September 1st 2010
The Real Deal
The Real Estate Board of New York has recently taken several steps to help give its members better access to data in the increasingly digitized world of residential real estate.
As of July 1, REBNY instituted a rule requiring its members to enter sale prices into the group’s back-end listing system (known as the RLS) within 24 hours of a closing.
Also, as The Real Deal has reported, the trade association recently requested bids on a new technology provider to replace its existing R.O.L.E.X. data platform, which brokers complain is slow and frequently inaccurate.
A few years ago, both of these moves might have caused quite a stir in the industry and been hailed as steps towards greater transparency.
Now, however, experts say REBNY is going to have to play catch-up.
Brokers in the secretive New York real estate market once had a monopoly on listings information here — in order to find out what was for sale, customers had no choice but to come to them. Yet over the last few years, the pendulum has swung far in the other direction. Indeed, as it struggles to enforce its rules and enact new initiatives that all members agree on, REBNY — and by extension, the industry itself — appears to be losing the battle for consumer eyeballs to outside aggregator websites like Street Easy.com and PropertyShark.com.
At first, these sites were shunned by brokers, but now the majority of the city’s firms — including the two largest, the Corcoran Group and Prudential Douglas Elliman — feed their listings directly to StreetEasy several times a day. Meanwhile, REBNY’s searchable public website, ResidentialNYC, still only has about 70 percent of the city’s listings. And while Corcoran joined earlier this year, Elliman still has not signed on.
Ironically, by trying to hold onto its listings information, the industry has been losing the ability to control how it gets to consumers. And some say brokers — already struggling to maintain their relevance in an increasingly digital world — are paying the price.
“The consumer right now is impatient with brokers who don’t have the information at their fingertips,” said Donna Olshan, president and sole owner of Olshan Realty. “StreetEasy is doing a better job than their broker. That wouldn’t be the case if we had a really efficient system.”
REBNY’s new initiatives have spurred the usual calls for a citywide conventional Multiple Listing Service. But that looks unlikely to happen anytime soon, opening the door for even more new players to step in.
“If the real estate community doesn’t jump to the plate to really do an MLS, and really have transparency, other people will,” said Klara Madlin, president of boutique brokerage Klara Madlin Real Estate, and a past president of the Manhattan Association of Realtors, which operates the Manhattan MLS.
A ‘human problem’
When it comes to the back-end system for brokers, REBNY’s new 24-hour rule for reporting closing prices is intended to give its members an advantage in the marketplace, said Frederick Peters, president of Warburg Realty Partnership and vice president of REBNY’s residential brokerage division.
Closed sales prices are public record, but they often don’t appear in the city’s ACRIS system for days or weeks after a closing.
“Rather than waiting for the ACRIS price to come out, we’ll have on-the-ground information within 24 hours,” Peters said. “All of that data is a matter of public record — we’re just accelerating the speed at which our people have it accessible.”
But few brokers appear to be adhering to the new rule.
“It’s not happening,” Olshan said. “Some firms do [it], but most of them don’t.”
Steve Spinola, REBNY’s president, said it may take a few months for the new regulations to catch on. “We will do friendly reminders,” he said. “If we find that people are not adhering to it, we will not be as friendly in terms of reminding people.”
But it may take more than reminders to get brokers to change their habits. In conventional MLS systems, certain infractions automatically trigger fines or suspensions, industry insiders said. (Only around 25 of the city’s firms are members of MANAR’s Manhattan MLS.) But REBNY has few mechanisms for tracking compliance and requires firms to try to work problems out amongst themselves before fines are imposed.
“Most of the companies rely on their agents to do the right thing,” explained Diane Ramirez, the president of Halstead Property and a member of REBNY’s board of directors. She said when infractions at her firm come to her attention they are taken seriously, and agents are frequently reminded to abide by the guidelines. “Our agents know how serious we are with following the rules.”
Still, brokers “traditionally have kept this information close to the vest,” said Eric Gordon, creator of the listing platform RealPlus, which is used by roughly 300 firms, most of them small, independent
“If there’s no penalty, if there’s no motivating factor to make agents want to give this information, a lot of them aren’t going to be inclined to do it,” he said.
Lack of enforcement is also behind many of the perceived problems with R.O.L.E.X. — the back-end software system that transmits listings among all of the databases used by REBNY member firms — agents say.
