Seller Privacy vs. the Connected Web
Russ Cofano on 05 20, 2007
There has been much discussion on RCG and other blogs regarding property blogs and seller’s right to privacy from bloggers who post “sometimes accurate/sometimes not” opinions about a listed home. As was recently shown by NWMLS’ fine against Redfin, an MLS may have legitimate rule authority to prevent a member from engaging in such activity. If, however, the property blogger is not an MLS member and is getting the information from open houses, the MLS rules would be of no consequence to the blogger.
Sellers and listing agents claim foul. How can someone have the right to post negative comments about the listed home for everyone in the world to see? There must be some legal consequence for such acts, right?
Since there is no reported case in Washington state where a private blogger was held liable for making comments about a listed home, we need to look at legal precedent to understand whether a seller could make such a case.
First, in Washington, a defamation case involves damage to the “character” of a person. Historically, it has not been applied to things because things have no “character”. So we shouldn’t use defamation as the legal basis that would support such a claim.
There is, however, a rarely used tort called “injurious falsehood” that may provide an answer. Under the Restatement (Second) of Torts, “one who publishes a false statement harmful to the interests of another is subject to liability for pecuniary loss resulting to the other if: (a) he intends for publication of the statement to result in harm to interests of the other having a pecuniary value, or either recognizes or should recognize that it is likely to do so, and (b) he knows that the statement is false or acts in reckless disregard of its truth or falsity.”
Let’s analyze this law in the context of a property blogger. First, is the blog post a published statement? Sure. Should the blogger recognize that published false information could cause economic harm to the seller? I would think so. Does the blogger know the statement is false or published with reckless disregard of its truth or falsity? Ah, the crux of the issue.
If the statement is true. There is no claim, period. So, if the blogger attends an open house and states, for example, that the kitchen has “old formica” counters which in fact is true, the seller is out of luck.
If the statement is provably false (same example as above but the kitchen really has granite counters), then the seller would have a claim but would have to prove some monetary damages caused by the blog post. While I am sure you could develop a theory to prove these damages, I can also see all sorts of defenses.
The bigger issue, I think, is if the blogger provides a negative opinion based on fact. For example, let’s say the blogger says “the ‘large’ garage is really better suited for your Prius instead of your Suburban.” And let’s say the garage could fit a Suburban but just barely. Is the statement false? Not really. But it does cast a negative light on the garage. Might a prospective buyer with a big SUV choose not to visit the home because of this post. Certainly. Does the seller have a claim for damages? Maybe, but I would think a very difficult one.
This issue is complicated even further if the comments are by an anonymous poster and not the person or company that hosts the blog. According to a recent court decision, a blogger is not liable for the defamatory conduct of contributors under the Communications Decency Act. Likely, the same would hold true in a claim for Injurious Falsehood. The hard road just got harder.
But is this really the issue here? I don’t think so. I think the real issue goes back to control. Enter the Connected Web. Sellers take advantage of property specific web sites and blogs and viral marketing of property specific email (BTW, please stop sending these to me) and even YouTube-esq video sharing. Yet, from many comments on RCG, sellers (or really their Listing Agents) deserve the right to completely control how such information is conveyed and more importantly, what the Connected Web thinks about it.
One can make a cogent argument that the moment a seller opens their home to the public in the context of a listed home on the Web, that seller gives up something. They are now in public view. In days past, the public view was the neighborhood where Lookey-Lous would visit the open house and engage in neighborhood gossip about the home. Today, it is bloggers who open that home to the world and engage in that same gossip.
The Connected Web has fueled the RE.net and many real estate professionals have latched on to this powerful dynamic as a means to gain public recognition and in some cases, make money. We live in a world of public opinion, now connected over the Globe. Sellers are not immune, nor should they be.
-Russ
About the Author: Russ Cofano
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35 Responses to “Seller Privacy vs. the Connected Web”
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Wow, finally a realistic and well reasoned examination of the issue on a RE blog. Very good.
Russ,
This is a great post and most helpful in the discussion!
This might sound too basic, but I just want to confirm something. There is nothing wrong from a legal perspective with providing an opinion on a home… We get into dangerous ground when we start talking about facts. Correct?
