Brokers, REBNY, Zillow/StreetEasy At Odds In 2024

David Goldsmith

All Powerful Moderator
Staff member
Not sure what Citysnap is offering agents exactly? I "registered" (admittedly, I have yet to enter my first listing; I expect to do that later this week) and all I've gotten is ads offering me hundreds of dollars "off" a Google listing -- one that it looks like I could sign up for myself if I cared to.
I'm curious what others are finding lately:
It seems to me that since Citysnap had started things have become more fractious and rather than moving in the right direction (i.e. having one place where one cand find all the information they need) it's taking more energy to search multiple places because not only isn't it "all in one place" but each place seems to have less of a complete picture than it used to.
 

nicolebeauchamp

Well-known member
In theory whatever someone is inputting into their listing system, ends up being in citysnap. The problem is, I think, that people are not , for example, entering things (open houses) into both, after a few snippy , can't you see I have an open house responses, I have now,particularly when doing weekend scheduling, made it a habit to look at both.

The upsell for the Pro - is nearly nonstop. What it's supposed to do, is give easy access to the data that's in the system - I don't really find a need to search citysnap, however I will say clients have found it easier to use and navigate than when I send invitations on Perchwell....not sure why that is so far....

Changing consumer behavior is HARD. I think it will take a long time for citysnap to have the same sort of brand recognition that something like SE has in this market...
I'm curious what others are finding lately:
It seems to me that since Citysnap had started things have become more fractious and rather than moving in the right direction (i.e. having one place where one cand find all the information they need) it's taking more energy to search multiple places because not only isn't it "all in one place" but each place seems to have less of a complete picture than it used to.
 

David Goldsmith

All Powerful Moderator
Staff member

REBNY plans sweeping rule changes for 2023​

New UCBA points clamp down on “off-market” and “no-fee” listing language​

The Real Estate Board of New York is ringing in 2023 with what the group called “significant” changes to its universal co-brokerage agreement.
The new rules, which are effective Jan. 1, are tightening the language used to advertise listings. Brokers won’t be able to use the term “no-fee,” which the group said misleads customers who don’t understand the term only applies to the listing broker.
The label “off-market” will be prohibited from exclusive listings and those omitted from the RLS by an owner’s opt-out agreement, often used by wealthy clients for discreet marketing.
view


In cases where an open listing is being advertised as off-market, REBNY can ask for documentation proving the listing is open.
“It’s co-broke or go broke,” a representative for REBNY said.
REBNY is also instituting a “coming soon” status for listings on the RLS, which will give brokers 14 days to switch them to active. The addition comes in response to brokers using the term as a marketing or staging tool without a clear standard, so it’s unclear when a property will hit the market.

Under the new guidelines, brokers will have 14 days to change their listings to active after first posting them under the label, and they won’t be able to show the property until the listing is changed to active.
A third rule clarifies language around commission splits, encouraging brokers to come to a written agreement if they’re pursuing an uneven split for a transaction.

A final rule change implements the Residential New Development Brokerage Agreement for new development buildings of all sizes. The agreement previously applied only to buildings with 10 or more units.

The change to the RUNDBA makes the agreement universal to all new developments, not just ones with 10 or more units. The rule, previously updated in 2019, was aimed at making life easier for buyers’ brokers by laying rules for commission payments.
The organization approved the changes in October and has since been working to spread the word before they go into effect and has reached roughly 500 member brokers, a representative for REBNY said.

While REBNY publishes yearly updates to the UCBA, it’s rare for rule changes to go beyond minor clarifications. It’s unclear why the organization chose this year to make sweeping changes.
While penalties for violating UCBA rules vary depending on the severity, the punishment for a first-time offense is generally a fine of $500, followed by a fine of up to $2,000 for a second offense and up to $10,000 for a third offense within the same calendar year.
 

David Goldsmith

All Powerful Moderator
Staff member


Meta updates property listing policy, riling agents​

Listings can no longer be shared on Facebook Marketplace with business profile​

Facebook Marketplace is becoming a less friendly hunting ground for real estate agents selling properties via social media.
Facebook’s parent company, Meta, announced late last month a policy change to the social media site’s virtual selling hub, that users can no longer share property listings on Facebook Marketplace with business profiles, upsetting some agents, Inman reported.

Agents still have the ability to use Facebook Marketplace to share their listings — they just can’t do it with a business profile. Utilizing their personal pages (which some may be uncomfortable with) remains fair game.
Agents can also continue posting listings on business pages. They simply can’t pose as their business on Facebook Marketplace as Meta looks to return the selling spot to an idealized person-to-person platform.

While agents may be disappointed or angered by the shift, they’ve always been at the mercy of social media companies, who can bend platforms to their whims, as evidenced by the widespread changes at Twitter since Elon Musk took over.
“Social media is rented ground. You don’t own it,” social media strategist and consultant Katie Lance said in a recent YouTube video, according to Inman. “We don’t make the rules. All you can do is adjust.”
Facebook has been embroiled in controversy regarding the housing market before. In 2016, the Department of Housing and Urban Development launched an investigation into how the platform’s ad filters could allow users to target ads based on protected characteristics, creating the potential for Fair Housing Act violations.

In 2019, HUD and the Justice Department charged Facebook with discrimination. That year, Facebook announced it would no longer allow housing ads to target users by ZIP code. The company also disabled targeted ads by age and gender, expanding those restrictions to job and lending ads.
The decision came out of a settlement of five discrimination lawsuits filed by the National Fair Housing Alliance, the Communications Workers of America and others. It also included nearly $5 million in payments.
 

