What many real estate brokers had secretly hoped for, is now happening. In an effort spearheaded by the 5 largest real estate brokerages in the Hamptons, a new data management system is being rolled out, finally breaking the industry free from the grip, and outrageous expense, of the incumbent platform known as RealNet.
The packaging of the cloud based RealNet data management platform and its listing sharing capability among broker participants, coupled to its leading online advertising platform known as hreo.com (Screen shot above) soon dominated the data management segment of the industry. Eventually enrolling 99% of the industry’s brokers and agents, the platform enriched its developers over the last 15 years
Unlike other real estate markets that have adopted MLS (Multiple Listing Service) the Hamptons has long resisted a move in that direction because of a rule common to all MLS participants which allows Brokers to advertise one another’s exclusive listings. Without that ability, in this internet driven world, it becomes much more difficult to crack the Hamptons real estate market. The industry was willing to pay the high cost of subscription to the RealNet platform (annual per office licensing and user fees of as much as $17,000, and $1,500 respectively, plus an hreo.com fee of $20,000) because the cheaper alternative (MLS at about $600/year all in) would lower a huge barrier to entry which could ultimately dilute commissions.
The agencies behind the new East End Real Estate Association have solved the riddle of keeping the market (at least a little bit) closed by customizing an alternate data management platform to meet the needs of the Hamptons market, and offering it for a one time, not so inexpensive, but one time membership fee plus an annual user fee which promises enormous long term savings to those who choose to participate. Which it seems everyone is doing.
The new platform which is known as the East End Listing Exchange is pretty rudimentary when compared to the RealNet system which it is replacing. Beyond the expense of RealNet, there were frequent complaints about the lack of response from the company to questions raised, or suggestions made for improvements, by users. Additionally the lack of transparency in the pricing of RealNet, and a licensing agreement that prohibited any disclosure as to fees charged, at the risk of license termination, freed the developers to charge whatever they felt.
The developers of RealNet/hreo.com claim to have been ambushed. I guess they could see it that way. Maybe it was complacency, the comfort you feel when your customers just hand over the money year after year. But what’s really happened is that the stale hreo.com website, which has not had a redesign in years, was falling further and further behind in relevance as alternate websites such as Zillow and Trulia moved into the space. In the end, the platform became way too expensive for the needs of the industry.