A buyer still has to look HARD to find the name and contact information of the exclusive listing … [+]
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Technology governs the process of shopping for residential real estate like never before. During the 9 months (and counting) of the pandemic, owners and seekers of homes have depended on online viewings in record numbers. While only a small number of buyers actually BUY from an online tour experience, it refines the process in a way that, pre-pandemic, was far more likely to be accomplished through in-person visits to multiple houses or apartments. Why, then, do several of the major technology providers both mistreat and exploit agents, who are their primary contact to the consumer that makes up our marketplace?
There has always been substantial tension between StreetEasy, the Zillow subsidiary which runs New York City’s most popular listing site, and the brokerage community. Admittedly, brokers initially misunderstood the benefits of aggregating all listings together. In the early days of websites, the largest city brokerages believed they could increase web traffic by building out good websites and waiting for consumers to find them (with a little help from aggressive marketing campaigns, of course.) But that wasn’t what consumers wanted. For them, one-stop shopping made their lives much easier. So while the brokerages dithered, the barn door was left open and the horses were quietly ushered into the pasture of the outside aggregators, StreetEasy chief among them. And once Zillow paid $50 million to acquire StreetEasy, they needed to monetize that investment.
And so the Premier Agent program was brought to New York. This program, for many years Zillow’s primary source of revenue, is based on what appears to me to be a classic bait-and-switch. Each Zillow property page contains, in bold letters at the top, the name of an agent to contact. Ah, thinks the reader, this is the exclusive listing agent who handles the property and is the person most knowledgeable about it. But no, it’s not. It’s just the name of the agent who has PAID Zillow/StreetEasy for the privilege of being listed there. These purchases were made by Zip code, and the more the agent paid, the more exposure they got.
In practice, this marketing strategy led to a great deal of consumer confusion. Buyers would arrive at a property only to discover that their “Premier Agent,” whom they had probably never met, was not in fact the exclusive listing agent but was there to represent them as a buyer’s agent. Which is great if they actually wanted a buyer’s agent. But if they assumed they were meeting the exclusive agent, it led (and still leads) to some very tense moments. Moments that become even tenser if these buyers already HAVE their own buyer’s agent.
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About a year ago, the New York Department of State ruled this form of advertising essentially deceptive and warned real estate agents that they could be liable for charges of misleading the public if they participated. So StreetEasy made a few cosmetic modifications to its page, to try to hew more closely to the exact requirements of the DOS dictum, if not its spirit. A buyer still has to look HARD to find the name and contact information of the exclusive listing agent. And as far as I can see, the Department of State rule mandating that the name of the Premier Agent appear with the word “Advertising” next to it has not been adopted at all. What does appear is a lot of camouflage to disguise the fact that the Premier Agent has purchased an advertisement from StreetEasy. So, real estate buyer, beware! Make sure you are contacting the person YOU mean to contact, not the person THEY mean you to contact. It’s all about transparency.