Two of New York City’s largest residential brokerages, the Corcoran Group and Citi Habitats, will not reimburse agents who wish to participate in StreetEasy’s new Premier Agent program, Corcoran CEO Pam Liebman said in a mass email to her brokers Thursday.
“We will not support Premier Agent,” Liebman wrote in the email, which was seen by The Real Deal. “If individual agents choose to take part in the program, you must do with your own credit card; there will be no reimbursement for any participation through your ad budgets.” Large brokerages typically provide marketing budgets for their agents, though the amounts vary widely.
In addition, both firms will discontinue all subscriptions in Streeteasy Pro as of March 31, she said. If agents want to continue their StreetEasy Pro memberships, they will have to foot the bills themselves.
The Premier Agent program, which StreetEasy rolled out on March 1, allows any agent who pays the listings platform a certain fee to be designated as the primary contact for another agent’s exclusive listing. StreetEasy parent Zillow has been running the program on its own site for years, and it’s been the publicly-traded firm’s biggest source of revenue by far, generating over $600 million last year.
Here’s how it works: Buyers who click on a contact form on a listing page for more information about a specific listing will then be directed by default to a “premier agent” who has paid StreetEasy 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, who had paid to advertise in a particular zip code.
“Many of you have reached out to me or to your managers to tell us how upset you are about this feature,” Liebman wrote. “I was told yesterday that to buy 20 percent of one of the zip codes is $6,000 per month. The more people that participate in the program, the higher that prices will get.”
Liebman is not the first brokerage chief to denounce the feature, which StreetEasy expects will be a big revenue driver.
On Wednesday, Compass CEO Robert Reffkin said the industry should be aware of the increasing power that aggregators hold over brokers.
“As an agent, you have to make a decision,” he said. “By having a [StreetEasy] pro account and taking their links and sending them to your clients, those are two ways you’re paying them. If you’re really concerned about this, you shouldn’t do those things.”
Sources said the Real Estate Board of New York penned a letter to the New York Department of State requesting an investigation into the program, which the trade group says violates state laws governing advertising. REBNY claims it’s illegal for someone to advertise another broker’s exclusive listing.
A spokesperson for REBNY did not immediately respond to a request for comment. Liebman declined to comment on her position and Gary Malin, the president of Citi Habitats, was not immediately available.