StreetEasy is planning to roll out a new feature that would connect prospective homebuyers with agents who buy advertising on the platform’s for-sale listing pages. The initiative, sources told The Real Deal, is invoking the wrath of major New York brokerages, with the heads of some firms suggesting a boycott of the platform.
Brokers are concerned that buyers will be directed to third-party agents who have no connection to the property, rather than to the listing agent with the exclusive. That could cost listing agents commissions, forcing them to split with brokers who get leads simply by paying StreetEasy to be designated a “premier agent.”
Executives at major firms, who were asked by StreetEasy to sign non-disclosure agreements in return for receiving a heads-up about the initiative, are huddling behind the scenes and strategizing ways to combat the rollout, slated for March 1.
Some are tossing around the idea of an all-out StreetEasy boycott. Others are pushing for a Real Estate Board of New York-funded multiple listings service, that’s currently under development as a back-end platform for brokers, to become a consumer-facing alternative to StreetEasy. REBNY and its members pumped more than $1 million into the trade group’s patchy MLS last year, saying they planning for it to be integrated with third-party websites like StreetEasy, Zillow and Trulia.
On the new StreetEasy system, buyers will click on a contact form on a listing page for more information. They will then be directed by default to a “premier agent” who’s paid for the privilege – though they can choose to change over to the listing broker. There will also be a concierge program, whereby buyers who call about a listing will be connected by a Zillow employee to a premier agent. New development listings will be exempt from the program, as will listings over $10 million, StreetEasy said.
The Premier Agent program has been running on Zillow, a site owned by StreetEasy’s parent company’s site, for years. It is the largest source of revenue for Zillow, while StreetEasy has relied on featured listings and display advertisements to make money. Pricing varies by zip code and by demand but can range from hundreds of dollars a month to thousands of dollars a month.
Susan Daimler, general manager of StreetEasy, pitched the initiative as a win for consumers.
“It is crucial for home shoppers to have a buyer’s agent on their side, helping them analyze information and protecting their interests during the shopping and purchasing process,” she said. “We believe home shoppers should have a choice to connect to someone who represents them and only them.”
Daimler declined to comment on brokerages’ specific objections to the program, but said the firms tend to underestimate the value StreetEasy brings to their listings. She also said the program allows brokers without exclusive listings the chance to gain new clients.
“Certainly, it’s a change, but what is unchanged is that we provide them the largest exposure to the largest audience for free,” she said. “A lot of people underestimate what it takes to build the consumer experience we have. It’s been 10 years. It’s not just about putting listings on a website.”
The saga sheds light on the delicate balance of power between StreetEasy and the brokerage firms whose listings it displays. Without permission to display the properties, StreetEasy can’t do much. But the platform is so popular with New Yorkers that brokerages run the risk of missing out on important eyeballs for their listings if they revoke that permission.
“We’re finally seeing the effects of what happens when you don’t control your own content,” said Olshan Realty’s Donna Olshan. “We created the monster of StreetEasy and now it’s hard to get away from it.”
Zillow paid $50 million to buy StreetEasy in 2013. At the time, StreetEasy had 1.2 million unique monthly visitors, primarily prospective homebuyers in the New York region, it said. Under Zillow, it’s rolled out a variety of premium initiatives, such as the much-criticized “Building Experts” program, which allowed brokers to qualify as experts with just two transactions at a particular property, and a similar program titled “Neighborhood Experts.” In February 2016, the firm said its revenues had more than doubled since the Zillow takeover.