Brokers and Zillow/StreetEasy At Odds

David Goldsmith

All Powerful Moderator
Staff member

Tougher rules for real estate ads go into effect this fall
NYRAC flooded DOS with letters calling StreetEasy’s Premier Agent “deceptive”

After three years of public vitriol, lobbying and rule-writing, tighter regulations for online real estate advertising will take effect in November.
The regulations, included in the May 6 edition of the New York State Register, require additional disclosures from firms and listing portals. The adoption of the rules, published in October 2019, comes three years after StreetEasy launched its lucrative-but-controversial Premier Agent advertising program, which set much of the real estate industry against the go-to listings portal.
The program, long used by StreetEasy parent Zillow, lets agents who advertise display their name alongside listings that are not their own. Despite popularity among buyer’s agents, listing brokers have called Premier Agent misleading and disingenuous. The Real Estate Board of New York said it caused a “maelstrom” of consumer confusion.

When the state revised the rule to require third-party sites to include the word “advertisement” if an agent is paying for an ad, both StreetEasy and the real estate industry called the new rule a “win.”
But that consensus cracked during the public comment period. The Department of State said it received more than 700 public comments related to the new rule — an “overwhelming majority” of which came from New York Residential Agent Continuum.
NYRAC, an industry organization formed in 2018, said in a letter to the DOS that it feared “the language in the regulation is already outdated” and called Premier Agent “deceptive.”
In a December 2019 letter, the Real Estate Board of New York praised the regulations as a “significant step forward,” but said StreetEasy continued to come up with ways to minimize listing agents. It also said the state’s slow-moving processes cost it credibility with some agents.
Heather McDonough Domi, an agent at Compass and founding chair of NYRAC, said while the jury’s still out, she does not think the current regulations go far enough. The broker group called on the DOS to require aggregators to disclose fees paid by advertisers, and to tell consumers who fill out a “contact” form on StreetEasy where (and to whom) their information is being shared. (The final rule also requires brokerages to obtain authorization if they display another firm’s exclusive listing.)

“If you’re submitting information to a third-party that’s giving it to someone who has paid for a lead,” McDonough Domi said, “there should be a check box saying, ‘We are selling your information.’ Because that’s what it is.”

Despite receiving feedback from the real estate industry up until the eleventh hour, the DOS said it would not make any further changes to the regulation.
In the May 6 register, regulators rejected NYRAC’s proposal, writing: “The purpose of the proposed rule is to require licensed professionals to use specific text in advertising, across a broad range of media platforms, to promote transparency.” Adding another layer of disclosure would be beyond DOS’ scope, since it would be equivalent to proposing a “new” rule governing online platforms, some of which aren’t licensed by the state.

Following the May 6 notice of adoption, a Zillow spokesperson praised the DOS’ “thoughtful” approach and said the final rules are “fair to all parties.”
“These rules affirm what we’ve said from the start — that digital advertising programs like Premier Agent are allowed under the law — and effectively refute the many misleading, untruthful claims made about online advertising during this process,” the spokesman said.
Since launching Premier Agent in 2017, StreetEasy has modified the contact forms for agents. Last year, it launched Agent Spotlight, which allows agents to avoid Premier Agent on their listings for $333 a month.
But the portal’s relationship with some agents — and brokerages — remains fraught. This past February, StreetEeasy stopped taking automatic listing feeds from firms. A groundswell of agents from the city’s biggest firms has started to bypass StreetEasy altogether.

In an email to members on Sunday, REBNY said the state will issue guidance “providing further interpretation” of the regulation. “REBNY will be providing more information and interpretation of these adopted regulations shortly.”
 

David Goldsmith

All Powerful Moderator
Staff member

StreetEasy threatens to yank Elliman’s rental listings
NYC’s dominant listing portal warned Elliman agents that rental listings would be pulled because of a “contract dispute”

Call it a declaration of war?
StreetEasy has threatened to yank Douglas Elliman’s rental listings in what the portal has described as a contract dispute.

The Zillow-owned company alerted Elliman’s nearly 2,500 New York City agents on Thursday that the brokerage’s rental listings would be pulled unless the dispute is resolved by June 19. StreetEasy also sent the email to landlords represented by Elliman agents.

