Once upon a time, New York City real estate agents kept all their property information on index listing cards in a locked file cabinet in their office. They would advertise in the local newspaper and wait for the phone to ring. This was the only way a buyer, or another agent, would know what was on the market. Real estate agents held the keys to the kingdom.
In 1996, I received my first computer as an agent. It was an IBM PS/2, and overnight, I could house all my listings on a floppy disk. Technology back then was like a freight train. It helped get us from point A to point B, but it was hardly elegant. Then came the first websites. They were clunky, at best, but it was really exciting and there was so much possibility.
As technology advanced, the internet allowed us to start sharing information. A golden opportunity presented itself – a way for us to combine our efforts. A multiple listing service. What an amazing opportunity to communicate as agents and what a great resource for a buyer or renter.
But when change happens, insecurity, ignorance, and fear can set in. And it did. The firms still believed that the value of their company, and its agents, was about their listings. The bigger you were, and the more data you controlled, the less you needed to cooperate. It was a narcissistic arms race to dictate the market. There was a fear of losing their competitive edge. These brokerages believed that their main value to their clients was their agent’s individual listings and the access they controlled. So, no MLS, no unified industry, and no transparency for the consumer.
However, the internet allowed others to start sharing the information. First, The New York Times became the defacto MLS and this is where the consumer and agent went to for their information. But smart businesses saw an opportunity and reacted swiftly. Enter Michael Smith. The founder of Streeteasy. He built a site that was truly consumer-friendly, and because of this, every agent wanted their listing promoted on the platform. If your listing wasn’t on Streeteasy, your listing wasn’t seen. But brokerages didn’t go out of business because of this. The fear was unfounded. Brokerages thrived, and they thrived with Streeteasy because real estate brokerage is a service business, not a data or tech business. The role of the agent is to deliver insight and advice to their clients. And Streeteasy thrived. While the majority of the brokerage industry was still trying to figure out their value, the consumer didn’t care. They went to the one place they could get everything they needed. The brokerages were feeding Streeteasy with all their valuable information.
Then, Streeteasy was acquired by Zillow (for $50M) and Zillow changed the rules of engagement. The industry now finds itself in the ironic position of being dictated to by Zillow, the disruptor who took advantage of the chaos and divisiveness. With the help and speed of technology, Zillow has built a go-to national website for all things residential. They are calling the shots, changing the rules again, and making hay while the sun shines. Their market cap as of this writing is $10.6 billion.
As our industry mirrors the time we live in, I’ve never seen a more divided nation with so much animosity, a lack of civil courtesy amongst competitors, and an unhealthy disregard for common decency.
I still remain hopeful that the industry stalwarts will learn some lessons from the past and will take a step in the direction of focusing on transparency, being unified, and catering to the needs of the consumer.
Clearly, that’s good business.