why a gag rule within REBNY about specific listings?

As a follow-up to yesterday’s startling post (for readers and for me), end of an era for Manhattan Loft Guy / a new day dawns?, I can imagine a reason for a REBNY gag rule about the listings of other agents that may be in the interests of sellers, as well as several reasons in the interests of sellers’ agents. In each case, I believe the rationales to be outmoded if not old-fashioned. But the rule is the rule.

I assume the rule predates blogging. It may even predate the rise of Manhattan real estate as a rabid spectator sport. It hearkens back to an era (and a mind set) in which agents actually did control information about a listing. They selling agent put it in the NY Times, or not; the selling agent offered to co-broker with agents bringing buyers, or not; the selling agent controlled that listing information to try to attract buyers for that listing (and keep the entire commission) or for other listings.

control the presentation
If you are the seller who has signed on for a high-end marketing plan, you may not be happy if your listing is also promoted in down-scale media such as cheap flyers or Craigs List. These choices should be between the seller and agent. Indeed, for very exclusive properties, the seller may insist that there be no media at all.

Keeping the exclusive selling agent as the exclusive source for marketing the listing makes it easier for the seller to control the marketing.

But there are probably ways to keep the seller in control in the (relatively few?) situations in which a seller wants less than The Broadest Possible Exposure without having a broad gag rule.

control the buyer flow
I believe that an equally strong rationale for a gag rule is that listing agents want to preserve or enhance their ability to exploit a listing for their own business purposes, apart from the interests of any particular seller. (After all, REBNY is a trade organization.) Firms may want to drive traffic to their websites, as opposed to websites of other firms or of listing aggregators such as Trulia or StreetEasy. Agents tend to view people interested in their listings as their prospects, with whom there is the possibility of a direct deal to sell one of those prospects the listing, or the possibility of helping those prospects buy someone else’s listing.

One could argue that REBNY and its member firms are swimming against the tide in restricting (especially) Internet access to listings, as there’s a history here. REBNY did not even have a rule requiring that firms share exclusive listing information and offer to co-broker with other firms until 6 or 7 years ago. The big push that REBNY made for "a single listings portal" bumped up against the refusal of prominent firms to permit their listings to be included — even though the portal would simply drive prospects to the firms’ websites.

(Note: firms that are also members of the Manhattan Association of Realtors can agree that their exclusive listings appear on each other’s websites, driving buyer inquiries about those listings to those other MANAR firms; the theory is that the listing firms are more interested in broader exposure than they are in keeping those buyer prospects.)

One could also argue that the motivation of some agents to control the buyer flow (by selling them the exclusive or working with them to buy another listing) puts these agents at risk of violating NY State law on agency disclosure. Absent written consent, it is impossible to "represent" both sides of a deal; it is also impossible to be a fiduciary for a buyer looking at other listings at the same time as being a fiduciary of a seller when that buyer is interested in your listing agreement. (Some agents seem to believe that the NY State law requiring agency disclosure does not apply in Manhattan, when in fact it is the obligation to provide a certain disclosure document that does not automatically apply in Manhattan.)

But one could argue that these concerns are for the agent, his/her conscience, and for risk management analysis by his/her firm. (Note: these concerns are taken very seriously elsewhere in NY State and in the US generally.)

But but one could reasonably wonder about a business plan designed to drive buyer inquiries to the one person who canNOT represent their interests, since that person is the fiduciary of the seller.

difference between civilian comments and agent comments
The question of regulating or banning comments by other agents about a listing is is not really a First Amendment issue. It is a trade group issue. REBNY’s rules were adopted under whatever process they have, and apply to REBNY members. Folks who don’t like the rules either work to change them, or leave the organization. I can’t leave the organization, yet I am unlikely to get much interest in changing the rule.

The rule does not apply to ‘civilians’ (non-members of REBNY). So NY Times reporters are free to "advertise" or "publicize" or "disseminate" information about a listing — indeed they clearly are encouraged by the firms to do so because the firms feel it is in their interests and in the interests of their exclusive sellers. So editors, good folk and trolls at Curbed comment on listings pretty much every day, often in a way that firms and sellers hate (if you are familiar with the feature called That’s Rather Hideous you know what I mean.) But REBNY can’t do anything about that.

if content is a problem, deal with that
As I mentioned in yesterday’s post, there are REBNY ethics rules that (reasonably, in my view) prohibit agent’s from disparaging another agent or a listing, and from offering misleading comments or information about a listing. That standard seems — to me — to be sufficient protection against ‘bad’ comments.

As a practical matter, the gag rule does not prevent positive comments by agents, because people generally don’t complain about positive comments. Instead, it forces people who’d like to provide fact-based commentary by reference to a specific listing to worry about being dragged into REBNY court. That is a ‘problem’ for the public that REBNY does not really care about, and a problem that conflicts with the 21st century world of multiple data sources, empowered consumers, blogs and the ethos of information-wants-to-be-free.

Just not (yet) relevant to residential real estate in the media capital of the world.

As a side note, was it NY Magazine that used to bring 3 agents to a listing and ask them what they thought about the property and the right price? I think so, but I did not find it on their website just now. Maybe they don’t do it anymore, but I wonder what the REBNY powers thought of that publicity. I suspect that it was seen as legitimate use of old media, even if agents sometimes said ‘this $1mm apartment should sell for $850k‘.

ah well….

© Sandy Mattingly 2008