Friday, May 11, 2007


It's at least interesting when two dominant forces of the mainstream media launch real estate related stories within a week of each other.

In the email this morning was this press release from the National Association of Realtors. Apparently SIXTY MINUTES is running a piece this weekend on the internet's impact on the real estate industry.

Full disclosure: I have no use for Sixty Minutes. I haven't watched it for seven or eight years, ever since they ran a Kevorkian snuff film during sweeps week. Between that and the Alar hoax they spent pretty much all their residual credibility, and I have many better things to do during that particular hour.

I've also had experience with one of their producers and film crews. In the early nineties there was a measure put before the King County (Washington) Council by the local animal rights org that would have essentially outlawed the breeding of pets, particularly dogs. Couched in typically painful compassion prose, it looked like it might pass; that piqued Sixty Minutes' interest and they showed up to document before and after the council vote.

Oddly enough, there were a number of people who thought that was an absolutely nutty idea, largely because it was. We showed up at the council meeting at 5:30am – speakers were called on a first come, first to talk basis – and, while the cameras rolled, we spoke for the first eight hours of the meeting. The measure failed overwhelmingly, and Sixty Minutes was no longer interested.

Which is what's happened here. Apparently intended to be a major Good Little-Guy v Bad Big-Guy hit piece, it sounds like the nuances of a very complex industry backed them off considerably. Now – and, again, I'm only going by the press release – it's more of a puff piece on some internet startups, particularly Redfin out of Seattle. Zillow's probably in there as well. So, OK. Big deal.

About Redfin: One of the Seattle stations got a jump on Sixty Minutes, so here (via Inman Blog) is a sample of what you might see. [I love Glenn Kelman selling the fact that he isn't a salesman.] Redfin works primarily as an internet buyer's agent, promising to rebate 75% of the buyer agent commission to the buyer.

Reminder: it's illegal in the state of Oregon for an agent to share commission, avoiding in the process lots of conflict of interest problems. Redfin cannot operate here. Whether that's good or bad is for another day.

I'll break my boycott, DVR the Sixty Minutes segment and respond accordingly, but my gut is models like Redfin have a lot of tweaking to do before they're ever profitable. Their agents by design stay by their computers, fold on their fiduciary duty, and allow their buyer, the listing agent and others to do the heavy lifting. I suppose that's great for savvy buyers, but it puts the listing agent in a position of much higher liability with no prospect for return. Not a good way to begin a transaction.

So in keeping with the theme that people aren't inherently stupid, I think NAR's angst is juuuuuuuusst a bit overblown. We'll see.

And for the record: I really hate talking points.

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