The $60 billion business of realtors is again threatened by Internet startups, reports the New York Times. One site gives buyers information that was once only available to realtors and the other has started online house auctions.

Zillow.com gives consumers information such as previous sales prices and the prices of similar properties on 60 million residential properties. Redfin.com is offering an eBay service for real estate. It doesn’t exclude agents but could drastically reduce commissions.

Realtors worry that Zillow could be a first step in an online evolution threatening their business, just as Expedia, Travelocity and other online sites disrupted the business of travel agents.

The realtors should be scared, especially now we all know what the authors of Freakonomics reported about realtors in the Chicago area. They had better information than their clients and on average took longer to sell their own homes but got a better price.

In other words, the realtors’ legal responsibility was to get the best price for their clients but their own economic interest lay in completing a deal to secure the commission, even if it the deal produced a less than optimum price. And they naturally went with their economic interest.