We already encourage agents to contact us with corrections, but we will at some point add a more public way for an agent to comment on what we’ve published about him or her.

That said, we’re not interested in Scouting Report becoming a marketing vehicle for agents who work for other brokers; promoting a brokerage’s agents is, after all, that brokerage’s role. But we do think it’s important that the brokers, and not pay-for-play media sites, provide the most reliable record of what agents have done and where. It’s hard, but not impossible, and it’s worthwhile. Redfin is just the first broker to do this, not the last.

The post Scouting Report, the Morning After appeared first on Redfin Real Estate Blog.

As John Cook recently speculated, Redfin has big plan growth plans. Portland is Redfin’s 11th market overall, and its opening follows closely on the December launch of Atlanta. Jeff Bale, Portland market manager, joins a long line of starry-eyed pied pipers — he is a youth minister — who at one point deep in their past managed a restaurant or small business. What a perfect combo!

So what stopped us from getting to Oregon earlier? Oregon Revised Statute 696.290, which states:
A real estate licensee shall not offer, promise, allow, give, pay or rebate, directly or indirectly, any part or share of the licensee’s commission or compensation arising or accruing from any real estate transaction

Translation: our commission refund is illegal in Oregon, and in eight other states. If a Redfin customer pays $500,000 for a house in Vancouver, Washington, we usually get $15,000 of that as a fee for our service, and give half of that, $7,500, to our customer. A mile across the river in Portland, we can’t give the customer any money directly.

All we can do in Portland is apply the refund to closing costs, lender permitting. This is usually worth a few thousand bucks. And then we donate the rest to one of four charities chosen by the customer:

• Oregon Food Bank
• Shriners Hospitals for Children Portland
• SOLV, an Oregon environmental non-profit
• Habitat for Humanity, Portland Metro East

Because of the Oregon law, the donation has to be in our name.

The first question people ask is what plausible consumer benefit such Oregon’s anti-rebate law could have. I’d always assumed the law was an artifact of early-20th-century Tammany Hall-style politics, or maybe even 1970’s Serpico-style corruption.

But the Oregon law was amended without comment as recently as 2005. Even better, Tennessee enacted a brand-new anti-rebate law in 2007, giving a Tennessee Association of Realtors spokesperson an opportunity to provide a modern rationale: “Unfortunately, rebates, in too many cases, take the form of cash incentives that could be used to lure consumers into risky real estate transactions.”

What? The money used to “lure” a buyer into a risky transaction comes from the buyer himself. A buyer can’t lure himself into a risky transaction, and certainly not more than a commission-based agent could.

Wait! There’s more: “In some cases,” the spokesperson continues, “you could see a rebate used as part of a down payment, which could amount to mortgage fraud.” It’s also possible to kill someone with a butter knife, but nobody is outlawing flatware. Fraud would only be possible if Redfin inflated the loan amount so as to pay a buyer under the table, prior to closing. In tens of thousands of transactions, Redfin and other brokerages notify the lender of a refund, and don’t allow that money to be used as a down payment. It isn’t fraud to charge a lower price.

Some states have stopped the silliness. In Kentucky, West Virginia, South Dakota and Montana, where real estate commissions created anti-rebate rules, the Department of Justice spent the past five years suing or threatening to sue so as to overturn these rules. But in the remaining nine anti-rebate states, the legislature has given anti-rebate rules the force of law, and the DoJ is powerless.

So that means it’s up you, the Oregon voter. Already in the frozen swamps of New Jersey last January, the legislature ignored the objections of the New Jersey Association of Realtors to pass a law overturning anti-rebate restrictions, which Governor Corzine signed before leaving office.

And then in 2007, Oregon Senator Jackie Winters sponsored an amendment to the anti-rebate law; she argued that since most of the original law was focused  on preventing finder’s fees from going to out-of-state real estate agents, the language outlawing rebates to consumers should be dropped. The text of the amendment in its entirety was:

Nothing in subsection (1) of this section is intended to prevent an Oregon real estate broker or principal real estate broker from rebating or paying a share of the broker’s or principal broker’s commission resulting from a real estate transaction to a principal of the transaction.

