City Connections offers new commission option
August 21, 2009 07:00PM By Sara Polsky
City Connections sales manager Brian Huang
City Connections Realty has become the latest New York City firm to change its commission structure. The brokerage will now offer sales agents the option of receiving between 65 and 85 percent commissions, marketing support and no desk fees.
The firm will also hang onto its current commission model, which offers agents 90 percent of the commission on transactions in exchange for a monthly desk fee of $825 for agents who choose to work remotely, or between $1,000 and $1,325 for agents who want to be based in the office in a "very large cubicle," said Brian Huang, the company's sales manager.
The new commission structure is part of an aggressive recruiting campaign for City Connections, Huang said. According to the City Connections Web site, the company currently has nearly 100 agents.
"I'm guessing…they're hoping to increase their agent count and make their money on the volume," said Kathy Braddock, a partner at Charles Rutenberg Realty, which launched in New York City with a similar model in 2006.
Under City Connections' new model, the commission starts at 70 percent for agents with their own listings and 65 percent for a deal in which the agent represents the buyer. The commission can increase up to 85 percent based on production, Huang said.
If an agent maintains an office desk for $1,325 per month and sells more than $1.325 million in exclusives in a given year, the 90 percent model would generate a larger paycheck than a 70 percent one. For less than $1.325 million in real estate, agents with a 70 percent split would fare better.
"If you are making money, you are doing deals…it makes sense to do the desk fee," Huang said. But "some agents don't feel confident enough to do [$1,325] a month [for the desk fee] and do the higher split."
The traditional commission model allows residential agents to keep half of an average 6 percent commission, with the other half going to the company. The firm in turn pays expenses such as marketing and training.
City Connections is not the first firm to alter its commission structure this year. In February, William B. May transitioned to a model in which brokers can receive 100 percent of their commissions in exchange for a one-time fee of $1,500 plus a monthly $500 fee.
Rutenburg's Braddock said she thinks her firm's implementation of the 100 percent commission structure has led other firms to re-evaluate the way they do commissions, although City Connections moved into its 90 percent commission model in 2004.
"The old commission structure is basically dead in many industries," not just real estate, she said.
RE/MAX pioneered the high-split commission structure nationwide in the 1970s, allowing brokers to keep 100 percent of the sales commission but charging them a fee and expenses.
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Comments
Anonymous
I am going to interview with these people. They seem to know what they're doing.
Comment #1 Posted By: Anonymous 08/22/09
Anonymous
Definitely interview before joining. They are a joke
Comment #2 Posted By: Anonymous 08/22/09
Anonymous
Those fees are outrageous. Charles Rutenburg only charges $99 a month for 100%
Comment #3 Posted By: Anonymous 08/22/09
Anonymous
Good- more NYC companies entering the 1990's. A bit behind, but it's the real estate agents that have been accepting a 50-50 split that need to rethink that decision- they make it possible.
Comment #4 Posted By: Anonymous 08/22/09
Anonymous
#3 How can you possibly compare the two firms so far as services they offer their brokers and the market presence of each firm? Rutenberg is just fine, but you get what you pay for.
Comment #5 Posted By: Anonymous 08/22/09
Anonymous
I have done a few deals with City Connections agents and they have all been very professional.
Comment #6 Posted By: Anonymous 08/22/09
Anonymous
#5 Brokers all over the city say the offer agents a lot of goodies. To me it doesn't make a difference. In this market only the strong will survive. If you cant go out there and grind to get what you want you'll never make it in this business. A lot of top agents today did not need the assistance of their broker and all his goodies to make money
Comment #7 Posted By: Anonymous 08/22/09
Anonymous
Not a good sign at all.
Comment #8 Posted By: Anonymous 08/22/09
Anonymous
It's a revolving door there too.
Comment #9 Posted By: Anonymous 08/22/09
Anonymous
Confucius Says: He who Lies the Best, Gets the Deal........
Comment #10 Posted By: Anonymous 08/22/09
Anonymous
haha #10
Comment #11 Posted By: Anonymous 08/23/09
Anonymous
I wouldnt go there because these people even they dont have the exclusive with large landords when you enter their office the two sisters there will not allow you to call these landlords anymore, they will tell you that they have this or that account and that even though you know some of these people personally you are no longer allowed to call them, so just go to Rutenberg and do or call whomever you want. Why leave a Tyrant to got work for another. plus their $850 desk fee is ridiculous.
