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To All New Yorkers

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STREETEASY LISTINGS DOWN 40% A YEAR AFTER GREEDY NEW FEE.      
It was exactly a year ago that Zillow’s StreetEasy started charging the greedy “monopoly” tax of $3 a day ($90 per month) to post a rental on their website.  Things are significantly worse in the industry since this dumb business move. The rental inventory on StreetEasy’s website is down a whopping 40% compared to last year. They are no longer the “go to” rental website.  As a renter or agent, now you have to search multiple websites.  Worst of all, StreetEasy’s most important customers – real estate agents – now have to come out of pocket hundreds of dollars per month.

WHY STREETEASY HAS NOT RECOVERED A YEAR LATER
In what seemed to be out of the devil’s playbook, here is how it went down: A few years after Zillow secured their near monopoly status by buying up the most trafficked real estate listing websites in NYC, they decided to start charging agents and landlords a lot of money to post on their website. This is after 10 years of being “free”, and implied winks and nods along the way that it would remain free.

Ultimately, what really stung their customers (i.e. mostly real estate agents) was the implied “deal” made between agents/landlords and StreetEasy over the last 10 years.  The deal was this: If you, Agents, let us show your listings on our website we won’t charge you.  This implied contract was broken a year ago.

And destroyed with it, sadly, was StreetEasy’s impressive original business model as a free and transparent marketplace.  This business model was ruined overnight.

Their customers – mostly real estate agents – are livid. And rightfully so.

Short term this will reap huge gains for StreetEasy, as it would for any company of “near monopoly” status. And unfortunately it will not be good for agents who have relied on StreetEasy over the years and now have to come out of pocket to advertise.

But let’s face it. It doesn’t get any less creative or more greedy than this:  “We have a near monopoly. Let’s jack up prices”.

Long term it will be a disaster, as there are always major consequences when decisions based on greed overwhelm decisions based on what is right for your customers. Principles should always come before profits.

THE FUTURE
Like most greedy and shortsighted companies, StreetEasy will eventually be replaced.  More competition is entering the space all the time.

Over time StreetEasy will be replaced by Frēlē and others like it who strongly believe in preserving the integrity of the NYC real estate marketplace. For Frēlē, this is the highest priority even if it means we don’t ever make a dime.

The fun is just getting started.  And with your help, and with our absolute pledge (www.frele.com/pledge) of always being free and transparent, we can bring transparency back to New York City Real Estate, one listing at a time!

Frēlē Launches! (www.frele.com)
So it has been a year since Zillow’s StreetEasy decided to fully embrace its monopolistic market position and take advantage of consumers and agents.  Since then, we have been working on a new website.  So, where are we now?

We are proud to announce a few things:

1. The New Rental Website Frēlē Has Launched!
2. How You Can Use (for free) Frēlē and Leasebreak.

Let’s look at each of these 2 items in more detail.

The New Rental Website Frēlē Has Launched!
Frēlē is based on this groundbreaking 4 point pledge of openness and transparency.  We encourage all of our competitors to embrace it.

It took us a few years to make Leasebreak the #1 NYC short term rental marketplace.  So how does Frēlē become #1 in the 12 month rental market? In my view, Frēlē only becomes #1 if it is:

1. An extremely transparent marketplace
2. A place where the experts (i.e. real estate agents) are an integral part of the process

After all, what all of these listings portals fail to realize is this:

Without your content (i.e. your listings) they are nothing.  Literally, nothing.

This is why the idea of having a “pay to play” scheme to post your listing, or, worse, selling off “leads” from listings to the highest bidder is unbelievably upsetting, unethical, and mark my words, a FAILING BUSINESS MODEL.

Imagine if a listings marketplace was exactly the opposite of that.

On April 10th, we shared this 4 point pledge of transparency and openness which has formed the basis for our new website Frēlē.  Hundreds have shared the pledge and we gave them early access to the website. Thank you for all of the feedback. Now, the website Frēlē is live.

The NYC real estate marketplace is starting to flow “freely” again! Can you feel it? 🙂

But PLEASE continue to provide feedback.  There is a purple feedback button on every page of www.frele.com.  Please use it! Frele will be constantly evolving, always striving for perfection. We can’t do this without you!