Something so simple could never pass. The amendment died in the Business and Transportation committee, chaired by Rick Metsger. Nobody in Senator Metsger’s office is sure what happened to the amendment. To get it back on the calendar when the legislature meets again in the winter of 2011 – 2012, email your Oregon state senator with one simple message: repeal the anti-rebate law for real estate commissions.

(One final post-script: when we contacted Senator Winters office to ask why the 2007 amendment died, the staffer who answered the phone late on Tuesday night spoke with genuine warmth about Senator Metsger, even though the two senators are from different parties. It gives you hope that, even when they make mistakes, politicians can work things out.)

Credit for photo of Jackie Winters : Celine… on Flickr

The post Redfin Expands to Oregon, First of Nine States That Outlaw Our Business Model appeared first on Redfin Real Estate Blog.

I was asked again last year at an Inman keynote if I still felt that way. I said that I regretted my tone, and was grateful to those in the industry who’d forgiven me for it. The moderator, Brad Inman, persisted: “is the industry still screwed up?” Well, I thought to myself, I sure can’t say no, the industry is just fine. So I said that respectfully, politely, humbly yes, the industry is still screwed up.

In recounting that discussion last week to the Toronto journalist, I emphasized how Redfin had changed, how the industry has changed, and how I have tried, with varying degrees of success, to change: to be more collegial and constructive, focusing on customer service as well as technology, blending what has always been good about the industry with what we like about our approach.

It has been a tough balance. We want to be honorable members of our industry, and a good partner to our fellow brokers, but we also want to be an advocate for the consumer, and for the industry to keep getting better. The whole dialog blows up when self-critical statements about how harsh I used to be are recycled as new opinions.

Even now that the journalist published a transcript of his notes, the focus is on our saying that there’s a problem, not on whether there actually is a problem, let alone the solution.  If we stop arguing over whether there’s anything wrong with real estate, we can start talking about how it could become better. Here, scribbled down during breaks in a conference, are a few ideas:

1. Pay agents in a way that doesn’t creates a conflict of interest with their customers, particularly when the customer is buying a home. Paying for a closed deal regardless of whether the customer is happy tends to maximize closed deals at the expense of customer happiness.
2. In fact, dump the whole coffee-is-for-closers culture, which makes brokerages feel like the Coyote, and our customers feel like the Road Runner, pecking at listings then running for cover. As I’ve come to know brokers better, I’ve been surprised at the genuine pride brokers take in their service. But I’ve been surprised too at just how deeply ingrained the sales mentality is in our culture. Before Redfin, I’d always thought that attitude was a relic of the 1970s, a caricature from Glengarry Glen Ross. But even now at industry events, I feel like a sissy when I say our agents are customer-service people, not salesmen. The audience sniggers. Outside of real estate, it’s hard to find a business with hundreds or thousands of employees without a published set of values or mission statement. Yet that’s sometimes the norm at brokerages. As a new generation of agent strikes out on Bloodhound Blog, Active Rain and Agent Genius to build her own, service-oriented brand, this attitude will change.
3. Spend money on technology, not lead-generation: The reason Redfin charges half what most other agents do isn’t because our agents make less: almost all the agents negotiating deals for Redfin in 2009 earned six figures, with benefits, vacation and all their dues, telephone bills, and travel costs paid. We just spend a lot less time and money buying leads and chasing customers, so we have more for ourselves and our clients.
4. Thin the herd: brokerages often make money by hiring the most agents, not the best. For real estate to be a profession like law or medicine, we have to profess to an ideal, to put our customers’ interest ahead of our own, and then ruthlessly exclude people from the profession who don’t uphold that ideal. Historically, we’ve excluded almost no one. But now that the number of agents has dipped, I’ve heard brokerages for the first time boast about agent quality. Let’s run with that idea. It’d be better for everyone if we had 500,000 well-paid agents, not a million half-starved ones.
5. Invest in the rest:  you can only get agents to commit to what a brokerage stands for if the brokerage makes a commitment to the agent: providing for fundamental needs like health-care, offering as best we can some basic level of financial security in hard times, creating a team-oriented atmosphere, delivering high levels of training and career development. To get the best young people to launch a career in real estate, we have to begin to compete with employers like Google and Zappos, who have made a cult out of treating their employees well.
6. Get religion about publishing data. We’re indignant that 4 of the 5 most-trafficked real estate websites show only a fraction of the homes for sale but it’s our own fault for being ambivalent and persnickety about sharing data. It is abundantly clear that consumers want data; we should be the ones to give it to them. The DoJ-NAR settlement opened a floodgate, but there are still plenty of rules around how many listings we can show on a page and how consumers register. To compete against Google, we need the simplest and smallest rulebook possible.
7. Be transparent about agent performance: consumers should be able to shop for agents as well as houses on our websites. Redfin surveys every customer, and publishes every response on our agent’s online profiles. The Houston MLS does the same, with some limits. Plenty of brokerages want to do this, but worry their top producers will walk over one bad review. Let ‘em walk. There isn’t another consumer product or service in the U.S. — and certainly not one that can cost a consumer $50,000 — that isn’t subject to some kind of consumer review. The truth will set us free, from lame billboards and late-night TV ads and all sorts of hucksterism.
8. Stop bickering and focus on the customer: the industry can’t fix its relationship with consumers because it’s still so busy arguing with itself: about what agents should pay brokerages, about what brokerages should give agents, about who promotes whom. Every time I start to think that real estate will sort itself out, I go to a conference of brokers and panic, because I’ve never seen so many professionals invest all their passion in topics that have nothing to do with the customer. If we focus on the customer, we’ll be unstoppable.