David Goldsmith

All Powerful Moderator
Staff member
Monopolies are never good for the consumer. And over the last few decades our government has become increasingly impotent in curbing them.

MIKE DELPRETE - REAL ESTATE TECH STRATEGIST

Predators and Prey
October 24, 2022 Mike DelPrete
Screen+Shot+2022-10-24+at+7.35.51+AM.png

The real estate industry is in the midst of a massive financial reckoning: public company valuations down by billions, widespread layoffs, and a rush for venture-funded disruptors to conserve cash and demonstrate sustainable business models.

Why it matters: Amidst this turmoil, the industry is bifurcating into predators and prey -- companies that have the resources to expand through acquisition, and those burning cash that are vulnerable to takeover.
  • Companies with dwindling cash balances and high cash burn will be forced to raise funds or face insolvency (for example, Reali closing operations).
The predators have the financial resources -- namely, vast amounts of cash -- to take advantage of the current market situation and acquire vulnerable businesses.
e9c9c11e-b2fe-8e5e-8c4a-c6cd6163d476.png

Companies like Zillow, CoStar, and Rocket are certainly predators: flush with cash and opportunistically acquisitive in their outlook.
  • Opendoor is the outlier; although it has plenty of cash on hand, it’s about to enter (at least) two quarters of massive financial losses.

  • Private equity firms with plenty of cash to deploy are the other opportunistic predators.
The prey are the businesses that are vulnerable -- diminishing cash balances with high cash burn. In other words, a typical real estate tech disruptor.
6cc407be-4feb-0f17-71b0-1bfd984a8da6.png

The majority of prey are the hundreds of private companies whose financials are not publicly available.
  • The severity of their situation depends on when they last raised money, how quickly they're spending it, and how much they have in the bank.

  • If a company doesn't have at least 12 months of runway, they're prey.

What to watch: The name of the game for the next 6–18 months is VUCA -- volatile, uncertain, complex and ambiguous.
  • Expect to see a larger amount of mergers, acquisitions, consolidation, and liquidation.
The bottom line: Cash is king. In today's market, a company’s cash flow determines if it is in control of its own destiny.
  • If a company is burning cash and needs to raise additional funds, it will be forced to do so on someone else’s terms.

  • But, if a company is cash flow positive with a solid balance sheet, a VUCA environment presents incredible opportunity.

  • "Only when the tide goes out do you discover who's been swimming naked."
    - Warren Buffet
Discover more from Mike DelPrete - Real Estate Tech Strategist
 

David Goldsmith

All Powerful Moderator
Staff member

David Goldsmith

All Powerful Moderator
Staff member
https://www.realtrends.com/articles...-com-seems-a-little-low-spencer-rascoff-says/

CoStar’s rumored $3B deal for Realtor.com “seems a little low,” Spencer Rascoff says

Reuters report revealed that CoStar is in talks with News Corp. to acquire Realtor.com parent company Move Inc.

CoStar appears to be looking to up its residential real estate game. The commercial real estate giant is in talks to acquire Realtor.com parent firm Move Inc. from News Corp., according to a report on Tuesday from Reuters. The report cited three anonymous sources and confirmation of the news from News Corp., but noted that there is no guarantee a deal will actually go through.

The Rupert Murdoch helmed firm purchased Move in 2014 for $950 million. CoStar, which has a market cap of $30 billion, larger than rival Zillow’s, is in talks to acquire Move in a deal that values the portal at $3 billion.

“To me it seems a little low,” Spencer Rascoff, the co-founder of Zillow, said Wednesday morning on the Inman Connect New York stage. “News Corp. bought it almost 10 years ago for roughly a $1 billion and it feels to me that it has more than tripled in value over that period of time.”

As searching for homes online has become standard fare, Realtor.com has become the second largest real estate portal behind Zillow, with 90 million unique monthly visitors.

“It makes total, logical sense,” Pete Flint, the managing partner at NFX, told Inman attendees Wednesday morning. “CoStar has very clear designs on residential real estate. Realtor.com is a mainstay. It has amazing content, and it has a big brand and from CoStar’s perspective, this acquisition should happen. This feels like the worst time to be selling a company — tech is down, real estate is down — but if the prices if fair then it makes sense.”

The acquisition of Realtor.com, which announced layoffs in late 2022, would be CoStar’s third foray into residential real estate, as it acquired portal maker Homesnap in 2020 for $250 million and Homes.com in 2021 for $156 million.

This news comes after Murdoch proposed reuniting Fox Corporation and News Corp. in October 2022, roughly 10 years after he split the two firms.

In a note to investors, analysts at Keefe Bruyette Woods said the immediate financial impact of a deal for Realtor.com “is much less relevant, in our view, than the transformational strategic value that Realtor.com would bring to CoStar’s residential marketplace strategy under Homes.com, where one of the key uncertainties has been the company’s ability to build consumer traffic.”

Said KBW’s Ryan Tomasello, “Realtor.com’s strong brand awareness and nearly 90mn monthly unique visitors (>10x CoStar’s existing residential traffic) would accelerate CoStar’s residential strategy by numerous years, catapulting the company to the #2 residential portal spot behind Zillow. We believe CoStar would ultimately fold the Realtor.com brand under CoStar’s flagship Homes.com portal.”
Most Popular Articles
NAR Charlie Oppler DOJ op-ed
NAR victorious in renewed DOJ antitrust probe

U.S. District Court judge rules that the terms of the NAR’s earlier settlement with the DOJ are still valid.
 