“Douglas Elliman agents will also no longer be able to create or publish new rental listings” on StreetEasy, Zillow, Trulia, Hotpads and Naked Apartments, according to the email, a copy of which was viewed by The Real Deal. Sales listings will not be affected, though it wasn’t clear why.

Neither company would confirm what sparked the email.
In a statement Thursday, a StreetEasy spokesperson said the company is committed to “ongoing conversations” with Elliman and wishes for a “swift resolution.”

“To be clear, this is not our preferred outcome,” the spokesperson said. “We know that StreetEasy is a valuable marketing tool for agents and a trusted resource for consumers.”
A spokesperson for Elliman declined to comment. But in an email to agents later on Thursday, the firm called StreetEasy’s threat “heavy handed” and said it was continuing to negotiate “some aspects of our relationship.”

The public clash marks a major turn in the relationship between the two companies. Ellliman largely stayed out of a brawl that erupted between StreetEasy and the city’s top firms in 2017, when the portal launched Premier Agent, its controversial agent advertising program. Instead, that year Elliman hired StreetEasy to build a back-end listing system for agents. At the time, Elliman COO Scott Durkin said of the portal: “No one can deliver listings to agents and customers like StreetEasy.”

But the system, which was supposed to debut in 2018, never materialized. Neither side would say publicly what happened. By late last year, Elliman joined other residential firms in blasting StreetEasy when the portal stopped taking listing feeds from brokerages. Although Zillow claimed that feeds were a “barrier to innovation,” brokers alleged manual entry was a form of blackmail that was time-consuming and would increase errors.

In an email to agents late last year, Elliman said it was “assessing the return on its StreetEasy investment” and exploring alternative marketing options. “We will not go backwards in our ability to quickly and accurately utilize technology to market and sell properties,” the firm said.

With 24 offices in New York City, Elliman churns out a heavy volume of rentals and sales. The firm sold $7.96 billion worth of real estate in 2019, according to TRD’s most recent ranking of top firms.

Some of its competitors, including Compass, Brown Harris Stevens and Warburg Realty, cut their direct feeds to StreetEasy in 2017 in favor of the Real Estate Board of New York’s syndicated residential listings service (RLS), which StreetEasy refused to accept.

The listing feed issue is just one point of contention among rental brokers, however. StreetEasy has steadily increased the fee to post listings, which now costs $6 per day per listing.
In New York City, agents have not been allowed to conduct in-person showings since March, when Gov. Andrew Cuomo ordered non-essential workers to stay home.

Elliman had a net loss of $69 million during the first quarter, having lost $10.4 million in the same period last year, its parent company Vector reported. Quarterly revenues were $165.5 million, up 2.3 percent.
During an earnings call, Elliman chairman Howard Lorber said the firm is bracing for a “severe decline” in sales activity.

The firm laid off 100 employees and already cut salaries by 15 percent. It plans to consolidate offices or negotiate “rent reductions, deferrals or holidays.”
 

David Goldsmith

All Powerful Moderator
Staff member
OneKey takes on StreetEasy with new listing site
The portal has 24,432 for-sale listings from Long Island to Putnam and Orange counties

Brokers in the New York metro area are taking on the real estate industry’s 800-pound gorilla.
Realtors in Westchester and Long Island, who merged their multiple listing systems in 2018, launched a consumer-facing portal on Monday.

OneKey MLS, which debuted last year as an MLS for agents, currently has more than 40,000 listings from Montauk to Manhattan to Monticello, said the group’s CEO Jim Speer, speaking at a Zoom news conference to introduce the site.

“In this day and age, accurate data is everything,” added Richard Haggerty, president of OneKey MLS and CEO of Hudson Gateway Association of Realtors, who said listing data in New York City comes directly from brokerage firms.

OneKey executives did not mention StreetEasy or its parent company Zillow by name, but they cast their site as a place where agents will retain control of their listings. The relationship between New York City’s brokerages and StreetEasy has been tense since 2017, when the listings portal introduced Premier Agent, an ad program that lets agents advertise to be a buyer’s agent.

