That’s right, their datacenter caught fire and they still smoked Realtor.com, pun intended. There is only one right way to handle such a situation: quickly, honestly and transparently. If Redfin gets this, why can’t Realtor.com?

Chris Neitzert Sorts Through Charred Rubble of Redfin Datacenter

There was a fire in the Seattle-based data center that Redfin uses to host our web servers, causing a loss of service between approximately 5 a.m. and 10 a.m. Pacific Time. The entire data center was shut down by the fire department, including universal power supplies. Thanks to Redfin’s Chris Neitzert and his team, the site is now up and running. Throughout the interruption, our agents have of course stayed at their posts working with clients. But as the data center installs new equipment, it is possible that we will experience much-briefer interruptions in our website service around midnight tonight. We will continue to be available by telephone at 877-973-3346 or through the direct number our clients have for their agents.
For now, we apologize for the interruption in our service.

Aftermath of Realtor.com Blog Hack

A good starting point would be to review Loic Le Meur’s 10 Rules for Success. While the list is geared for startups, many of the ideas work just as well for established businesses.

1. Don’t wait for a revolutionary idea. It will never happen. Just focus on a simple, exciting, empty space and execute as fast as possible
2. Share your idea. The more you share, the more you get advice and the more you learn. Meet and talk to your competitors.
3. Build a community. Use blogging and social software to make sure people hear about you.
4. Listen to your community. Answer questions and build your product with their feedback.
5. Gather a great team. Select those with very different skills from you. Look for people who are better than you.
6. Be the first to recognise a problem. Everyone makes mistakes. Address the issue in public, learn about and correct it.
7. Don’t spend time on market research. Launch test versions as early as possible. Keep improving the product in the open.
8. Don’t obsess over spreadsheet business plans. They are not going to turn out as you predict, in any case.
9. Don’t plan a big marketing effort. It’s much more important and powerful that your community loves the product.
10. Don’t focus on getting rich. Focus on your users. Money is a consequence of success, not a goal.

(via Financial Times)

Previous Coverage: It all started here.

Another stunning story comes from 4Realz.net with news that weeks ago, following in Zillow’s footsteps, Realtor.com launched a new home estimates feature. Again, nobody noticed and nobody cared. Perhaps this is why Realtor.com thinks they can behave in the manner they have and  get away with it. The fact is that if nobody notices what you do or don’t do and you are a company with the reach and funding of Realtor.com / NAR, that should be a warning that you are not doing things right, not something to be used as a shield to hide behind.

In an unfortunate turn of events, Realtor.com has failed to acknowledge its website and or servers were breached and has failed to inform users whether or not personal data was compromised. This is disturbing on a number of levels. While the breach may have been as simple as a flawed wordpress plugin or much worse, nobody can know for sure due to Realtor.com’s failure to communicate.

Realtor.com Failure to Communicate Fallout:

• It signals to users that they are not valued and builds distrust and disloyalty in users.
• Fails to inform users if their data was compromised, on a legal basis, my guess is that users have a right to be informed as such.
• Is counterproductive to fostering community.
• Shows lack of leadership on the part of Realtor.com team members.
• Gives credence to criticism that Realtor.com does not act in members’ best interests.

Common Courtesy. After repeatedly informing Realtor.com that their website had been compromised, they failed to acknowledge our requests and failed to give us any feedback on the situation at hand. Oddly enough, despite their lack of communication with BrokerScience and Realtor.com users, their IP Address, 209.74.96.62, shows up as one of the most frequent visitors in BrokerScience traffic logs.

To be more specific, the IP Address of HomeStore.com shows up. It is not clear whether HomeStore is now considered a parent or partner of Realtor.com or whether it only shows up because the ARIN record has not been updated since 2001. It does, however, serve as a reminder of Realtor.com’s past and may provide a clue to the company culture that exists that would allow such a basic, preventable and unheard of gaffe to occur.