David Goldsmith

All Powerful Moderator
Staff member

CoStar beats rival CREXi’s antitrust suit​

Judge tosses startup's counterclaims in high-stakes copyright dispute with data giant

In a high-stakes copyright dispute with far-reaching implications for commercial real estate, a CoStar competitor failed to prove that the data giant holds a monopoly and prevents brokers from sharing their data with rival firms.
Commercial data startup CREXi filed 14 counterclaims in August after CoStar sued the Los Angeles-based company in 2020, alleging copyright infringement.

CREXi — which is backed by Mitsubishi Estate Company, Industry Ventures and Prudence Holdings — is a platform for commercial real estate listings that competes with CoStar’s LoopNet.
LoopNet applies a watermark to photos. CoStar found that these watermarked images were being displayed on CREXi and sued to recoup damages.

In the counterclaims, CREXi argued that many brokers use LoopNet as a de facto repository for their images, and accused CoStar of anti-competitive activity by preventing brokers from using those images elsewhere.
Judge Consuelo Marshall in California’s Central District court ruled Thursday that CREXi failed to prove any anticompetitive activity.
“Whether brokers have become dependent on LoopNet and thus choose not to maintain additional copies of listings apart from what is on LoopNet is not anticompetitive conduct by CoStar,” she wrote. “If CREXi wishes to do business with brokers, CREXi can advise brokers to use their own images, not the modified images listed on LoopNet or linked through LoopLink.”
CREXi also argued that CoStar holds a monopoly in many markets, based on the dollar volume of listings on the site relative to the total commercial real estate sales in those markets.
The judge said that CoStar’s business is providing listing services in a market — not selling property — and therefore CREXi’s analysis didn’t prove a monopoly. Judge Marshall granted CoStar’s motion to dismiss the claims with prejudice, which means they can’t be brought again.

CREXi does, however, have the right to appeal. A representative for CREXi did not immediately respond to a request for comment.
CoStar’s general counsel, Gene Boxer, wrote in an email that CREXi’s competition claims were “long on hyperbole, but utterly devoid of substance.”
“CREXi’s allegations were always simply a smokescreen, a vain attempt to divert attention from CREXi’s industrial-scale scheme of copyright infringement and misappropriation, which it wielded against CoStar using a web of offshore agents,” he wrote. “We have obtained injunctions against four of those agents, and in the process uncovered damning evidence of CREXi’s willful misconduct.”
The case is being closely watched by the industry, because CoStar has a reputation for aggressively litigating against competitors.

The company in 2016 filed a copyright infringement lawsuit against Xceligent, which ended up in bankruptcy. CoStar was awarded a $500 million judgment in that case, based on more than 38,000 violations. Last summer, CoStar sought an injunction against a former employee who created an Instagram meme page poking fun at the company and its executives.
CoStar alleges that CREXi has stolen more than 50,000 images. The copyright infringement trial is scheduled to begin in March 2024.
Correction: A previous version of this story stated that CoStar sued over photos that brokers uploaded to LoopNet, which then applied a watermark. Brokers do upload photos to LoopNet, but those photos were not the basis for CoStar’s lawsuit.

 

David Goldsmith

All Powerful Moderator
Staff member
I'm curious who is using Citysnap, because as an owner of various websites going on a quarter century, this graph would seem to be saying "nobody." The comparison is with StreetEasy Screenshot_20230306-030953.png
 

David Goldsmith

All Powerful Moderator
Staff member

NYRAC co-founder launches Compass team​

Heather Domi’s team finished 2021 with $66.8M in sell-side volume
Compass broker Heather Domi, who has made a name organizing New York City residential agents, is launching her own team at the brokerage.
Her former team, which she led with broker Henry Hershkowitz, finished 2021 with $66.8 million in sell-side volume, according to data collected by The Real Deal. Domi places the team’s overall volume that year at $129 million.

A 22-year industry veteran with $1.5 billion in lifetime sales, Domi’s recent transactions include kicking off the year with a deal for a $23.5 million townhouse at 137 West 13th Street in the West Village.
Domi co-founded in 2018 the New York Residential Agent Continuum, an agent advocacy group aimed at bringing awareness to industry-specific issues and promoting information-sharing among agents. She also served on REBNY’s Residential Brokerage Board of Directors until October, when she stepped down and accused the trade group of “taxation without representation.”

In a fiery resignation letter, Domi criticized the group for a lack of broker input in the organization’s decision-making process and the fact that brokers do not get a voting seat on the board of directors.
https://therealdeal.com/national/2021/04/06/for-compass-agents-who-invested-ipo-is-watershed-moment/
“We’re paying their bills but we don’t have a say,” Domi said in a call for equal representation between executives and rank-and-file brokers, which she said more closely resembles other realtor association leadership groups.
Joining Domi’s newly minted team is Alexa Lemieux as its first broker. Lemieux, not to be confused with a cast member from Netflix’s “Love is Blind” of the same name, previously worked with Beverly Hills Estates before joining Compass in December.

Lemieux and Domi share personal connections to the world of professional hockey: Lemieux is the daughter of Hall of Fame hockey player Mario “Le Magnifique” Lemieux, and Domi is married to former Toronto Maple Leafs player Tie Domi.