How Can You Use Frēlē and Leasebreak? How Do They Compare?
Click this link to see the differences between Frēlē and Leasebreak and how you can use both websites.  While both websites get traffic for all kinds of rentals, Leasebreak gets extraordinary traffic for short term rentals, leasebreaks and shares.  In fact, almost every single agent and landlord tells us they get more traffic on Leasebreak for their short term listings than StreetEasy.  Oh, and we are FREE!

Frēlē will be focused more on the 12 month rental market, and probably eventually sales.

Together, let’s restore transparency to New York City Real Estate!

Reports of the death of “Brokerage” have been greatly exaggerated.

Despite what some people are saying, the shutting down of Town Residential brokerage in NYC does NOT mean that the end of “Real Estate Brokerage” is near or even close to it.

In fact, it is quite the opposite.

If you have any doubt, let’s look at these facts and recent trends:

  • Almost all of Zillow’s revenue comes from real estate agents.  Their entire business model relies on agents and brokerage firms continuing to thrive and do well.
  • Compass – a relatively new real estate brokerage  – is able to raise almost a billion dollars. If real estate brokerage was dying, would investors be putting hundreds of millions into it?
  • The greatest investor of all time  – Warren Buffet – is investing more into brokerage.  Berkshire Hathaway Homeservices now is the #2 real estate brokerage in the USA.
  • Zumper, the listings platform, recently got into brokerage by becoming licensed and hiring a bunch of real estate agents.
  • Another brokerage – Redfin – just had an IPO within the last year and went public. Usually industries that have IPOs are thriving not dying.
  • Gypsy Housing (yes the Facebook Group) has recently become a licensed broker
  • Many, many new brokerages have launched in the last few years.
  • Reality TV shows based on real estate agents (like Million Dollar listing) continue to be popular.

If brokerage was dying, would we see so much investment in the space right now?

Of course, all of this influx of investment and new competition has led to increased pressure on a real estate brokerage firm’s profits. When there is more competition, profits take a hit.  This is just basic capitalism at work. It also creates all kinds of opportunities, especially for agents, and especially for brokerage firms who are “leaning in” to the changes.

Let’s look at this a little further.

TWO MAJOR TRENDS HAVING DRAMATIC EFFECTS ON BROKERAGE
While “Brokerage” is still a healthy business, it IS changing.  There are two major trends dramatically affecting brokerage firms: the first (“Better Technology”) everyone seems to be talking about.  The second (“Agents as Marketing Machines”) very few are focusing on. Both of these trends are putting pressure on splits and commissions.

TREND #1: BETTER TECHNOLOGY
Better technology (artificial intelligence, new apps, better CRM software, etc) is allowing more players to enter the market, and with varying business models.  This puts great pressure on splits and commissions. The brokerage space along with their juicy commissions is also attracting a lot of VC money. VC firms and their companies have very high growth targets. To grow in real estate brokerage, you need agents.  The fastest way to get great agents is to acquire them as opposed to building them organically. This hiring frenzy is leading to even more pressure on splits.

TREND #2: AGENTS AS MARKETING MACHINES
Like never before in our history, agents have an unparalleled ability to communicate their message, craft their own personal brand, market their own listings, build their own audiences, and reach out directly to them using tools such as Instagram, Facebook, Twitter, enhanched email software platforms (CRM’s), etc.

Conversely – and possibly even more important – consumers also have an unparalleled ability today to find and reach out directly to agents whom they feel connected to.

For example, I am personally amazed at what is happening on Instagram and the agents’ ability to create interesting content by using Instagram Posts and Instagram Stories.  I only joined Instagram a few months ago (@philiphorigan) but wish I would have joined years ago. Real Estate Agents are using Instagram (and other platforms) to express themselves in such creative ways. Ultimately, it is the agent and the agent’s personality that wins the client’s business, and agents can showcase themselves like never before.

This is a really good thing and should lead to more efficient connections between agents and consumers,  Is there a better goal for brokerage firms then getting their agents matched up with the “right” clients?  By viewing agent’s “content”, consumers have much better information and better ways to evaluate agents than ever before.  This is a game changer and is not being talked about enough. Brokerages should be enabling agents to market themselves more effectively.

