We’ve all seen how technology can completely change an industry. Remember going to Blockbuster to rent movies? Or searching the phone book instead of Google? Or how about going to the record store to buy music? Ah yes, we all remember the archaic ways of business which seem ancient to us now, but in reality were not all that long ago.
Well, a major disruption is happening in NYC real estate right now and both consumers and industry professionals should take notice. As a former professional in the music biz (now a full-time real estate agent in Manhattan & Brooklyn), I see many parallels between the two industries: Brokerages are like record labels, real estate agents are like recording artists, and Zillow is like Apple. That being said, the big question is whether or not real estate firms will adjust to technology changes within the industry or fight them to the bitter end, like many record labels did in the past. Time will tell, but here are my thoughts:
Zillow’s StreetEasy is like Apple’s iTunes.
When Apple first released iTunes it flipped the entire music business on it’s head. On the one hand, it solved the problem of illegally pirating music. It also gave consumers the ability to buy single songs instead of being forced to pay for a full album just to get the one good song they wanted to hear. It transferred the power away from the labels and over to the consumer by giving them options and the ability to choose. The convenience of it all also destroyed the need for a record store. Why leave the house to buy a CD or cassette tape when you can stay at home and download mp3’s online? Convenience is king.
StreetEasy provides that same level of convenience to prospective homebuyers and it’s the closest thing to a consumer-facing MLS this city has to offer. Buyers now have access to condo, co-op and townhouse listings, can set up neighborhood searches with fine-tuned criteria, monitor price changes, and review a property’s history- all without having to use a broker or leave the house. The amount of free information StreetEasy provides potential buyers is endless.
And now that everyone and the mother uses StreetEasy, Zillow seized the opportunity and implemented their ‘Premier Agent’ program; selling leads to real estate professionals who are willing to pay for them. At face value, that doesn’t seem like such a big deal, but it’s definitely not business as usual and many real estate firms are fighting it tooth and nail.
So, what’s all the fuss about? Consumers are potentially being mislead and agents are losing direct deals. Here’s how: StreetEasy displays a ‘Contact Agent’ form next to a property listing and essentially forwards the inquiries to participating Premier Agents – instead of the listing agent.
Firms like LG Fairmont and TripleMint are partaking in the Premier Agent program and are giving leads they purchase to their agents. LG Fairmont considers themselves a tech-based real estate firm and their adoption of Premier Agent backs that claim. One of the biggest barriers to success for aspiring agents is lead generation, but now anyone- even with virtually no network- can hit the ground running at firms like these. The concern however, is that newbies lack the experience necessary to navigate buyers safely through the complicated purchase process, potentially leading to poor service and costly mistakes for the consumer.
In addition to the Premier Agent program, StreetEasy rolled-out their $3 a day listing fee last month for all rentals posted on the platform. Brokers who want the exposure that the popular website provides are now forced to pay for it. The Corcoran Group and Citi Habitats were the first to decide they weren’t playing ball and pulled all their rental listings off StreetEasy the day the fee was initiated. Agents of these firms are still allowed to list their properties on StreetEasy if they want to, but they will not be reimbursed the expense. And to top that off, just last Tuesday four major real estate firms, Brown Harris Stevens, Compass, Stribling & Associates, and Town Residential pulled their sales and rental listings from StreetEasy as well.
So what does this all mean for the future of real estate in NYC? Are consumers being better served with programs like these? Are things more transparent and less confusing now or the other way around? And with so much information available online, will consumers feel more empowered to brave the home buying process alone or hire the help of a trusted real estate professional?
Time will tell, but one thing’s for sure: change is here and more is coming – technology never slowed down for anyone. If brokerages don’t adopt StreetEasy’s programs, they’ll at least need to adjust to them because just like iTunes, StreetEasy isn’t going anywhere any time soon.
If you found value out of this article, please like or share with your colleagues. It will help motivate me to keep writing and pushing these out.
[Kyle Jekielek is a licensed real estate salesperson at The Corcoran Group – Manhattan and Brooklyn’s largest residential real estate brokerage. Learn more about buying and selling NYC real estate at Kyle’s website:www.FearlessAgent.nyc]