 

David Goldsmith

All Powerful Moderator
Staff member

Mayor calls on REBNY to fight for state housing plan​

New York’s top real estate brass gathered for annual gala
Without state action, New York City’s housing goals are sunk.
Hours after news surfaced that the governor’s housing plan had fallen apart, Mayor Eric Adams appealed to a crowd of some of the biggest names in city real estate to help revive it.

“Not getting a deal in Albany, you may think it does not impact you, but it impacts all of us,” he said, while speaking at the Real Estate Board of New York’s annual gala Thursday evening. “We need a housing deal in Albany this year. We need it. It impacts us all.”
“If we don’t get 421a, then we cannot build affordable housing,” he said. “If we don’t have affordable housing, then you won’t have employees who are able to stay in this city.”

If the state does not lift the city’s residential floor area ratio cap, he said, then the city can not move forward with its hopes to convert millions of square feet of office space into housing.
“This is all for nothing. We gotta get a deal. We must make sure that that housing agenda is back on the table,” said the mayor, who has faced criticism for asking the city’s housing agencies to cut their budgets by 4 percent.
He urged the real estate professionals to push their elected officials on these issues, noting that politics need to be “built into your business plan.”
“We need your voice,” he said.
Previous
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
Jim Whelan (Credit: Jill Lotenburg)
Jim Whelan (Credit: Jill Lotenburg)
Douglas Durst (Credit: Jill Lotenburg)
Douglas Durst (Credit: Jill Lotenburg)
Jim Whelan, Mary Ann Tighe and Douglas Durst (Credit: Jill Lotenburg)
Jim Whelan, Mary Ann Tighe and Douglas Durst (Credit: Jill Lotenburg)
Mayor Eric Adams (Credit: Jill Lotenburg)
Mayor Eric Adams (Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
Bill Rudin (Credit: Jill Lotenburg)
Bill Rudin (Credit: Jill Lotenburg)
Jim Whelan, Barry Gosin, Douglas Durst (Credit: Jill Lotenburg)
Jim Whelan, Barry Gosin, Douglas Durst (Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
Jim Whelan (Credit: Jill Lotenburg)
Jim Whelan (Credit: Jill Lotenburg)
Douglas Durst (Credit: Jill Lotenburg)
Douglas Durst (Credit: Jill Lotenburg)
Jim Whelan, Mary Ann Tighe and Douglas Durst (Credit: Jill Lotenburg)
Jim Whelan, Mary Ann Tighe and Douglas Durst (Credit: Jill Lotenburg)
Mayor Eric Adams (Credit: Jill Lotenburg)
Mayor Eric Adams (Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
(Credit: Jill Lotenburg)
Bill Rudin (Credit: Jill Lotenburg)
Bill Rudin (Credit: Jill Lotenburg)
)

Not as many state officials attended the gala this year compared to last, in part because of the ongoing budget negotiations. Gov. Kathy Hochul initially expected to make an appearance, according to a number of attendees, but she ultimately did not show up.

But state Attorney General Letitia James was there, as was Sen. Leroy Cromie and state Comptroller Thomas DiNapoli, as well as several City Council members and borough presidents.
Politicos weren’t always a given: In the years immediately leading up to the pandemic, elected officials largely shied away from the event. But the last two years have seen a considerable shift, both in terms of attendance and tone.
The gala, held at the Glasshouse on the Far West Side, has evolved over the years from a black tie event to a more modern, schmooze-focused party. Bars in the VIP reception area featured signature cocktails and a commitment to elevating guests’ experiences: A request for water at one station was met with mild dismay, and negotiated up to a sparkling water with lime.
Last year’s event did away with the sit-down dinner, and was more of an extended cocktail hour, seemingly acknowledging the desire of attendees to network.

This year’s event revived the dinner portion of the night, which was sandwiched between a cocktail hour and afterparty.

Televisions throughout the room led to a fun jumbotron-like moment, when developer MaryAnne Gilmartin realized she and Brown Harris Stevens CEO Bess Freedman were projected on the screens chatting.
The format may be different, but some things remain a constant of the gala: The biggest names in city real estate. To name a few: Douglas Durst, MaryAnn Tighe, Bill Rudin, Daniel Tishman, Jeffrey Levine, Bob Knakal, Pam Liebman and Leslie Himmel.
What also has not changed is that speakers and the evening’s honorees must compete for the attention of a chatty audience.
“I have been to enough REBNY banquets to know that the least interesting person at the gala is whomever is speaking at the front of the room,” said Durst, who noted that Thursday’s gala was his last as REBNY’s chair. “I will not be as brash as my father who recited the Gettysburg Address from this podium 35-odd years ago.”
(The late Seymour Durst apparently had his own way of acknowledging that people were not paying attention.)

The market downturn and the likely exclusion of any housing policies were popular topics throughout the night.
“State legislative leaders, through their actions and inactions, are making the city’s housing crisis worse,” said REBNY President Jim Whelan. “And the commercial market has challenges that we need to work through.”
But he and the mayor both struck a hopeful note about the city’s future. As did Durst.
“Will the office market collapse? Will work from home be the new normal? Will the MTA ever finish the Second Avenue Subway?”
Ever the optimist, Durst said the answers are, in order: No, no, and yes.