Comment #12 Posted By: Anonymous 08/23/09
Anonymous
True True and more Truth, the two cup cakes sisters there run the listings department and they claim to be the point person for many accounts, while these accounts are open listings to any brokerage house, their model is no different than the clown who owns Ardor realty where they will not allow you to call certain accounts even if you been in the business for 30 years. Listen to this advice and stay away form these bozos
Comment #13 Posted By: Anonymous 08/23/09
Anonymous
hahahahahahaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
Comment #14 Posted By: Anonymous 08/23/09
Anonymous
Ken Malian may have to lock the door to keep the Brokers from fleeing to City Connections
Comment #15 Posted By: Anonymous 08/23/09
Anonymous
I would ask to see Signed Exclusives.
Comment #16 Posted By: Anonymous 08/23/09
Anonymous
HAHAHAHAHAHAHAHAHHA
Comment #17 Posted By: Anonymous 08/24/09
Anonymous
another joke of a firm. news please!
Comment #18 Posted By: Anonymous 08/24/09
Anonymous
If you want to be taken seriously, you have to work for a major brokerage firm. If you just want to run craigslist ads, go for it. But you'll never move any volume of exclusives, sales or rentals, this way.
Comment #19 Posted By: Anonymous 08/24/09
Anonymous
Major brokerage firms are ridiculous them selves. Only a hand full do well. The others are just stuck in a nice office. Ive been do this for 17 years and I get taken very seriously and Im a one person firm, me. If another broker ignores me or my bid, I will call the owner directly, which I have done in the past when a Corcoran broker refused to place my bid in with hers. Thus I won. Made her look stupid. I thank Property Shark and me not belonging to REBNY that double edged sword that cuts mostly one way, towards the most money.
Comment #20 Posted By: Anonymous 08/24/09
Anonymous
I know of agents leave for City Connections and not last for more than 2 months. There is a firm that works on growing agents strength at different levels of their Real estate career. Funny how most real estate agents in the city don't realize that the best of athletes coach and train everyday but somehow real estate agents with 1 year or 2 years under their belt don't find a need for this training. You should go where a firm provides coaching, Marketing, SEO optimization outside seminars, business planning and so much more.. Do your research,... Exclusives are mostly open right now. You need support that helps you grow your relationships and save you time on administrative follow-up that will hinder your profit in the long run. Test for yourself, 2 deals a month that you may recieve a higher split on will not bank the 4+ deals that help you build your book of business.
Comment #21 Posted By: Anonymous 08/24/09
Malcolm Carter
How the Charles Rutenberg Realty model is, to quote the article, "similar" to any other eludes me. I joined the brokerage in January after two fruitless, expensive and infantilizing years with a major prestigious competitor that objected to my promotion of my own brand. Differences from other business models: The monthly fee could not be more modest; agents never pay more than $1,500 out of any commission, resulting in tens of thousands of dollars more for me out of my recent $2.2 million sale than elsewhere; the owners and manager could not be either more professional or helpful; we are treated like adults whose chief interest is in building their own business, not someone else's. Charles Rutenberg Realty is similar to its competitors in only one way: Each is a real estate brokerage. I have never been happier in a brokerage and always find myself urging other mature agents who are burdened with outlandish costs and the slim returns of outdated traditional firms to try the best of all worlds, ours.
Comment #22 Posted By: Malcolm Carter 08/24/09
David Schlamm
Lots of "silly stuff" on this thread! This is not a "one size fits all" business. What's good for one one broker may not be a good fit for another so lets not get carried away with one firm being better than another. You, the agent have the power to get your business to the next level so if you are new, go to a firm that has great training. After that then you can decide what firm/culture fits best for you. David Schlamm
Comment #23 Posted By: David Schlamm 08/24/09
Anonymous
One approach does not work for everyone. There are 100 different ways to reach the finish line. Its best to do what is right for you. Important factors when selecting a firm: Setting :: What style setting/atmosphere works best for you ? (ex: competetive in a healthy manner, ethical, professional, small, boutique, cubicle, open, sleezy, cut throat, shady, comfortable, or a bit too comfy in your own shoes, challenging, optimistic, negative, dull, complainers, slackers, whiny, casual in your shorts and or hoochie mama attire, three piece suit, professional attire, energetic, or sitting by the phones waiting for the phone to ring ! Hey, the choice is YOURS ! Have it YOUR WAY ! =0)
Comment #24 Posted By: Anonymous 09/01/09