So those are some ideas on how the industry — and Redfin, too — can change for the better. Except the ideas aren’t really our ideas. Late at night, over drinks, most everyone in the industry seems to agree that some day we need to have fewer agents, focused on the right things, and kick-ass websites of our own for connecting consumers with reliable  information. The only difference of opinion is how long we wait to begin making those changes. We think the time is now.

(Photo credit: Canadian Pacific on Flickr)

The post If I Can Change, and You Can Change, Everybody Can Change! appeared first on Redfin Real Estate Blog.

All the games that agents play with inventory were supposed to end now that that the DoJ settlement with the Realtors is being enforced. The settlement requires listing agents to publish to the web all the information about a listing that could be disclosed to a client in person. The loophole in the settlement is that the listing agent can require other brokers’ websites to register users before showing the listing, and to validate their email address.

In Long Island, where dual agency is common, a whopping two thirds of all listings on the market now require Internet visitors to register before seeing the address. The form New York agents use to list properties online includes a field indicating whether the address can be displayed without registration; for 66% of listings, the agent requires registration, overriding the default.

And overriding the default is definitely not in the best interests of the listing agent’s client, the seller. On our website last week, New York listings that freely publish their address got 42% more views than listings that require registration. If the seller discovers a registration requirement, he can ask the listing agent to remove the registration requirement, but most never find out: the Multiple Listing Service of Long Island doesn’t require seller notification or permission.

Why would a listing agent want to force Redfin to register you as a user before we can show you a listing’s address? Everyone knows that the vast majority of consumers don’t want to register, because most real estate websites are so spammy. And it has become increasingly clear that a web page requiring registration is invisible to Google — the Great Traffic Director in the Sky — whose indexing robots have no password, and no way of determining the addresses of these listings.

Perhaps some agents are old-fashioned and just don’t like listing information out on the web. Others want to protect the privacy of movie-star clients.

But withholding the address can be part of a bigger game to build the listing agent’s business, not a fiduciary duty to act in the best interests of a client. Any book on how to get your start in real estate begins with the advice to control inventory so you can attract buyers. “Listers,” the saying goes, “last.” It’s a big advantage if you can tell buyers about homes they can’t easily find on the web.

And by promoting their own listings  to their own buyers first and foremost, listing agents hope to double their fee by representing both buyer and seller in the same transaction. Recently, we’ve seen this happen most often with REO properties, which have been in high demand.

And it’s not just the gangs of New York that are doing this. In San Diego, where dual agency is much less common, more than a quarter of all home-sellers still do not publish basic information about their listing to the Internet. Here’s the break-down of San Diego-area listings in our database as of this morning:

• 73.8% are publicly visible, with no registration required
• 11.3% require registration to see the address; here, unregistered users cannot even see the property on the map
• 2.6% require registration to see the listing at all
• 12.3% agent-only, where even a registered user cannot see the listing via the Internet

And in San Diego, listing clients who don’t freely publish their address pay a steeper price: public listings get 110% more views than listings that limit the address to registered users.