 

David Goldsmith

All Powerful Moderator
Staff member























Signal vs. Noise: Unpacking the “Portal Wars”

May 31, 2023 Mike DelPrete

Screenshot+2023-05-23+at+10.59.15+AM.png


The first quarter of 2023 saw a seasonal increase in traffic for all U.S. real estate portals and, despite the hype, the competitive landscape remains unchanged.

Why it matters: For real estate portals like Zillow, traffic – consumer eyeballs – remains the lifeblood of their strategic and unrivaled power across the industry.

Zillow added twice the amount of monthly unique users than any other portal during the quarter.
  • Absolute users are more important than percentage gains; users turn into leads, and leads turn into money.
  • The number of users also increases the total audience size, which is THE most important metric for an advertising platform.

Screenshot+2023-05-24+at+8.20.08+AM.png


Zillow has increased its commanding lead over realtor.com during the previous year.
  • This is a reflection of the overall real estate market and a change in consumer behavior, rather than anything within Zillow or realtor.com’s direct control.
  • During a hot housing market with limited inventory, consumers spent more time on multiple portals, but in a cooling market with significantly less people moving, consumers are simplifying their casual searches on just one portal.

Screenshot+2023-05-28+at+7.19.16+AM.png


The new entrant is CoStar’s Homes.com, which was acquired in May 2021. With deep pockets, CoStar is known for its heavy advertising campaigns.
  • Homes.com’s Q1 growth of 7 million monthly uniques did not come cheap; CoStar spent $112 million across all of its consumer properties during the quarter, including an increase of $55 million “primarily for SEM advertising of our residential brands.”
  • SEM (search engine marketing) is buying traffic.

Screenshot+2023-05-23+at+10.55.17+AM.png


What’s playing out in the U.S. portal space is not unique, but the latest example of network effects and the dominant position of leading portals.

Screenshot+2023-05-23+at+10.52.47+AM.png


The bottom line: Once the signal is separated from the noise, Zillow’s commanding position becomes clear, despite heavy investment from competitors.
  • The hype may suggest that the portal wars are heating up, but the evidence suggests no meaningful change – in fact, Zillow’s position has become even more dominant.
  • Furthermore, it’s not even a war; Zillow already won.







MDPxAJ-183.jpg

About the author: Mike DelPrete (email me)​

Mike is a global real estate tech strategist, and a scholar-in-residence at the University of Colorado Boulder. He is internationally recognized as an expert and thought-leader in real estate tech. His evidence-based analysis is widely read by global leaders, and he is a sought-after strategy and new ventures consultant. His research and insights have featured in the New York Times, Wall Street Journal, Financial Times, and The Economist.

Latest analysis​






Agent Compensation at the Top U.S. Brokerages


Agent Compensation at the Top U.S. Brokerages

Jun 5, 2023


Signal vs. Noise: Unpacking the “Portal Wars”


Signal vs. Noise: Unpacking the “Portal Wars”

May 31, 2023


Agent Migratory Patterns


Agent Migratory Patterns

May 22, 2023


 Opendoor Recalibrates to a New Environment


Opendoor Recalibrates to a New Environment

May 18, 2023


Zillow 3.0: Is It Working?


Zillow 3.0: Is It Working?

May 10, 2023


A Comparative Study of Real Estate Portal Revenue Growth


A Comparative Study of Real Estate Portal Revenue Growth

Apr 24, 2023


The Rise of Real


The Rise of Real

Apr 17, 2023


Incentive Splits and Agent Retention


Incentive Splits and Agent Retention

Apr 13, 2023


Brokerage Winners and Losers


Brokerage Winners and Losers

Apr 5, 2023


Apocalypse Now


Apocalypse Now

Apr 4, 2023

Insights, trends, and strategy—straight to your inbox!​




















  • Copyright © Mike DelPrete
 

David Goldsmith

All Powerful Moderator
Staff member

StreetEasy rolls out a bridge for broker feedback​

Sometimes controversial listing site debuts agent advisory board

StreetEasy is offering brokers another olive branch in the form of an agent advisory board.
The board, composed of 19 brokers from firms of different sizes across the city, gives the listing site a formal channel through which to solicit broker feedback on products and resources.

The full board meets in-person once per quarter and has less formal online meetings on an as-needed basis. Members of the board, which first convened earlier this year, are also treated to private dinners and chances to network around a quarterly meeting.
StreetEasy gathers informal feedback through its business advisors, support team and surveys, but is seeking to “formalize” its channels for soliciting feedback from the industry, StreetEasy spokesperson Casey Roberts said.

The advisory board roster will change every year, according to Roberts, and applications are open for next year’s group.
StreetEasy’s recent programs have been well received by the brokerage community, but the Zillow-owned listing site, which serves as New York City’s defacto MLS, has occasionally drawn its clients’ ire.

Zillow bought StreetEasy in 2013 and soon after started charging brokers for rental listings and lead generation, features which had previously been free. It also allowed brokers to advertise on rivals’ listings and it briefly banned brokers who violated its exclusivity rules before walking back the policy.
That stands in contrast to StreetEasy’s Experts program, an invitation-only tool that only charges brokers after they transact that has been generally well received among agents.

The listing site hit a home run earlier this year with brokers when it announced the launch of products targeting sellers’ leads, which are sometimes referred to as the holy grail of lead generation products. They’re much more likely to lead to a sale than buyers’ leads and can multiply as brokers network at open houses.
“We’ve always had a good relationship with the industry, we’ve always had that open dialogue,” she said. “We’ve had a lot of those channels and continue to have those channels. I think this was just sort of one of the ways we could more formalize it.”

