Well, it’s now official… I’m now a fully licensed real estate agent. I passed all my tests a couple weeks ago and then I interviewed at a few firms and in the end chose Level Group.
New Business Model
Level Group is a part of a new breed of real estate companies that are challenging the traditional business model for real estate companies. These new companies are based on a virtual office business model where the agents are more independent and essentially run their own businesses. The agents find their own clients, pay for their own advertising, and pay their broker a monthly fee that gives them access to listing services, etc. In return the agents get to “keep their entire commission” – though if the monthly fee is low there are transaction fees, but those fees are far lower than the 40 to 60% that’s typically taken out of an agent’s commission by a traditional broker.
The independent, virtual business model was a good fit for me. I like running my own business – I’ve been doing it for the last 10 years now. There are two big players in NYC with this new business model and Level Group is one of them. In fact Level Group (under it’s old name Pari Passu) was the first New York brokerage to go with the new business model.
Level Group’s Advantages
In the end I picked Level Group for a couple reasons. First, they understand that a virtual office business model doesn’t work very well if you don’t have good technology behind it. The other firm didn’t seem to really understand the importance of technology. Second, Level Group’s principal broker and founder (a real estate lawyer) are both personally focused on commercial real estate. While some may see that as a negative I saw it as a positive since commercial real estate is largely rational and numbers oriented. While I had really great interaction with the other company, rational & numbers oriented management just seemed to be a better fit for me.
A Catch 22 That Almost Ended Everything
There was actually a little drama right after I signed up. The first thing I needed from the broker was clarification on how I should handle blog posts. They came back with an observation that nearly ended the entire real estate pursuit for me… Agents can’t advertise other agents’ listings without permission and blog posts about properties (even if negative) are seen as advertising. Websites like Curbed and Real Deal get away with it because they’re not licensed agents.
The Catch 22 was that as soon as I became a licensed agent I was essentially barred from doing frank and honest blog posts about other agents’ listings. The problem is that honest/frank blogging is my marketing strategy to get customers. So if I’m an agent I can’t blog, and without blogging I have no customers – which makes it pointless to be an agent.
Luckily we came up with a solution… When I blog about active listings I’ll be obscure and won’t identify the property. It will actually be a good thing since being obscure will encourage buyers to contact me to find out details.
The second part of the solution is that I’m going to be really conservative and require all the buyers I work with to sign what’s called a buyer’s agency agreement. By default all agents work for the seller, not the buyer – even when they’re working with the buyer looking at multiple properties. (They’re legally subagents of the seller’s broker.) A buyer’s agency agreement changes that – it means the agent works for the buyer. If all the buyers I work with sign buyer’s agency agreements then I’ll never have a fiduciary obligation to the sellers (except when I have listings).
After a property is sold I will be able to identify properties and talk frankly about them as comps – I just can’t do it for properties that are for sale.
Need An Agent?
If you or someone you know are looking for an uptown townhouse and want an agent who’s been through the process and will be frank and honest with you – call me or e-mail me and I’ll be happy to help you in your search – 917-447-2572 / email@example.com
Congratulations, Jay! This is an exciting development – wish you all the best. p.s. I always hesitated signing a purchaser’s agreement when I was in that position, but so long as it’s not for an inordinate period of time I think buyers should be OK with that – some agents wanted 3 months exclusivity and I wasn’t willing to do that…
Buyer’s agency agreements don’t need to be exclusive – at least not in NY.