Northfork Properties

Rethinking Commissions

 
Posted on Sunday May 15, 2011 6:28 PM
by Joseph Kazickas 2 Comments »

It isn’t easy to build a great lead generator like hamptonsrentals.com. The website keeps us busy servicing the enquiries we receive. By phone, or via email, the work of converting our leads into closed transactions is non-stop. Especially this time of year.

In order to succeed you need thick skin, organizational skill sets, a work ethic, and the desire to earn money. Each interaction must also be framed as an investment in the future.

Real estate brokerage business models that evolve in the 21st century are bound to be disruptive to the status quo. We already know that one website, our own hamptonsrentals.com, is having a major impact on how the local vacation rental market is serviced. We see it in the behavior of our competitors. And customers.

But a great lead generator, which serves as the foundation of your business model, creates problems as well; problems which one wouldn’t readily anticipate.

One area we needed to reinvent was agent compensation.

Traditionally, an agent’s share (%) of the commission he receives on a transaction increases as the amount of gross commission he has brought to the Broker grows. Historically it started at 50/50, and went up from there. Always worked well, and seemed fair.

But what if your business model is built around lead generation? And it’s successful? What if the emphasis on service becomes just as important, if not more so, than the commission potential itself? Some mechanism needed to be developed in order to encourage agents to understand that the transaction itself had a value, irrespective of it’s underlying potential monetary value.

We decided to move to a point system for determining an agent’s share of the commission. The more points an agent earns from any of three pools of opportunity and performance (listings which transact, leads that are converted, and cumulative gross commission dollars earned) the higher that agent’s split becomes.

It seemed too simple to be faulty. So that’s what we decided to do.


Nest Seekers. A Promise Kept.

 
Posted on Wednesday May 11, 2011 11:49 PM
by Joseph Kazickas Comments Off

A sort of “Big Story” broke last week. The Engel and Volkers Hamptons franchise was taken over, and rebranded, by Nest Seekers, Intl. We wish them luck and look forward to working with them.
But it brings a scene back to mind.
Shortly after Rosehip launched hamptonsrentals.com a few years ago, we received a call from, and had a great visit with, Eddie Shapiro, the power behind Nest Seekers.
Things hadn’t gone especially well for his efforts to penetrate the Hamptons real estate market at the time. But he made a pledge to us that he never abandoned an initiative.
Wasn’t a threat. Just conviction.
The opportunity presented itself and he moved on it.
The Hamptons real estate pie is big enough to accommodate anyone. But what enamors us to firms like Nest Seekers is their belief in the flow.


Zoning and Reality

 
Posted on Saturday May 7, 2011 2:35 AM
by Joseph Kazickas Comments Off

Zoning laws surrounding the rights of landlords and those of the community at large are a hodgepodge. Enacted in large part to preserve the peace, safety and quiet of the community, zoning codes dealing with rental properties were written for a different world than the strapped one we currently endure.
Here’s why zoning codes which limit landlord rights regarding short term rentals should be re-visited.
Short term rentals have no incremental impact upon our summertime population.
Fresh wallets are brought into our economy more frequently.


Shifting Forces in the Rental Market

 
Posted on Thursday May 5, 2011 8:24 PM
by Joseph Kazickas Comments Off

Most all agents would agree that the 2011 Hamptons rental season has strengthened as compared with 2010, and certainly 2009. Weak or strong, one thing is sure: as the calendar moves into May the dynamics of the market start to shift.
Some owners of un-rented properties begin to become more flexible, others start to worry, all at the same time as rental customers feel the market shifting to their favor as they pursue a “deal”. We see it every year. The shifting battle lines are driven by supply and demand, the calendar and the weather.
By this time in the rental season most landlords who need to rent already have, and customers willing to pay for quality are looking forward to an easy going summer, plans all made.
This leaves properties, that may have been overpriced to begin with, chasing the market down; and those customers seeking a bargain, smelling blood in the water. Especially as the beginning of the Memorial Day to Labor Day summer is only a few weeks away.
Not to be ignored however is the huge pool of customers who are seeking shorter term rentals. Our experience last year was that we closed as many rental transactions after the July 4th holiday, as we did prior to it.
Many landlords earned more off their rental properties by accommodating this class of short term tenant, than they would’ve had they rented only to longer term customers.
One way or another we see enough demand in the market place to keep brokers busy until well into August, but only if they are willing to service a generally less lucrative market.


