Rules, innovation and a shot in the foot

Redfin's revival of the controversial Sweet Digs blogs today brings to mind the MLS rule which got them shut down in the first place: Cooperating brokers agree not to advertise other brokers' listings. The Northwest MLS, of which Redfin is a member, ruled that its former in-person property reviews constituted advertising. Had the reviews been made by consumers not hired by Redfin, they wouldn't have been violating the policy. This calls attention to a fine line that's likely being questioned on other real estate Web sites: What is the definition of advertising and when is it advertising versus simply making public information more public?

At least one agent on Zillow.com has questioned this in regards to the feature that enables homeowners or agents to flag homes for sale on Zillow. An agent in this Q&A section of a property page was miffed that another agent presumably was flagging homes for sale. The thread has been chopped since I first noticed it last week, with certain comments removed, but the point was that this agent was questioning the other agent's authority to do this.

Redfin's Glenn Kelman mentioned in an interview last month that the MLS has a policy against commingling listing information with other non-MLS information on a Web site, though he said that Redfin's blog reviews were clearly separate from the listings on its site. In a Web 2.0 world where information is constantly being mashed up together in new ways, he worries that consumers won't be getting what they are looking for in real estate sites.

When you look at it that way, one could argue that it's more beneficial to be an outsider who's not a member in the MLS if online innovation is the goal.

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