What’s astounding about the San Diego data is that 12.3% of clients don’t publish their listing to the Internet at all; yes, because of the DoJ settlement, this requires seller permission but a listing agreement is so complicated that we wonder if the seller signs this permission away without even realizing it.

Now some agents will respond that showing a very high-end home to every Tom, Dick and Mary on the web won’t contribute one whit to an actual sale. But especially now, when so many high-end buyers are using the web to shop from overseas,  it’s hard to believe that 1 in 8 home-sellers are willing to take that chance. As of 2007, the California Association of Realtors estimated that 72% of consumers start their home-search online.

Of course, there’s a precedent for this. Back in the ’90′s, investment banks used to sell IPO shares to their cronies in exchange for a promise that the cronies would sell the shares back through the bank, doubling fees. This hurt the IPO client, because the stock wasn’t marketed to everyone for the highest possible price, but only to a particular type of buyer, one in fact who was less desirable than other clients. The bankers who did this faced criminal charges.

Today, nobody is going to jail over a withheld address. But we wish that more listing agents, and more sellers, would publish every address free and clear. And we wish that the MLSs would just do away with registration requirements altogether.

(Photocredit: Oldvidhead on Flickr)

The post Are Listing Agents Hurting Their Clients by Hiding Addresses? appeared first on Redfin Real Estate Blog.

“The most important success factor for these sites,” Erick writes, “is how comprehensive they are.” By comprehensive Erick means within a market: nobody wants to see every listing in the U.S., just every listing wherever he or she wants to live.

So Erick published a study from Roost, a lead-generation site with a feed from the MLS — the database that, in nearly every market, all brokers use to share listings. (Redfin has MLS listings like Roost, but also for-sale-by-owner homes and bank-owned foreclosures not yet in the MLS.)

The study showed that on the strength of its MLS access, Roost has far more broker-listed properties than sites like Trulia, Yahoo and Google — which have to get their listings through one-by-one agreements with brokers.

Redfin wasn’t included in the study, and can’t even get a copy to assess its accuracy. But it was sad for us to see everything but the kitchen sink thrown at the study, from people who never denied its basic conclusion: that a site with MLS access has many more homes for sale in a market than one that doesn’t.

And while the debate in TechCrunch’s comments section raged over the quantity of listings, no one acknowledged the huge differences in quality: what brokers share with media sites is only a teaser photo with a few basic details, rather than the complete MLS listing shown by Redfin and Roost, with dozens of fields and photos, updated as transactions occur. The difference in quality is plain for anyone to see: compare Redfin’s Washington DC listing to what appears on media sites.

But since everyone focused on Swiftboating the quantity claim, let’s take a look at the arguments:

• The study was arbitrary. That’s true. The parameters were arbitrary: 3-beds, 2-bath homes between $400,000 – $450,000, in Miami, Dallas & San Diego. But to argue a study is skewed, don’t you have to say how it was skewed? Which parameters would have shown that Trulia, Yahoo or Google has more listings?
• Actually, “we have roughly 70% coverage in most major metros.” Trulia argued that its coverage was better than reported, at 70%. Setting aside that missing 1 in 4 listings is itself a calamity, we wondered 70% of what? Of MLS listings? The claim seems as arbitrary as the study Trulia was trying to rebut.
• Consumers care most about “filtering options,” not seeing all the homes for sale. Redfin has a dozen advanced filters but 94% of our searches are on the basics: price, beds, baths. One of the most common filters is no filter at all.
• Only 80% of the properties in the U.S. are sold via the MLS.  Academic studies have found that even in Madison, Wisconsin, reputedly the nation’s capital of for-sale-by-owner homes, 86% of the properties were sold by a broker via the MLS. In other areas with an MLS, that percentage is much higher. Where did 80% come from?
• The MLS doesn’t include foreclosed homes, which comprise 31% of home sales in San Diego. But in fact foreclosures are likely already in the MLS, because banks hire brokers to put them there. Redfin obtains listings from the banks and directly from the MLS, so we know how the numbers break out. Here’s what we have as of this past weekend:
  • 6,000+ MLS-listed properties in San Diego.
  • 715 of those MLS listings in San Diego are bank-owned.
  • 184 bank-owned properties in San Diego are not yet in the MLS; Redfin displays these listings by scanning bank sites directly, and comparing what we find to the MLS. We undoubtedly missed some banks’ listings, but it is very likely that most bank-owned properties are in the MLS.
  • 120 for-sale-by-owner properties in San Diego are not listed on the MLS. An unknown number of sale-by-owner listings are available on Craigslist, but this doesn’t help anyone: Craigslist refuses to share its data with any real estate websites.

