Here is news coming from the east coast that the State of New York is considering — mind you, just chatting about — regulating online real estate ads placed by agents. The focus is on third party ads such as Zillow’s “Premiere Agent” whereby an agent buys an ad on another agent’s listing. That is, the on line publication/portal, Zillow or Realtor.com, displays a listing. You would think, or at least I did when I first discovered this process, that only the agent who is actually contractually listing that home would be allowed to advertise next to it, right? I mean, who knows the listing better than the actual listing agent?
Wrong: any licensed agent can buy the spot for lead generation.
I learned of this process when I first started writing about real estate listings at D Magazine. I’d surf the web looking for homes, amazed at how many beauties I could find out there. I’d find one, then move over to see who the listing agent was to call for more information and photo permission, etc. Nine times out of ten I called someone who was not listing the house, and knew nothing about it for my editorial purposes. Surely they were sorely disappointed I was an editor, not an online millionaire from New Zealand wanting to invest in Dallas real estate. This bugged me — because I’d have to scroll forever to find the actual agent — until I learned what was going on. Right from the getgo, I said, I don’t think this is fair to the consumer. If they are really interested in a property, why shouldn’t they or their agent have direct access to the listing agent, not a go-between?
Apparently the state of New York thinks the same thing. And word is that the company with the biggest target on its head is Zillow ad a company it recently bought in NYC called StreetEasy, which is an online real estate listing site. This could one reason why Zillow announced in April it was competing with OpenDoor to buy and sell houses on line; a ban could limit Zillow’s cash cow program, especially if other states begin to follow New York’s lead. But Zillow denies being any such target:
“The New York Department of State is reviewing the application of NY real estate advertising rules with the intent of issuing guidance to clarify aspects of online advertising across the industry and the entire State of New York,” Zillow told HousingWire.
“The guidance issued will not be specific, in any way, to the Premier Agent advertising program. The clarifications will affect things such as the display of brokerage and licensing information in all online real estate advertising across the state,” Zillow continued. “We fully expect that the Premier Agent program will allow brokers to comply with the guidance when it is issued in the coming months.”
I truly hope the state aims to protect consumers and not just charge Zillow and others a toll for letting this continue. While seemingly innoculous on the surface, I think this practice adds a layer of confusion, and possibly drives up costs, for consumers.
I could see demanding better information: let Agent X say “I am not representing this property, but I would be happy to assist you in your real estate needs. Here is why you should hire me.” That’s honest. That’s clear to the consumer.
We’ve got mandatory solar panels on new homes coming from the west coast, government regulation of real estate advertising coming from the east, and the NAR conference in D.C. right now. What else is going on?