 

David Goldsmith

All Powerful Moderator
Staff member

Judge tosses antitrust claims directed at Zillow Group and National Association of Realtors

by Taylor Soper on August 18, 2023 at 3:04 pm
(Bigstock Photo)

A federal judge in Seattle this week dismissed antitrust claims in a lawsuit filed in 2021 by Austin-based real estate startup Real Estate Exchange (REX) against Zillow Group and The National Association of Realtors (NAR).

REX accused Zillow of anticompetitive behavior related to how certain homes were shown on its platform, alleging that Seattle-based Zillow concealed REX agent listings following a change to Zillow’s search portal.

Zillow joined the NAR in 2021 so it could source homes from multiple listing services (MLS) databases.

Due to multiple listing service (MLS) rules, Zillow grouped listings into “agent listings” and “other listings” that showed properties not included in MLS databases.

REX said the change hurt its traffic and impacted its reputation.

In a ruling issued Wednesday, Judge Thomas Zilly said REX did not prove that Zillow and NAR worked together to disadvantage REX and non-MLS listings.

Some of the claims against Zillow still remain. NAR is no longer listed as a defendant in the case.

“This ruling affirms Zillow’s business decisions were squarely focused on improving the data on our website for consumers,” Zillow spokesperson Will Lemke said in a statement. “With REX’s central argument tossed from this case, we believe the public now sees this case for what it is: REX seized upon another company’s website design change to hide its own business failings.”

We’ve reached out to REX for comment and will update this story if we hear back.
 

David Goldsmith

All Powerful Moderator
Staff member

REBNY changes buyer’s agent commission rules
Mixed reaction from agents as buyers’ brokers gain leverage
The Real Estate Board of New York is implementing new buyer’s agent commission rules as the industry faces backlash nationwide.
The provision will prohibit listing brokers from paying buyer’s agents and will instead require sellers to pay them directly. The rule also requires listing agreements to clearly outline the seller’s offer of compensation to buyer’s agents.

The new rule is one of five revisions coming to the Universal Co-Brokerage Agreement, which governs REBNY and the Residential Listing Service. The amendments will take effect Jan. 1.
REBNY is implementing the changes to “promote transparency and consumer confidence” and “provide for a more efficient RLS,” Ninve James, who runs the group’s residential brokerage services and products, said in an emailed statement.
Some agents oppose the change, fearing it gives buyers’ agents too much leverage, but it does have supporters.
“Transparency on fees is ultimately a good thing for the industry,” Leslie J. Garfield agent Ravi Kantha said. He added that the changes aren’t out of line with guidelines he already follows.
Kantha, a townhouse specialist and co-founder of the Lesser Kantha Team, said many sellers, especially at the high end, already ask to hammer out commission splits before signing listing agreements.
Other brokers, however, expressed concern that the amendment opens the door for buyer’s agents to hold up deals to negotiate their commission with sellers.
Nest Seekers’ Bianca D’Alessio said she’s worried about buyer’s agents using the “final hour” before a sale closes as an opportunity to vye for more money.

“As the market shifts and gets more difficult, a buyer’s agent that feels they’re more in control can leverage that,” D’Alessio said.
The update comes as the National Association of Realtors, Keller Williams and HomeServices of America are fighting two monumental class-action lawsuits over buyer’s agent commissions.
At the center of the contention is NAR’s “participation policy,” which requires listing brokers to offer compensation to buyer’s agents. The plaintiffs — home sellers in Missouri and Illinois — allege the group violates antitrust laws and conspires with brokerages to drive up agents’ pay.

The trial for the smaller of the two cases, called Sitzer/Burnett, kicked off in Kansas City earlier this week.
REBNY and the RLS are not affiliated with NAR.
Other amendments include an update to the UCBA’s rules on “opt-out” listings, which refer to properties that owners do not want listed publicly. Under the revisions, brokers can submit an opt-out form alerting REBNY of the listing and notify other brokers through individual calls and emails.
The guidelines previously barred brokers from distributing any information about these listings.
REBNY has often pushed against opt-out listings, which Kantha said “harken back to a time when brokers hoarded listings.”
He added that these changes are likely a result of the industry group “trying to help brokers who might feel like they’re between a rock and a hard place while still maintaining a regulatory posture.”

Starting next year, the RLS will accept listings for professional and retail units in residential properties, which D’Alessio said will allow more visibility and oversight in the larger market.
Brokers will also be permitted to relay unsolicited offers to owners with RLS listings with “coming soon” status. If the owner wishes to move forward with the offer, listing brokers will need to switch the listing status to active before continuing communication.
The UCBA will also recognize electronic payments for commission and rent deposits, including wire transfers and applications such as Venmo and Zelle.
Changes to the UCBA are recommended by a committee of REBNY members and confirmed by the group’s board of governors.

 

David Goldsmith

All Powerful Moderator
Staff member
Mike DelPrete
to me
18 hours agoDetails
Portal War ‘24
2024 is shaping up to be the year of the PORTAL WARS in the U.S., with CoStar Group, owners of Homes.com, leading the world’s largest effort to unseat a #1 real estate portal.

Why it matters: This multi billion-dollar game of financial chicken will certainly shake up the portal landscape and will force competitors to change strategy – if they can – or risk the specter of irrelevancy.

