The chiefs of New York City’s top residential brokerages turned out to talk inventory, broker tactics and industry newcomers at a panel event hosted by luxury lifestyle magazine Haute Living yesterday – and boy, did they have a lot to say.
Speaking at the Upper East Side’s exclusive Core Club, Douglas Elliman’s Dottie Herman, the Corcoran Group’s Pam Liebman, Dolly Lenz of eponymous firm Dolly Lenz Real Estate, Halstead Property’s Diane Ramirez, Town Residential’s Wendy Maitland and Stribling & Associate’s Elizabeth Ann Kivlan went toe to toe on the biggest issues facing their industry today.
Read on for the highlights of their discussion.
On newbie brokers and their tactics:
Liebman: When I first came to Corcoran, we had 30 people and we have thousands now. Some of our top people from 20 years ago, you don’t even know who they are today. They used to say things to me like, “Why are you bringing in so many new people? I hate all the new people.” I looked at them and just sort of laughed. I said, “You better watch out for them.”
Maitland: You can’t sit on your laurels at any point. You need to work on sustaining relationships. It takes a long time to build a relationship but you can lose it in a heartbeat. The thing about up-and-comers that they’re doing wrong is that they don’t know what they don’t know. There’s wisdom that can only be learned with experience over the arc of time. There’s nothing that will fix that.
Herman: Yes, you can’t replace experience. However, you can’t discount the person that has no fear and doesn’t know all the negative things that could go wrong.
On the craziest thing they’d done to get business:
Maitland: I dropped off a lease at an apartment when I was newly in the business. The guy was directing a film in this great apartment that had a swimming pool and he had two other apartments downstairs. I said “I can sell these.” I called the owner in Israel and told him the price I could get. I got it sold in two months at the price I told him. One of the apartments I could only show between 12 and 12:15 [p.m.] on Fridays and I didn’t know why. Afterwards, the [buyer] called me and said, “Why didn’t you tell me you were selling me a bordello?”
Liebman: This could be the stupidest thing I ever did. It was early on in my career. I was dealing with a very expensive co-op down in Soho. It was a couple million dollars and back then, that was a lot of money. The owner was literally crazy, a horrible guy. I had gone to meet with him and he met me in his bathrobe, which was open. I went back to my office and told my assistant the letter I wanted to send him. It said “you are the most repulsive, horrible, unprofessional…blah blah.” Then I wrote my real note, which said, “so nice to meet you.” I faxed the wrong one. To this day, I don’t send anything without really double-checking it.
Lenz: Michael Shvo was teaching me how to do things more aggressively. He was the young guy and I was the old lady and we were going to get into this together. When Michael Shvo did a lease, he put sticky glue on a tooth pick, stuck it in the lock, he said you break it and then no one else can get in so you get the deal. Talk about the aggressive and the new, it’s really true. The new people just work harder but they’re really over that line a little bit.
On things that other brokers do wrong:
Liebman: They sell themselves too cheaply and, in their desperation to get property in a market that is very compressed with inventory, they’ll do anything to get the listing. It’s damaging all around but that’s what we will always have to compete against. They do that rather than really expressing to a seller why they add value to a transaction and why they deserve to get paid a standard fee. We all have a certain value proposition that companies bring to the agents and agents bring to the sellers. Sometimes I’ll see an agent that has an incredible iPad presentation and a wonderful book they’ve put together and then someone else walks in with a piece of paper like this [waving around an A4 piece of paper]. You’ve got to grow up. You’ve got to do it right.
Maitland: Brokers are going in and asking for listings. We always teach people to go in and be confident that they’re providing a valuable service. You’re not asking for a favor, you’re providing a valuable service and you’re a trusted professional.
Ramirez: Thinking you can do it on your own and convincing the sellers that they shouldn’t be giving it out to the whole community. You don’t ever get your best price when you whisper a listing out. I fear for that going forward.
Kivlan: Someone said to me recently, “70 percent of my business never goes on the open market.” That’s not how supply and demand works. It goes against all the basic principles of economics. There used to be the 10 top brokers in real estate in New York and everyone knew their names. If you look at who is selling the biggest houses of the week now, they’re often people you may not know. They may be someone’s cousin’s husband’s brother’s boyfriend. It’s really important to get it out there because you never know who is going to sell it.
On new technology and discount brokerages changing the commission model:
Lenz: There is a lot of downward pressure on commissions. If you look at something like [online brokerage] Redfin, they got a $50 million round of financing. That does not portend well for us. If I’m them, I’m going to come out and say, “Hey, they’re charging you 6 percent? I’ll charge you 4 percent.” They make [selling a home] look like a very simple process and it may or may not be a simple process. I don’t think it’s a threat but it will cause downward pressure on commissions.
Liebman: I’m not afraid of Redfin or any of these discount brokerage models because they don’t work. I believe what makes a company (big or small) great is your agents. Until they figure out a way – and they’re not doing it with a discounted commission – to hire the best agents in New York, they’re not going to be a threat. It’s like when people said the Internet was the end of brokers. Anyone can go on StreetEasy and look at information, but who is going to bring that information to life? It’s like you went on a dating site and the guy’s profile said great looking, independently wealthy, full head of hair and washboard abs. That sounds great until you realize he’s wealthy because he lives with his mother, his hair is a toupee and the abs are under 50 pounds of, you know.
Herman: If the only thing you think about is who’s the cheapest, and you couldn’t care less about the service, then I’m not really even going to have a conversation with you because there’s nothing to talk about. Good luck to you. They’re not something to compete with.