Brokers are upset about it, but what does StreetEasy's new "premier agent" feature mean for buyers?
New York City real estate is never short on drama. And most recently, this has come in the form of a kerfuffle over "Premier Agent," a new feature on StreetEasy that rolled out in February, and allows brokers to pay to be a featured broker, and thus be promoted to buyers as the contact person for a listing, rather than the seller's broker who's actually in control of the listing. (A similar feature has been in place for years on Zillow, the parent company that bought StreetEasy in 2013.)
What this means is that when you see a sales listing you like and want to contact the agent, you're first shown a contact option for the "premier" agent, and may have to take an extra step to contact the actual seller's agent. The feature also includes a link to New York State's warning page about "dual agency," in which one broker represents both the seller and the buyer in a deal (more on that later).
The reaction from the real estate community has been swift and negative, with prominent brokers and brokerages condemning the feature as allegedly a pay-for-play move that deprives listing agents of rightfully-earned leads, and potentially pairs buyers with agents who know nothing about the listing or neighborhood for which they're advertising themselves as a go-to expert. The Real Estate Board of New York has also asked the state to launch a probe into the feature (The Real Deal has covered the dust-up extensively here, here, and here).
While it's understandable why some brokers may not be fans of the new feature, what does the change really mean for the typical buyer?
In part, StreetEasy touts the new feature as an opportunity to educate buyers about the importance of getting their own agent, someone who's representing just them, and not simultaneously stumping for the seller. "The way I put it is, if you were going through a divorce, would you want the same lawyer represent you both? Probably not," StreetEasy representative Lauren Riefflin tells us. "It's in the best interest of both the buyer and seller to have someone navigating this complex conversation and transaction with solely their interest in mind."
And while buying directly from a seller's agent isn't necessarily nefarious, at Brick, we do generally recommend that buyers work with their own broker, both to have someone to guide them through the process, and to make sure that the best possible deal will be negotiated on their behalf. (Keep in mind that it's also unethical for listing broker to refuse to work with you because you're coming to the deal with your own representation.)
Plus, having your own buyer's broker doesn't cost you as a consumer. (In a standard deal, the seller pays six percent commission, which is split evenly between the listing broker and the buyer's broker.) "A lot of people aren't aware that the seller is paying five or six percent regardless [of whether they use a buyer's agent]," says Mdrn. Residential agent Kobi Lahav, who has paid to be featured as a Premier Agent. "The seller is basically paying for you, the buyer, to be represented. And people don't take advantage of that, thinking if they go to the listing broker, they'll get a better deal."
Of course, the benefit here hinges on your broker being competent and well-informed, and here lies a lot of the criticism of the Premier Agent feature. After all, just because someone has paid to be advertised next to a listing, doesn't mean they have any experience with a specific board or building, or in the neighborhood in general.
And here's where the importance of doing your research comes in, though we'd always recommend doing some digging about a prospective broker, regardless of how you found them (tips on the vetting process here). "I would advise obviously that buyers do their homework," says Matthew Bizzarro, another agent who has paid to be featured as a Premier Agent. "Just because somebody calls themselves an expert doesn't mean you should not investigate their areas of expertise, their business, their reviews, their word of mouth. I think it's super important for the consumers to do the homework on their end."
If a Premier Agent is the first person you contact about a particular listing, you're also perfectly within your rights to find a buyer's broker you like and trust more, then go to the listing agent directly. "You don't have to work with the first person that you talk to [via the Premier program]," says Lahav. "It doesn't put you in a specific right-to-buy agreement. You can shop around."
For their part, StreetEasy is still making tweaks to the feature, including testing different versions of the "contact" box that let you easily toggle between the Premier Agent and the listing agent's contact information. "The goal is to give consumers as much access and as much transparency as possible," says Riefflin. (There are also financial goals to consider here; having agents pay for placement has become a major revenue stream for Zillow, and is likely expected to do the same for StreetEasy.)
And for the buyer, the bottom line is pretty much the same as it always was: Train yourself to read between the lines when browsing listings, and before you trust anyone to help you make one of the biggest purchases of your life, make sure they're someone whom you fully trust to get the job done right.
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