Assuming so much, the owners would have no legal recourse if someone said “I think the house is ugly”, whereas the owners might have a case if someone said “The roof is old and needs to be replaced” when the writers (blogger, commenter, etc.) knew this to be false. (Of course, all this goes out the window if the writer is an agent bound by NWMLS rules! )
It’s a fascinating topic because, just as you say, it gets to the heart of the real issue, which is control over the listings on the internet.
Excellent post.
Thank you for your post, Russ.
As a real estate professional, we face a similar situation where someone that participates in the sale or purchase of RE isn’t held responsible for false claims if they are not licensed. It is because the unlicensed person is not governed by NAR, DBPR, or in the case mentioned, the MLS. Same thing happens in financial analysis, and their governing body, the SEC. I feel these governing bodies should have more power and be able to any situation under their umbrella.
[...] A sound attorney’s point of view on “Seller Privacy vs. the Connected Web” – where do we go from here? [...]
Dustin
“This might sound too basic, but I just want to confirm something. There is nothing wrong from a legal perspective with providing an opinion on a home… We get into dangerous ground when we start talking about facts. Correct?”
Not necessarily. Opinions stated as facts could give rise to a claim. And facts stated as opinions may not. The analysis a court would likely go through is how would a reasonable person intepret the statement.
Each case would depend entirely on the facts and context and I would not even try to create any sort of bright line rule as to what can and cannot be said.
-Russ
Shaun
In Washington, the DOL (and Attorney General) has the authority to take action against an unlicensed person engaged in activities that require a license. NAR does not because it is a trade association. Not sure where you are located but I presume the same would hold true in your state.
Russ
Russ,
Awsome Post.
My question is would a licensed agent be held more accountable by the court vs joe public?
For example if the licensed agent said it needs a new roof vs some public post.
Thanks Russ…
Allen
Good question. Talking strictly from a license law perspective (and not trade assn or MLS rule perspective), my ‘gut’ says there may be some higher level of care to not engage in any “misrepresentation” about the property. I will take a look at license law and give a more informed response a bit later.
Russ
Russ — as noted above, great post. As you point out, this would be a difficult claim for several reasons, not the least of which is the owner’s ability to prove damages as a result of the blog post. Realistically, any such litigation would cost thousands of dollars (most likely tens of thousands) with a probable adverse outcome (given the difficulties of proving the claim). So, the risks associated with this type of blogging are quite low. Until, that is, you anger an owner who has the money to invest in such an endeavor, or the NWMLS or a broker’s association decides to protect the “sanctity” of the listings and convinces the aggrieved owner to pursue a remedy.
As for a blogging agent vs. a joe public, my gut tells me the opposite. The agent’s duties are governed by statute, and those duties run to “all parties to whom the licensee renders real estate brokerage services.” (RCW 18.86.030). I don’t see a basis for imposing a higher standard or greater duty on a claim of injurious falsehood.
Craig
I was talking about license law issues under RCW 18.85 and not .86. I agree that the Agency Law (.86) would not apply but there are different issues in .85.
Russ
Turn this all around and look at it from the perspective of a homebuyer.
If any of us were considering purchasing a home, AND we knew we could go to an internet website and read comments about that house before we put in an offer, would any of us go ahead and read?
I think we would.
Somewhat similar to a home inspection, we review the home inspection report, which exposes possible defects, and then we still buy the home anyways.
If a homebuyer is curious, and a home SELLER has a place to go to also join in the conversation about his or her home, then whoever offers this platform is going to be in the game.
Zillow is probably a great place for this kind of dialogue to begin, as they are offering a homeowner the opportunity to “claim” their property. As far as I know, they are not MLS members.
As far as I can tell, they are building an MLS for all of us to use, not just licensees.
OMG is there going to be a new question added to Form 17… I can see it now… “Are you aware of any blog posts about your home?”
Just throwing out an example for discussion purposes.
Listing agent in public remarks says “New Roof!”
Someone commenting says, “Hey, that’s not a new roof. That ’s a second composite shingle job on top of a wood shingle. That’s not a NEW roof, that’s three layers that need to come off!”
Does it matter who the commenter was? The listing agent? The guy next door? A buyer who decided not to buy the house because of the three layers? An agent with a listing down the street with a “real” NEW roof?
