UPDATED: Sept. 9, 10:30 a.m.: What started as a way for StreetEasy to vet rental listings has led to another all-out brawl between New York City resi brokerages and the Zillow-owned portal.
Over the past year, StreetEasy has been asking brokers to submit copies of their exclusive rental agreements in order to “verify” the accuracy of the listing data. But in recent weeks, several of the city’s top brokerage firms have accused StreetEasy of using confidential information in those agreements to reach out to landlords and convince them to work directly with StreetEasy — instead of their agents.
“StreetEasy has been using the information included in our exclusive agreements to contact owners and landlords directly to pitch for an exclusive on their entire building, circumventing the agent,” Douglas Elliman said in an August 22 email to agents, a copy of which was obtained by The Real Deal.
Fearful of being pushed out of rental deals — and feeling protective of client information — Brown Harris Stevens and Warburg Realty have sent similar emails to its agents.
“They are overstepping their bounds,” said CEO Bess Freedman, who told TRD that StreetEasy reached out to at least one of her agents’ clients.
“Maybe it’s a one- or two-off, but I want agents to protect themselves and our clients,” she said. Any time there’s an exclusive agreement, it’s between the firm and client. “You have to respect the four corners of the agreement,” she said. “StreetEasy needs to stay in their lane.”
It’s not clear how many landlords were contacted by StreetEasy. But the handful of purported cases raised the specter of ulterior motives in the wake of several money-making programs rolled out by StreetEasy in recent years.
Most recently, StreetEasy pushed agents to manually update their listings (instead of sending them via a feed), and said agents could pay $333 per listing per month to ensure that “Premier Agents” don’t appear on the page. In January, StreetEasy raised the cost of posting a rental listing online to $4.50 per listing per day.
Bohemia Realty’s Sarah Saltzberg said if she hadn’t experienced firsthand StreetEasy’s attempt to monetize listings, the new protocols would not have raised as much of a red flag. According to Saltzberg, when her agents have not provided copies of their exclusive agreements, StreetEasy has refused to post the listing. “But when we look at the pattern of behavior over the last few years with this company, you can’t separate those things,” she said.
StreetEasy initially declined to comment on the fracas, but after publication issued a statement saying the allegations are false.
“Streeteasy has absolutely not made any attempt to cut out agents,” the statement said. “Our verification process is the way we ensure that StreetEasy has accurate and up-to-date rental listings. It is unfortunate and irresponsible that some are using a misinterpretation of this important process – which protects consumers – to spread this false rumor.”
Brokers, however, see things differently. In late July, StreetEasy sent Bohemia an email saying that “to expedite” a listing being posted, the firm could provide the landlord’s name, a leasing contact and phone number. Saltzberg said it felt like a threat.
“They know that every day a listing isn’t on the market is crucial,” she said. “This is a particularly glaring wake-up call because it’s so transparent; why else would they want this information if not to compile a database and contact landlords to cut out agents?”
The practice of collecting copies of exclusive agreements — which contain client names, contact information, terms of the agreement and commission fees — doesn’t sit well with agents for privacy reasons. In New York’s ultra-competitive market, discrete agents have been known to shield the identity of their clients even from the heads of their own firms.
“Agents don’t give up their exclusive agreements to anybody,” said one brokerage executive. “The lifeblood of a brokerage is their relationship with their client, so we train our agents from the get-go: Never give out a document to anybody.”
Halstead’s John Wollberg agreed. “I would be in shock if any of our agents decided to send an exclusive agreement outside of the organization to anyone,” he said.
Others took things a step further.
“If in fact they have been requesting the listings agreements so as to solicit the existing business of agents then they would essentially be declaring war on the brokerage industry,” said Cathy Taub, who is a Sotheby’s International Realty broker and a co-chair of NYRAC, a broker advocacy group.
Bohemia Realty’s Sarah Saltzberg said StreetEasy hasn’t given her agents a choice about providing copies of their exclusives. “When this first happened, I was like, ‘How do I know you’re not going to contact the owner?’” she recalled. “They were like, ‘If you don’t, we won’t put it on our platform.’”
Saltzberg conceded the policy puts her agents in a tough spot because StreetEasy is so strong. “It’s the de facto aggregator,” she said. “So do we continue to feed the beast? Or do we say enough?”
Correction: StreetEasy raised its fee for rental listings in January, not summer 2018.