May 2007   >>  return to MAI in the news

Q & A: Going for brokerage
Firm management walk fine line in quest for profits

By Melissa Dehncke-McGill

HIGLIGHTED Manager:
Jerry Weinstein
Founder, President

If location, location, location is the core cliché of real estate success, the second is at least equally sound: Watch the bottom line. The Real Deal spoke to chief executives of Manhattan's top residential firms about running a brokerage in today's market.

Agents constantly push for better commission splits, and technology, space and advertising overhead costs continue to mount. Keeping operating costs down and revenue up is a tough proposition for any business, but it's especially hard in the competitive Manhattan real estate market.

Of course, brokerage heads are finding more ways to make money too, including the "gold rush" of new condo developments. Other firms are recouping some costs of doing business with new agent fees.

an excerpt:

... Jerry Weinstein founder and president, Manhattan Apartments:

What is the most interesting trend you see in the New York City residential brokerage business right now?

The most interesting aspect of the brokerage business right now is the motivation of most companies to continue to grow and expand as quickly as they can. This trend has been going on for a number of years and shows no signs of a letup.

What is the most negative trend in the brokerage business?

The most negative trend is that agents forget that they are the brokers of a deal, and the ones who make the deals happen, rather than the idea that they just "show" apartments through open houses and the opening of doors. They are tending to underestimate the value of their own participation in the transaction.

Are the broker ranks expanding right now or receding?

Right now the glamour of the brokerage business has receded, and fewer people are coming into the field. That requires more competition in marketing and hiring techniques. Still, most companies are looking to expand.

Is there an overrated or underrated part of the brokerage business right now?

The overrated part of the business is the continued drive towards luxury as the prime market, in a city that prides itself on the commonality of all.

The underrated part of the business is the steady presence of the rental business as a strong force in the New York real estate market.