Shiny Object Syndrome - Choosing Your Real Estate Brokerage in NYC💥

If you have been following my real estate progress, you will know that I have been ardently following the philosophy of "follow through and micro objectives". I talked briefly about starting over as a fledgling and solely focusing on the basics till I become more advanced. I correlated this with my real estate venture in NYC, and how I was only focusing on 1 step at a time. At the time I was in the "finding a real estate brokerage" phase. Today I will be talking about shiny object syndrome and how it kills progress. Towards the end I will talk about what you should know about the New York City real estate business when starting as a new agent.

I believe follow through is one of the hardest things to accomplish over the long term because we are in a world where information is easily accessible. Since the advent of the internet, by pioneer degenerate Al Gore, culture has moved into one where attention is pulled in every direction by social media and advertisement. Facebook ads have been supercharged to target by demographic, and online marketers have been super successful at it. As a result, people like Tai Lopez or Grant Cardone have been able to profiteer off of gullible plebs who are longing to make a name for themselves. Only a minority of these people have been able to follow through on Lopez's 67 steps or Grant Cardone's "The 10X Rule". They simply haven't been able to follow through on one mentor or system, and they developed shiny object syndrome.

These people tried such systems and gave up after only a few years because their risk aversion and fear of failure kicked in; believe me, I am speaking from experience. The reason why they failed was because they hedged their bets with so much information. They moved on too quickly to the next system or mentor because they didn't have the patience to concentrate. We are in an age of immediate gratification and messaging that conveys to people that their self worth is based on their net worth and in which age they did it at. On YouTube people are constantly flaunting their material possessions and bragging about how they achieved it when they were only 18 years old. This causes a sense of urgency in people to duplicate their successes by purchasing the systems being sold by such gurus.

Dial it down and focus on the basics. Read one book at a time, and read the ones that have withstood the test of time. "Think And Grow Rich" by Napoleon Hill or "Living The 7 Habits" by Franklin Covey have been popular books that helped millions of people accomplish the things because they were simple and easy to read. They also didn't shill or flaunt any particular type of branding in a salesy marketing sense. Also, focusing on a strengths-based career is important, but follow through on decision making is more importanter (sp).

Follow through on important matters such as career choice is crucial because it leaves no other option but to get good at it eventually. It scales down the decision making so deeply that the timeline of when one finally becomes good at it is moot. It forces one to get good at their career decision and eventual success comes. It might be in 2 years or it might actually be in 20. The good thing is that the more one does something, the better he gets at it. This bypasses the bottlenecks of fear-based hedging and moving on to other career paths ala "path of least resistance". Choosing the path of least resistance ironically causes more friction and wastes even more time than if one were to stick with one career path over the foreseeable-obscenely long term. It bypasses any sort of resistance by chunking down the roadmap into steps. Doing so causes one to be one-track minded and evade the noise.

Like I said in a previous post Developing Follow Through On NYC Real Estate: choose your career path and stick with it as if you were choosing your first Pokemon on Version Red. When you first started the game, you were given 1 choice among 3 options: Bulbasaur, Squirtle, and Charmander. When you were 7, this was the most difficult decision you had to make because each Pokemon evolved into really cool beasts later on. They also had different strengths and weaknesses, and developed into really OP chars later on. Nevertheless, you ultimately had to choose one Pokemon, and you eventually beat the whole game anyways by beating all of Elite 4's asses using this Pokemon; so why hedge? Likewise, follow through and eliminate the bullshit ass Shiny Object Syndrome. You can get the other 2 Pokemons much later on by trading for it anyways.

I said in a previous post that I am concentrating on one aspect about the real estate business at a time, in phases, because it allows me to hone in and focus. It also causes me to have tunnel vision and create micro objectives such that I have no choice but to accomplish it. I don't have any time to focus on the negatives. Starting the real estate business, with no other back up plan, requires a high degree of risk tolerance. The real estate market biz in NYC is shrewd and requires a lot of strategic thinking in order to position one for success. Right now I'm at the choosing brokerage phase, and after interviewing with a number of firms around town, I narrowed my decision making to 2 digital realtys. Before I get into that, I'll phase this into parts: Teams vs Digital, Associations, and Commission Splits and Fees

Teams vs Digital

The selling proposition that most traditional firms employ is that they have a wide network and are part of a team. They tell you that their extremely low commission split, of as much as 50/50, is due to the costs related to brokerage upkeep; technologies; and training. As a result, there is often a variety of fees, like onboarding or desk fees, in many traditional firms.