  The suggestion that 31% of listings are not in the MLS because of foreclosures is off by an order of magnitude.

• The study was “silly.” It isn’t silly to worry about whether you’re seeing all the homes for sale. And trying to make a joke out of the whole issue by saying “I was thinking about commissioning a study saying that I’m a size 2 supermodel” implies that Roost is trying to prove something unimportant and obviously untrue, when in fact it is trying to establish, however artlessly, something important and almost undeniably true.

But here’s what’s great about TechCrunch. Erick didn’t just print the he-said she-said arguments between websites. He queried all the websites himself, and found that Redfin had slightly more listings (6,300) than Roost (6,036), and Roost had far more listings than Trulia (4,395).

Zillow, which had the lowest number of MLS listings in the Roost study, claimed the most listings of all, 7,661, but Erick couldn’t confirm this because Zillow’s site searches on the county of San Diego, not the city. Redfin gets listings from Zillow as well as the MLS, so any listings on Zillow that aren’t on Redfin should appear shortly.

Hats off to Erick for having done the research.

He shouldn’t have had to. The pledge of every new real estate site has been to bring transparency to real estate. But so far, most sites have been anything but transparent about what they have and what they don’t. Now Joseph Ferrara at Sellsius blog is asking us all to stop hiding the ball and say where our listings come from and what we’re missing. Since April 2008, Redfin has done just that. Trulia, Yahoo, Google, please step forward.

Photo credit: Roberdan on Flickr.

The post TechCrunch Asks the $24,000 Question appeared first on Redfin Real Estate Blog.

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 have 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…

The post No One's Going to Take Away Our Data, But What Can We Do With It? appeared first on Redfin Real Estate Blog.

The post makes me physically ill, not only because it seemed mean-spirited but because we know Kris Berg to be a wonderful person, a total pro and a darn good blogger. Worst of all, it deepens a brainless, destructive division between Redfin and our peers that has caused me great — this is the right word — anguish. We have already commented directly on the post, and Kris has already been gracious enough to accept our apology. So the rest of this post is an apology to everyone else in real estate, many of whom have reacted to more than just what we said about Kris last night. And because this is so hard to write, it’s also a list of small but important things we can’t apologize for too.

We all know that Redfin’s business model is different than yours: we try to get customers via our search site, we pay our agents salaries and customer-satisfaction bonuses, we want to put the escrow process online to avoid talking so much to our customers, and we refund part of our commission. This makes us freaks perhaps, or even fools if you like, but not an enemy.

Just because our model is different doesn’t mean that we think it’s universally better than the commission-based model. You have no idea how many times a day, every day, all night, we worry that we can’t make it work, usually right before we’re filled with euphoria at our prospects. We long ago imagined the party you’ll throw on our grave if we fail. But the reason we can’t give up on Redfin is that it’s what we would want for ourselves. Clearly, most consumers still prefer the traditional model. But some consumers have chosen our model too.

So that’s what we can’t apologize for: for who we are, for tinkering to make our model better (especially around tours, where it has been broken), for believing we can make it work. But we are sorry for our tone — I am sorry for my tone. What is most important to us is that Redfin’s (often ineffective) calls for reform stop ticking you off. Like you — and unlike the Zillows and Trulias whom you love (and whom we sometimes find ourselves admiring too) — we are real estate agents. We have a vested interest in making real estate better. We share our data via the MLS. We play by its rules. And we work together buying and selling homes.

The change we want is change everybody wants: that consumers can choose the services they pay for without fearing retribution, that they can access property information on their own. That’s it.