“The consumer will never be offered pay-to-play agents,” said Leah Caro, the chairperson of OneKey’s board of managers and president of Park Sterling Realty in Bronxville.
Like aggregator sites, OneKey offers a slew of information about each listing, including neighborhood data translated into 20-plus languages and information about recently sold properties nearby. Users can save favorites, sign up for updates and see when a listing was last updated. (OneKey syncs with local MLS systems every five minutes.)

In the five boroughs, where data comes directly from brokerage firms, users can see a unit’s block and lot number, as well as the unit’s sales history from ACRIS. Users across the metro area can also schedule a tour from the OneKey site.
The site currently has 24,432 for-sale listings. By comparison, StreetEasy has 15,258 for-sale listings in New York and New Jersey.

A deeper search, however, shows StreetEasy still has the upper hand in Manhattan — by a lot. OneKey currently has 1,093 for-sale listings compared to 6,616 listings on StreetEasy.
New York City brokerage firms have clashed publicly with StreetEasy over the site’s agent advertising programs. Last year, StreetEasy said it would stop accepting brokerage feeds, and instead encouraged agents to send listings directly.

Many New York firms already cut ties with StreetEasy, instead sending listings to the Real Estate Board of New York’s syndicated Residential Listing Services. The RLS has hinted at launching a consumer site but hasn’t gone public with concrete plans to do so.

Haggerty said OneKey does not get an RLS feed. Instead, it gets listings directly from major firms, including Compass, Keller Williams and several others. Agents from Douglas Elliman and the Corcoran Group have also shared listings with OneKey, according to the site.
 

David Goldsmith

All Powerful Moderator
Staff member
Elliman gives in to StreetEasy’s manual listings
Earlier memo to agents said listings feed would stay intact

The Douglas Elliman-StreetEasy drama has taken a new turn.
After emailing agents June 19 that the two sides had settled their bruising contract dispute, sparing agents from manually entering listings on StreetEasy, Elliman’s leaders have told them manual entry must continue.

In a memo obtained by The Real Deal, the brokerage tried to spin the news as positive — despite months of criticizing StreetEasy’s decision to stop taking automatic listings feeds from residential firms.

“We are excited to inform you that beginning July 15th, you will directly enter all new sales and rental exclusives on StreetEasy using Agent Tools,” read the June 30 memo, signed by Elliman’s New York City CEO Steven James. “By allowing you access to Agent Tools, we are providing the most effective means for you to upload your listings quickly and accurately.”

The policy amounts to a 180-degree turn for Elliman, which last year was among the New York City brokerages to condemn StreetEasy for pivoting to manual entry. Previously, the Zillow-owned portal had agreements with individual firms to take their listings in bulk.

Things came to a head in May when StreetEasy emailed Elliman’s nearly 2,500 New York City agents (and landlord clients), threatening to pull rental listings unless the firm resolved an undisclosed contract dispute.
After hasty negotiations, Elliman sent its June 19 memo to agents, letting them know the dispute — and the tedium of typing in data — were over. “As of today, the listings feed between Douglas Elliman and StreetEasy is live and you will no longer have to perform any manual entry for the site,” it declared.

Douglas Elliman declined to comment on the email sent 11 days later, in which it said it was working with StreetEasy to develop training for agents and ongoing tech support.
In a statement, a Zillow spokesperson said, “We are pleased to offer Douglas Elliman agents uninterrupted access to Agent Tools and the StreetEasy platform.”
 

David Goldsmith

All Powerful Moderator
Staff member
And now giant IBM
IBM slams Zillow with second suit over patented search tools
Tech giant said listings portal used 5 patents without licensing deals

IBM is escalating its legal battle with Zillow, filing a second lawsuit accusing the listings giant of infringing on patents to build its real estate search engine.
In a July 21 lawsuit, filed in federal court in Washington, IBM claimed the Seattle-based company infringed on five patents that improve searches by ranking results and simplifying content displays, among other things. Despite written notifications, Zillow has engaged in a “policy of willful blindness” and continues to use the technology, IBM alleges.

