When Lynette M. Hegeman, vice president of marketing for Atlanta-based Gables Residential, would go on Craigslist to view her company’s advertisements, she’d browse the listings and see recognizable pictures and text.
But the company to contact for those apartments wasn’t Gables. It was what appeared to be a re-used ad posted by an apartment locator, a service provider that offers two-way matching between landlords and tenants. “They’re taking the ad and scraping all of the details, including photos and pricing,” Hegeman says.
Hegeman isn’t alone. For many in the industry, Craigslist offers nothing but upside. It’s a cheap source of advertising and gets lots of traffic. In an environment where budgets have tightened, it’s a great way to advertise without spending lots of money. But there’s a downside as well. The "anything goes" atmosphere on the website provides ample opportunity for unregulated locators to scrape ads and make them their own.
Seeing the Signs
Hegeman says it’s pretty obvious when a locator pulls an ad. “They keep the same price,” she says. “They post them not knowing that we change the prices daily based on availability.”
But Nancy Freeman, executive vice president for the Southeastern region at Dallas-based Riverstone Residential Group, says that over the past six months she’s seen a number of the her company’s ads used by other sources. “We have not had a problem with this type of thing in the past,” she adds.
Freeman says Riverstone has approached these companies to change their practices. If they’re operating ethically and legally, the company will continue to work with them. If not, the relationship ends. “In some cases, these are copyrighted ads that they’re pulling from,” Freeman says. “There are some issues into who owns the copyright in some of the ads that they are scraping.”
Weighing the Costs
Many apartment owners and managers caution that just because a couple of locators may be scraping ads, the whole industry isn’t bad. In fact, they rent brokers can be valuable partners. “Brokers are typically a good resource for networking and to learn about prospective apartment opportunities that may be of benefit to our existing clients,” says Dennis Treadaway, president of Folsom, Calif.-based FPI Management.
Hegeman emphasizes that legitimate brokers and locators are good partners. Freeman agrees. “It’s more of a double-edged sword because brokers and locators are a very good relationship builder, and we’ve been partners with them in many markets and have used them in many markets for many years,” she says.
Once a locator or broker secures a potential renter, that prospect will be brought on-site and the locator will request a fee. Hegeman says brokers and locators generally want anywhere from half-a-month's rent to a full month’s rent as a finder's fee.
“The locator is paid only when the qualified renter moves into the apartment,” Treadway says. “Consequently, there is no speculation on the effectiveness of their service.”
Tough to Say No
But in this environment, it’s tough to turn away a lease, regardless of the strings attached. Now, locators may come and want to be paid within a month. “Fees to brokers and locators have continued to increase, and I don’t see that changing any time soon,” she says.
Hegeman would like to see some type of national program that rewards legitimate, lead-producing brokers and locators. But getting the fragmented apartment industry to agree on that is difficult, to say the least. “Gables really values the relationships that we have with brokers and locators,” Hegeman says. “They are an important part of our business and will continue to be. Our task is to create a seamless program that will benefit and reward those that truly cultivate leads and, ultimately, leases.”