Hybrid firms, like Keller Williams, employ a highly incentivized commission split at 70/30%, but incorporate ancillary costs for doing business with them and their wide networks. They also boast expansive training material for new agents and really try to sell you why you would be successful if you were to team up with them.

Digital firms such as EXP Realty or REX Homes are cloud based brokerages that employ streamlined autonomous brokerage services for real estate agents and their clients. Since they do not have physical upkeep, they are allowed to incentivize agents with up to 100% commissions. But, since they do not have a physical footprint, there are no mandatory team meetings or 1 on 1 trainings.

The differences between firms whether digital or otherwise are competitively different from firm to firm and franchise to franchise. Each franchise usually employs the standards for the HQ brand, but they have different rates based on the location. Sometimes the owners of such franchises decide to waive some of the standard practices of the larger company by offsetting some of the fees.

The selling proposition for traditional firms is in the brand name, networks, and training for new agents. They want to sell you that their company is better for your growth starting out, and they usually do this by telling you that 100% commissions of 0 is nothing if you don't have anybody to sell it to. This plays on your fear so that you choose them over competing digital brokers that offer you 100% commission splits.

One of the main selling points for some firms, digital or not, is the ability to take all of the clients you have retained during your time as their agent. This is a big one because most traditional firms have the right to keep your clients should you decide to move to different brokerages. All of the time you have spent working to build relationships is now lost because you have a contractual obligation to give them all of your clients after you jump ship. Hybrid companies like Keller Williams allow you to keep your clients should you leave their stable.

I'll get into costs later on, but usually team training and usage of physical buildings or desks have an innate cost. They are usually taken in the form of low commission splits that favor the company or are literally taken by upfront payments once you sign the papers. Keller Williams in NYC can have university costs (for the KW University platform) as high as $420. In other firms such as Century 21, they have technology fees every year that amount to as high as $345 in one brokerage in Queens, NY.

Cloud based brokerages allow you to work from anywhere you want. They also give you higher commissions of as much as 100%. Also, many such brokerages have built up their online platforms so that they are accessible to their agents 24/7. Traditional firms have this too, but online brokerages might be specialized in this area. Agent support might favor the traditional firms because, since you are part of a team, they have more incentive to answer your phone calls on time or make sure that you are learning all of the things correctly. However, if you choose your digital brokerage correctly, agent support should be decent. Many digital only realtys employ experienced agents of at least 2+ years; they do this because they want to lower the risk associated with brand new agents. But if you dig deep enough, you will find digital realtys that accept brand new agents.

In the information age, you want to decide whether mandatory team training meetings in traditional or hybrid firms, for well-known and respected brand names is worth the price tag. Conversely you want to figure out if doing business with a digital realty, with optional webinars and cloud-based trainings, is the better option. In my personal opinion, YouTube is filled with training material from successful realtors; you will be successful if you put in the time. But if you were to join a firm for the foundational building blocks, do your fundamental research on the team and make a calculated decision based on what you find. You will have less errors if you work with experienced brokers, since real estate is a highly regulated field. The question you should be asking yourself is "Am I confident in myself that I will do whatever it takes to learn this shit on my own, or do I need help by being involved with a team to build my confidence?"

Associations

Nobody talks about this. Not even experienced agents talk about how crucial being part of an MLS association is, and it boggles my mind. I wished they would have spoken about this before I had started on my real estate endeavor, but a part of me is glad they didnt because that means there would have been more doubt in my head going into it.

MLS stands for multiple listing service. This association creates a database of all inventory in the market that is affiliated with them. This is an important association because it allows members to cobroke on listings, or be able to use their databases to scour for potential leads. They can also use their databases to find potential homes for buyers, or to look for expired listings to contact. Different associations were formed because they either cater to different markets or have power in numbers. Being a part of such associations enables one to use the networks as a referral system and etc.

There are numerous different associations in NYC that a firm can be member to. The most well known currently are REBNY and LIBOR. HGAR is also popular but it is nowhere near the realm of REBNY or LIBOR. 