BrokerScience IP Address Traffic Log

NetRange:   209.74.96.0 - 209.74.127.255 

OrgName:    Homestore.com, Inc
OrgID:      HOMEST-7
Address:    30700 Russell Ranch Rd
City:       Westlake Village
StateProv:  CA
PostalCode: 91362
Country:    US

At around 7 PM last night the Realtor.com Blog was taken offline. 17 hours later and counting, they are still down. The speculation is that a wordpress plugin was at fault, but that remains to be seen.

We are still scratching our heads over how nobody at Realtor.com noticed the hack in their RSS readers, why no action was taken when we notified them of the hack for over 36 hours and why securing the website and servers is taking 17 hours and counting.

Realtor.com is not a mom and pop shop, they take in millions from hard working Realtors and should be held to a higher standard. Have you ever seen Trulia, Zillow, Redfin or HomeGain down for 17 hours? Of course not.

Realtor.com has yet to release comment or respond to our request for comment.

Update: As of 2:30 PM, the site is back up minus the specific posts that had injected spam for a total downtime of around 19 hours. Wow. Still waiting for an official response from a Realtor.com spokesperson. My hope is that they do not fail to address the issue and communicate with the Realtor.com community and bloggers that use their service. Failure to make users aware of the circumstances involved with the hack (considering its anyone’s guess whether personal data was compromised) would be unfortunate for the Realtor.com blogging community.

Since the Realtor.com blog is actually located on a sub-domain at talk.realtor.com, my suspicion is that this could also lead to adverse effects or de-listing by Google of the primary domain of Realtor.com. I pinged Aaron Wall of SEOBook.com and Rand Fishkin of SEOMOZ.org and they concurred that issues with the sub-domain could indirectly affect the primary domain of Realtor.com

I also just noticed they DO have a contact page link if you look hard enough that I didn’t see yesterday before I emailed one of their bloggers yesterday…. let’s see if a quick email changes the situation.

The Real Question. Am I the ONLY person that gets the Realtor.com Blog FEED? Does not one employee of the NAR / Realtor.com team read their own blog / feed? I’m just saying…….

Sample of Spam Links Injected into Code (Click image below for full view)

Follow Up: Realtor.com Hacked Day 3

(Click on image for full length image)

Original post:

Of all the serious flaws in HVCC that stand to hurt consumers, Realtors, appraisers and lenders, Richard fails to address even one of the primary deal breakers that make HVCC a non-starter in its current form. When given the opportunity to name specific recommendations, Richard gives three specific examples:

• Recommendation for change in verbiage regarding “partial payment”
• Requests change in verbiage so that “licensed and trained” employees are required as opposed to “appropriately trained and qualified” employees
• Requests change in HVCC guideline that lenders may not use appraisal company that they have a 20% or more stake in so that lenders must have 0% stake in any company they use

Fair enough, three sensible suggestions until you consider that he has failed to address any of the real issues on the table that stand to detrimentally affect consumers and real estate professionals including those he represents, Realtors. While Realtors stand a very real chance to be hurt by HVCC in its current form, Richard’s comments to the GSE’s fail to even touch on the most pressing issues within HVCC but instead waste an opportunity by nit picking verbiage. One might characterize these oversights as a clear lack of leadership in representing the best interests of consumers and Realtors.

#########

LETTER SENT TO FREDDIE MAC AND FANNIE MAE:

April 30, 2008

Home Valuation Code of Conduct Response
Attn: Ray Romano, Senior Vice President, Credit Risk Oversight Freddie Mac
1551 Park Run Drive, Mail Stop D2Z
McLean, VA 22102-3110

Dear Mr. Romano:

On behalf of the 1.2 million members of the National Association of REALTORS®, I am writing to provide comments on the implementation of the Home Valuation Protection Code. NAR has approximately 30,000 appraiser members from across the country and approximately 750 retain our Residential Accredited Appraiser (RAA) and General Accredited Appraiser (GAA) designations.

