The Real Deal New York

Has the RLS ship sailed?

With pressure from StreetEasy mounting, REBNY is pushing to improve its syndicated listings feed, but some fear it may be too little, too late
By E.B. Solomont | March 01, 2019 12:00PM

REBNY is struggling to sell the value of its Residential Listing Service.

When the Real Estate Board of New York flipped the switch on syndication — the technical term for blasting listings out to brokerages and consumer-facing websites — back in 2017, it promised to “drive listing visibility” and streamline the way agents share data.

Despite the fanfare around that move, nearly 20 months later the digital listing universe in the city is more volatile than ever. Now, amid the brokerage industry’s latest showdown with StreetEasy — over another advertising program being launched by the Zillow-owned portal — REBNY is struggling to sell the value of its Residential Listing Service, also known as the RLS.

In fact, many top agents said they still scour three or four portals to search for listings and compile comp reports. Data errors are less frequent than they were when the RLS launched syndication, but they haven’t been eradicated.

And StreetEasy is still the dominant platform to showcase exclusives, despite charging brokers for a slew of advertising features. Most recently, StreetEasy introduced a way for agents to avoid ads on their own listings, to the tune of $333 per listing per month.

“The whole reason StreetEasy can do this is because they are literally the only game in town for consumer eyeballs,” said one source.

Meanwhile, other players are moving in, such as the nascent New York MLS, formed this past fall by Realtors from Westchester and Long Island. That service got a major boost last month when Compass signed on to share its listings via the portal.

But the RLS, which currently has about 19,000 listings, has been making a renewed push to improve its systems and gain traction in the brokerage community. (By comparison, StreetEasy had nearly 14,500 for-sale listings in mid-February.)

In recent months, it’s tightened data-sharing rules in an effort to “clean up” its data. And in January, REBNY named Warburg Realty’s Clelia Peters — a co-founder of real estate tech accelerator MetaProp and a proponent of innovation in the industry — as co-chair of the RLS.

“We want to ensure the RLS is as good as any system out there,” said REBNY President John Banks. “Can it get better? Absolutely. We strive for improvements every day.”

Clean and mean

In many ways, the standoff between StreetEasy and the RLS comes down to clean data.

Since syndication, StreetEasy has refused to accept REBNY’s feed, citing concerns about inaccurate listings. Proponents of the RLS have disputed those claims. (Full disclosure: TRD has partnered with REBNY to publish the RLS feed, but has yet to begin doing so.)

But in November, the board announced a “Clean Data” program that lays out new rules to ensure listing accuracy. Agents who fail to comply can be fined up to $20,000. Agents can also be penalized for submitting listings that violate fair-housing laws.

REBNY officials are acutely aware that agents tend to see the RLS as a means to fight back against StreetEasy, which recently encouraged agents to manually post listings (instead of through a direct brokerage feed).

“The financial arrangement that StreetEasy engages in makes it very expensive for brokers,” Banks said. “It’s important that the RLS exists on its own. It provides a counterbalance. If people want to put their listings on StreetEasy, we have no problem with that. The best defense is a strong offense.”

While that may be a step in the right direction, some see irony in the timing of REBNY’s data crackdown.

The RLS launched back in 2002 as a de facto multiple listing service soon after the biggest brokerages in the industry tried (but failed) to join forces to create an MLS.

In the years since, REBNY has tapped various vendors to manage, upgrade and ultimately syndicate the RLS. But it has a reputation for moving slowly and having technical problems. Many argue that those circumstances gave StreetEasy an opening and allowed it to capitalize on the digital listings space that has now nationally become a multibillion-dollar sector.

“The RLS has finally gotten its shit together on compliance, and now here comes StreetEasy — which for years complained about RLS data not being good — and now [StreetEasy is] encouraging agents to input listings directly,” said one brokerage head.

Meanwhile, the RLS’ progress (or lack thereof) has tested the relationship between REBNY and residential brokerages, which have complained in recent months that the organization puts commercial interests ahead of their own. Several brokerage chiefs aired that grievance this fall during closed-door meetings with Banks.

“It’s REBNY’s job to galvanize,” said Robert Dankner, president of Prime Manhattan Residential.

If there was an organized effort in the industry to make the RLS more powerful, agents would have a fighting chance to fend off StreetEasy, he said. “But that requires coordination from competitors,” he added. “All I know is, they’re walking on fragile ground.”

But many sources argued that REBNY isn’t solely to blame.

“In my opinion, the RLS and StreetEasy have nothing to do with each other,” said the head of one brokerage firm — rather, the RLS’ primary objective is to supply the brokerage industry with listings, since the majority of deals are still co-brokered. “The most important thing we need is clean data, and we have not had that,” the exec said.

Others say the industry has — incorrectly — looked at REBNY for a solution.

“The reality is we can’t. We need to look to ourselves for a solution, and then hopefully REBNY can carry that out,” said Jed Garfield of Leslie J. Garfield. “REBNY is all of us. It was our inability to work collectively to make this happen.”

‘Like playing telephone’

Despite the hype surrounding syndication, the system was buggy at first. Some of those kinks still exist — or did until very recently.

