Your luxury apartment or townhouse is genuinely spectacular. It's a multi-million dollar home, and when the time comes to sell it, you're not going to entrust the sale to just anyone. The broker who represents your property must be every bit as refined and pedigreed as your lovely home. This is clearly the milieu of the "Boutique Broker""Edwin Paddington Snodgrinckle" of "Snodgrinckle Elite Luxury Residences" is "the" most prestigious broker in the city -- or so you hear -- and fortunately for you he's been able to squeeze you in this Thursday so he can evaluate the suitability of your humble abode for inclusion in the Snodgrinckle stable of superior luxury homes.
Snodgrinckle arrives punctually, and nods casually at your tastefully decorated home. He remarks that it reminds him of the well appointed servant's quarters of the Rockefeller mansion; where he regularly attended black tie affairs when New York was "New York!".
Oh, it gets better. Old Edwin here has done $500,000,000 worth of business over his career and he conspiratorially -- "I really shouldn't tell you this, but ..." -- rattles off a gaggle of names from old New York Society whom he has represented.
Ask Mr. Snodgrinckle how he plans on marketing your property and he'll wax poetic about the thousands of buyers unique to his rolodex gathered over the course of his 45 years in the business. He'll also tell you that you'll get the best of both worlds; his premium service and the service of all the brokers in Manhattan since he distributes your listing to all the "big name" pedestrian firms.
Flushed with excitement from artfully spun tales of patrician hob-nobbing, and overwhelmed by his 45 years plus in the real estate business, you practically beg for the honor of having him represent your property.
Sounds like a dream come true to me, so what's the catch? Where is the myth?
- Unfortunately for you the Boutique Firm has no real advertising and marketing budget. They can not hope to reach the number of qualified buyers that the largest firms do. Instead they play up their "expertise" in your type of luxury property as if this will somehow mitigate the fact that they can't and don't advertise extensively. All the alleged expertise in the world is completely worthless if buyers aren't exposed to your listing.
- Their one page, out-of-date, homemade website; (if they even have a website); is virtually invisible to anyone searching for a property. It may appear on page 2,137 of a Google search, but who realistically looks past page 2 (at most) of the results? No buyer searching for a luxury property is ever going to find your listing on the Internet.
- The only advertising you will likely get with a boutique firm is the occasional ad in the New York Times. Unfortunately the role of the Times as the "New York Real Estate Bible" has almost completely evaporated in recent years along with its precipitous decline in circulation. My listings typically attract over 10 times the number of visitors to my company website than I receive on the Times site! (Yes, the big firms advertise on the Times too -- we have the budget to advertise on many, many venues.)
- While it (should) be true that Mr. Snodgrinckle will share the listing with other brokerage firms, the other firms will not advertise it on their multi-million dollar prominent websites, nor will they publish it in magazines, newspapers and international venues since it's not their listing. Since all the major firms share their listings, it begs the question why not invest your $500,000 commission with a firm that can actually promote your listing around the city, country and world, since all the one-man-bands like Snodgrinckle will still receive the listing information anyway?
- Mr. Snodgrinckle almost certainly has a rolodex, but buyers at this level do not "belong" to one broker. If you're a player in New York real estate, you appear in many rolodexes. When your listing is disseminated among all the brokers in New York, you can be absolutely sure that Mr. Snodgrinckle, all the other "boutique brokers" and all the brokers from the big firms will be on the phone to their best buyers within seconds because each one of them will be competing to be the first to reach the big players and therefore share in the co-broke commission.
- Today's buyer is younger, more educated and computer savvy. They do not read print ads. They use the Internet, and they search on their own. Having no public presence other than a newspaper ad borders on ludicrous. You would be doing yourself a egregious disservice by not doing all you can to reach these buyers.
- Snodgrinckle's track record of success over 45 years is most likely just that: Snodgrinckle's success, not his seller's! If Snodgrinckle sells a $10,000,000 townhouse directly to someone on his rolodex, he collects $600,000. That's a tidy sum. But what if more buyers saw the property? Buyers not in Snodgrinckle's rolodex, but instead brought by a co-broker? Maybe the townhouse would have gone for $12,000,000. In this case Snodrinckle would "only" make $360,000 since he would be splitting the commission with a co-broker who brought the buyer to the deal. Can you see how it's in Snodgrinckle's best interest; and specifically not in your best interest; to keep the deal close to the vest?
Reach me at: michael.sussilleaux@gmail.com
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