I don’t know how we’ve screwed things up so badly that our complaints about vandalized yard-signs or blocked offers have ticked you off. We should all denounce the one-in-a-zillion nut jobs who pull these stunts, because they make us all look bad, and it only takes one or two to terrify an entire market (#1 reason Redfin.com visitors don’t buy through us, 2 years straight: “fear of discrimination”).

It took us a while to realize how stupid it is for us to talk to the press about these incidents — nobody is ever punished, in even the slightest way, even when caught red-handed, and nobody else in real estate is outraged — but we’ll try harder to work out future incidents in private.

And, today’s blog post aside, there is reason to believe we can patch things up with everyone else. Last week, I finally told Greg Swann — he was so nice and gracious — that I was sorry for picking fights with him. Last month, an MLS decided to liberalize its data-sharing rules. Yesterday, a broker phoned to point out — privately, kindly — a possible error in one of our marketing claims (which we will correct if it’s wrong). And Kris Berg took my call today when 9 out of 10 people would have hung up in my face. Every week or so, I get a thank-you note from an agent about a deal we worked on together. How wonderful, how unnecessary and necessary, is that?

So maybe there’s hope that we can work things out. This isn’t a promise to be boring. But at least we can be civil. We weren’t today. We are sorry for the post about Kris Berg. We wanted to say to everyone else in real estate talking about this post that we hope there can be peace between us.

The post Something I've Been Meaning to Say for A Long Time appeared first on Redfin Real Estate Blog.

We are an (online) broker ourselves, but have argued that consumers should be able to choose the real estate services for which they pay, so I’m not sure we have a dog in this fight. In the past, we have welcomed studies showing that buyers and sellers can get along without a broker, and argued that a client working with an online broker negotiates a better price. But in this case I was surprised that the Freakonomics team didn’t evaluate the Stanford economists’ methodology.

The Stanford study only evaluated 800 homes sold on the Stanford campus, “the ownership of which is limited to Stanford faculty and a limited number of senior staff.” In such an environment, marketing is much easier because of the small number of potential buyers, trust is high because of the buyers’ affiliations with one another, and supply is extremely limited: many academics would kill, or even teach an extra freshman survey course, to live on the Stanford campus.

Moreover, there is no broker-operated MLS on the Stanford campus, and likely no other broker representing the buyer, so there is no rationale for buyers’ brokers to steer clients away from properties not paying a commission. It seems like a leap to draw conclusions from this data set for the typical consumer, who is probably selling a home in a larger market, with more competition, to strangers largely represented by brokers.

In real estate and in life, college is a smaller, more perfect vision of how the rest of the world could be. We thought it was interesting that the previous academic study on brokers’ effectiveness focused on Madison, Wisconsin, because this is also a small college community where alternative approaches to real estate have reached critical mass. Maybe these communities point the way to a post-brokerage world waiting for all us, where both sides abandon their brokers, where we can access information for ourselves online, where we can come to terms more easily and economically.

For now though, we should at least take such findings with a grain of salt, because the Stanford campus isn’t the Hobbesian jungle of, say, the Orange County real estate market. We revere the Freakonomics team, who inspired us to offer real estate e-commerce in the first place, but it seems a bit too credulous to present these findings without acknowledging that Stanford, far more even than Madison, is a different world.

Bonus link: a consumer reviews the best real estate search sites… photo credit: To Mr. “Leaning Right” on Flickr.

Also, the NYT obituary on William F. Buckley is unusually good:

“No other act can project simultaneous hints that he is in the act of playing Commodore of the Yacht Club, Joseph Goebbels, Robert Mitchum, Maverick, Savonarola, the nice prep school kid next door, and the snows of yesteryear,” Norman Mailer said in an interview with Harpers in 1967… For Murray Kempton, one of his many friends on the left, the Buckley press conference style called up “an Edwardian resident commissioner reading aloud the 39 articles of the Anglican establishment to a conscript of assembled Zulus.” A friend of mine was, as a teenager, once fundraising door-to-door in Buckley’s Stamford neighborhood, and William F. Buckley invited him in and held forth at length on obscure topics…

The post The Broken Tower and the Ivory Tower appeared first on Redfin Real Estate Blog.

The lead plaintiff is a 60-year-old university fundraiser who describes herself as “114 pounds of absolute perseverance.” She spent the past year picketing the agent’s office. With shoot-from-the-hip media-savvy, her former agent says “the lady’s a nut job.”

