Louise Phillips Forbes
Park Avenue Office
Park Avenue Office
Park Avenue Office
Jonathan D. Schulz
Park Avenue Office
By Leigh Kamping-Carder
In February, Oren Alexander, a 24-year-old vice president at Prudential Douglas Elliman, joined two other brokers to form the Alexander Group. While the name refers to Alexander himself, among the team members, he said it is also a quiet allusion to one of history’s best-known conquerors: Alexander the Great.
“We’re all hungry,” Alexander said of his teammates, who are all under 31. “We don’t really have distractions in our lives. Our main focus is on our careers.”
Alexander formed the group to corner as many transactions as possible, but plenty of other brokers are currently forming similar partnerships to maximize sales in a low-volume market and to cater to an increasingly demanding clientele.
While broker teams are nothing new, sources said that the number of teams has been growing steadily in the last few years. (It’s unclear exactly how many teams currently exist because outside entities like the Real Estate Board of New York don’t keep track.)
“More often than not, I’m seeing teams on a listing,” said Christopher Kromer,ofHalstead Property who is partnered with his ex-wife, Nora Ariffin, echoing the observations of other brokers. “Whether or not they’re [officially recognized], I don’t know, but I’m certainly seeing more people team up.”
In fact, one of Halstead’s motivations for opening its Park Avenue flagship about a year ago was to provide top-producing teams with dedicated office space, the firm’s president, Diane Ramirez, said last month at a New York Law School forum. In contrast to the cubicles provided for individual agents, the office has walled off areas for groups, such as the Louise Phillips Forbes team, sources said.
Just a few years ago, the idea of a broker teaming up with a marketing specialist or a closing coordinator was rare, said Michael Shapot, who heads up a six-person team at Keller Williams NYC. Now, those associations have increased threefold, he estimated.
In New York City, brokers with diverse abilities who are joining forces are following in the footsteps of their counterparts in other regions of the country, sources said.
“Teams [are] the wave of the present,” said Shapot, who moved six of the nine people on his team over from Elliman in February. “Quite frankly,” he added, “Manhattanites are late to the game.”
But today’s teams are not identical to the teams of the past, which often revolved around one superbroker, with the teammates playing supporting roles.
Alexander, for one, plans to avoid the traditional team structure where one leader directs assistants who handle showings and administrative responsibilities.
Although Alexander will manage deals above $3 million and his teammates will cover different parts of the under-$3 million market, he envisions the alliance as a coalition of experienced brokers — a team of equals.
“Not everyone in the group will be producing as much as me, maybe,” he said, “but getting close to that.”
Few formal guidelines
Brokers attribute the recent rise in teams to a changing industry that many see becoming more professional and laborious.
“It’s really turned into a 24/7 job,” said Brown Harris Stevens senior vice president Russell Miller, who formed a two-person team with his colleague Mary Beth Flynn in late 2007 before the market took a nosedive. “People will send you e-mails at 2 a.m. and want a quick response.”
A sales market that has failed to catch fire (even if the market looks more promising recently), is exacerbating the situation. In this environment, clients are demanding a new level of responsiveness from their real estate professionals.
“Today, when you go to get a listing, people want to see that more than one person is working for them,” said Alexander, whose older brother, Tal, is also on his team.
With lower volume, brokers say they must now seize every opportunity for a showing and weigh every offer. Add in technology that lets buyers and sellers do their own research online and fire off e-mails at all hours of the day, and brokers find it pays to be available round-the-clock.
For brokers like Miller, enlisting a partner was the best way to cope. “I don’t know how someone does it on their own,” he said.
Additionally, a group represents the kind of security that comes with a two-income household, minimizing the risk of losing out on deals, and allowing team members to broaden their expertise and client base — even though they ultimately share commissions.
Despite the prevalence of broker teams, there is little guidance for agents on how to divvy up the work and — perhaps more importantly — the commissions.
The New York State Board of Real Estate, the 15-member group of state elected officials and industry members that helps draft industry regulations, is currently weighing rules that would establish advertising guidelines for teams. But REBNY leaves it to individual brokerages to decide how to regulate the way teams operate, and the city’s major residential firms have few formal guidelines for brokers who wish to partner up.
At Elliman, for example, a manager typically meets with a broker who wants to start a team to ensure that they have enough business to sustain one, as well as the managerial skills to oversee a staff, said Yuval Greenblatt, an executive vice president who is on the firm’s management team.
“Any time someone tells me they want to merge a team or start a team, I always tell them, ‘One plus one needs to equal three,’” Greenblatt said, explaining that he warns brokers not to enlist team members with overlapping skill sets. Teams made up of agents who simply want to “serve a leader” will fall apart, he added.
Greenblatt said that teams first became prominent in New York City about 10 years ago, but in recent years they have picked up, although he said it was difficult to quantify the increase, even at his own office.
Citi Habitats, the city’s largest rental brokerage, takes a similar approach — providing advice to brokers on setting up teams without mandating how they function, according to the firm’s president, Gary Malin, who could not say how many brokers at the firm were teamed up.
