February 2, 2010

One day in 2002, a self-professed computer nerd named Glenn Kelman scratched his head. Why was it, he wondered, that he could get more information about a $20 book for sale at Amazon.com than he could for a $500,000 home listed on the national Multiple Listing Service?

Later that year, Mr. Kelman founded Redfin.com. He describes the site as a cross between Century 21 and E*Trade. A more pointed description would be to call Seattle-based Redfin a dart aimed at the heart of the real estate industry. Internet-savvy companies like Redfin are breaking MLS's lock on listings data, which the industry uses to ensure that consumers buy and sell houses the traditional way: through real estate agents who are paid hefty commissions.

The move hasn't endeared Redfin to the real estate industry.

“I get death threats,” Mr. Kelman says. “I gave the finger to an industry that only exists to charge a commission on the most important buying decision you'll ever make. We save people money by automating most of the process.”

The battle to free real estate data is well advanced in the United States. Now, it is coming to a head in Canada as the technological attack on the old order is bolstered by both industry rebels and government: The federal Competition Bureau accuses the industry of dampening competition and consumer choice. To consumers whose houses often sell in a few days – but still net agents tens of thousands of dollars in commissions – Canada's real estate boom has made MLS's monopoly on information seem all the more anachronistic.

Like sectors such as travel and retailing before it, the multibillion-dollar Canadian real estate industry is finally facing a reckoning with the Internet's power to make data free and open.

Steve Ladurantaye, Globe and Mail