By Sarah Trefethen
Starting this June, some City Connections agents will be eligible for a new commission structure that caps how much of their commission goes to the house.
Under the new model, once an agent reaches a “cap” of $25,000 or $30,000, he or she will then keep 100 percent of commissions for the remainder of their contract year.
The cap refers to the amount paid to City Connections, setting a maximum limit on the amount of money the firm will earn per agent.
In 2004, City Connections launched a high-split model that allowed agents to keep 90 percent of their commissions while also paying a monthly desk fee to the agency.
“People were fearful of paying our monthly desk fees,” said David Schlamm, president and founder of City Connections. “As it turns out, a good broker will now make the same and, in most cases even more, without paying that $950 to $1,425 monthly fee.”
Salespersons and associate brokers will need to have a minimum of two to five years experience in real estate to be considered for the new model.
“Today’s agents have many choices in choosing a firm to associate with, especially in the high-split and 100 percent arenas,” Schlamm said. “This new model is much more suited for the seasoned and higher-producing agents who want a strong firm behind them.”
All of the company’s current agents are eligible for the model, Schlamm said, and some had already requested to switch just two days after the new model was announced.
The idea of capping the amount of commission that an agent shares with a brokerage is not new.
Keller Williams, which opened a New York City office last year, offers a capped sharing structure along with modest agent fees ranging from $75 to $110 per month, according to the company’s website. Desk fees are optional for brokers who choose not to work from home.
In spite of national success, however, Keller Williams has so far failed to catch on with the city’s star brokers, according to a report in Crain’s New York Business last week.
Crain’s attributed Keller Williams’ struggles to lack of brand recognition, though Eric Barron, Keller William’s NYC’s chief executive, told Crain’s that the company was in “no rush” and was “ahead of schedule.”
Meanwhile, City Connections’ recent new hires include Lynda Deppe, founder of Site Realty; Joann Wasserman from Prudential Douglas Elliman; John Contribus from Citi Habitats and Molli McCarthy from Town.