The primary driver of CoStar’s Homes.com growth is the near doubling of its annual advertising spend to almost $600 million, a massive investment that keeps increasing.

Keep in mind this advertising spend also includes brands like Apartments.com and other commercial real estate portals – but the big increase is being driven by Homes.com.

Comparatively, CoStar’s advertising spend – all to drive consumer traffic and build awareness – dwarfs its real estate portal peers.

In 2022, CoStar outspent Zillow by a factor of two, and is on track to outspend Zillow by 3.5 times this year.

Momentum is important: While Zillow and Redfin have been slimming their advertising to cut costs, CoStar continues to increase its investment.

Competition between portals is a marathon, and cash in the bank is not only a requirement to play the game, but a critical prerequisite for success.

CoStar has an enormous war chest of over $5 billion in cash, enabling it to outspend the competition, while Redfin simply does not have the resources to compete at the same scale.

Note: News Corp is the media empire that owns realtor.com and dozens of other businesses, including TV, newspapers, publishing, and more.

The ability to invest with cash flows from a profitable core business is another key factor in this race.

Once again, CoStar outstrips the competition with its cash-generating core business, as opposed to Redfin and Zillow, which both posted a net loss in the most recent quarter.

As a massive media conglomerate, News Corp generates a good deal of cash, but also pays a dividend and is more conservative with its investments.

An effective strategy should be simple and straightforward – and as I like to say, Compete Where You Can Win.

CoStar is demonstrating clarity in its strategy; it knows what its unique advantages are and is leveraging them to the fullest.

And it’s targeting a gap in the market: the 97 percent of real estate agents that aren’t buying leads from its competition.

Critically, CoStar is focused on ONE key point of difference for each of its two main audiences, agents and consumers – in areas where it is betting that it can win.

For agents, Homes.com offers “Your listing, your lead,” which prominently positions the listing agent to collect leads directly, instead of being auctioned off to the highest bidder.

And for consumers, Homes.com is building exclusive content that’s actually good for consumers: rich media on over 20,000 neighborhoods across the U.S., including custom promotional videos, created by a team of over 1,000 human employees.

The bottom line: At its core, this is a case study in the importance of a clear strategy and focused execution.

Love or hate it, CoStar’s strategy is crystal clear and its tactics aligned with its strategy and competitive advantages, while some of its peers are stuck in reaction mode with disbelief, discredit, and distraction – which is not a strategy.

Without a cogent strategy, CoStar’s competitors (especially realtor.com and Redfin) are at risk of being stuck with a waning value proposition, decreased relevancy, and not enough resources to mount an effective defense.

Oh look, my latest podcast guest is David Mele, president of Homes.com. We discuss Dunkin Donuts coffee, post-acquisition growth, lead gen hell, the 97% opportunity, innovator's dilemma, exclusive content, strategic clarity, what's in Andy's head, and what he would do if he were Zillow's CEO.
If you were forwarded this email and would like to get my updates directly, click here to join my mailing list.

Thanks,
Mike
Publ
ications | Consulting | About
www.mikedp.com

Unsubscribe
 

David Goldsmith

All Powerful Moderator
Staff member
Mike DelPrete
to me
3 days ago
Details



Redfin: High Debt, Low Cash, and Unprofitable​

cCxfl-j0qYz6AJYcBgNjFbY3EiJGOyJW6pwmI5uY_fiW-W8w3bArLM02ZbJu3nZWnWKi4WELiCMFUMxQwHAnLooZcf_bZMlgcEK0pcfzkAnWhnaIjcUOsJk603Tm_FZDVIe6Y4cBqx-NmCldmvcUewwnYGB0HQ=s0-d-e1-ft

Redfin’s latest results reveal a worrying financial trend – and raise questions about the sustainability and viability of its business model.

Why it matters: A lot of debt, dwindling cash, and an unprofitable core business are a challenging collection of attributes for the business to deal with, which may force a larger strategic change.
  • It all started with Redfin taking on a substantial amount of debt in 2020, eventually rising to $1.2 billion by 2021.
5pz1oMRr6HgGVmGyOErZug2Mg6V6XN6mbLAZvk-jUyrPk98gCLooigT2lH6LjIfGv74mYNsBI31L6qgEo5TQvp_tB7K7oqGXSxStZjDr_gzszshHIDSgec7fAJO_tASBj1eVTDCCd1pa9wkyUyzPxP2_IlfRJw=s0-d-e1-ft

Redfin then made a pair of expensiveacquisitions: In 2021, it bought Rentpath for $608 million, and then acquired Bay Equity Home Loans for $138 million in 2022.
  • Since 2020, Redfin’s available cash balance (cash and liquid investments) declined sharply, from over $1 billion in 2020 to just $173 million at the end of Q3 2023.
k3whWJa1Dmx-yDpn-aV2rRWIIHtznnTdh4mJGkpPdSavaqRTEDLvWNHsDn7bOvSx7jmI39hSFrcNoPUDG9aCxoUGrsfKqJm-5BDpKNyddaHjZ8C5x3sbOHEqHjJRikhzxQdzGpJdRl0IIRcyB8XJMaJsk17Odw=s0-d-e1-ft

