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.