With our neighborhood blog, I’ve only posted a couple of interesting house that have been listed. One of my neighbors had “redfin fever” and wanted to comment things she thought were humorous about the listing and I discouraged her by letting her know I would not allow comments to be posted that are negative about homes for sale (she thought they were funny…I saw potential issues).
I believe licensed agents owe duties of honesty to all parties, including the general public. Hopefully licensing laws would, at least slightly, deter a competing agent from posting untrue information.
Listing agent says “New roof.”
Other commenters, including a competing agent say “Not quite.”
Doesn’t this help bring more transparency for homebuyers and indirectly help home sellers give more accurate data (avoiding possible future liability)?
A blog host could require the commenter to create an authentic account, meaning, “no anonymous commnents allowed.”
Obviously, the blog would need to be moderated, which would require money. Either the general public pays a small fee to join this community (therefore also providing a credit card and other verifiying information which would have the potential to weed out anonymous flamers) OR the site could run like craigslist where it is moderated by all of us. Or perhaps there are a hundred other ways to make this work.
Jillayne, I think it would be more likely to be neighbors possibly thinking their comments are harmless or funny–not so much agents making negative comments. A neighbor may not realize how much a “Hey, that’s not a new roof” or “Hope the new owners have a good subpump” comment might adversely impact the sellers of a property.
Zillow might be that ticket IF they allowed for owners to UN-claim the property entirely.
Lately I’ve been noticing Zillow employees being the ones originating the questions. Feels like a shill in the crowd to me. My grandparents used to live in Atlantic City and people selling handy dandy potato peelers would plant people in the crowd to ask key questions about the product. Even buy it. Isn’t Zillow originating the questions to be answered, kind of like that?
Hi Russ, awesome post and great information for everyone to consider. We’ve been really curious in my office on how these things will turn over time. I just had to send a complaint to Redfin and the NWMLS about a blog post they put out on a client’s property. No real negative info but it was posting a lot of info that my client didn’t want flouted in public venues such as blog posts and they’d posted it without permission of either me or the listing agent. Also,congrats on the blurb in the Seattle Times today with your new position.
Jillayne,
Zillow is a member of the NWMLS and has or is trying to become a member of every MLS in the U.S.
Thx Reba!
The option to “comment” on a home listed for sale is an open invitation for abuse, whether by competing realtors or by unfriendly neighbors. Hopefully the public will realize that these comments are just private opinions, and not necessarily based on fact.
On the flip side, this should make the listing agents a little more “honest” in the home’s description, where a “new roof” that is really not quite new is listed as a “newer roof” or “new roof 5 years ago” instead.
I think the most abused realtor remark is “adult occupied”, which implies super-clean but could really mean that the home hasn’t been updated (or cleaned!) in 20 years, and nothing short of a jackhammer and buckets of bleach and Kilz will make it habitable again.
Blogs are glorified rumor mills. Hopefully this over-hyped web trend will end soon. The subjective nature of all blogs (political, RE, whathaveyou) should always be seen for what they are-personal opnions. RE sites, and others, trying to cash in on this latest buzz word and create blogs surrounding their niches or products, the liability problems that arise seem predictable. Whatever “buzz” you create or however it effects your search optimization data may not be worth it in the long run.
Do away with your blog if it ultimately hurts your business or industry! I certainly don’t take any info i read on a blog as truth. In the case of a house, anyone not getting their info first hand and relying on gossip is foolish. Why would an industry tie it’s horse to such a cart?
Jeff,
My experience and opinion at this point, is that real estate blogs do NOT give consumers ALL the answers.
But, Real Estate Blogs DO:
1) help consumers ask better questions, when getting their “info first hand”.
2) help consumers know when they are getting bad or unsatisfactory answers first hand.
3) cause professionals to look at things in a different and consumer-centric light…slowly but surely.
As to the industry clamming up on blogs if it hurts them, well, that’s a big sore point for everyone. Clearly commissions could end up being lower overall as a result of blogging. That “hurts” the industry. But can you really say that blog efforts that might elevate the consumer’s choices, and yet “hurt” the writer and or industry, should be avoided “at all costs”? If that is the case, then blogging as to consumer choices that are less than some industry norm cost, might have to go “back in the closet”.