TO BE A SUCCESSFUL BROKERAGE
The successful brokerages have to make sure they are adding value to the agent, well beyond just showcasing the brokerage “brand”. Brokerages should be helping each agent work better with clients, as well as to help craft his or her own personal brand by using the latest technology tools and social media platforms available.  This way, agents can work with sellers, buyers, landlords and renters as efficiently as possible. Brokerage firms that recognize this and support this trend will continue to thrive.

WHERE DOES PREMIER AGENT FIT INTO THESE TRENDS?
It doesn’t.  Not at all. The implementation of Premier Agent by Zillow’s StreetEasy last year has nothing to do with any of these trends. Premier Agent has been around in other markets for a very long time. There is nothing new or innovative about it.  Rather, it is just an example of a monopolistic company taking advantage of its market position in a greedy and deceiving way, and the Department of State seems to agree.

Like I said many times before on this blog, when you take advantage of your customers, there will be huge consequences.  It seems the law is already catching up with them, and the Premier Agent program will be forced to change.  Ironically, if anything, Premier Agent is a HUGE step backwards in transparency. It is quite the opposite of these trends which are all about breaking down barriers. Premier Agent erects new barriers.

OKAY SO BROKERAGE IS NOT DEAD.  IS THE “TRADITIONAL BROKERAGE” DEAD?
While some people are tempted to say that “Traditional Brokerage” is dead, I wouldn’t even go that far. Let’s face it, to survive, “Brokerage” has always had to change. Judging from history, they seem to be quite good at it.  For example, can you imagine if in the years 1995-2000 “traditional” brokerage firms refused to embrace the internet and decided not to create a website with their company’s brand, listings and agents?

Of course not.  Most of them changed then, and most of them will change now.  And most of the brokerage firms around now will be with us for years to come.

NOTE: My new rental marketplace frēlē with the 4 point pledge is now in private beta and we are about to launch to the public.  You can access the private beta by going to the 4 point pledge at www.frele.com/pledge.  We will start to display your listings (for free) and you will start to get leads on your listings (for free) as soon as we get the green light from REBNY’s RLS.  

Today is a big day for our industry. Up until now it has been a lot of talk.  But today we start to take some action.

I am launching a new website along with a 4 point pledge.

The 4 Point Pledge is a promise of openness and transparency which is sure to make Zillow and StreetEasy blush.  This pledge will be the foundation of our new real estate website.  (Spoiler Alert: The last point in the pledge is to NEVER SELL OUR COMPANY TO ZILLOW OR STREETEASY 

And I need your help.

If each of you shares the pledge with up to 5 of your friends, we can broadcast this message of transparency to EVERYBODY. (Click any of the links above to view the pledge and share it.)

By sharing, and therefore supporting the movement for transparency, you will get first access to our new website (below) which is launching in beta in a few weeks.  (This is really important because I want to include as much of your feedback as possible into the final product! )

Why is this pledge so important?
The last thing we as an industry want to do is to put all of our trust in a new listings platform (mine or another) just to have that new website turn deceptive and greedy, right? Or worse, by selling to Zillow!

This 4 point pledge guarantees this will never happen.

And I welcome all of my competitors to endorse it!

The Name Of The New Website
Well, over the last year as most of you know I have been expressing outrage through this blog (flowfreely) as well as my Instagram posts at the astounding deception and greed shown by StreetEasy and Zillow.  Instead we need honesty, transparency, and openness.

Put another way, as I stated throughout the last year, a real estate marketplace should “flow freely”.

That’s why the name of our new real estate marketplace will simply be….

This name will be a constant reminder that our primary mission is to honor the integrity of the real estate marketplace first.  Everything else – including making money – comes second.  

Please share the 4 point pledge.  You can access and share the 4 point pledge at www.frele.com/pledge. When you share the pledge, we will put you on the list to get the first access to frēlē’s beta version launching soon.

Together, let’s restore transparency to New York City Real Estate!

Phil Horigan
Dedicated NYC Real Estate Agent for 14 Years
Founder, frēlē & Leasebreak.com

 Let’s Bring Transparency Back!

To beat StreetEasy, I am refusing to raise money. Here’s why.   

