Dave Liniger, the man who built RE/MAX from a local shop to a global powerhouse, has his sights set on New York City.
The company just announced it has bought back the Master Franchise for the state of New York.
Liniger’s goal in New York is to power up the local brokerages and expand across the state.
It is part of a national plan that has seen the company buy back 16 regional offices from franchise owners.
Liniger has tapped company veteran, Terri Bohannon, to lead a new specialist team that will start a fresh marketing and branding campaign to help grow the New York operation.
“I think they’ll do extremely well,” said Liniger. “Our New Jersey region has been a phenomenal success, we have 20 percent market share in the state. In Pennsylvania, there’s almost the same figure and in New England, too.”
RE/MAX has more than 100,000 agents in offices across the U.S. and 100 countries around the world. Liniger started the company in the 1970’s, and expanded the network of offices by selling master franchises, which set up regional offices.
While RE/MAX does have a Manhattan office, like many franchises before it, the company has never been able to really grow here.
Getting into the cut-throat and fast-paced residential Manhattan scene has been a struggle for firms that are well-established nationally in suburban areas.
Liniger believes the answer is a generational and branding issue, and likens getting a foot in the Manhattan door to transferring to a new high school and trying to be a part of the popular clique.
“The sales people that work in major metro markets — New York City, Chicago, Atlanta, Philadelphia — are very different than salespeople in the suburbs and rural areas,” said Liniger.
“It’s just about getting the right management team, selling franchises to the right people with the right drive and ambition and leadership style.”
Indeed, in the past five years, industry upstarts such as Keller Williams New York, Rutenberg Realty, BOND New York and TOWN have been growing at a rapid clip.
Keller Williams NYC is the New York City master franchise of the Texas-based brokerage giant.
Launched by Ilan Bracha in 2011, it appears to have grown by using an unconventional business model and profit-sharing that gives brokers a 70 percent commission split, and financial incentive for recruiting other brokers to the firm. Led by 29-year-old Stefani Markowitz, Rutenberg has grown by 20 percent in the past year, from 489 to 620 agents, and is now the sixth largest company in New York City, by number of agents.
Instead of having to split commissions on a 50/50 basis with a brokerage firm and pay high costs for desk and administrative fees, Rutenberg agents are able to keep 100 percent of their commissions.
At Rutenberg, residential brokers pay a fixed fee of $99 month and closing costs of no more than $2,000 (applied to sales over $1.5 million.) On any commercial transaction, agents keep 90 percent of the commission.
In return, agents get a private phone line, voice mail, desk, computer, administrative and technical assistance, coaching and training sessions, symposiums, advertising discounts, and public relations and social media support. Agents also benefit from extensive databases and networks, and the company’s concierge services. “Not to mention, getting paid the same day,” said Markowitz.
She recently told Brokers Weekly, “The interesting thing about our model is that we attract self-sufficient, experienced brokers. Mostly, these are agents who realize that their network is one they built themselves, and their success is due to their hard work and determination.
“They should not be giving a company 50 percent of the money that they are working so hard for, when the company is not doing 50 percent of the work.”
BOLD was started by Jordan Sachs and Todd Jacobs in 2010 when the two were in their mid-20s. It has since grown to more than 80 employees, and the firm is in charge of leasing at one of the city’s biggest and most expensive rental buildings, Moinian’s SKY on the far west side.
TOWN Residential grew rapidly after it was founded by Andrew Heiberger in 2010. Before that, Heiberger founded and grew Citi Habitats over 10 years into one of the biggest residential brokerages in the city.
“I’ve identified that small doesn’t work, because you need to have marketing muscle. And I also think discount brokerage doesn’t work, because you don’t attract the high-end broker, and you also don’t attract luxury real estate,” Heiberger told Broker’s Weekly in a 2013 interview about how he grew his business.
“You can’t combine the word discount with luxury unless you’re an outlet mall.”
Heiberger emphasized the importance of a neighborhood based-approach, central to the company’s philosophy, and the need for offices in every neighborhood of the city.
“In order to properly service this marketplace, we need to have a foothold across Manhattan and parts of Brooklyn, sooner or later,” he said.
Anthony Franzese started his own franchise of national brand, Weichert Realtors, in Brooklyn in 2008. The Franzese Group started out with just two people, and has since grown to 75 employees in two offices. For him, his focus was always to stay in Brooklyn.
“When I got into it, I had the whole plan of how I wanted it to grow and knew the customs and the neighborhoods,” said Franzese. “You really have to know what you’re doing, and that’s the bottom line.”
Franzese lives and works in Brooklyn, and as the borough has grown and developed exponentially in the past decade, he’s very happy that he chose to plant his flag there.
“Personally, I never wanted to go to Manhattan,” he said. “I think people who come in who do know how to promote and market have a much better shot of breaking into Manhattan, than a company that’s more traditional.”
The NYC real estate market can be radically different from a typical suburban market in any given state, and for brokers looking to get into the market here, doing your research is crucial to making it big.
“It has to do so much with broker to broker,” said Franzese. “It’s really what you’re going to put into it. You can’t just rely on the name, you have to really know a market and where you are. Real estate is very hyper local, so you really need to be a specialist at where you’re at.”
He added that many people are drawn to NYC because of the much higher price points, which offer the chance at more commission, but may not realize how competitive the industry is, and the legwork needed to succeed.
“You have to have track records,” said Franzese. “It’s hard getting into the business period. Persistence definitely has to defeat the resistance.”
Liniger, who founded RE/MAX in Denver, Colorado and has since grown the company into a worldwide brokerage firm with offices in 100 countries, including China, is confident that Manhattan will soon have RE/MAX offices, and that they’ll be there to stay.
“It will happen very quickly,” he said. “New York City is a city I visit constantly, and I’m anxious to see the success. We put a great team together, and they’ll do well I’m sure.”