I’m sure you are not meaning to suggesting that agent and industry self interest is the ONLY consideration when determining whether or not to blog. Or are you? That’s what it sounds like when you say: “Do away with your blog if it ultimately hurts your business or industry!”
Jeff: You’ve got me thinking about the whole “rumor-mill” idea. What compelled you to leave a comment?
Dustin,
Did you ever play “Whisper Down the Lane”?
dustin,
what compelled me? it’s just an interesting topic.
Do i detect sarcasm? (context being difficult to read in the unspoken word) or am i being paranoid?
if you’re suggesting that leaving a comment on the issue of blogging is infact blogging and therefor synonymous with its inherent problems, then i shall counter with the idea that “commenting” is different than “blogging”…though it is a fine line…and people forget a time before the internet…
I have a problem with the term “blog”. How it got separated from “opinion” i’m not quite sure, but i have my suspicions….and therein lies the need to define them separately:
i would submit that comments are reactions to a definable topic – one immediately at hand, and can therefor be taken with a more accurate dosage of salt – where as blogging tends to editorialize on a much broader scale.
Comments, by definition, are more understood as personal opinion where bloggers have, for some reason, been legitimized in the press as “professionals” or “journalists” . I suppose it’s a buyer beware situation redux, only here the product is “information”…
so if in the future, my comments about comments is now to be defined as the new animal called blog, then i better stop typing. lucky for you (and your database, haha) i fractured two ribs last week skiing so i’ve got some spare time…
Ardell,
I’d trust the “bad or unsatisfactory answers first hand” over anonymous third-hand commentary anyday.
as for providing “consumer information” and helping readers to “ask better questions” i will say “yes”, blogs do help….albeit indirectly…..
i get more out of the debate generated by comments(blogs?) than the actual article(blog) that initiated said comments(blog?) All this is a convoluted way to gain information, in my opinion(internal blog). That said, the reader is then left with lots of information indeed, but information is never knowledge.
if your brand or company becomes associated with rumor(blogs) then i don’t really see how that can do anything but eventually devalue said brand?
To both of you i understand you most likely get paid to “blog” and that’s fine. just understand there are some who are a bit befuddled by this. I don’t blame you for defending the mini-quas-psuedo-industry which is your employ. If you are both actual qualified agents or RE professionals, and merely blog for fun or excersise, then i apologize and suggest you disassociate yourselves, if possible, from the blogosphere. or just call it your opinion….
didn’t know i could type so much all hopped up on vicodin. thanks for the interest. I really do appreciate the topic.
Dustin,
“Did you ever play “Whisper Down the Lane”?”
No, do tell!! Is it like Dodgeball or Kick the Cat?
Jeff
Jeff,
Your opinions are most appreciated… I was somewhat tempted to go sarcastic at first, but I thought there was an interesting element that you were uncovering, so I resisted the urge in order to dive a little deeper.
I’d agree that for many posts, the real value lies in the comments. And that back-and-forth nature is extremely valuable. However, I’m not sure I’d devalue the nature of the posts because they are often instrumental in determining the type of comments that follow.
The reason I asked “what compelled you to comment” was really to get an understanding of why you wanted to take part in the conversation. I happen to think that people’s urge to be “part of” the story is one of the reasons that blogs work so well and why they are more than just a fad.
And I definitely disagree with your concept that a blog will “eventually devalue said brand” in that I happen to think that a blog is a wonderful avenue for a real estate professional to demonstrate some of the skills that make for a great agent (local knowledge, technical skills, reaction to difficult situations, etc.) in addition to building up a “brand” that the search engines love and will continue to send consumers who are looking for relevant information and conversations.
Nonetheless, I can see how a blog based purely on rumors could be bad for a real estate agent. I just don’t see a lot of those. For the most part, I see a lot of real estate professionals who are doing their best to navigate the online world in order to find and help people.
Ardell,
I just playing a round of telephone this weekend!
translation, anyone?
glad to see our russian friends have an opinion too…
Jeff,
I’m nearly positive it is just spam that slipped through the filter, so I deleted it.
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