The dispute over the creation of a publicly accessible listings portal continues to stir debate and conflict between the board of New York’s largest real estate trade group and its smallest member firms.
In November, the directors of the Real Estate Board of New York told members they’d have to pay for the creation of an Internet portal site that would make portions of members’ 12,000 to 15,000 exclusive property listings open to the public.
Backers of the plan said the rise of a publicly accessible listings service would help weaken the nearly ironclad grip on real estate advertising now enjoyed by the New York Times, which dominates both online and print listings in the tri-state area.
Plans to open up the now-private REBNY Listing System, or RLS, weren’t well received by a few smaller and medium-sized real estate firms, who objected to the apparent domination of the new system by big-firm listings that make up the majority of the current RLS system. Fees that firms would have to pay for the new portal were also a point of contention. The cost for smaller firms with fewer than 20 agents was nearly half as much as that for largest firms, some with hundreds and hundreds of agents.
In an apparent compromise measure, Steven Spinola, president of REBNY, last month announced a revised pricing plan that features a four-tiered pricing system. The original fee structure would have cost small firms $3,500 and large firms $7,000 to be part of the service. Spinola said the new pricing system would cut costs for the smallest firms and boost prices for larger companies, which eased some criticism of the plan. But hard feelings remain.
Reba Miller, principal of RP Miller and Associates and a representative of smaller firms within REBNY, said she could not reveal the full details of the revised pricing but that firms would also pay a $100 per agent fee the following year, which would put a greater weight on larger firms with more agents.
But bickering over the price isn’t the only issue at hand.
Chris Shiamili, owner of Ardor NYC and unofficial leader of a dissenting group of about 53 brokerages (out of REBNY’s 317 member broker firms) that signed a petition against the plan, said the petition took pains to explain that critics were not against an “open MLS system,” which they thought the entire trade group membership would support. They said they were concerned that the Web site would simply serve to display “overwhelmingly the listings of the large firms at the expense of the small firms.”
In their petition the signatories, who included Klara Madlin of Klara Madlin Real Estate and Bob Eychner of Eychner Associates, said they did not feel REBNY had demonstrated the portal would “further the best interests of its member firms,” that “the decision to embark on this project was neither transparent nor democratic,” and that they therefore were requesting that “the Board immediately cease plans to implement this portal and instead seek further discussions with the members,” after which the proposed plan would be “put to a majority vote” of all member firms.
Lala Wang, president of BrokersNYC, who is suing REBNY over alleged antitrust violations and whose REBNY membership was rejected in December, supported the idea of a public portal for the organization, though with conditions.
“Theoretically, a consumer-facing portal is good for consumers — and inevitable,” she said. “However, this portal appears to be misconceived, vague and unfair to many REBNY member brokers,” she added.
She also said the portal was unfair unless the brokerage commissions between seller-brokers and buyer-brokers were “uncoupled,” so that small brokers could have an equal chance to have buyer clients.
Wang said she received a letter signed by Spinola dated December 14 and representing the board, which “voted unanimously to reject” her application for membership, presumably in part because of her BrokersNYC lawsuit against REBNY, which alleges that REBNY rules that make access to listings contingent upon its members using its database services are illegal. The lawsuit is still unresolved.
Compromise talks
Spinola spent the last few weeks trying to smooth badly ruffled feathers, particularly among executives at smaller brokerages. Representatives of the dissenting group met recently with Spinola to air their concerns, after complaining they were being treated like “children,” according to one source. REBNY management has in turn accused the critics of being “inactive” and not cognizant of the importance of the system they are presenting.
The new public portal would be a big step forward for the organization, according to many, serving as a one-stop site where consumers could search for nearly all the properties on the market in New York City. Currently, home buyers have to search ads in newspapers like the Times, on Web sites like Craigslist and on individual brokerage Web sites. The REBNY system would be similar to an MLS, or Multiple Listings Service, found in nearly all markets across the country.
While few members of the REBNY Board of Governors were willing to go on record when contacted by The Real Deal last month, Hall Willkie, president of brokerage Brown Harris Stevens, argued that with optimized search capability REBNY listings could come up first on a search for New York City real estate in Google and other search engines.
Willkie said he sympathized with some of the cost concerns and said he hoped REBNY would be able to work out the fee structure with the smaller firms.
He compared the public portal initiative to another reform REBNY instituted back in 2003. The so-called 72-hour rule required members to share listings with all other members within three days of getting a listing; it was seen as a way of bringing greater efficiency and transparency to the marketplace.
Despite resistance from some firms at the time the measure was instituted, Miller said the 72-hour rule and the REBNY Listing System have put money in the pockets of independent brokerages.
“There is a reason why you have 300-plus small firms at REBNY,” she said. The public portal is the next logical step, she added.
Companies that may bid on creating the portal include Stratus, Property Rover, OLR, Trulia, Entronic, Something Digital, Wolfnet Technologies, Infusion development and Real Plus. According to trade group documents, the finished system would be launched as a limited liability corporation wholly owned by REBNY.
But Shiamili and several other owners of member firms still worry their listings will be dwarfed by larger firms, and that they will pay for the lion’s share of a system that doesn’t represent them proportionately.
“No matter how many tiers, the five biggest firms will get 90 percent of its content and pay a much smaller proportion of its cost,” Shiamili said. “If they are so confident they represent the views of the membership, why don’t they put it to a vote?”
“The only way to make the cost-benefit equitable is to level charges based on the number of listings each firm exports on this Web site,” Shiamili said, adding, “At least in this case they will pay for what they are getting, even though they will still monopolize this site by virtue of their size and number of exclusive listings.”
The trade group plans to press ahead with plans to develop the system, which was decided on after long and careful deliberation, said Spinola.
“The world has changed, the real estate profession has changed, and REBNY will not encourage the holding back of legitimate, honest information from the public or from other real estate agents,” he said.
Critics are missing the potential benefits, said Willkie. “If I were a one-man or a 10-man firm I would want this,” he said. “This allows me to go to the seller and say I can expose my listing the same way that a Brown Harris or a Corcoran does,” he said, “And it is a lot cheaper than going to the New York Times,” he added.