| Dear Real Estate Agents and Brokerages,
Make no mistake. The recent StreetEasy pronouncement is by far the most aggressive move to date. There is even a sleight of hand at work here. In fact, the most important announcement has been overshadowed by the new $333 monthly fee.
What Did they Announce?
Last week StreetEasy said that if you want to be the only agent listed on your exclusive (i.e. get rid of Premier Agent) you have to pay them $333 per month. However, in order to do this, you have to enter your listing manually, directly through StreetEasy. This part of the announcement is getting overlooked. No one seems to be really focusing on this.
Therefore I am actually NOT going to focus much here on their more obvious shameless behavior: Requiring people to pay to get rid of a hated “bait and switch” feature (Premier Agent) which was forced upon them.
Instead, I would rather focus on the broader, more serious implications of what they are up to, and why we as an industry have to act NOW!
Why are they doing this?
1) Over time StreetEasy plans to replace Premier Agent with “Pay to Play” in sales (like they have in rentals)
StreetEasy has obviously recognized that Premier Agent in NYC is failing.
This announcement will only ACCELERATE the end of Premier Agent in NYC since it will mean less leads for Premier Agents.
In addition, StreetEasy knows the Department of State may soon require substantial changes to the shady “Premier Agent” program. These changes may kill off Premier Agent for good.
The new pricing scheme to pay $333/month to “opt out” of Premier Agent is a great way for them to slowly kill off Premier Agent in NYC without having to admit what a colossal failure it has been. More importantly, they can do it in such a way as to keep collecting Premier Agent revenue from buyer’s agents, while starting to get revenue from the new program.
2) StreetEasy wants to be the sole manual entry point for all agents on all listings, no feeds.
But the real implications are in the fine print: Agents who want to get rid of Premier Agent will have to upload their listings manually, directly into StreetEasy.
Let’s face it, many top agents may request this, and they may even get their firms to pay for it.
This should set off alarm bells!
Why does StreetEasy want you to upload manually directly through them?
Currently many top firms could instantly – with a single click – remove thousands of listings from appearing on StreetEasy. This is enormous leverage that the top brokerage firms have over StreetEasy. In fact, as reported by the Real Deal, many of these firms have used this leverage in the last year or two to cut deals and negotiate better pricing for themselves.
By slowly nurturing these “direct” relationships, StreetEasy can dramatically weaken brokerage firms as well as vendors who feed to StreetEasy.
In fact, there is even more proof of their plan. While it has not been reported much (if at all), over the last year or so StreetEasy has required many smaller firms to cut their feed and upload their listings manually.
Controlling the sole point of entry will also give StreetEasy additional ways to dig even deeper into agents’ pockets (Ugh).
Having access to all of the listings used to be one of StreetEasy’s main competitive advantages. However, now that hundreds of consumer websites have the ability to plug into REBNY’s RLS feed, this is no longer a strategic advantage for StreetEasy.
How Can We All Respond?
1.Think twice before cutting the feed to StreetEasy. Think long term. Hold on to your leverage.
The big firms who are still sending their listing feeds to StreetEasy may want to strongly consider NOT cutting the feed. Cutting the feed at this point would be playing right into their hands. Once your agents are posting directly with StreetEasy, your leverage is gone. It would be really hard to put that genie back in the bottle.
Of course if you are still sending your listings feed to StreetEasy, this means you will be stuck with Premier Agent on your listings. Given how “weak” Premier Agent is becoming, perhaps that is the best alternative FOR NOW. This would essentially freeze the status quo, provide the opportunity to seek other solutions, and maintain the leverage you have to help bring about positive change.
2. Move Closer to a True “MLS”: Create One Single Point of Listing Entry Run by an Agent Advocacy Group
Right now agents input their listings in all different ways. Some enter through their brokerage and some enter through a third party vendor. Some enter directly through StreetEasy. StreetEasy is trying to take advantage of this “chaos” and standardize this behavior by having everyone list through them. This would be disastrous for the industry. You think things are bad now?
The only way to effectively neutralize StreetEasy’s plans of being the single place for everyone to go to enter their listings would be to have a competing database (accessed only by brokers) where all agents can enter their listings directly (This is how MLS’s work in other regions of the country). It should be run and owned by an entity that advocates for agents (e.g. REBNY).
REBNY’s RLS has made significant progress, but the time is now to allow – and perhaps require – agents to enter their listings directly into the RLS all in one place. While other solutions can be considered, adding this capability to the RLS to work this way would probably be the fastest and most efficient way to compete.
A HUGE critical secondary benefit of this approach would be incredible standard listing quality throughout the industry since everyone would be using the same exact form to enter their listings! This listings database – with a single entry point and managed by an organization that actually understands NYC real estate to maintain accuracy – could become the gold standard for listing quality. This could be a huge competitive advantage.
3. Educate your clients about new platforms. Why? The quality and number of listings on StreetEasy continues to decline.
Educate your clients to search on new platforms for sales and rentals (Frele, Leasebreak, and other competitors.). To understand what will happen to sales after some of these changes, look at how “pay to play” has affected rentals on StreetEasy.
As StreetEasy moves to a “pay to play” scheme on sales, you will see a drop in quality and a drop in the number of listings, similar to what has happened on rentals. I hear from agents all the time that they are receiving leads on rentals from different and more varied websites than ever before!
Please shoot me an email with any thoughts on any of this, or if you want to get involved or help in some way. I always love to hear from you! 🙂 |
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