The Real Deal New York

StreetEasy says it’s improving Premier Agent. But some agents fear fewer leads

“It’s like: What have you been selling this whole time?”
By E.B. Solomont | September 05, 2018 08:00AM

(Credit: iStock)

Amid the backlash over StreetEasy’s Premier Agent last year, a band of New York agents doubled down on the controversial advertising program.

But with changes afoot — the Zillow Group subsidiary will be screening buyers by telephone before handing leads off to agents — some loyalists are concerned not only that they’ll get fewer leads, but also that the cost per lead will skyrocket.

After StreetEasy billed the change as a way to verify leads and improve the quality of the service, one agent put it this way: “It’s like, ‘What have you been selling this whole time then?’”

Last week, StreetEasy informed New York brokerages about the change, which will take effect Sept. 10. Going forward, the company’s reps will screen buyer inquiries before connecting them, by phone, with a Premier Agent.

A spokesperson for the company confirmed that buyers will not necessarily be speaking with a local rep, but said they will be connected to a local agent. “One of the reasons we recommend all buyers work with an agent is that agents have unparalleled local expertise,” the spokeswoman said. “We are not trying to replicate that — just making the connection.”

But Mdrn. Residential’s Kobi Lahav, who has been an advocate of the program in the past, said he’s still rather be the buyer’s first call. “A good agent can explain the process and win business,” he said in an email. Zillow’s sales reps aren’t agents, he said, and therefore “have less chances of converting the leads into viable buyers.”

The new process also eliminates the possibility of a Premier Agent following up with a client who may not be ready to buy, he said. “Today, I can have someone call me and not want to work with me. But if I call him in two months, he might change his mind.”

Aaron Graf, CEO of LG Fairmont, a firm that relies on lead generation, said he’ll keep up his spending if the conversion rate holds — meaning if agents can close the same number of deals for the amount of money the firm currently spends.

“I’d rather have my agents making the first contact,” Graf said. “But they have the right to monetize how they want to monetize.”

Over the past few months, Zillow has updated Premier Agent in 20 cities, with what the company said is positive results. Previously, some 49 percent of buyers never heard back from a Premier Agent, the company said. Now, 97 percent are connected to an agent.

In order to speak to an agent, prospective buyers need to confirm they’re actively shopping for a new home; that they’re not working with an agent already; and that they want to work with a buy-side agent.

Lindsey Skye Maguire, an agent in St. Augustine, Florida, said she’s getting fewer leads, but they are better quality than before. “We were getting 250 leads but 90 of them were trash,” said Maguire, who was referred by Zillow to The Real Deal.

Along with partner DJ DellaSalla, Maguire leads a 12-person team that spends up to $30,000 monthly on Premier Agent. The program generates 60 percent of their business; they claim to have closed 270 deals so far this year.

New York brokers complained loudly last year after StreetEasy introduced Premier Agent. While some major firms ultimately bought into the program — including the Corcoran Group — others now say the newest change adds even more confusion to an already misleading program.

“I do think it will add to the confusion,” said Hall Willkie, co-president of Brown Harris Stevens. “A buyer, when they’re calling on a listing, they want to hear about the listing. They don’t want to be screened. Now they’re going to be talking to a second person who knows nothing about the listing.”

During an Aug. 6 earnings call, CEO Spencer Rascoff acknowledged higher churn among Premier Agent advertisers in markets that have shifted to the new system. “Premier Agents aren’t just advertisers, they’re really small business owners that have built their business on our platform,” he said. “Every time we change the rules on them… that can cause pushback.”