In 1994, after a career in banking and fashion consulting, LaLa Wang turned her attention to the real estate market in New York City.
“My husband and I were interested in selling coops and condos. We saw that the market was kind of inefficient. The more we became involved in looking to sell we thought, ‘Why wasn’t there a (multiple listing service) for consumers in Manhattan? In Manhattan there wasn’t even a broker MLS,” she said.
The first step was to design and develop in-house databases. “We were using data feeds exchanged by bulletin board systems and FTPs.”
The initial effort, called Principal Connections Ltd., evolved into Manhattan Listing Xpress or MLX.com, an Internet-accessible database of thousands of New York City listings of for-sale and for-rent apartments, co-ops, condos and townhouses. The site is intended to connect renters, buyers, sellers, landlords and brokers. Wang is also founder and CEO of BrokersNYC, a company that offers Web services for brokers. And this year she launched Matchifieds.com, an online classified advertising site that includes listings of properties for sale and posts by people searching for properties.
While MLS systems have been in place for decades in other markets across the country, Wang said that the Manhattan market had largely resisted such a system. “Large brokers had comprehensive internal binders and internal databases and didn’t want to share with smaller brokers,” she said. “We evolved because there was a need for more efficiency among brokers.”
In a perfect world, Wang said, New York City consumers would have more access to property information, and there would be more sharing among brokers, she said. “I think that it should be an open marketplace, where everyone should be able to do what they want to do – sort of the Burger King ‘Have it your own way.'” Brokers could designate which listings they want to be available for consumers only, for brokers only or for both. Consumers should be able to search for properties from owners, from brokers, or from both, she said. The New York real estate market does not match her vision.
“I’m an advocate of a free market with full disclosure. There should be creativity and differentiation of services. There can be so many varieties of different models. Professionals should be able to offer whatever services they want to as long as they disclose what services they offer and how they offer them.
“Consumers want open access, they want choices and they want lower prices. (Some) brokers want standard commission, they don’t want to share information with consumers.” In Manhattan, especially, “the stakes are really high” for brokerages, she said, because there is a lot of money made in commissions.
The average cost of a coop or condo is about $1 million she said. Real estate transactions can be complicated, and many buyers work with lawyers as well as real estate agents. And many real estate brokers in Manhattan wear a lot of hats. “Outside of Manhattan a broker is a broker is a broker. In Manhattan, they are developers, on site managers there is just a lot more cross-pollination.”
While Wang has worked to open up the power structure of the New York real estate market toward greater consumer access, her methods have not always been welcomed with open arms.
In offering apartment listings information to consumers for a fee, Wang was called to a hearing in 1999 for allegedly operating as an “apartment information vendor” without carrying a specialist license for this business. An administrative law judge ordered a suspension of Wang’s real estate brokerage license “until such time as she has presented proof satisfactory to the Department of State that she is no longer engaged in the business of apartment information vendor.”
Wang, who contends that New York’s 1975 apartment information vendor law does not apply to her MLX.com business, has fought to reverse this decision and to restore her real estate license. She appealed all the way to the U.S. Supreme Court, though the court did not consider the case. Her ability to get an apartment information vendor license is now hampered by her lack of a real estate broker’s license, she said. Another hearing was scheduled this week on the licensing issue.
These problems “have damaged us terribly in not being able to grow,” Wang said. “Fifty percent of my time is spent on legal (work) and lobbying.”
Earlier this month Wang launched a lawsuit against the Real Estate Board of New York, an organization that has as members many of the largest real estate brokerages in Manhattan. The lawsuit claims that the board and its members have worked to crush competition and create a monopoly of exclusive listings and technologies related to transmitting these listings among member companies. The board said in a statement that the lawsuit lacks merit.
Last year, Wang launched an online petition relating to new business models and consumer choice in New York real estate, and so the effort has received the support of about 25,000 people. “For years now the electronic revolution has brought efficiencies and cost savings in various industries across the country. Yet still New York City real estate has remained the domain of the dominant players,” the petition states, citing a clash between brick-and-mortar companies and new Internet competitors.
“Now is the time to help us take a stand against forces which seek to protect the status quo and limit competition at consumers’ expense,” the petition states. If you are a buyer or renter, stand up for your right to choose how to conduct your apartment search. If you are a seller or landlord, send a message to state officials that as a voter you are interested in and have a right to deal with buyers and renters directly – or to deal with a fee for service, discount or full service, full price broker. If you are a broker, cast your vote for a cooperative exchange of listings amongst all brokers for your benefit and for your clients, the end consumers.”
Wang said she hopes that the New York real estate market will become more consumer-friendly, and while she is a supporter of one-stop shopping she is opposed to mandatory bundling of real estate services. “Everybody wants most of these items in easy access and related to each other,” she said.
There will be a transformation in the New York real estate market eventually, perhaps within a few years, Wang said, adding that the role of the broker will hopefully shift from “one of monopoly of information” to “one of service and experience.”
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