There is no doubt that the glitz and glamour of larger real estate firms is intriguing. However, when it comes to building one’s career in the sometimes cutthroat, chaotic world of New York City real estate, a smaller firm offers numerous and often more desirable benefits.
At a boutique brokerage, there aren’t multiple rungs of bureaucracy through which agents must climb in order to gain access to the best listings. Without a pre-established hierarchy in place, agents can enjoy a great degree of autonomy in their work. There is less pressure on each individual: agents at smaller firms often have more freedom to create their own schedules. In addition, they generally work closely with principals, giving them greater access to resources and experience. Direct access to management also facilitates negotiation on a case-by-case basis. For example, if an agent works on an especially difficult deal that he or she believes deserves a higher split, it’s much easier to make the case directly to management. Agents at boutique firms are integral contributors to revenue stream, so management generally has a greater interest in accommodating them. The smaller the firm, the more important everyone is to the greater good.
Because boutiques typically have much lower overhead costs, it is not unusual for agents to receive more generous commission splits. Other perks such as a part-time assistant may also be more available to everyone at small firms. Although agents who are among the top five percent earners at any of the large firms do well staying in place, those in the top 30 percent often can benefit by making the move to a boutique. Agents peaking at a 60 percent split can potentially negotiate a 70 or 75 percent split at a boutique. This is why it is not uncommon to see agents who have worked at large residential brokerages for many years decide to take their knowledge and network to a smaller firm where they can enjoy a higher split as well as a more convivial atmosphere. Boutiques enable agents to be large fish in small ponds by securing more leads, perks, and publicity for themselves. If agents reach a very high level of success at a boutique, they may even be offered part ownership in the company.
In addition, many of the smaller firms already have built-in client bases developed over time by the principals. After all, the most successful agents must have strong personal relationships with their clients. In line with the relationship-driven nature of these brokerages, trust is paramount in a boutique. Principals and agents must trust one another as many small firms consider this to be even more important than making the numbers. When making the jump from a large firm to a small one, agents should keep in mind that they may lose clients, as certain people are only interested in big firms with brand-name recognition. However, agents making this move should also recognize that they will gain clients who are concerned not with labels, but with trust and one-on-one interaction.
From the client’s point of view, smaller firms may have more to offer them as well. At a larger company, clients may be left in the hands of less experienced agents who are juggling numerous other people at any given time. However, agents at smaller firms often help their clients to feel as if they are truly being taken care of by providing each individual with personalized treatment.
With that said, boutique brokerages are not utopias and larger firms do come with a number of benefits. Agents at large firms can always trust that they will be paid on time and that any disputes will be dealt with amicably in a systematic fashion. Resources such as in-house legal counsel are typically only available at larger companies, meaning that agents at boutique firms need to be incredibly careful to avoid legal issues, as their companies may not be able to afford to stand by them legally. Small companies also run the very real risk of being bought by larger companies, which could be a factor to consider for agents thinking about making the move to a boutique firm.
As with anything, there are certain downsides to working at a boutique brokerage versus a larger, more established firm. However, agents searching for increased professional development, greater financial benefit, and quality relationships with clients may find themselves wanting to call a boutique brokerage home.
Adam Frisch
Sierra Residential
875 Avenue of the Americas, Suite 1808
New York, NY 10001
afrisch@sierranyc.com
www.sierraresidential.com
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