Sandra Carlson got off the red-eye from Los Angeles at 7 a.m. on a Saturday in November, jumped in a taxi, and went to see her dream pied-à-terre. The 1,200-square-foot TriBeCa loft was listed at $429,000 on Corcoran.com just one day before.
But it sold long before she got back to California with Polaroids for her husband. Weeks later, Carlson saw an East Village condominium on the same Website – $448,000 for 1,200 square feet in an elevator building. Corcoran broker Stephen Perlo took digital photos and e-mailed them, along with a floor plan, to Carlson. She and her husband made a full-price bid, sight unseen, the next day. That was in early December. Their bid accepted, Perlo found Carlson a New York attorney, and within three business days, all the contracts were signed.
Carlson is still the exception to the rule: Most people want to see a home before they buy it. But brokers are wondering if Carlson’s experience is a sign of things to come; every company in town has been grabbing a chunk of dot-com real estate as it prepares for the future. With inventory low and properties selling overnight, brokers know that people will do anything they can to have an edge on the next buyer.
There are already a number of places to look online for Manhattan and Brooklyn residential-real-estate listings: Jason Krebs, general manager of newyorktoday.com, the section of the New York Times’s Website containing the classifieds, says 20 percent of the site’s estimated 1 million monthly visitors are specifically looking over the more than 2,000 real-estate listings for the tri-state area. The section also automatically searches the databases of the city’s largest brokers, including Corcoran, Douglas Elliman, Halstead, and Brown Harris Stevens. It’s hardly revolutionary, but in a city with no central listing service, it makes poking around a lot easier. The jury is out on the “virtual tour” videos offered by newyorktoday.com and agents like Douglas Elliman and Corcoran for some of their online listings – the technology is still slow and the footage is a little fuzzy – but they’re better than nothing.
Phil Beer, head of NYRealty.com, dismisses traditional brokers’ sites as “listings with pretty pictures,” adding, “We have 250,000 pages, block-by-block maps, bios for buildings, mortgage information, and comparative sales information.” The idea is that you get on NYRealty and say you want a two-bedroom condo with a marble bathroom in the East Sixties; Beer’s site spits out listings that match your profile. His brokers will then make inquiries for you at those buildings. (Beer’s exclusive listings tend to be condos.)
“Eventually, brokering over the Internet would help bring down the standard 6 percent fee; by making more information available to buyers, the whole industry will become more competitive.”
“When you look through the New York Times, you’re going to see an ad and answer an ad. But most of the time, what you see in the ad is not what’s purchased, ultimately,” explains Beer. “In the end they’re just lead generators, connecting a broker with someone who’s in the market to buy.” Having in-house mortgage brokers on hand helps speed things along. Beer says that these days, NYRealty.com gets 4,000 to 5,000 unique users, and 100 to 200 phone calls, daily.
Real-estate auctions are next on the agenda. NYRealty.com plans to begin online auctions some time this year for condominiums (co-ops are more complicated). “We’ll e-mail buyers, give schedules of open houses, and prequalify up to a certain amount,” says Beer.
Eventually, selling housing over the Internet could help bring down the standard 6 percent broker fee; by making more information available to buyers, the whole industry will become more competitive. “If you can just eliminate 40 of the 50 places by looking at them online, it’ll be a more efficient process,” says Clay Shirky, an Internet consultant and professor of new media at Hunter College. The sites make money for their companies by helping to generate fees. At Corcoran, when a broker makes a sale generated by the Internet on one of the firm’s exclusive listings (only exclusives are listed on the Internet site), Corcoran.com collects a full 6 percent commission, as it represents both the seller and the buyer.
“Up to 30 percent of online deals are direct deals; the buyer bought exactly what was listed on our site,” says Alfred Renna, head of DouglasElliman.com (and former Webmaster at Corcoran.com). One broker at a different firm recently lost a $2 million exclusive to Corcoran because the client decided he wanted to be listed on Corcoran.com. That same seller later bought a $3 million apartment through his Corcoran broker. Firm founder Barbara Corcoran says she’s planning to spin off the online site in an IPO as soon as she can.
“We are planning on being the premier Internet site for luxury-home buyers and sellers globally,” says Corcoran.com’s new CEO, James Kim. Corcoran is attempting to build a database with worldwide affiliates that would allow a visitor on its site to see all of an affiliate broker’s listings in Tokyo, Paris, or Los Angeles. DouglasElliman.com also offers overseas listings that are tied to its affiliates. Like NYRealty.com, DouglasElliman.com will connect you with mortgage brokers through its site; Corcoran does the same. Kim says his site gets 200,000 visitors a month. DouglasElliman.com’s Renna puts his own firm’s number of visitors at 150,000.
A few national Internet services have New York City listings. Yahoo!’s real-estate site offers the most in terms of local listings. Realtor.com’s local listings are currently dominated by Coldwell Banker for Manhattan and Brooklyn. And Microsoft’s HomeAdvisor.com local listings are still pretty skimpy (when you can even find them on the site).
But not everyone is galloping onto the Internet; cybershopping will assuredly prove far more useful for rentals and condos than for co-ops. Edward Lee Cave, founder of the eponymous Upper East Side firm, hasn’t set up a Website and isn’t planning to. “Most of our clients are people who are known to us or people who are recommended by people who are known to us,” says Cave. “We tuck them into the right place, buildings that are vertical neighborhoods – private clubs, really. That’s my business. As for people coming to us over the Internet, I’m not sure we could serve those people properly.” Cave thinks it’s unlikely that his well-heeled clientele will be buying $5 million properties over the Net. “When I started Sotheby’s Real Estate a while ago, everybody was so excited about doing videos. But I said, ‘You’ve got to get them into the house.’ After all, this is a home, not a shopping center in New Jersey.