It has been rough for NYC brokers for the past couple of days. The famous online listings platform Streeteasy just recently announced in a very untasteful way that they will start charging brokers $3 per rental listing PER DAY! So yes, if you have 10 legit listings you would need to cough up $30 a day, which is about $900 a month! There are some brokers who have over 150 listings, which is about $13,500 a month — WOW! So the outrage began, brokers signing petitions, REBNY’s (Real Estate Board of New York) phone blowing up with brokers looking for answers. It was complete mayhem.
But this whole thing got me thinking…
Of course, I understand why Streeteasy is doing this. Not only are they looking to increase their profits, but they are looking to clean up their website with real listings without having to do all the work. Smart move? Maybe.
Currently, the website is showing 30,682 rental listings all over NYC. As of right now, brokers don’t have to pay for their rental listings until July 18th, 2017. My guess is that the current amount of listings will dramatically reduce after the 18th, due to Streeteasy’s new rental policy.
What does this mean to the current renter? Streeteasy wants them to have a great experience with access to real listings, in real-time. Hence this new rule. Once an apartment is already rented out, the broker will more than likely pull the listing from the website. You might be thinking, don’t all brokers take listings down once rented? Why would they keep a listing up if it is already rented out?
The answer… To keep generating leads. I see this all the time.
So now with this new rule, instead of having a rented listing stay up on Streeteasy — the broker will be more inclined to take it down to save money. Therefore, the renter will see real-time listings. Sure, some brokers might keep some fake listings up to generate leads, but I am sure Streeteasy will implement an algorithm to verify the listing.
Are brokers doomed?
Not so fast — according to Newton’s third law, with every action there is a reaction, right? Renters may think they have the upper hand in the rentals market, but unfortunately, they don’t.
Brokers have worked really hard building relationships with landlords for years to get exclusive accounts. They will not let something like Streeteasy destroy it. My prediction is that brokers will only put a couple of listings up, and hide the rest to protect their profits. Therefore, the renter will not have access to every listing on the market. The market will be reduced to the point that they NEED to work with a broker.
As time goes on, more and more brokers will not put all their listings on Streeteasy — which makes it harder for the renter to see what is out there. Do you see where I am going with this?
So is Streeteasy’s new rule great for renters then? In the short run, yes — but in the long run, I believe it is a no.
Streeteasy will not exist if it wasn’t for brokers. We are the ones who keep Zillow, Trulia and Streeteasy alive. How? Google “Streeteasy premier agent” or “Zillow premier agent” — a huge percentage of their profits come from that. But I have to give it to them, they are positioned pretty strong in the NYC real estate market, and they are not holding back in increasing profits. Gotta love capitalism.
But will it backfire?
Before Streeteasy there was Craigslist, then they started charging and now the website is somewhat obsolete. Before Craigslist, I have no idea to honest. I wasn’t practicing real estate during that time, but I am sure it was really hard to find listings — which made people contact brokers for help.
Are we seeing a trend back to the past? Maybe. Opportunity for brokers? Yes.
But who knows, maybe there is another site in the works that will be better than Streeteasy and free for all brokers. If so, it will bring us back into the cycle that never ends.
Till then, let’s see what happens…