First, where are we now?
2018 is going to be very special. It is the year StreetEasy’s stranglehold over the marketplace begins to show “cracks”.  The new REBNY RLS feed in particular has empowered all kinds of new competitive solutions, most of which have not even become public yet. I would argue that the RLS is the single biggest threat to StreetEasy’s dominance.  But these things do take time (months/years, not days/weeks).

But I know it can be frustrating.  It seems everyone is just “giving in” to StreetEasy and nothing is being done about it.  I assure you this is actually not the case. You will see an avalanche of new products and ideas coming out over the next two years. Many this year.  Zillow’s short sighted business decisions suddenly put the NYC residential real estate power dynamics back “in play”.  There will be significant shifts and big shakeups happening over the coming years.

Example of Good Stuff Coming: My New Website
For example, in the coming weeks I will be launching a new product in beta which will compete with StreetEasy in 12 month rentals.  Leasebreak became #1 in short term rentals (i.e. leases between 1-12 months).  We will apply similar techniques to become #1 in 12 month rentals with the new website (with a new name).  It won’t happen overnight, but it will happen.

And when it does, you won’t have to pay for posting rental listings ever again.  

The new website will also likely show “sales” listings down the road, but maybe we won’t have to.  There is a real chance the attorney general – or some other government entity – forces StreetEasy to change the Premier Agent Program because it is just so unbelievably deceiving to consumers.  

(By the way, please make sure you subscribe to my blog flowfreely.com so that I can give you first access to the private “beta” version of the new site in a few weeks.  I would welcome any feedback and encourage you to share the new website with your friends and colleagues.)

Why I Won’t Raise Money Now.
When I run into many of you in person or online (Instagram) you are so supportive of my stances on these issues.  Many of you encourage me to “keep up the good fight”. Thank you, this is so important to hear and means so much (but I also welcome criticism and suggestions too, fyi).

Many of you also suggest that I raise a boat load of money so I can compete with the deceptive monstopoly (monster + monopoly. I just came up with that LOL).

Many of you have even offered to “invest” yourself or suggest I speak to a VC friend of yours, etc.  I can’t tell you how much I appreciate this and your confidence in me.

But here is why I can’t accept that money.

Once I take money from investors or VCs, then those investors expect a “return”.  They expect me to focus on “maximizing profits”. Even if not right away, down the road for sure.

This means that I may have to do things I don’t want to do:  Things that are not right for consumers or brokers. Things that violate my vision of what a real estate marketplace should be: Honest, transparent, and functioning as freely as possible.

For example, as you will see, when we launch the new website there will always be a free option to list an apartment. “Always”, as in forever.  If you were an investor, you may not like the sound of this. But that’s too bad.

And once I do launch, it will be even more clear to all of you why I just can’t take any money right now.

This is about principles.  It’s about values. Having a NYC real estate marketplace which operates freely with transparency is the focus.  Everything else – including profits – is secondary.

I have lived in NYC almost 20 years, and I have been a NYC real estate agent for 14 years.  Zillow and StreetEasy are not going to destroy the NYC real estate marketplace we have all come to love.  Not on our watch.

Who’s with me? 🙂

My objective here is to prove with spontaneous video interviews of consumers that Zillow/StreetEasy does not pass even the most basic “smell test” for transparency.  I took my video camera to the NYC streets and asked random people about Zillow/StreetEasy’s website.  EVERYONE  whom I spoke with had the same reaction!  (See video clip at top or bottom of post). 

There is real outrage out there caused by Zillow/ StreetEasy’s antics. But it is much more serious than most people believe.  By almost any definition, Zillow/StreetEasy has monopoly power in NYC,  and probably enough abuse to warrant investigation by the powers that be.  

But we can’t wait for that because that day may never come.  It won’t happen until consumers are just as outraged as the brokerage community.  But most of the outrage comes from those who are the most familiar with StreetEasy’s website;  Those who use it day in and day out, like the brokerage community.  Consumers don’t use real estate websites every day like real estate agents do . After all, how often are consumers really in the market to buy or rent?  Also, some of these issues (buyers agent vs sellers agent, dual agency, etc) are complicated to understand, especially to new buyers or renters.  

