Real estate websites could be facing a major hurdle as New York regulators look to change the future of online real estate advertising in the state.
The New York Department of State has been looking into real estate advertising, looking to update its regulatory policies, sources told HousingWire.
Could this threaten programs such as the StreetEasy Premier Agent advertising program, which Zillow bought out back in 2013 to gain access to the New York market, and other third-party real estate sites such as realtor.com.
While the department hasn’t made any official announcements, it shared its thoughts with Zillow and other affected parties weeks before it is expected to issue formal guidance on the matter.
The law being looked at, and possibly reinterpreted says that “Any advertisement that references or includes information about a property that is not listed with the advertising broker or was not sold by the advertising broker shall prominently display the following disclaimer: ‘This advertisement does not suggest that the broker has a listing or has done a transaction in this property or properties.’”
Some media outlets reported that New York is looking to completely ban Zillow’s Premier Agent program, however the company highly disputes that claim.
“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.”
However, if the ban does ban or even limit Zillow’s program, it could be a major hit for the company, especially if other states begin to follow New York’s lead and change their advertising regulations. In 2017, Premier Agent revenue grew by 35%, totaling $604.3 million for the year.
The only other revenue source that beat this was Zillow’s marketplace revenue, which increased to $778.1 million for the year. Aside from that, all other revenues came up significantly short, with the closest one being other real estate revenue at $102.6 million.
Recently, the company began expanding into other revenue sources, announcing in April that it will begin actually buying and selling homes. However, the new expansion has yet to become a source of major income for the company as it is still in its early stages.
Of course, Zillow isn’t the only company that could need to change how it does business in New York. As regulators seek to update the state’s policies, all MLS websites that allow real estate agent advertising will have to change how they operate in New York state.
But Zillow does not think its Premier Agent program is at risk at all under the new changes based on talks it has had with the state.
“The Premier Agent advertising program is legal, and the NY DOS has given no indication that the program will be deemed illegal,” Zillow told HousingWire.
While the New York Department of State has yet to make any official announcements, online real estate advertisers could soon be walking a very thin line and should be preparing to make changes to their online real estate advertisement programs.
“Premier Agent helps thousands of brokers offer home buyers guidance and expertise navigating New York City’s real estate market,” Zillow said. “We’ve been working closely with the Department of State as they update their interpretation of New York advertising rules as they apply to online advertising, and it will be our top priority to help agents gain a clear understanding of the guidelines and how they apply to the real estate licensees who use our platforms.”
[Update 1: The original version said real estate agents can’t advertise on another agent’s exclusive listing, but the actual law says agents can’t advertise another agent’s exclusive listing. The story has been updated to reflect this change.]