NAR supports the independence of appraisers and the integrity of the appraisal process. We applaud the New York State Attorney General Andrew M. Cuomo and both government sponsored enterprises (GSE), Fannie Mae and Freddie Mac, for their efforts to address appraisal fraud in the mortgage industry. While the agreement addresses appraisal fraud, we have concerns with the implementation of the proposed “New Home Valuation Protection Code” through the newly created “Independent Valuation Protection Institute.”

The agreement signed between the New York State Attorney General and Fannie Mae and Freddie Mac expires in 28 months. The newly created Independent Valuation Protection Institute will be funded by both GSEs for 5 years. The agreement is silent on how the GSEs will operate with respect to appraisals after the agreement expires. There is no indication from any party involved in the negotiations that the agreement will continue after 28 months, if one or both of the GSEs will return to pre-agreement appraisal requirements, or if a third option will be explored. It is also unclear how the Independent Valuation Protection Institute will be funded after 5 years or if more than the $5 million allocated by the GSEs is required to fund its operations.

NAR recommends the Independent Valuation Protection Institute be affiliated with an already existing appraisal organization. This will help to ensure that the code is implemented in such a way that it adds value to the appraisal process rather than becoming a duplicative layer of bureaucracy. If properly implemented the code will compliment, rather than duplicate or contradict, already existing appraisal codes such as the Uniform Standards of Professional Appraisal Practice (USPAP). Further, the Independent Valuation Protection Institute will be better positioned to work in conjunction with appraisal organizations and state regulatory agencies to ensure the independence of appraisers and the integrity of the appraisal process.

There is concern that GSEs will increase their reliance on automated valuation. While this would appear to address appraiser influence in a transparent way, a deeper look at automated valuations generally reveals they are not able to consider qualitative factors with the same level of reliability that professional licensed and certified appraisers produce. Professional appraisal organizations and licensed and certified appraisers should work closely with the GSEs to ensure the highest quality appraisals remain the preferred method of valuation for residential real estate transactions.

The agreement reached between the New York State Attorney General and the GSEs, including the valuation code, does not address the costs of the real estate transaction. Appraisers will now have to consider their obligations to USPAP and the Appraisal Foundation and the additional burden of ensuring the Code, in conjunction with the institute, is being adhered to. This may also be an issue for lenders. The creation of a new set of standards to follow and a new oversight organization may lead to increasing cost of the real estate transaction. The GSEs and the institute should work to ensure this agreement is implemented without increasing costs of the real estate transaction.

Several items in the Home Valuation Code of Conduct should be clarified. NAR recommends the following modifications to the Code:

• Section I. 1) should include the term “partial payment” and should read “withholding or threatening to withhold a timely payment, or partial payment, for an appraisal report;”.

• Section V states that any employee of the lender be “appropriately trained and qualified in the area of real estate and appraisals.” The word qualified is not defined and does not necessarily mean that the employee must be a licensed appraiser. If the employee is not licensed, then the individual may be operating under the broad scope of “appraiser” without liability to be disciplined while acting like an appraiser. The employee should be licensed and certified by the state in which the property to be appraised is located. The same requirement should hold for employees of appraisal management companies as well.

• Section VI states that lenders or affiliates of lenders cannot use an appraisal report obtained by or through an appraisal management company that is owned by the lender or affiliate of the lender and that this prohibition does not apply where the lender has an ownership interest in the appraisal management company of 20 percent or less. Lenders should be prohibited from using an appraisal report from any appraisal management company where the lender or the lender’s affiliate maintains an ownership stake. Allowing lenders to obtain appraisal reports from appraisal management companies where the lender has a stake in ownership does not meet the spirit of this agreement and does not uphold the independence of the appraisal process.

Thank you for the opportunity to present the views of the National Association of REALTORS®. These comments are also being provided to Freddie Mac and the U.S. Office of Federal Housing Enterprise Oversight. If you have any questions or comments regarding this letter, please contact our Regulatory Policy Representative Jerry Nagy at 202.383.1233 or jnagy@realtors.org.

Sincerely,

Richard F. Gaylord, CIPS, CRB, CRS, GRI
2008 President, National Association of REALTORS®