Something Off Topic

 
Posted on Thursday May 5, 2011 3:00 AM
by Joseph Kazickas 2 Comments »

We’ve just returned from a very special place in the Bahamas called Cat Cay. Cat Cay is a private island owned by the members of the Cat Cay Yacht Club and is located 25 minutes east of Fort Lauderdale, FL. Cat Cay is a very unique destination. Here is how it looked after we left earlier this morning in a Cessna Caravan from about 7-800 ft. altitude.


$43 million ‘Tear-down” Approved

 
Posted on Thursday April 28, 2011 3:37 PM
by Joseph Kazickas Comments Off

Here’s one that numbs us. The new owners of the oceanfront Sagaponack estate once owned by former New Jersey Governor Jon Corzine and his now ex-wife plan to raze the 6,200-square-foot house they paid $43.5 million for just last year, making way for a neo-Georgian design nearly double its size that affords better views of the sunset, according to the project’s architect. Read more here, courtesy of 27east.com.


How Professional Is Your Real Estate Professional?

 
Posted on Tuesday April 26, 2011 1:30 AM
by Joseph Kazickas Comments Off

In an earlier post we speculated on how much money a real estate agent earns. We’ll be the first to admit that the median professional’s income would be a better measure than the average, but only the IRS knows that value.

Honestly we would rather not know.

The question raised is the following: how professional is the agent you are working with? If the dollars suggest it isn’t likely your real estate agent depends upon real estate for his livelihood, then how valuable is he to you, if he isn’t completely committed to his profession? Did your agent come to you only as some close friend’s friend? Or perhaps as a random assignation? Is it fair to conclude that an agency with hundreds of agents has a greater percentage of the hapless 80%? Are you in bed with one of them? How would you know?

In our opinion it doesn’t really matter.

As a buyer or tenant all you want is access to the listings. As a seller or landlord all you want is results. So if you aren’t happy with the real estate “professional” you are working with, you can always engage another one.

In the age of instant and ubiquitous information, consumer loyalty is fleeting. Today’s consumer could easily be better educated than the professional he works with.

In the Hamptons real estate market, he probably is. So how does a real estate sales person win this battle for customer loyalty? Among other ways, by taking command of the dialogue, from the first point of contact.


MLSLI Local Radio Spot…Missing Three Words

 
Posted on Saturday April 23, 2011 6:48 PM
by Joseph Kazickas 1 Comment »

“…including the Hamptons.”

MLSLI -Mixdown


The Challenge of Data Integrity – 2

 
Posted on Saturday April 23, 2011 6:16 PM
by Joseph Kazickas Comments Off

Not quite on the heels of our April 14 post about the challenge of maintaining accurate data on the availability and pricing of rental properties, comes news that the market reports issued by Douglas Elliman/Miller Samuel, Brown Harris Stevens, Town and Country and Corcoran, may be flawed to the point of being meaningless. As reported by George Simpson on his blog www.eastendlistings.com, the source data sold to the four agencies by The Long Island Real Estate Report, a local data management company, is incomplete. This is no small matter.

What’s ominous to the veracity of ANY of the reports published by these agencies is that they, in turn, each contain differences in their own reporting of data. That might be  because the agencies parse the data in different ways. So long as they are, for each window, comparing the same apples with apples, and oranges with oranges, one might be able to live with the differences between the reports. But then, you wouldn’t know which one to believe. Which report provides the most accurate accounting of the market?

It turns out likely none of them does.

How hard is it to collect and process accurate data about home sales? Not very, it seems: regular visits to the county clerks office with computer to computer data transfers, parse by tax map number and usage, and that should do it.

The fact that significant differences exist between the data collected by The Long Island Real Estate Report, and the data collected by Suffolk Research Services calls everything into question.


A Marker Day

 
Posted on Thursday April 21, 2011 6:58 PM
by Joseph Kazickas Comments Off

We will never but openly advance our agenda, or proclaim our milestones. So today we announce the planting of our first South of the Highway sign in East Hampton Village. At a 70′s era contemporary style house on fast changing East Hollow Rd. Priced fairly at $3,500,000.

"A journey of 10,000 miles begins with one sign."