The main database for Manhattan is REBNY. REBNY brokers usually target the wealthy areas of Manhattan, parts of Brooklyn, the Bronx, and are encroaching into Long Island City territory. The curious thing is that while REBNY is the largest MLS for Manhattan, it is not affiliated with the National Association of Realtors. The NAR gives member firms the privelege to call themselves Realtors, so to bypass this, many REBNY member firms also are members of HGAR (an NAR affiliate).

The main database for Queens and Long Island is LIBOR. LIBOR brokers usually target all of Queens, Nassau & Suffolk Counties, and parts of Brooklyn. LIBOR is an affiliate of NAR, so affiliating members are able to call themselves Realtors after being designated as a LIBOR associate.

Many member firms are part of both REBNY and LIBOR, but being part of two MLS databases means that their salespersons working under them must be signed up to both databases. This requires hefty upfront costs yoy. As a result, many salespersons are given the difficult decision to choose a member firm that targets a few main locations and is a part of only 1 MLS. You have to figure out, if as a new agent, you are able to sell high priced luxury homes in Manhattan; or if starting out as just a LIBOR associate will be better since those homes typically sell or rent for less.

Being a member of an association as a new agent is important because there are upfront costs associated with them, and they also have referral power in numbers. You are given the ability to leverage these networks by being a part of them. Sometimes other agents won't work with you or give you your commission simply because you were not a part of their MLS association. Additionally, being a part of the NAR can give you the title of Realtor, which gives you more credibility in the consumers eyes. Choosing to go the luxury route in Manhattan real estate will be tricky because REBNY is the dominant force in that network, so you might also have to pay to be in HGAR to be designated as a realtor.

You have to figure out what you want in a real estate firm, and where you see yourself scaling in the long term. If you only see yourself targeting homes in Queens, than a LIBOR only firm is needed. If you want to scale to Manhattan someday, perhaps you will have to find a firm that has both designations. Or you can choose to align yourself with a Manhattan only brokerage, but choose to target Queens as a free-agent. 

Commission Splits & Fees

 

Keller Williams 

Costs:

• 70/30 split - option to move to 100% if cap is met for the year
• $395 on-boarding fee (Manhattan)
• $400 approx for KW University platform & books
• Desk fees (optional)
• MLS dues (prorated)
• Up to $125 monthly technology fee (for apps such as Slack and Nestio)

Benefits: 

• Retain all clients if you move brokerages
• Good training platform and networks
• Ability to develop residual income from referred agents
• Ability to develop KW approved partner businesses (such as KW keynote speaker) 
• Networks and ability to sell/refer in numerous states

Coldwell Banker

Costs:

•  6-9% franchise fee off the top of commissions
  • usually 50/50 - 1/2 of 9% is 4.5% 
• No desk fees for some or all locations
• MLS dues (may be prorated and split by broker)
• 60/40 split  

Benefits: 

• Good training program
• Networks and ability to sell/refer in numerous states
• Global exposure

Douglas Elliman 

Costs:

• 1st year REBNY dues: $325 OR
• 1st year LIBOR dues: $755 (non-prorated) 
• Errors & Ommissions fee
• 60/40 split

 Benefits:

• One of, if not, the highest grossing real estate brokerage(s) in NYC
• Networks and ability to sell/refer in numerous states 
• Global exposure

Century 21 

Costs:

• $375 Yearly technology fee 
• MLS dues (prorated) 
• Errors & Ommissions fee
• No desk fees
• 50/50 split 

Benefits 

• Trusted brand name
• Networks and ability to sell/refer in numerous states
• Ability to contact each branch location and request open desk 
• 24/7 office access with private key code

VORO Realty 

Costs:

• $99/mo for REBNY MLS association
• $89/mo for no MLS 
• $79/mo for LIBOR
• $79/mo for HGAR 
• MLS Dues for chosen monthly plan
• $200 one time activation fee
• $20 transfer fee (for moving brokerages)

Benefits:

• Digital work-from-anywhere realty
• Agent support and 1-1 training if requested
• 100% commission split
• Errors & Ommissions included 
• Keep clients
• Affiliated with mortgage banks/lenders
• No fees

Next I'll talk about which firm I chose and why:
I Chose __ Realty (Big Reveal)

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