Secret meetings are being held in the Hamptons.
Brokers have quietly been drawing up plans to protect their market share in one of the priciest areas in the country.
The discussions in these clandestine meetings revolve around the creation of a listings database, tentatively named after the group that’s forming to support it — the Hamptons Real Estate Association (HREA). The new portal would function as a listings service only for brokers in the Hamptons (read: excluding the North Fork, which HANFRA, the current East End MLS, includes). The HREA would work in tandem with a front-facing marketplace for consumers.
But few are willing to go on the record to talk about it, and no one will say if the brokerages powerful enough to create a sea change — Douglas Elliman and the Corcoran Group — are on board. Why all the mystery?
It’s a highly charged situation, according to those in the know, like Bespoke Real Estate co-founder Cody Vichinsky.
“It’s almost pathetic that in this day and age the systems are so rudimentary and the politics around them are so childish,” he said.
The battle for a comprehensive listings service in the Hamptons has been raging for years. New York City and the Hamptons have been among the only areas in the United States without a centralized listings system.
In most of the country, real estate brokerages amicably share data, storing information about their listings and properties in trademarked multiple listing services that are overseen by the Council of Multiple Listing Services, or CMLS.
But the number of MLS sites nationwide is shrinking due to mergers, CMLS CEO Denee Evans said. There are now roughly 600 systems nationwide, down from 900 when Evans joined the CMLS in 2015, she said.
MLS systems are businesses, after all, so they buy each other out and consolidate to serve mutual interests.
“Agents are going to battle for clients and to get deals done, and yet we realize we have to cooperate to meet that end goal,” Evans said.
A peaceable local merger is in fact possible. The merger over a year ago of the Hudson Gateway MLS and the Long Island MLS has seemingly been a success. It recently launched a rebranding effort as OneKey and is looking to expand its reach. Meanwhile, a lack of consensus from brokerages in the Hamptons has paved the way for third parties like Zillow to swoop in and attempt a takeover of sorts. But after expressing extreme dissatisfaction with Zillow’s moves in the Hamptons, the local brokerages are taking action to fight back.
In the Hamptons, most brokerages once used RealNet, a system not associated with the CMLS. It was owned and operated by Hamptons Real Estate Online (HREO), a privately owned company that also offered a consumer-facing site under the HREO name.
But in 2014, as the site became increasingly expensive, 13 East End brokerages formed a new a trade organization, the East End Real Estate Association (EEREA), to protect and lobby for their interests in a role similar to that of the Real Estate Board of New York in the city. The group, including Brown Harris Stevens, Corcoran, Elliman, Saunders & Associates and Sotheby’s International Realty, named their portal the East End Listing Exchange (EELE).
Then, in 2017, HREO and RealNet sold to Zillow for an undisclosed amount. When that happened, the masterminds behind the EEREA and EELE, who had been working on their own initiatives for three years, announced they were disbanding both.
“There were just too many moving parts in achieving this objective,” EEREA’s director, Joseph Sabella, said in a statement at the time. Sabella said EEREA’s board decided to “wipe the slate clean.”
Zillow rebranded the consumer-facing HREO as Out East and relaunched it in February 2018 with a modernized look and hyperlocal search options for consumers. Broker reception was tepid at best. Zillow’s existing reputation on the Island didn’t help.
“Half the time, on Zillow, they have incorrect taxes, they lack the additional village tax, they usually have the wrong school information,” said Scott Wallace of Daniel Gale Sotheby’s International Realty in Nassau County.
This past April, a little over a year after the Out East launch, Zillow unveiled the new back-end component that would replace RealNet, dubbed Out East Agent Tools. Condemnation of the new tool came swiftly as brokerages bemoaned the bug-ridden site, which was lacking much of the functionality RealNet had offered.
Information on the site is often incorrect and outdated, the formatting gets distorted when brokers try to email or print listings, and the controversial Premier Agent model can confuse consumers about who actually represents a property, brokers said.
Saunders & Associates’ CEO Andrew Saunders reportedly wrote that he assigned a team of administrators to review Out East after encountering “countless issues, many of which compromise our ability to operate.”
“Here’s the company that bought the holy grail, wouldn’t you copy the holy grail, simplify the holy grail?” said Judi Desiderio, president of Town & Country Real Estate, referring to Zillow’s purchase of RealNet. Instead, by dismantling the portal, “they threw the baby out with the bathwater,” she added.
MLS initiative renewed
The revived effort to build a new Hamptons-only listings portal has been underway for over a year, but it’s still very far from launch, according to Bespoke Real Estate COO Michael Cantwell.
