(New York, NY) — Last week, BrokerPulse reported that StreetEasy plans on charging agents at brokerage firms $3 per listing, per day to advertise each rental listing. The fee was met with overwhelming criticism, just like when Craig’s List put up a paywall. It did not help that StreetEasy looked like the bully in the playground when the company said brokers’ listings would be eliminated from their platform if they didn’t partake in the controversial program. But as soon as StreetEasy made the announcement, the number of rentals posted on its platform plummeted 55 percent from 30,967 on Monday to 13,978 on Tuesday, as the Real Deal pointed out.
This felt like a threat to many brokers, who said the fee was like a ransom and a way to cheat them.
SOME FIRMS HAVE HAD A CHANGE OF HEART
However, we’re learning today that respectable brokerage firms are doing a 360 and, while not fully embracing StreetEasy’s platform, will suck up because both the real estate industry and the potential buyer or renter are backed into a corner, noting that it’s very hard to ignore or go against a mammoth site that they already use and which is guaranteed that their leads will be seen because StreetEasy generates heavy traffic. While some firms revealed that their agents would be personally charged for the fee, others said they would cover those costs for its employees using their advertising budget.
ELLIMAN OPTS IN
That’s the case with the high-end, high-reaching Douglas Elliman, whose COO Scott Durkin said that using StreetEasy would give the firm an edge in recruiting rental agents.
But that partnership is not without problems since there is roughly 1,000 up to 1,500 exclusive listings a day on StreetEasy. The Real Deal did the math, and said that the program could cost Elliman $1.6 million annually. Also, since the fees would be covered by an agent’s existing advertisement budget, the agent will have less money in the pot for such thing as marketing.
But despite Elliman experiencing a profit dipping, Durkin seems assured that the listing fees would pay off, saying:
“We felt that it would be a disservice to agents and clients if we didn’t subscribe to their new rental listing program. . . “StreetEasy is our biggest driver of traffic, other than our own site, to our listings. There was no way we were going to let that feed be interrupted. It was a smart business decision.”
A CLEAN SLATE
The one good thing about the new platform is that real estate brokers will have the ability to remove old, inaccurate and purchased listings. Durkin agrees about starting new on a clean slate, because his agents will be quick to update rental listings that have already been rented out in order to avoid unnecessary costs.
WHO’S IN AND WHO’S OUT
Elliman’s rivals, which include the Corcoran Group, Town Residential, Halstead Property and Brown Harris Stevens, have reacted in different ways to the $3 fee.
Corcoran made its promise to stop sending its feeds to StreetEasy but it has also been set up so that agents can opt to list if they wanted to.
Pamela Liebman, the president and chief executive officer of the Corcoran Group, pointed out that less than 7 percent of Corcoran’s rental listings are on the site. Agent Brian Meier said he’d stop paying when StreetEasy is not worth it anymore, which Meier said may happen soon because “[R]enters understand that StreetEasy is not a platform to see the whole market.”
Brown Harris Stevens and Town Residential are on the fence about the fees and will not embrace them, but it will also let agents to display their listings on StreetEasy with one major caveat: the agents will have to pay their way.
DECISIONS ABOUT OTHER BROKERAGE FIRMS
Until syndication starts with the REBNY RLS feed, Stribling will fully reimburse agents. Bond plans on sharing the expenses with their agents. Mirador Real Estate said they will pay to play once they feel that the marketing is worth it. MNS plans on covering the cost of agents’ exclusive listings, while Nest Seekers International will participate so that their clients will have maximum exposure, which is something they “deserve.” Meanwhile, Compass will opt out, and Gabriele Sewtz has been frank with her decision, saying:
“I don’t feel that one player in a market should have the power to decide what a consumer is going to see and what a consumer is not going to see.”
WHAT’S FAIR AND NOT FAIR
A spokesperson for StreetEasy is confident that, once agents realize their listings are no longer on its site, they will conform. StreetEasy boasts that now agents are “opting in by the minute,” and that the site will be extraordinarily helpful to rentals who will no longer see stale listings since the company is getting rid of them. Apartment hunters, the company added, will now “have access to a database of legitimate, active and accurate NYC inventory.”
That’s true, but let’s wait and see if other firms will adopt the program and whether or not the hold-outs will eventually succumb to behemoth StreetEasy because no one else in the real estate industry can afford to ignore them without paying a price.