Property Grunt

Tuesday, January 31, 2006


Steve Spinola of REBNY, recently wrote a letter in response to an article that was published by the Real Deal.
Below is the letter in it's entirety along with my comments in bold.

December 8, 2005

Mr. Stuart Elliott
The Real Deal
36 East 23rd street
New York, NY 10010

Dear Stuart,

Dear Stuart? I believe the proper way to address someone is either Dear Mr. Elliott or Dear Editor.

Your article “Weaving Webs In Online Property Hunting” in your December 2005 edition, made a number of plainly inaccurate statements. Of note, the article stated that “…the major internal, proprietary system brokers use is R.O.L.E.X., which distributes listings between firms and is backed by the brokerage behemoths in Manhattan and owned by the powerful Real Estate Board of New York”.

First, R.O.L.E.X. is not and has never been owned by the Real Estate Board of New York. Second, the phrase “backed by the brokerage behemoths,” attempts to imply that R.O.L.E.X. is controlled by the large firms. That is also flatly wrong.

R.O.L.E.X. is a proprietary based system which means it has to be owned by someone or entity. Mr. Spinola may claim that R.O.L.E.X. is not owned by REBNY but it sure as hell is controlled by REBNY, which is used to keep brokers in line. In order for real estate brokers to get access to R.O.L.E.X. all of their agents must become REBNY members. Which means each agent has to shell out a personal membership fee which adds up to alot of money.

As for the implication of control that Spinola raises, I don’t think any of these firms have dominion over REBNY but I wouldn't be surprised if they get a perk of two. It was recently brought to my attention that some of the big firms who are members of REBNY do not advertise their open houses through R.O.L.E.X and instead utilize NYT ads and their own web ads since it increases the chances of direct buyers. Yet other brokerage firms share their open houses in R.O.L.E.X. Whether this situation has been remedied is unknown to me at this time however it is an example of how certain firms are able to operate under the radar despite being REBNY members.

The truth is that more than 280 firms of every size participate in the sharing of their exclusive listings through their participation in the REBNY Listing Service. No one firm or small group of firms control in any way the system of cooperation between the REBNY Listing Service participants, or more importantly, the residential brokerage industry. Through REBNY, these firms have established rules and regulations that benefit the entire industry and more importantly, the buying and selling public.

In a story that attempts to identify how the public can hunt for a new apartment, it fails to identify the best option. Sitting down with any one of the 283 participating REBNY Listing Service firms, who will give the public the most current and accurate information of available apartments in Manhattan. Access to this comprehensive data, along with the professional knowledge and training of a broker participating in the REBNY Listing Service, all of whom abide by the REBNY Code of Ethics, offers the public the best opportunity for finding a new home or selling their apartment for the best available price.


Steve Spinola

It appears that either Mr. Spinola has failed to understand the point of the article or is just afraid to face the truth. The fact of the matter is that with advances in the Internet and technology, brokers are quickly becoming outmanned and outgunned. With options like craigslist, natefind, cribseek, sellsius and now google base, consumers have more options at their fingertips. And we have yet to see Zillow which is being implemented by the same group behind the online success of and practically annihilated the travel industry. It doesn't matter how big REBNY is and how many listitings REBNY members have in its possession. If the consumer finds another option that is more convienient and cost effective then they will leave broekrs in the dust.

Brokers are no longer the gatekeepers of information. With sites like Curbed and the Matrix, consumers are able to gather their own information without the help of a broker. By no means do I believe brokers will be eradicated but a growing number of brokerage services across the country are being outsourced for less then the 6% commission by discount brokers. At Real Connect New York there were a ton of new businesses that specialized in the online transaction of real estate without the use of a broker. If the worst case scenario occurs and the housing market leads to a recession, sellers will definitely examine these options in order to lower their overhead which includes reducing or eliminating the commission altogether.

In my opinion, Mr Spinola is questioning the credibility of the real deal’s article as an attempt to preserve the public perception of the indispensability of the real estate broker. But it all comes down to the consumer. If these alternatives become more popular than the current real estate broker model than REBNY’s influence will begin to wane.