Redfin is using its cashto gradually repay its debt, but the challenge is that the business itself is unprofitable (as measured by Net Income/Loss).
  • Redfin has incurred a net loss since at least 2018 – it doesn’t appear that the business has ever been profitable.
VJv_qLU3nYGuX8RsbHOWVa-LahwJRx63YQess4xsFlVYhsXvvIuRBtyEdaWpl0aHs2FV7xsKBLfirfwnXiet_Dc1kMxvIcbeL2eigAW85NPtkAHNRUopuo_PvbCuCgJZ42lwnRfjAHMG5HNZ3zTv0EnxCqPfVw=s0-d-e1-ft

Over the years, Redfin has assembled a collection of unprofitable business lines.
  • Redfin’s real estate brokerage is unprofitable, its now-closed iBuying business, RedfinNow, was unprofitable, its rentals business is unprofitable, and its mortgage business is unprofitable.
f6RQtxSoOis2j0-FlbhQ7QlnkuYm6ym9jIWhjnWCJCI6mzrlbvi0KFZ_jWOfIX4sJNQfK5DJbuctkBtzUkT4NXcltne8X9bK4lfJF6q5gYV1xDexiGc4uqF5bJLw6-EzL_ejtq04dgQBzyUg5ulBdLlIaizZ4A=s0-d-e1-ft

To say Redfin’s problemsare a direct result of the market would be incorrect – it’s not the market, it’s the business model.
PghRpgonCVLe-Sh1CADTp9XI8K4lMOELJPeVfe01ARlyXWthfBo_23mtntI0dwbOutc4_8hf893IjGu4Dkm8beFtqTmaSdkpaciZx6D4hTQGUOPin_y8ERidqrTteRUSaAoAd6839vcLWXtWnaT8G8kY_6uTFg=s0-d-e1-ft

This leads to a strategic dilemma: Redfin is significantly under-resourced in a challenging, competitive market.
The bottom line: A receding tide reveals, and the current market is highlighting Redfin’s various challenges.
  • Strategically, it appears that Redfin is overstretched with limited resources, and up against well-funded competitors with cost advantages, something it cannot compete with.
  • This is a galvanizing moment for the business; one way or another, something has to change.

I've had the CEOs of some of the companies mentioned above on my podcast. Dig deeper and check out my discussions with Glenn Sanford of eXp, Robert Reffkin of Compass, and Dave Mele of Homes.com.

If you were forwarded this email and would like to get my updates directly, click here to join my mailing list.

Thanks,
Mike
pQ7vI-7wIqtWJq9ywOY6D1z_KIi-D_Dqey5dsCW0_gN6NS1NshhHpVeXLPLhTWQAPGHpNXiSdCJwuxp8eKy18xlp7iHyLgLV6hE0lI7VxpTSzu6k9_bYePdAhS3ORIKbcJMIk4eACOqqt5_wXBJjNLYKXDiIk1MDSpAzgA=s0-d-e1-ft
 

David Goldsmith

All Powerful Moderator
Staff member

Streeteasy raises rental listing fees to $7 per day​

Price bump takes effect on Jan. 1, 2024

Streeteasy is bumping its fee to a new height in the new year.
The Zillow-owned platform is raising its daily listing fee for rentals from $6 to $7, the company told agents on Tuesday. The new charges will take effect on Jan. 1, 2024.

In an email announcing the change, the company cited “record engagement from renters,” including nearly doubling the average number of renter inquiries on the site. Since the last rate increase in 2020, time on the market for rentals is down 19 percent and asking rents are up 30 percent.
Streeteasy started charging agents for listings in 2017. After starting at $3, Streeteasy upped the daily fee to $4.50 in 2019 and $6 in 2020. The platform cut the fee in half during the pandemic but raised it back to $6 in September 2021, citing a recovery in the rental market.

Agents and brokerage heads have pushed back against the platform’s fees since their inception. After the initial fee hike, brokers argued that the charges were already unaffordable for many agents, with some paying up to $40,000 a year to advertise rental listings.
“They were getting greedy at $4.50 a day,” Compass agent Jed Wilder told The Real Deal in 2019. “This is getting excessive… I don’t think people will list at this price.”
Brokers previously attempted and failed to organize a boycott against the platform as it raised prices, introduced paid advertising programs and required agents to manually upload listings. Instead, some took to email blasts to tout listings not posted to Streeteasy, TRD reported in 2020.

Others have called for an alternative platform to Streeteasy, but a competitor has yet to topple the company’s stronghold on listings in the city.

Last year, the Real Estate Board of New York partnered with CoStar to launch CitySnap, a public listing portal that doesn’t charge agents for rental listings.
At the time, brokerage heads rallied behind the initiative, but several agents expressed frustration with REBNY for its failure to introduce a listing platform sooner and concern over CitySnap’s ability to meaningfully capture market share.
In February, Streeteasy launched a trio of products for sellers also aimed at generating leads to pass on to brokers. The tools include a real-time data platform, concierge service to connect with agents and a dashboard with estimated home value, nearby sales and closing costs.

 

David Goldsmith

All Powerful Moderator
Staff member
Regarding "Data Integrity" on StreetEasy;
Apparently, if an agent posts something on a listing which is fairly obviously untrue and there is a user complaint, all the agent has to do is refuse to respond to emails from StreetEasy regarding the issue and the data stands. One would think silence would indicate that there was no justification for the false information and the default setting would be that the information would be removed until the agent justified it being there.

If I can post anything I want on a listing, and if someone challenged it all I need to do is not respond to the challenge, then there is no data integrity on StreetEasy.
 
Last edited:
Top