Redfin Fined For Real Estate Blog

    May 21, 2007

For an outfit like Google, $50,000 isn’t much – this is, after all, the corporation that bought a full-size SpaceShipOne replica for no apparent reason.  But for Redfin, a $50,000 loss is a show-stopper, and the real estate company shut down part of its “Sweet Digs” blog after being fined that amount.

The blog had offered property reviews, but the Northwest Multiple Listing Service (NWMLS) “deemed our reviews (particularly the harsh ones) as an advertisement,” according to Redfin’s Glenn Kelman, and “advertising another broker’s listing” is against NWMLS rules.

So the NWMLS whomped Redfin with that $50,000 fine.

This action has been condemned in the “3 Oceans – San Francisco Bay Area Real Estate Blog,” the “Square Feet Blog,” and countless other industry sources.  Techdirt’s Joe Weisenthal compares it to a “War Against The Web.”  And, naturally, the Redfin people aren’t happy.

Kelman applauds his writers’ work, describes the Sweet Digs blog as “wildly successful,” and then writes, “The MLSs don’t seem to realize that outdated rules against commingling MLS listings with data from other sources will preclude any brokerage site from accepting the basic premise of the Web 2.0 paradigm for building sites: mashing up data from many different sources to give consumers a comprehensive portrait of a market.  These rules are dooming us to obsolescence.”

This obsolescence – assuming that no sort of reversal takes place – will be most notable on the west coast and in Boston (Redfin’s areas of operations).  And no, I’m not sure how the company ended up with that one geographical outlier, but Redfin should soon enter Chicago and our nation’s capital, as well.