Malin said he recommends that prospective team leaders devise a business plan that sets out the duties each team member will perform, how commissions and salaries will work and what team activities, such as progress meetings and training sessions, will take place — and to put every agreement between brokers in writing.
“Most people don’t truly understand everything they do day-to-day unless they take a step back, digest it and put it in writing,” Malin said.
Meanwhile, Bond New York takes a more active approach to establishing teams.
“When we have new agents, we encourage them to join a partnership where they aren’t responsible for product knowledge they can’t possibly have as a new agent,” said Bond CEO Bruno Ricciotti. “This allows them to transition into being an asset individually to their customers without sacrificing integrity or the company’s reputation in the interim.”
Divvying up pay
In general, every team in the residential brokering world has a different method for dividing up responsibilities and pay. But most fall into three broad types:
Partnerships of two brokers — such as Brown Harris Stevens’ Miller and Flynn or Halstead’s Kromer and Ariffin — often split everything right down the middle. (Miller and Kromer both said that their firms, which are both owned by Terra Holdings, require two-broker teams to divide commissions in half.)
Top broker Elaine Clayman, who started her eponymous team 13 years ago when she joined Brown Harris Stevens, has taken a unique assembly-line approach to transactions. She breaks each deal down into a series of steps handled by about a dozen “functional specialists,” including her daughter, Justine Bray, who acts as director of sales, and a transaction manager who takes care of deals from accepted offer to closing. Ten agents are responsible for signing and showing exclusives, while Clayman herself is the designated negotiator.
Many teams, however, still have one broker at the helm who brings in the bulk of the business and then farms out leads to the group’s agents, who then handle the deal from start to finish.
The top-ranked Hamersley team at Citi Habitats, led by sisters Tracie and Elizabeth Hamersley, has three additional agents and an assistant, but the sisters bring in an estimated 75 percent or 85 percent of business, they said.
The sisters — who have been working together since 2004, registered as an LLC in 2007 and added their first team member in 2008 — give team members a 25 percent cut for sales referrals and 10 percent for referrals of rentals.
Otherwise, the Hamersley team addresses splits on a case-by-case basis, depending on how much work a team member has contributed as of the closing, the sisters said. As a rule of thumb, the agent who secures the listing and does most of the work gets 60 percent, while his or her partner on the deal gets 40 percent, they said.
The Litvak Group, another team at Citi Habitats, mimics the splits offered at the firm, team founder Eugene Litvak said.
Litvak first paired up in 2009, when he could no longer handle his business alone, and collaborated with a colleague who was struggling to find her own clients. Since then, the less-experienced broker has left the firm, and he has established a formal team. The group was incorporated as its own business late last year and has taken on three additional brokers and an assistant.
Litvak Group members start out with a 35 percent split and move up to a 50 percent split after a certain number of deals. But Litvak Group members reach higher commission splits sooner than working directly with the firm, he said.
“I want them to feel incentivized to do better and try harder,” said Litvak, who has a 65 percent split with the company.
About the brand
Regardless of how commissions are split, it’s clear that groups must bring in at least twice as much — or, in some cases, many times more — business for members to make the same money they would as solo brokers. For this reason, Citi Habitats’ Malin said he usually asks prospective team leaders if what they really need is an assistant to handle administrative duties.
But running a team comes with its own administrative burden, from training green agents to coordinating group schedules to holding weekly progress meetings. Clayman, for example, devotes an hour three mornings a week to teaching sales training classes.
For team members, it’s also difficult to build a name; while they might forge relationships with clients at showings, they don’t establish a track record of closing deals on their own.
Sarah Katz, a former personal shopper at Saks Fifth Avenue who is now a member of the Litvak Group, acknowledged this drawback. “Sara Katz is not going to build up a name in the real estate world, and that’s okay with me,” she said. “I don’t need my name in lights anywhere.”
Halstead’s Richard Johnson spent 18 years as a public relations executive before joining the Louise Phillips Forbes team nearly two years ago and appreciated the idea of working with the established “brand” of a veteran broker.
“It’s never been about me, it’s always about the brand or the product or the service,” Johnson said. “I look at it the same way here.”
But not every team member operates with the same mind-set, and the entrepreneurial qualities that make a successful broker are the same ones that motivate a group member to branch out on his own. In some ways, team leaders are simply training their future competition.
Last month, Elliman’s Iman Bacodari and David Cooper left the Jacky Teplitzky team after working with the noted broker for seven and eight years, respectively. Neither broker would explain their reasons for opting to go their separate ways, since they are still with the firm. Teplitzky did not return requests for comment.
As for Alexander, he doesn’t appear worried that his teammates — his brother and an Elliman colleague — will go solo anytime soon, although one longtime friend decided not to join the group at the last minute. He looks at forming a team as a necessary step to becoming one of the city’s leading brokers.
“If you want to be competitive today, and you’re really trying to be the top agent in the city, I think you need to have a group,” he said. “It’s the only way to capture the most market share.”
Sunday, April 01, 2012