Some brokerages, like Cantwell’s firm, have taken measures to resist the play for dominance by outsiders like Zillow and even those on the North Fork.
After Zillow bought HREO, Bespoke took its listings data back behind its castle walls. To buffer the brokerage from the database turmoil, Bespoke built its own exclusive back end and consumer-facing site and does not give its information to Out East or any other site.
There is typically more than one MLS-trademarked site per area. Long Island, for example, has two, MLSLI.com and HANFRA, from the Hamptons and North Fork Realtors Association. But Hamptons brokers want a listings portal that only they can use.
Cantwell said that “there is no use” in joining either of Long Island’s existing MLSes, as they are not geared solely toward the South Fork.
Vichinsky, too, said he is fully on board with the creation of a Hamptons-specific database, noting that there is no consumer-facing site featuring only agents working exclusively in the Hamptons.
“What I care about most is that we are getting accurate information in real time, that our properties are presented in the right way and that users have a sufficient and adequate experience,” he said.
Local agents know more about their area than anyone else and are therefore the most qualified to help consumers buy and sell real estate there, Desiderio said.
“When I go looking in New York City, I’m going to call someone who knows every square inch of Manhattan,” Desiderio said. “I would rather have someone who’s an expert in that area, not somebody who just has access to information.”
And while many Hamptons brokers may be on board with the idea, a critical mass of participants is required to get it off the ground. Desiderio said the HREA or any other site will not survive without the cooperation of the big brokerages, such as Corcoran and Elliman.
She added that she would like to have a separate Hamptons real estate trade organization, governed by a non-broker entity, that objectively fights for the industry’s needs, whether it be through lobbying or other methods. However, such a group would also need participation from the major firms to be successful, she added.
A spokesperson for Corcoran did not respond to requests for comment on this story, and Elliman declined to comment. Representatives from Zillow and its affiliate websites also declined to comment.
Rallying around OneKey
In other parts of the tri-state, collaboration between regional entities has been far more successful.
The Hudson Valley and Westchester Association of Realtors’ Hudson Gateway Association of Realtors (HGAR), the Connecticut MLS and MLSLI.com merged in September 2018. The rebranding as OneKey was announced last month.
The platform currently has 47,000 listings from the Catskills to Montauk, including the five boroughs of New York City. OneKey CEO Richard Haggerty said he’s confident that his company has the momentum and resources to become the go-to MLS for the entire New York metropolitan region.
“It may sound like a big goal, and we may not be able to achieve it overnight, but ultimately I think it would be a great solution for real estate brokers in this geography to access data from one source,” Haggerty said. “It’s an offer of participation of all cooperating brokers, where they share listing data within 24 hours and it’s accurate and comprehensive.”
Daniel Gale Sotheby’s International Realty in Garden City is joining OneKey. Scott Wallace said he feels that the MLS makes it easy for agents to find and advertise properties in a variety of geographic areas. If sellers want to keep their listings off an MLS or limited to a select set of buyers, that should be solely their decision, he said.
“If you’re trying to sell a house, especially now while the market is a little soft for high-end properties, you need to have the most exposure possible,” Wallace said. “Your buyer can be anywhere, so your brokerage needs to be everywhere.”
OneKey will cost $2,200 per year per office, with agents paying $110 per year. Currently, there are no charges for listings on the site.
New York City also has a database called the RLS, which is provided and regulated by the Real Estate Board of New York, the trade association and lobbying group for the New York City industry.
But both REBNY and its RLS need to step up their game to become better resources for the industry, said Clelia Peters, president of Warburg Realty and co-chair of the RLS board at REBNY.
The RLS currently doesn’t have complete, comprehensive, real-time storage of information, she said.
Meanwhile, despite the Big Apple being one of the biggest hubs for tech advancement in all industries, several New York brokerages use inefficient and downright archaic computer interfaces in storing their listing information, which makes it difficult for the RLS to pull that information, Peters added.
Getting everyone in the city to agree to unite under one system has been a challenge, too. Bosses of the biggest brokerages, including Corcoran and Elliman, tried to agree on a system as far back as 2001, in a meeting described at the time as being similar to that of mob families.
“We’re an anomaly in New York and the Hamptons in that our system is so deeply disjointed,” Peters said. “I was motivated to get involved with the RLS because it was so clear to me that there are much more functional systems in other parts of the country, and I didn’t understand why we couldn’t move toward that.”
The post Brokers secretly conspire to launch a Hamptons-only MLS appeared first on The Real Deal Miami.