The Real Deal New York

Realogy’s deal with StreetEasy fuels more criticism of Premier Agent

The arrangement is unfair and counterproductive, brokers say
By Meenal Vamburkar | August 10, 2018 08:00AM

(Credit: iStock)

StreetEasy‘s Premier Agent program is drawing a fresh batch of criticism from the city’s brokerages and agents. This time, the fuss is about a deal its parent company Zillow Group cut with Realogy.

Last month, The Real Deal revealed that agents at Realogy — the conglomerate that owns the Corcoran Group, Citi Habitats and national brands like Coldwell Banker — receive email notifications when a Premier Agent is contacted by a prospective buyer about one of their listings. When that happens, the Realogy agent gets an email revealing the name of the Premier Agent who was contacted, and an email link so they can contact the buyer directly. Sources told TRD that the Realogy deal predated StreetEasy’s launch of the lead generation program, which lets buyers’ agents advertise on listings that are not their own.

The deal creates an unfair advantage for Realogy agents who already have the sell-side of the deal, according to some agents and brokerage executives.

“We feel like they’re trying to cut us out,” said Beth Gittleman, head of sales and development at Bohemia Realty Group. “Why should we not be given the same consideration?”

The setup can also create confusion for customers, according to Compass agent Ethan Leifer. If buyers are contacted by both agents, it can complicate the scenario for consumers who don’t know the dynamics of the advertising program. Nonetheless, Leifer said he doesn’t plan on altering his approach. Even if a buyer has heard from the listing agent, his pitch is simple: “It is still in their best interest to have their own representation.”

He added, “I guess I’m going to have to count on the fact that I have a very, very fast response rate.”

A spokesperson for Zillow previously said the company doesn’t have agreements “that allow listing agents to solicit business away from [Premier Agents], and that type of behavior would be met with sanctions.”

Realogy and Corcoran declined to comment for this story.

Zillow’s Premier Agent program has long been controversial among brokerages and agents. When StreetEasy rolled out the feature in New York, brokerages including the Corcoran Group decried it for being misleading — and threatened to boycott the listings portal. Premier Agent also invited regulatory scrutiny of real estate advertising, and the New York Department of State is expected to issue a formal guidance on the practice. The agency’s change could significantly alter how the product is presented to consumers.

Though contentious, Premier Agent has also been a cash cow for Zillow. In the second quarter, revenue from Premier Agent rose 22 percent to $230.9 million.

Given the previous backlash, StreetEasy may be trying to appease listing brokers, said Mdrn. Residential’s Kobi Lahav. He likened the agreement between the listings giant and Realogy to “playing poker with somebody who looked at your cards.”

Regardless of how significant an impact Realogy’s access to notifications has on Premier Agents, Gittleman called it an issue of transparency.

“We feel like there’s a lack of honesty,” she said. “When things like this happen, it’s one additional level of distrust.”

According to one brokerage executive, Realogy’s agreement may not affect Premier Agents unless listing agents make a real push to start contacting those leads. But “the moment they see a drop off in the number of leads and emails, that’s when they pull away.”