Real estate brokers are teaming up to face the real estate downturn.
Brokers who have worked independently for years are now forming teams to help survive an economy that requires more work for a smaller payoff, experts said.
“I think it’s really the only solution, unless you want to quit,” said Terry Naini, a senior vice president at Prudential Douglas Elliman who works in the company’s Brooklyn Heights office. After five years of working solo, she is now in the process of forming the Terry Naini Team.
Teams are not a new concept in real estate. For years, prominent agents like Elliman’s Jacky Teplitzky and Ilan Bracha and Brown Harris Stevens’ Elaine Clayman have formed teams of agents to help manage their many exclusive listings.
But now that the economy has turned, it’s harder to make a living as a solo agent, prompting previously independent agents to form new teams.
Naini came to the realization this winter that a team was necessary to help her handle the backlog of inventory caused by the real estate slump.
“A year ago, it would take one week to a month to get a listing into contract,” she said. “Now it can take six months to sell a property.”
While the listings take longer to sell, they also require a lot more work than in the past, with more marketing and negotiating necessary for each deal.
“It’s very busy, but there aren’t necessarily as many deals,” she said. “People are coming out and making appointments, just not pulling the trigger. Or when they do, it’s an unrealistic offer.”
Naini got so busy that she had to start turning down listings, and couldn’t service the clients the way she wanted to. “I realized I couldn’t continue just by myself,” she said.
In February, she started recruiting for her team, which will include her assistant and four Elliman agents who will help her run open houses and respond to client inquiries.
John Dolle, a rental agent at Century 21 NY Metro, had a similar experience. After leaving the team where he got his start, he operated on his own for several months, but soon realized that he wasn’t able to keep up with all his showings.
“There [are] only so many places one person can be at a time,” he said. That’s particularly true in the current real estate market, where rental commissions are lower, since most brokers’ fees are paid by landlords rather than clients. Meanwhile, Dolle said more of the apartments he rents are below $2,000.
“You really have to do volume now to make a decent living,” said Dolle, who is currently hiring agents for his new team. He plans to start with one to two agents, then building it to four or five. He hasn’t yet picked a name for his team.
Teams are advantageous for both the team leader and the members, said Marc Lewis, the president of Century 21 New York Metro. “For the team leader, they can do more business because they have a lot of people showing [units],” Lewis said. “For the new people, it helps them learn the business.”
Joining a team helps new agents develop a client base, work with an experienced agent and learn marketing techniques.
“When you first start out, it’s really hard to break into this business,” Naini said. Joining a team “helps them get business they wouldn’t have had.”
She added that when she gives listings to members of her team, they have access to more resources for advertising than they otherwise would have.
Since real estate brokers are independent contractors, it’s up to them whether to form a group or not, said Lewis, though he prefers to work with teams. “If I have 150 people renting apartments and they’re all in teams, I can deal with 10 to 20 team leaders rather than all 150 people,” he said.
Other agents who are now forming new teams include longtime agent Jay Siller, an associate broker at Century 21 NY Metro, and Elliman’s Jacquelyn Lew.
How a team is structured is entirely up to the group head: while some are rigidly organized, others are more loosely affiliated, and others are just partnerships between two brokers, like Elliman’s well-known pairing of Leonard Steinberg and Herve Senequier.
“You’re running a business within a business,” Lewis said.
The team leader also decides how to pay his or her subordinates, though many don’t divulge how team members are paid. Dolle said he’s thinking about a 70-30 split with his team members, with 30 percent of commissions (after the portion that goes to Century 21) going to him and 70 percent to the team member.
It will take a long time for him to train the agents, which will detract from his productivity in the short term. But he views it as a worthwhile investment.
“In the long run, it makes so much more sense,” Dolle said.