portal potted / REBNY website to limp out in September
weak-ass website coming
It may sound like inside baseball to many, but the saga of the REBNY public web portal is a fascinating story, with important implications for how coops and condos are marketed and bought in Manhattan. I think it is worth a very long post, one that has been percolating in my mind for weeks.
NYCResidential.com is coming (yawn?), just not in the Spring, and not much
REBNY will launch NYCResidential.com in September, which will provide a single web presence for the public to see all the “exclusive” sale and rental listings of REBNY firms that choose to participate.
In concept, there would be none of the phantom or open listings that plague NYTimes.com. Potentially, this portal would have up-to-date links for 95+% of the apartments really for sale in Manhattan – since REBNY member firms probably have that large a portion of the for-sale market.
In theory, buyers would want to start a search here, rather than wade through the garbage on NYTimes.com, then look to NYTimes.com for the for-sale-by-owners or to take a chance on wasting times calling agents who offer vague descriptions of apartments that are too good to be true (or who offer the same vague descriptions of apartments as three other firms offer about the same apartments).
Possibly, the public would begin to appreciate that information provided by REBNY firms, and the business practices of these firms, are “better” than the information and business practices of non-REBNY firms. Over time, consumers might look at the public web portal as The Best source for information, and the easiest way to click through to the individual REBNY firm websites for details about interesting listings.
In theory, potentially, possibly, and over time. But … no, this ain’t gonna happen – at least not for a while and very possibly never.
a big deal for REBNY
How could this Very Important Project that was announced as a done deal in October (a giant step for REBNY, but how big a step for humankind? Listings web portal coming in the Spring) turn out to be a dead duck by May?
While the early press commentary focused on the objections of the smaller REBNY firms (rebels in REBNY may repel web listing portal), this portal will be crippled from the start by the defection of the two largest firms – Corcoran (and its affiliate Citi-Habitats) and Prudential Douglass Elliman, which typically account for something north of 50% of the resale listings in Manhattan.
I will skip to the end (as of now) then walk back to see how we got to a surprisingly screwed up position.
to be designed and operated by pros
Trulia.com will build and operate the site, which Trulia announced on March 22 but which REBNY did not until mid-April. REBNY sent a memo last week to its members about the project. The details of what will be presented, and how, are undoubtedly the result of compromise and negotiation among the Large Egos that manage the (Large and Small) REBNY Member Firms.
presenting intentionally limited data, with links to firm websites
Interesting choices about the web data to be presented are:
- searchable by neighborhood, price, type, and number of rooms
- no information about square footage or time on market
- only exclusive sale or rental listings (no ‘open’ or ‘ours alone’ listings)
- all firm names will be in identical font, color and size
- search results will randomly re-sequence (so repeating the same search at different times will show different listings on top)
- will cover all five boroughs
- participating firms will decide how much information to provide (i.e., no address is an option for firms that see value in that)
The goal seems to be to drive customers to the individual firm websites for more information (and for pictures? floor plans?) – hence the careful use of the term “portal” to describe this thing to REBNY members from the beginning. Firms that think that their individual websites provide competitive advantages should still think they will realize those competitive advantages. The listings of smaller firms will have the same ‘presence’ on the portal as those of other firms.
Reasonable compromises, I suppose.
The choices to permit firms to piss off consumers by being coy about location (“East 70s stunner!!!”) and about size (square footage is prohibited) are other compromises – not so reasonable to me, but I wasn’t on that committee.
All in all, the kind of information to be publicly available on this portal is probably similar to the public information made available out there in America by the various Multiple Listing Services, which also link back to member firm websites for details.
the small firms won a big battle
Fascinating to me that the so-called small firms that agitated early within REBNY seem to have won a major battle about cost. What started as a two-tiered firm-based fee structure ($7,000 for large firms and either $3,000 or $3,500 for small firms) ended up as a five-tiered structure ranging from $2,000 to six times that figure.
As announced with REBNY last week, the sliding fee schedule has slid a lot, with an initiation fee and $100 per agent annual fees. The initiation fee for a one or two person firm will be $2,000, $2,500 for 3 – 5 people, $3,000 for 6 – 19, $7,500 for 20 – 74, and $12,500 for 75 people or more. (The initiation fees will increase by 25% after May 21. Operators are standing by!) For big firms, the big expenses are the annual per-agent fees, clearly.
big players with big problems
While the ‘little firms’ were fighting about paying too much, some of the big players started to grumble. As I noted in December (REBNY vs. REBNY vs. REBNY / portal potties still percolating), the power structure within the Residential Brokerage Division is such that you would reasonably have thought that an ambitious and (for The Establishment) radical plan such as this would never have gotten off the ground publicly without having been blessed by all the Big Girls and Boys.
Indeed, as I said in my New Years Day post about the squabbling (REBNY portal pot still perking / bad plan or just bad communications?):
The Ramirez-Peters cover memo says that the entire 13 member Board of the Residential Division voted for this portal. That includes representative of The Establishment, of course (Halstead, Warburg, PruDE, Corcoran, Stribling, Sothebys, Bellmarc and Brown Harris are all represented) as well as some smaller firms (Cornelia Netter and Barbara Fox from their eponymous firms, as well as a few others).
Assuming that all the Big Girls and Boys were on board was reasonable, but incorrect.
But thinking about PruDE and Corcoran bailing out on the other members of the Establishment represented on the Board of the Residential Brokerage Division helps to make sense of an odd note from the REBNY memo last week about management of NYCResidential.com. The memo explained that the site will be governed by a nine member Board (elected by participants in some manner) that will be under the supervision of the REBNY Board of Governors rather than the Residential Brokerage Division. Weird….
what are they thinking?
I am at a complete loss to understand (1) how The Establishment at REBNY let this thing unravel or (2) why Corcoran and PruDE refuse to participate.
Not that I agree, but I can only think it is based on money, cut two ways for the two Elephants – (1) the expense of paying $100 per agent per year (worth around six figures to both Corcoran and PruDE) and (possibly) (2) the fear that they are diluting the impact of their web sites and web-focused marketing. These two firms must spend a fortune developing, maintaining, tweaking and selling their websites – much more than any other Manhattan firms.
If I am right, I believe that is very short-sighted thinking – not least because a successful REBNY public portal would finally give the firms negotiating leverage against NYTimes.com. In addition, this path is the way of the future (indeed, it is the way of the past and present out there in America, but we are still stuck in 20th century business practices in Manhattan).
If I am a PruDE or Corcoran agent, how do I explain to a potential seller when pitching a listing why my firm refused to participate in what could otherwise be a useful marketing forum?? If I explain that “it’s money” I will expect a more difficult negotiation with the seller about my commission.
Perhaps it is just a power thing (“I am taking my ball and going home!”), but Corcoran must know they would essentially destroy this thing by not participating. (With Corcoran but without PruDE, the thing would work fairly well; without Corcoran’s market share it is no longer a Must Use consumer web instrument.)
Whatever the behind the scenes knife work, if I were Diane Ramirez or Fred Peters I would be embarrassed at not being able to deliver what had been grandly and prematurely announced. If I am Pam Liebman or Dottie Herman I would not be proud of myself, either.
If I were a consumer frustrated with the phantom listings and evident low ethics of real estate firms as demonstrated on NYTimes.com I would be unhappy with all the bastards.
Not a good thing, methinks. What are the odds they will reconsider?
© Sandy Mattingly 2007
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