Small real estate firms in the city face a particular challenge: often, they invest time and money in training new agents, only to later lose them to bigger firms.
Barak Dunayer, head of the 40-agent Manhattan residential brokerage Barak Realty, is testing out a new way of combating this problem.
In an elaborate, aviation-themed presentation today at his Upper West Side office at 237 West 72nd Street, Dunayer explained that his agents will now receive cash bonuses for productivity and other, more subjective qualities, such as loyalty and customer service.
From now on, for example, Barak clients will be asked to give feedback about agents once a deal is completed, ranking them in terms of customer service. The agent with the highest ratings at the end of the year will receive a check for $2,000. In addition, the company will now pay a $250 referral fee for agents who bring new agents aboard, and will give the referring agent 10 percent of the first $20,000 the new agent earns for the company. And in an initiative Dunayer calls the Agent Productivity and Loyalty Program, the company will make contributions to retirement accounts for the five top-producing agents each quarter, and continue funding the accounts as long as the agents remain highly ranked within the firm.
To emphasize his point, Dunayer handed out nearly $14,000 in surprise bonuses to agents and staff members during the course of today’s presentation. The incentives will help the company “fly as high as we want,” he said, donning a pilot’s cap while staff members dressed as flight attendants handed out peanuts.
It’s rare for a real estate firm to offer bonuses in addition to agents’ commissions, let alone give payouts for intangibles like customer service.
“This is the first I’ve ever heard of it,” said new Barak agent Chuck Sage, who formerly worked at Prudential Douglas Elliman. “Nobody does that.”
The intent of the program, Dunayer said, is twofold. First, he hopes it will help foster behavior he wants to encourage, like putting the customer first. But it will also encourage agents to stay with the firm.
“I know the competition is calling our agents every single day to try to woo them,” Dunayer said. In the decade since he founded in the company out of a 300-square-foot studio apartment, the company has grown to encompass two offices, but along the way he’s lost a number of agents to other firms. “We can’t build a business with high turnover,” he said.
With the new program, “I think they’ll be inspired to stay,” Dunayer said, adding that the idea came to him during a Saturday morning jog. While the company has always given its agents awards and recognition, he realized that good behavior needed to be encouraged more directly, with “substantial cash rewards.”
And since the first quarter of 2010 ranked as the company’s best ever, he said, now seemed like a good time to start.
Already, the method seems to be working.
Dunayer’s innovation is proof that the company “puts the agent first,” said Jeffrey Tanenbaum, Barak’s top-earning sales agent for the first-quarter of 2010, who received a check during the ceremony.
“The company investing in the agent is sealing the deal, so that the agent will stay,” said Tanenbaum, a doctor who got his start in real estate in 2006, and said he has been courted by other firms. “Companies that share the wealth have a high retention rate,” he said.
“It’s very good for business,” Sage said. “It shows that [Dunayer] cares for the staff.”
Barak may have his work cut out for him as new rental and sales brokerages — often with new business models — have popped up with increasing frequency since the real estate downturn began.