Last September, five of New York’s top brokers met to brainstorm a new idea. Collectively, the agents and their teams — from Compass, Douglas Elliman and Sotheby’s International Realty — had closed more than $1 billion in sales in 2016. But despite their individual successes, they felt the industry was lacking consistent standards and proper transparency: Why don’t brokers do a better job of sharing data? Why is measuring square footage still not standardized?
By January, the brokers — Elliman’s Raphael DeNiro, Compass’ Heather McDonough Domi, Toni Haber and Leonard Steinberg, and Sotheby’s Jeremy Stein — were joined by their peers, and formed a larger group that would eventually become the New York Residential Agent Continuum.
“We thought, let’s see if there’s a greater consensus and appetite for this,” said McDonough Domi, NYRAC co-founder. “Of all the agents we got in touch with, only three said no.”
Watch the video below where NYRAC’s co-founders explain the new group.
The move comes in the midst of the market slowdown, plagued by fewer sales, abundant price chops and increasing days on market. At the same time, brokers and brokerages have been grappling with changes to the business model — whether that’s StreetEasy’s Premier Agent feature, competitive (and expensive) recruiting or so-called iBuyer programs. All those shifts make a peer-to-peer network for agents even more crucial, according to co-founders McDonough Domi and Taub.
McDonough Domi drew inspiration for NYRAC from her time in Miami, where her boss and mentor Carolyn Block Ellert started a chapter of Master Brokers Forum. When she moved to New York, McDonough Domi realized the city didn’t have a similar peer group for brokers. Now, her answer to that problem is NYRAC, which is launching with a group of 21 residential agents from the city’s biggest brokerages.
The group wants to bring awareness to some specific industry issues — such as discrepancies in measuring square footage — and also promote more information-sharing among agents, McDonough Domi told The Real Deal.
For starters, however, only top-producing brokers will be eligible to join. Prospective members must be endorsed by three active members and have at least five years of experience in residential sales in the city. Additionally, they must have at least $10 million in annual sales volume over the previous five years.
“We want to scale at a rate we can manage,” McDonough Domi said. Initially, NYRAC also wants to lure “a group of people that can bring the most weight” to the organization.
Unlike the Real Estate Board of New York, NYRAC isn’t aiming to be a governing body. But it will have a discussion with REBNY, which confirmed that it has agreed to meet with NYRAC and learn more about the initiative. Like its co-founders McDonough Domi and Sotheby’s Cathy Taub, all NYRAC members are required to be members of REBNY as well.
Standardization is a concern Steinberg has previously addressed. Earlier this year, TRD reported on the discrepancies in advertised square footage of condos at 443 Greenwich Street. And appraisers have inconsistent methodologies for measuring co-ops and townhouses — which makes price-per-square-foot comparisons difficult or inaccurate.
“It’s a red-button issue, and we’re being responsive to it,” Taub said. “It’s not going to be solved overnight, but it does deserve attention.”
How exactly to tackle such a problem is unclear, but speaking with appraisers and brainstorming among other agents is a place to start, she said.
Another topic on the group’s platform include accounting for outdoor space in valuations and increasing collaboration among agents. One step, Taub said, would be for agents, with seller permission, to share contract prices — which would help determine pricing for other listings. While its co-founders insist the idea isn’t borne out the market downturn, more information may help move units lingering on the market.
Starting off with 21 members, the group hopes to reach membership of roughly 500 agents in the next year or two. As it grows, NYRAC may adjust its eligibility requirements. Its other members include Stribling’s Sean Murphy Turner and Pamela D’Arc, Brown Harris Stevens’ Amanda Brainerd and Elliman’s Sabrina Saltiel.
NYRAC will be funded by membership fees — $500 per year — and sponsorships. Current sponsors include First Republic Bank, law firms Romer Debbas and Chaves Perlowitz Luftig, and Sciame Construction.