This is what makes the deception “brilliant” but so “dangerous” at the same time.  That is, most people  – even a lot of agents – are just not paying attention nor do they understand how dangerous this deception is to a free flowing and open real estate marketplace.  However, the good news is this:   

Even consumers who have limited buying or renting experience in NYC understand what should happen when you attempt to get information about a property on a real estate website, right?   Try asking any consumer this question:

“When you click “CONTACT AGENT” on a property listing for sale, where you would expect your message to go?”

Note that I have played this game with many of my friends who are NOT working in the real estate industry.  EVERY one of them is really surprised to learn that your message goes not to the listing agent but to a RANDOM AGENT WHO IS PAYING THOUSANDS OF DOLLARS FOR THESE LEADS. 

But producing a video showing you what my friends say is not going to convince anyone of anything.  Therefore, I decided to just go up and ask random people on the streets of NYC to prove just how misleading things are on Zillow / StreetEasy’s website.  

And of course, the average New Yorker is just as surprised to learn that they are being “tricked”.  Everyone I went up to had the same reaction:  They all just assumed that the message would go to the listing agent.

To be clear, I did NOT show you only certain interviews.  I showed you EVERY interview.  I could have interviewed 1000 people and the results would have been very similar.

Aren’t we all just tired of being bait and switched?

Aren’t we all just tired of being bait and switched?  The internet is supposed to make things MORE transparent, not less.  This is deceptive and misleading, and when you have monopoly power, potentially illegal. 

Let’s be clear, without having this monopoly power, there is no way consumers or agents would be putting up with this.  

But what can we do about it?

We know that national companies who have listing real estate marketplaces have historically really struggled to gain market share in NYC. The NYC market is just so unique.  This is why people are not holding too much hope in companies like Realtor.com, Apartments.com, and Homes.com to come save us.  Ironically, even Zillow tried to gain share in NYC before failing miserably which is why they decided to buy StreetEasy in 2012. (And a further irony is that StreetEasy did so well in New York back then because StreetEasy was such a transparent marketplace before all of these dramatic changes last year.)

So, we can’t necessarily wait around for a big national competitor to sweep in (although no doubt that the more competition the better!).  The only way we would ever compete with a billion dollar company is to eventually support a solution for a transparent, honest, free flowing real estate marketplace which can never be turned into a greedy deceptive one.  

I believe that ultimately consumers won’t put up with a greedy deceptive platform focused more on profits than on advancing the consumer and agent experience. 

Let’s work together to make something great.  I am posting every day on Instagram (@philiphorigan) and trying to engage with as many of you as possible.  Please meet me there, and subscribe to this blog.

 

 

 

Zillow / StreetEasy’s Premier Agent Program Could Be Shut Down By Regulators
Zillow/StreetEasy’s Premier Agent program will likely be shut down by regulators at some point, or at least forced to be changed in a MAJOR way.  The program in its current form is just so egregiously deceptive and misleading to consumers.  

And the program is much more deceptive than you may think, especially if you look at it from the consumer’s perspective.  

The Internet Was Making NYC Real Estate More Transparent…Until Zillow in 2017.
The internet changed the real estate buying process dramatically.  Up until 2017, buyers could see ALL the apartments for sale, and they could easily see the agents who are listing the property, along with the listing agent’s contact information.  Buyers or their agents could contact the listing agent or owner directly.  

Buyers LOVED this transparency.  In fact, this transparency is what fueled StreetEasy growth in the early days.  Also, in 2011 New York State began requiring brokers and buyers/sellers to sign disclosure forms. This was to ensure that buyers and sellers understood who was representing their interests in a particular transaction.  The age of transparency was upon us!

But in 2017, that all changed.  

Zillow’s StreetEasy’s decided to abuse their monopoly-like market share in NYC.  The potential existence of a monopolistic position was even hinted at by Zillow CEO Spencer Rascoff when he said last year referring to Zillow’s presence in NYC:  “Our audience size really dwarfs the competition.”  

So, here is what changed.  In March 2017, Zillow’s StreetEasy dramatically changed the listing page for homes listed on their website and removed all of the listing agent’s contact information!  (Here is a “before” and “after” shot on my Instagram feed).  Instead, they added a new form which tricks consumers into contacting a random buyer’s agent; That is, an agent who is bidding thousands of dollars to get the “lead”.

This resulted in a HUGE step back in transparency, mixed in with a healthy dose of misleading and deceiving consumers.

