RESIDENTIAL BROKERAGE: THEN AND NOW
Last month Fred Peters wrote in the Warburg Blog about how real estate brokerage has changed since 1980 when he first got started in the business. I began as a broker in the same year, and Fred’s musings got me thinking about how remarkably different our business was then, and how it has evolved.
In the early 80’s, when 7 room prewar apartments on Park Avenue were approaching $500,000, brokers were mostly providers of information. Fred’s description of us as “ladies in mink carrying keys” is not too far off the mark. Exclusive listings were the exception and not the rule. Sellers would usually list with more than one agency, and each would advertise in the New York Times, while competing brokers worked like detectives using clues from weekly ads to uncover the building, apartment number, and then seller’s name and ultimately phone number to sign up the listing for their particular agencies. In those days, we earned a considerable amount of money in listing fees. Today, listing commissions are nearly extinct at the major firms.
At Corcoran, where I began in 1980, we had weekly listing breakfasts, where over coffee and muffins, we would comb the Times real estate classifieds which we considered our Bible. Then we would set out for about two and a half hours to walk the streets of our assigned territories. We would schmooze with the doormen and supers on our individual routes and develop a rapport with each that lasted for years. My turf was the 90’s from Fifth to Park, and I would crisscross the streets and stop to talk about news in their buildings. We discussed who might sell—who was pregnant, who had died, who was divorcing, and who was being transferred— as we piled up leads for follow-up phone calls and letters. Listing breakfasts ended some time after the mid 80’s.
Before the computer transformed businesses, we stored listing information in thick three ring binders and each night, we had at least two hours of administrative homework. We would get daily copies of updates and new listings, and each night, I would cut and paste strips of information into expanding notebooks. Regularly, we replenished our supplies of glue sticks and reinforcements for our hole punched pages.
Moving to a new world
Information was tightly guarded and rarely shared—if ever—between firms. With the advent of exclusives in the late 80’s, however this began to change. When co-broking became prevalent, good working relationships between co-brokers became all important, and frequently we traded information discretely. It wasn’t until 2004 that co-op selling prices became a matter of public record, and until then, we relied on each other’s good will to exchange closing information. We still do when recorded information lags behind closing dates.
In the early 80’s, when I negotiated on a property, more often than not, I was the direct link between the principals with a buyer on one side of the deal and a seller on the other—and a whole commission was earned when we closed. Today, it’s more likely for a broker to have access to only one of the principals, and to work with a co-broker who represents the other side—and to split the commission.
It was always important to present a property in its best light, though we didn’t refer to it as “staging” in New York until about 2004. I would advise sellers about cleaning, painting and de-cluttering. Often I would often ask a designer friend to come over to help reposition furniture. Today, brokers regularly enlist the services of a professional stager.
Before the Internet, brokers bought print advertising weekly as much to attract buyers as to sell apartments. The same apartment might appear in a single Sunday Times section more than five times, since sellers would list with multiple agencies who each advertised the property making it look to the buyer that there was more inventory to be had than was actually the case. Confused buyers depended on brokers to direct them to properties for sale. Today, print advertising is minimal.
With the Internet today, information of all kinds is readily accessible. Buyers can turn to websites like ResidentialNYC and StreetEasy to see what’s on the market. The public can search ACRIS, the city’s online register, by name or address to view recorded prices, mortgages and filing dates.
When I first entered the business, I worked hard to develop a following, and it’s gratifying that I have a repeat customer and referral base with shifting real estate needs. In the 80’s, I was clever about obtaining listings, was a skillful administrator to organize inventory and customer data, and an intuitive negotiator. Today, even though I have everything I need at my computer fingertips, I’m working harder than ever to demonstrate my value to buyers and sellers. Consumers are smarter, more informed and more demanding. To be successful today, more intellect and greater marketing savvy are required of brokers. We’ve evolved from gatekeepers of information to trusted advisors who analyze and interpret information to set prices for sellers and evaluate choices for buyers. We’ve become skilled at branding and are taking strides to learn about social networking and blogging. Better schooled in ethical decision making, we’re signing up in increasing numbers to earn the new NYRS® credential from the Real Estate Board of New York (REBNY) which recognizes the business and educational achievements of top brokers.
Most assuredly, it’s a different world.