“You want to get the listing out to as many people as possible, and the RLS is paving the way for that kind of environment,” said one vendor. “It’s doing a good job in that regard, [but] there are a lot of technical issues that have to be dealt with.”

For example, until recently, agents had no way of checking the RLS to make sure their listings were accurate before blasting them out.

Sources said that has caused certain avoidable errors — such as new development listings with bungled amenity descriptions, or townhouse listings that don’t include the proper bedroom count.

In addition, several sources said, there is sometimes a lag between when the RLS pushes out listings and when brokerage firms receive the data.

“It’s like playing telephone. There are so many stops along the way. By the time it gets to the 10th source, it might not be 100 percent accurate,” said the manager of one brokerage’s listing department. “One thing I do hear from agents is, how come it’s on StreetEasy but not anywhere else?”

Part of the problem is that brokerages, which all feed into the RLS, have different listing platforms that use varying technology. Many are also reliant on vendors like On-Line Residential, RealPlus and Perchwell to send listings data to the RLS.

“That’s part of the complexity of New York City: the fact that everyone has a different vendor and historical preference to manage their listing systems,” said Sandhya Espitia, REBNY’s senior vice president for brokerage, education and the RLS.

Turnover on the RLS team itself may be complicating matters.

Early last month, longtime RLS director Freddy Sarabia resigned; around the same time, Ossie Shemtov, the RLS compliance director, announced she was leaving. Over the summer, Stefan Martinovic, director of innovation and products, left after 15 months, while Daniel Bohorquez, a technical project manager, left in November after four months.

Banks noted that the “loss of Freddy” will be a “bit of a challenge,” but he said the board has already hired a replacement, John Canniffe, who most recently served as vice president of strategic initiatives at brokerage conglomerate Realogy, the parent company to the Corcoran Group, Sotheby’s International Realty, Citi Habitats and a number of other firms.

The RLS also has high hopes for Peters when it comes to improving its tech game.

Until now, however, REBNY has been slow to address certain issues that arose post-syndication, sources claimed. They also alleged that REBNY has dragged its heels on a public listings portal.

The RLS board of directors and REBNY management approved a consumer-facing platform more than a year ago and even contracted a tech vendor to work out the design and concept.

But work has yet to begin.

“We have a fully designed system,” said a former RLS employee. “There’s still nothing that’s been delivered.”

Espitia would only say “stay tuned” when asked about a public portal.

But others said that in some ways, REBNY is still getting in its own way.

“This is a multibillion-dollar business. They’re a trade organization, and they’re confined by the way they’re structured and the politics within REBNY,” said Donna Olshan, founder of Olshan Realty.

For the RLS to matter, it needs clean data and a singular database, she argued. “Those two things would break the shackles of third parties selling data back to us,” she said.

A New York (City) MLS?

As REBNY wrestles with its RLS issues, others are making moves in the listings space.

While Compass also sends its feed to the RLS, its announcement last month that it will send listings to the New York MLS — which is setting out to create a metro-area MLS — will help give that service a stronger foothold (see story on page 132). Compass had 810 listings, valued at $2.21 billion, during a one-day snapshot in November, according to The Real Deal’s recent ranking of New York City firms.

NewYorkMLS.com was formed last year by the Hudson Gateway Association of Realtors and the Long Island Board of Realtors, which merged their MLS systems. The CEO of the group, Jim Speer, said that the venture started because “Manhattan brokers told us they needed accurate data, and a means to market their listings to consumers where the listing broker is always the start of the show.”

But at the same time, some of the city’s top firms are investing in their own websites in order to attract direct digital traffic.

Corcoran, which for years resisted displaying other firms’ listings, recently launched a “virtual office website,” or VOW, that shows all active listings. But some say VOW sites — which came into vogue in the early aughts — are too little, too late. They argue that unequivocal support of the RLS would be a more powerful message.

In fact, several firms stopped feeding listings directly to StreetEasy in favor of the RLS after REBNY launched syndication. Douglas Elliman and Corcoran, however, inked deals to maintain their StreetEasy feeds in addition to the RLS — a move many say paved the way for Zillow to continue to monetize the site and stick brokers with the bill. Both firms have defended the moves as smart business decisions.

“There’s a spigot that could have been cut off at a point in time with proper planning,” said Dankner.

Banks said that as a trade association, REBNY has a “very narrow lane” to run in.

“We certainly wouldn’t do anything that would be constituted as anti-competitive,” he said. “So we try to use all legal methods possible to help them help the consumer, so they can get the best information about listings as possible.”

But several brokers said RLS syndication hasn’t materially changed their day-to-day, compared to pre-syndication days.

Doug Perlson — founder of the brokerage RealDirect — said he thinks “the ship has sailed” as far RLS being able to unseat StreetEasy.

“If there’s a plan to relaunch that ship, there needs to be a serious effort on the parts of these organizations, and I think it would be good for consumers if they did,” Perlson said.
But he said brokers can’t count on that as a business model.

One brokerage manager put it more bluntly: “The consumers are going to StreetEasy. You can syndicate to every other site; it doesn’t matter.”