Why would the Zillow / StreetEasy monopoly do this?
Because they are making SO much money doing it, while taking advantage of brokers and consumers along the way. Since the website has had a near monopoly on sales traffic for years, implementing a program to get buyer leads would of course draw the attention of thousands of agents.  As an agent, if your colleagues are paying for these “leads” you have to consider it too, or so goes the thinking. 

Of course we don’t blame the agents. After all, what a great way for a newer brokerage firm to start getting million dollar buyer leads their first day in the business? Or for a more seasoned agent to “protect” his or her own listings by paying enough money to do so.  

Either way, all of these new incentives disrupt a free flowing transparent marketplace.  They create a “pay to play” scheme, all at the expense of consumer transparency.  

This is deceptive to consumers.  And here may be the worst part.  Zillow’s StreetEasy is doing it under the guise of “protecting the consumer”, as if by tricking them into meeting with a buyer’s agent is somehow in the buyer’s best interest.  

But this really distorts the reality.  Let’s be clear.  Most NYC sales deals already have TWO agents, a buyer’s agent and a seller’s agent.  It has been this way for at least the last 14 years since I have been in the business.  So, consumers seem to be having NO problem finding buyer’s agents.  

So, can StreetEasy/Zillow really make a case that buyers need this and that it helps them?  Not a chance.  

It is beyond deceptive for a monopoly-like enterprise to build a money making scheme based on this faulty premise, especially one that is misleading to consumers.   

In sum, the Premier Agent program exists to enrich the pockets of Zillow (and its shareholders), and it misleads and deceives consumers.  And even agents are not going to benefit in the long run.  While some real estate agents may get lucky with the program, most agents are wasting their money because these consumers are being deceived.  And a real estate deal never starts off on the right foot when a consumer is misled.  

Because I have been appalled at this lack of transparency, I decided to launch a competing real estate marketplace later this year.  Please follow me on Instagram (@philiphorigan) and subscribe to this blog for updates. You can also subscribe to my YouTube channel here.

 

Let’s bring transparency back to New York City real estate.  While some may joke that “transparency” never existed in NYC real estate, the truth is that technology and innovation have been making things more transparent.

But that all changed in 2017. Real Estate in NYC has become less transparent. This is because of some disastrous and unethical business decisions made in 2017 by the near monopoly StreetEasy (owned by  Zillow).

While agents and landlords are well aware of what is going on, one of the purposes of this blog (www.flowfreely.com)  is to make sure consumers are up to speed as well.

After all, consumers are not involved in the real estate markets every day.  So we have to make sure that these huge greedy billion dollar corporations  – who have already demonstrated their intention to push profits over ethics – don’t take advantage of consumers (nor agents for that matter).

We need a platform that ensures consumers and agents will never be taken advantage of again, promising a free flowing real estate experience.  Consumers and agents deserve this.

This is just the beginning.  I won’t stop until we have a NYC real estate marketplace that flows freely; one that all consumers, landlords, and agents can be proud of.

If you want to stay updated and see more video episodes and blogs, please follow me on instagram, twitter, and subscribe to this blog, flowfreely.com 

Sincerely,

Phil Horigan

p.s. If you want to see the 8 letters I sent to real estate agents about this over the last year, I re-posted them on this blog for your reading pleasure.  Look for the “older posts” or “prev post” link below.

p.s.s. Here is the text of the video:

“Look, everyone knows it is not easy to buy or rent an apartment in New York City. The process is a pain in the “a**”.  But the internet was making things easier, and the process was getting more transparent. Until last year. You know why? Hold that thought.  This is a river.  It’s the Hudson River. And even on the coldest day of the year, notice how it’s flowing freely, no hidden obstacles, no obstructions. We can jump in there right now if we wanted to.  For free! This free flowing transparency is where New York City real estate was heading.  It was slow.  But we were heading there. But this all changed last year, when market leader StreetEasy, a near monopoly owner by Zillow, decided to take consumers and broker for granted in a big, big way.  If you have any doubt, check this out.  Last year people were so upset by their antics, that they pulled half of the apartments off of StreetEasy’s website.  So, we’ll have a lot more to say about this in 2018. For now, follow me for updates on my new blog at Flowfreely.com as well as follow me on instagram and twitter. “