And of course, the suit is just the kind that drives conservatives nuts, too. Why can’t people take responsibility for their decisions?

But wait. The only problem with blaming the buyers for overpaying is that the rationale for traditional buyer agents’ fees has been to protect buyers from overpaying. As the Times observes, the Ummels’ lawsuit is new in part because the buyer agent is fairly new, too — in the last downturn, agents represented only sellers and so buyers had only themselves to blame.

This time around, no one expects a buyer agent to have a crystal ball. The suit isn’t charging that Ms. Ummel’s agent should have foreseen a future downturn, only that he failed to guide his clients on current market conditions. Two nearly identical houses in the same, nearly new development sold at almost the exact same time for $105,000 and $175,000 less.

And even then, no one expects a real estate agent to be an appraiser either: the plaintiffs’ beef is that the agent withheld an independent appraisal they had requested, which would have notified them before their own closing of at least one of the nearby sales. Since the Ummels had already scotched two deals, it seems reasonable to think that the appraisal would have scotched a third.

Now we could argue endlessly that price comparisons are odoriferous and no two homes are the same, even in Southern California, but that misses the point. For the purposes of this discussion let’s just take a flying leap and assume that the Ummels overpaid, so we can focus on the interesting, difficult question of whether an agent can ever be liable for his clients’ overpaying.

Once a buyer’s agent begins making representations about price, it seems possible for him to make negligent representations about price. This doesn’t mean an agent can’t make representations about price, and can’t be wrong when he does. He just can’t be negligently wrong, by withholding material information that a reasonable person would want to see. If the Ummels’ agent did that, he should pay for it.

Of course, since we have no idea from our seat in the peanut gallery what really happened between Ms. Ummel and her agent, the whole debate is academic. The only undeniable fact is that the lawsuit that Ms. Ummel is pursuing, at greater cost than she is likely to recoup, must be like all other forms of revenge, a hopeless attempt to regain what she lost: her sense of trust and self-reliance.

In this respect, the case just illustrates the perils to both parties when a client outsources her brain to a real estate agent, or a stock-broker, or anyone else trying to sell something. It is why we dislike the paternalistic mindset occasionally used to justify brokerage fees, in which talk of “hand holding” is not seen as condescending, fears about “the single biggest purchase in your life” are stoked, and agent attempts to be persuasive during tense, personal moments are seen as heroic.

That’s messed up. It seems like most clients would prefer a partnership, carefully constructed to avoid conflicts of interest, in which agents provide information, professional judgment and support so as to empower the client to make a few big decisions: Is this the house you want? Does it have anything wrong with it that you didn’t notice? Could you get it (or one like it) for less money?

It is still possible — though we think less likely — that the Ummels could have taken this approach and still paid as much as they did for their house, but somehow I doubt Ms. Ummel would have wasted a year of her life afterwards feeling, rightly or wrongly, like a sucker.

(And no, we don’t think the behavior the Ummels attributed to their agent is at all typical, and we aren’t trying to make any claims against the industry beyond arguing for a different approach to customer service.)

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The segment was scheduled to run at 7:40, and the producer asked me to arrive by 6:50. Outside the Today studio it was festive: there was a gigantic Christmas tree, and traces of snow still on the ground, and a crowd of tourists, and a security guard manning a velvet rope. It was windy and cold. Inside there was another security guard, and — what a thrill! — another velvet rope.

The green room was just around the corner. The carpets were comfortable and worn. I was alone with two production assistants who were surfing the web on an ancient computer and watching the show; the food was plentiful: doughnut holes, egg sandwiches, cookies, bagels, granola bars, a plastic bowl of cut fruit. The place was crammed full of newspapers and televisions, all tuned to NBC. “Mind if we see what else is on?” I asked. They shook their heads.

A contingent of cooks showed up with a truck-sized slab of beef that they were going to prepare on the air. Since it was so early, I asked the PAs if they ate the food from the cooking segments and they said, “Oh yeah.”

