The Real Deal New York

The jury’s still out on StreetEasy’s move east

Hamptons brokers want the ease of the site’s technology, but not the preferential treatment for agents who pay for it
By Elaine Pofeldt | July 05, 2017 12:00PM

StreetEasy’s New York site has a minimal design that is familiar to many consumers

How StreetEasy manages Hamptons Real Estate Online (HREO) is top of mind for East End brokers these days — and although they seem generally pleased with the development, there’s definitely some skepticism, too.

Zillow-owned StreetEasy acquired HREO, the free consumer portal for sales and rental listings in the Hamptons for which brokers pay a monthly fee, in January. At the time, 13 residential firms — among them Brown Harris Stevens, Corcoran Group, Douglas Elliman, Saunders & Associates and Sotheby’s International Realty — were trying to create their own multiple listing service, East End Listing Exchange. In conjunction, they’d also formed a professional trade association called the East End Real Estate Association. The five founding brokerages had planned a January launch, but after StreetEasy announced it was buying HREO that same month, the group disbanded.

“It’s unfortunate that [the East End Listing Exchange] didn’t work out,” said Christopher Burnside, an associate broker in the Bridgehampton office of Brown Harris Stevens. “I hope they somehow figure out a way to bring it back … Had they really spent some time developing the program, I think it would have been successful.”

However, like many brokers in the area, Burnside sees StreetEasy as a necessary tool. “I get StreetEasy leads all the time,” said the broker, who pays for featured listings on the site.

Nicole Gary

So far, there have been only minor tweaks to HREO since its purchase, according to agents’ accounts.

“It’s in its beginning stages,” said Scott Durkin, chief operating office of Douglas Elliman Real Estate. “They acquired HREO and they haven’t really launched the version that we’re used to seeing in Manhattan and Brooklyn. It’s too early [to see the impact] right now.”

As part of the acquisition, StreetEasy bought RealNet, software for agents and brokers that helps them manage their listings, and Open RealNet Exchange (OREX), distribution software that provides brokers with a way to market or share their listings with other brokerages and syndicate to HREO and other sites.

In response to initial feedback from the real estate community, Matt Daimler, RealNet/HREO’s general manager, said the company has already reduced the membership costs for brokerages by 40 percent on average. “Since the acquisition, we’ve been swift to assess and react to pain points from HREO’s customer base,” he said in an email.

As for other planned changes to HREO and the other properties Zillow acquired, Daimler did not share many details or the timing of planned changes.

“There is a lot of opportunity to build a stronger, hyper-local resource in the Hamptons — on desktop and mobile — that brings listings, data and content together to help connect buyers and renters with the home they’re looking for,” Daimler said. “The Hamptons is a unique market and we’re going to build experiences that are tailored for it.”

One burning question is whether StreetEasy intends to bring its much-debated Premier Agent program to HREO. The program enables brokers to buy advertising on listings that do not belong to them that identifies them as the “Premier Agent” and, as a result, to receive leads on those properties through the site. Some brokers say the program levels the playing field for newer agents, giving them a crack at big-ticket listings. But while many New York brokers and big brokerages are just now coming around, the program has been widely criticized and called a “pay to play” scheme.

“For a big listing broker like myself to have the Premier Agent be the face of my listing and have a buyer just call them, it’s not a fair practice,” said Cody Vichinsky, co-founder of Bespoke Real Estate, which last year sold David Geffen’s $67.3 million property in Bridgehampton. “There are mechanics in the system that could be adjusted and a little more democratic.”

Burnside participates in the Premier Agent program on Zillow, but he sees flaws in how the program operates.

“I don’t think it’s in best interests of the homeowners to have a sponsored broker pop up on their listing when it’s exclusively listed with another broker,” he said. The program may lead to brokers showing properties that are not familiar to them, he added.

Although Premier Agents get leads through the program, that advantage only goes so far.

Ray Lord, a salesperson at Douglas Elliman in the Hamptons who has sold real estate for six years, has been a Premier Agent on Zillow for at least three years. He points out that agents still have to be capable of converting the leads to sales to make any money from their investment in advertising. “Just because you are a Premier Agent, it doesn’t mean you’re good,” he said.

He sees participating in the program as going with the flow. “There are a lot of agents that will complain about Zillow’s infiltration into the real estate industry,” said Lord. “They are not realizing the consumer is not going to change. Consumers know of Zillow and Trulia and go to those things.”

In any event, fears that Premier Agent will be coming to HREO seem to be unfounded, for the moment. “There are no plans to expand Premier Agent to HREO,” Daimler said in his email. “We’re focused on refreshing the site, leveraging mobile and launching new and better tools for consumers and brokers in the Hamptons.”

In general, the brokerage community seems to be welcoming StreetEasy.

“We have used StreetEasy extensively in our Manhattan and Brooklyn markets,” Elliman’s Durkin said. “When we heard they were launching their software in the Hamptons market, we knew that would be something we would be excited about. They already have the system in place. It works very well in our market for both the agent and the customers.”

Durkin feels the quality of StreetEasy’s search is particularly good. “StreetEasy’s search engine makes the search for real estate quite easy in any of the markets we’re in.”

Veteran real estate agent Diane Saatchi, a broker at Saunders & Associates in East Hampton, has been using HREO for about 20 years and hopes StreetEasy will bring needed improvements.

“It was never a very good program,” she said of HREO. “I’m looking forward to seeing what StreetEasy does. It has to be an improvement. Things change. Life moves on.”

Lord, from Douglas Elliman, also thinks the acquisition will bring needed improvement. The current site, he said, is “kind of hilarious — it doesn’t even fit to the page.”

Lord said he found Zillow’s CEO, Spencer Rascoff, to be very open to feedback when he attended one of the company’s events in Las Vegas and exchanged emails with him. “I foresee them changing it to be a more user-friendly interface on the public side, HREO, and on our side, RealNet,” Lord said.

Regardless, brokers have little choice but to get on board with StreetEasy.

Nicole Gary, an associate real estate broker at Keller Williams Tribeca, said that when many of her clients are looking for second homes, they already turn to the site, coming to her with listings they would like to check out. She has embraced the technology, seeing it as an efficiency booster.

“It helps us service more clients at the same time,” said Gary. “We’re able to cut out those initial steps because our clients are ultimately doing them themselves.”

On the flip side, since clients can access more information for themselves, sites like StreetEasy raise the bar for brokers to provide value in other ways that technology can’t, she noted. Because she has an interior design background, Gary often proactively informs clients of small details of the property that should be discussed in negotiations, such as cabinets that are not lined up or broken tile. “It takes the naked eye to notice these details,” she said.

Saatchi looks for opportunities to draw on her deep knowledge of the community to advise clients about matters that might otherwise be time-consuming for them to research.

For instance, one client who looked at a piece of farmland online thought it could not be developed. Saatchi happened to know, through experience, that it could be.

“You just can’t get all of that information without talking to someone locally,” she said.