“Dozens of similar companies, including Amazon, Apple, Google, and Facebook, have agreed to cross licenses with IBM,” said the complaint. “Unfortunately, Zillow is not among them. Instead, Zillow has chosen to willfully infringe the five patents in this lawsuit without even considering licensing discussions.”
IBM and Zillow have been fighting over patent licensing deals for several years.
In September, the tech company sued Zillow in federal court in California, accusing it of building its portal with the unauthorized use of seven patented technologies. In that complaint, IBM said it tried for three years to reach a licensing deal with Zillow but wasn’t able to do so. In that case, IBM is seeking “royalties on the billions of dollars in revenue that Zillow has received based on their infringement of IBM’s patented technology.”

IBM, which reportedly invests more than $5 billion a year in research and development, has a history of suing tech companies, including Groupon and Twitter, for patent infringement. In March, it slapped Airbnb with a suit accusing the travel startup of using patents related to improved navigation using bookmarks and advertising in an interactive service.In a statement, Zillow said, “We are aware of the lawsuit filed in federal court. We believe the claims in the case are without merit and we intend to vigorously defend ourselves against the lawsuit.”

Since 2019, the company has bet heavily on home-buying as the future of its business. Last year, Zillow generated $2.7 billion in revenue, including $1.365 billion from its iBuying segment. However, the company lost $305.4 billion, up from $119.9 million in 2018. Zillow temporarily paused home-buying in March amid Covid’s uncertainty.
 

David Goldsmith

All Powerful Moderator
Staff member
Zillow launches brokerage to boost iBuying
Salaried agents will represent listings giant on cash offers

For years, Zillow denied it had plans to become a brokerage. But the listings giant is doing just that, in a move it says will streamline its iBuying operation.
Starting in January 2021, the company said salaried agents will work with sellers who want cash offers for their homes through Zillow Offers. In those transactions, Zillow Homes will be the broker of record, the company said. To start, Zillow agents will work with homeowners in Atlanta, Phoenix and Tucson, with plans to expand the service to other markets later next year.

Previously, Zillow relied on local brokerage partners to represent it when it purchased homes. Zillow’s iBuying is a burgeoning piece of its business, and by bringing that work in-house, Zillow said it hopes to make the transaction smoother for homeowners.

“Many customers found the handoffs and the back-and-forth between the Zillow employees and the agents to be confusing,” Errol Samuelson, Zillow’s chief industry development officer, said in a video circulated Wednesday to brokerages. “This new approach will streamline the transaction.”

Samuelson made a point to stress that Zillow is not looking to usurp the role of local agents, who have long feared the Seattle-based giant would push them out of transactions. “Let me address one thing right off the bat. We are not recruiting agents from other brokerages,” Samuelson said. Instead, Zillow will ask current employees who work on Zillow Offers to get licensed.

Zillow, which historically made money by selling ads through its Premier Agent program, has bet big on iBuying since 2018, when CEO Rich Barton called instant home-buying a “moon shot” opportunity. In general, iBuyers like Zillow, Opendoor and others make cash offers for homes for a fee, and aim to resell at a profit after making modest repairs.

A Zillow spokesperson said the company’s agents will only represent it on iBuying deals and will not be allowed to moonlight as agents in the traditional sense. “We are only bringing in-house the back-end work to represent ourselves whenever we directly buy or sell a home,” spokesman Viet Shelton said. “In no way are we signing clients traditionally.”

According to Shelton, Zillow will continue to refer sellers to local broker partners (i.e., Premier Agents) if they choose to sell their home traditionally. Zillow will also refer clients to local agents if they need help finding and buying their next home.
Zillow first got licensed as a brokerage in Arizona in 2018, under pressure from local regulators after it launched its iBuying program. It has steadily accumulated licenses in other states, including New York earlier this year. (Zillow does not operate its iBuying business in New York.)

Zillow has denied plans to operate a traditional brokerage. Rather, it says some of its offerings require licensing, such as its “Flex” program, which gives agents qualified buyer leads. Agents pay no upfront costs but get a “success fee” akin to a referral fee if they close a deal.