The mood was unruffled. Brian Boitano was in the building, and somebody said, “It’s Brian Boitano.” Julia Roberts appeared just after Redfin, but her segment was taped the day before. Unlike “60 Minutes,” which was as highly charged and carefully wrought behind the scenes as it was on camera, “Today” is sunny, relaxed and fast-paced. It is after all on for four hours a day, almost every day. All the make-up people and production assistants are very encouraging, almost like amusement park attendants.

Heading up the stairs to the make-up room, I walked through a door and literally ran into Matt Lauer. “Hi guys!” he said. “Do I really need make-up?” I asked and the make-up people nodded with religious conviction. I asked them about their favorite stars to work on and they told me “the stars bring their own make-up people.”

The producer called to say I would do great. I think I sounded nervous, which made him sound very nervous. We ended up reassuring one another. I wanted to ask if I could use the word “kick-ass” on the air, for reasons I can no longer remember, but then told him “forget it,” and he said “what?” and I said, “no, forget it,” and then he said “Just don’t get nervous.”

At that very moment I was thinking of a Post headline I saw on my last visit here, when the Mets choked in a pennant-race (“PAGING DR. HEIMLICH”), and the one from the day before, when Mike Huckabee had to apologize to Mitt Romney (“I HUCKED UP.”) A PA escorted me onto the set five minutes before the segment started. I shook hands briefly with Meredith Viera, and with 90 seconds to go, I was wired for sound.

While I sat in the bar-stool, Meredith Vieira’s executive producer kept making jokes in her earpiece that caused her to say “You’re terrible.” And “stop.” She turned to me and said “He’s just being mean,” though of course I had no idea what the executive producer was saying. She sized me up and then said, “Can I preview the out?”– the segue to the next segment which the anchors memorize in case at any moment they have to end the current segment.

I tried to remember the advice I got the day before from a friend of a friend, waiting on the outdoor platform for a train in an ice-storm, clutching a cell phone with a frozen, agonized claw (“How much time do you have?” he asked. “12 hours.” “Oh my God. And what’s all that noise in the background?” “It’s me, freezing to death.” “Ok, the first thing to remember is to sound happy — you don’t sound too happy right now, ha ha!”). Here was the advice we got from him, and an Omaha pediatrician with TV experience, both of whom were enormously helpful:

1. Enthusiasm, passion, conviction: The most important qualities
2. Always answer three questions: So what? Who cares? What’s in it for me (that is, the viewer)?
3. Assume the viewer is channel surfing and didn’t hear the question.
4. Look at the interviewer; let the camera-people worry about the angle in which to shoot your face.
5. It isn’t uncommon for the questions to change the night before the show.
6. Don’t lean back in the chair; scoot forward, as this naturally tends to improve your posture.
7. Tuck arms close to sides, as this also tends to improve posture, but don’t have your arms too close to your sides.
8. Talk with your hands if that’s how you’re comfortable.
9. Avoid correcting the anchor; validate the questions.
10. If you want to circle back to an answer, you can say, “Like we were talking about earlier…”
11. The interviewer usually chooses you because he or she is most interested in your area; assume she is interested in what you have to say.
12. It’s probably best to avoid wearing white or patterns of a finer weave than a centimeter. Wearing a blazer gives depth (“I left my blazer at home.” “OK then, wearing a blazer makes you look stuck up. Ha ha!”)

On the set, Vieira was very relaxed and amazingly good at scrolling ahead through the teleprompter script just before the segment started and then never really looking at it again. She was also friendly, which calmed me down. Then she kicked off the segment by saying that I was here to explain how everything a Realtor tells you may be wrong. I knew that somewhere at that very moment, a blood-thirsty mob of real estate agents was forming.

The rest of the interview, I was worried about what they would think. But then before I knew it we were done. The producer showed up and said we did great, not entirely convincingly. Swinging by the control room — eerily dark but for the light of forty television monitors — I saw on one monitor that Vieira was already doing aerobics with her next guest.

I met a children’s book author from Palm Beach when I went to pick up my laptop from the green room, and someone in the crowd outside cheered when I came outside. I checked my phone and saw nine text messages from Redfin’s well-wishers. And I felt very grateful to Today’s producers, and lucky to have such a wonderful team, and to work at such a great company.

My mom called to say I was “very informative. But why can’t you sit up straight?”

The post Eyewitness "Today" Account + Twelve Live TV Tips appeared first on Redfin Real Estate Blog.