In other parts of the country, MLS systems often double as listing platforms for all of the system’s member firms. But New York City has a number of separate internal listing platforms used by local real estate companies, including RealPlus and its competitor Online Residential, Corcoran’s “Taxi” and Elliman’s “Limo.”
In July, REBNY started accepting bids from different vendors for potential new technology to replace R.O.L.E.X., which was developed by Gordon. But instead of embracing the possible change, many agents have reacted angrily, saying that money shouldn’t be spent on new technology when many of the problems with the current system are caused by lack of oversight.
“You’ve got to start with the problem of scrubbing the data and getting it pristine, and making sure everybody plays by the rules,” Olshan said. “This is not a technology problem, it’s a human problem.”
Not only is it expensive for individual city firms to maintain their own internal listing platforms, she said, but she often finds that fellow brokers don’t put all of the required information into their listings — leaving out taxes or the townhouse width, for example.
“It’s extremely inefficient,” she said. “To have to sit there and research is extremely time-consuming. It lengthens the time on market for the seller and it is not efficient for the buyer. So where have the buyers gone? They’ve gone to StreetEasy.”
In the mid-2000s, websites like StreetEasy and PropertyShark began offering consumers Manhattan sales and rental information that had never before been available, including days on market and price changes.
At first, StreetEasy was mostly popular with consumers. “The brokers have their internal systems, and that’s what they were trained to use,” said Dawn Doherty, the vice president of strategic development at StreetEasy.
But now, it does frequent training sessions with agents to help them use the site. And while StreetEasy started by “scraping” firms’ websites for data, they now receive direct feeds from all of the major firms several times a day, and many small firms enter their listings manually, Doherty said. (PropertyShark also receives feeds directly from brokerages.)
Sometimes listings pop up on StreetEasy before they make their way through the RLS to other firms’ listing systems, Gordon said.
Of course, brokers say StreetEasy has its faults. Some have complained that there are inaccuracies on the site, and since it gets much of its information from feeds, it is plagued by the same problems that impact brokers’ internal systems.
“StreetEasy is not immune to a broker who leaves an active listing on the market and doesn’t update it,” said Noah Rosenblatt, founder of Manhattan brokerage and analytics firm UrbanDigs.
Still, real estate junkies have voted with their mouse clicks. StreetEasy now gets around 12 million page views per month, according to the data tracking website Quantcast.com, while Corcoran.com, for example, only gets 2.4 million — roughly the amount of traffic StreetEasy got four years ago, Doherty noted. Contrast that growth with REBNY’s public site, ResidentialNYC.com, which debuted in 2007, the year after StreetEasy launched. REBNY initially mandated that all firms join the new portal, but members revolted because they wanted customers to search for listings on their own sites, sources explained.
Finally, REBNY relented and made participation optional.
The rest is history: When the site was launched, the city’s two biggest firms, Corcoran and Elliman, famously refused to join, and the site never caught on with the public. Corcoran eventually joined in early 2010, bringing the site’s total listings up to roughly 10,000 properties (StreetEasy has around 24,000). Corcoran and Elliman both declined to comment for this story.
Spinola remains committed to ResidentialNYC.com. “I haven’t given up on my lifetime goal of getting it up to 100 percent,” he said.
Sources suggested that changes to the R.O.L.E.X. platform could make it easier for REBNY to require all of the city’s firms to feed their listings to ResidentialNYC.com.
But no matter what its intentions, REBNY’s efforts are somewhat hobbled by its very identity: As a trade organization, it must get consent from its members before acting.
StreetEasy and other outsiders, on the other hand, don’t — a crucial advantage.
“Our position has always been to stay out of the politics and just work to continually evolve what we’ve created,” Doherty said. “We don’t have any rules that we’re following in terms of, ‘We’re paying you, so you can’t do this.'”
That’s one reason, she said, why the site doesn’t currently have plans to offer the type of broker-to-broker information, like commission amounts, that a traditional MLS would have.
But experts say instituting a full-blown MLS is unlikely anytime soon, in part because firms have invested so much in creating their own systems and websites.
“We do not have, and probably will never have, a [conventional] MLS because most MLSes work off a central database,” Ramirez said. “We don’t all have the same technology and software. We all have spent lots of money on our own systems.”
Peters said he favors a citywide MLS but, he noted, “everybody has to want to do it.”
And that leaves the door open for even more newcomers. “The industry will be forced to make changes because interlopers will come in, like StreetEasy,” Olshan said.