Still, the lines between traditional brokerage and iBuying are getting blurry.
Brokerage giants Realogy and Keller Williams offer online home-buying options. And in June, Offerpad launched a real estate solutions division that allows clients to list their homes with in-house agents and use a concierge service to get their property ready to list.

Last month, SoftBank-backed Opendoor quietly began recruiting agents. The company, which plans to go public via a $4.8 billion SPAC deal, said agents would work on a new “Home Reserve” platform that lets sellers list their home with Opendoor while purchasing their next home with an all-cash offer. To start, Opendoor has sought agents in Phoenix, Inman reported.

Zillow said its brokerage operation is different from its rivals since agents will only work on Zillow Offers.
Last year, iBuying accounted for 0.5 percent of the U.S. housing market, or $8 billion in sales, according to industry analyst Mike DelPrete. Opendoor, the market leader, generated $4.7 billion in revenue. Zillow, in the No. 2 spot, generated $1.365 billion in iBuying revenue in 2019, up from $52.4 million in 2018. But it still lost $300 million on iBuying.
 

David Goldsmith

All Powerful Moderator
Staff member
Tell me this isn't a thinly veiled lead generation platform?
StreetEasy launches automated home-valuation tool
Homeowners can request estimate of property value and monthly rent

At a time when the pandemic is tossing property values around like laundry in a washing machine, StreetEasy has launched a new tool to tell New Yorkers what their homes are worth.
The automated valuation model tool is similar to the Zestimate tool from parent company Zillow, but won’t be public-facing, Inman reports. Instead, homeowners must request access. Those who do can expect to receive an estimate of their home’s value, price per square foot and monthly rent.

Doug Perlson, StreetEasy’s vice president of real estate strategy and operations, told Inman the tool was created using “cutting-edge statistical techniques and backed by StreetEasy’s wealth of data.”
However, the company stressed that the tool is intended to be a “starting point” for homeowners, not a replacement for a professional appraisal or a real estate agent’s expertise.

Automated valuation models have faced criticism over the years from some homeowners and industry professionals who have questioned their accuracy.
A 2018 study by economists at the Federal Reserve that compared valuations from homeowners versus automated systems found the two were fairly similar, but neither was great.
According to the study, only about half of the automated estimates and 40 percent of homeowners’ estimates fell within 10 percent of the actual selling price.
 

David Goldsmith

All Powerful Moderator
Staff member
Looks like an anti-competitive practice:
Buy your competition and then shut it down.
Zillow to shutter Naked Apartments
Listing giant bought NYC rental site for $13M in 2016

Rental listings site Naked Apartments will go dark later this month as Zillow sends apartment seekers to StreetEasy instead.
Starting Oct. 28, apartment seekers who visit Naked Apartments in search of a New York City rental will be redirected to StreetEasy, according to an email notification. Going forward, Streetasy will have “the most complete set of NYC apartments available for rent,” the email said.

Zillow bought Naked Apartments for $13 million in 2016, three years after it bought StreetEasy for $50 million to gain a foothold in New York. Naked Apartments was founded in 2010 and billed itself as a hyperlocal rental platform with subway information, market data and agent reviews.

A StreetEasy spokesperson confirmed Naked Apartments would be discontinued. “All of the same apartments you see on NakedApartments.com are already on other Zillow Group sites,” including StreetEasy, the spokesperson said.

As of Thursday, StreetEasy listed 20,849 apartments available for rent throughout New York City.
Zillow has made several acquisitions over the past decade, and in many cases continues to operate established brands like Trulia, StreetEasy, HotPads and dotloop.
In the Hamptons, Zillow operates as Out East, after acquiring the listing platform Hamptons Real Estate Online. Zillow rolled out the new name in 2018, along with a glossy website to replace HREO’s portal, which hadn’t been updated significantly since the 1990s.

New York’s rental market is struggling as a result of mass unemployment and the departure of residents during the pandemic. Manhattan rental inventory climbed to a 14-year high last month as the vacancy rate hit a stunning 5.75 percent, according to the latest rental report from Douglas Elliman and appraiser Jonathan Miller.
The median net-effective rent in Manhattan fell to $3,036 per month, an 11 percent drop from $3,411 per month in September 2019.
 
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