There are 27,000 licensed real estate agents in New York City. Last year there were 10,000 transactions, meaning 17,000 agents did not close a deal, and the number is probably higher than that. That could mean some agents did not work or changed careers, but it also suggests that a lot of agents just could not close a deal.
Closing a deal requires a certain amount of the closer mentality (think "coffee is for closers"), but is due in much larger part to competence throughout the process. Volumes of research is required to find quality listings, understand market value, find good bargains, and perceive what the client (whether buyer or seller) is looking for.
In other words, the ideal real estate agent is not just a good people-person, they are a well-rounded, full service real estate professional.
For the average buyer, working with a licensed REALTOR® at least guarantees you are not being scammed. But the increasingly competitive market has created a niche for more elite services and vetting organizations. That is why a new industry is gaining traction in some of the biggest markets in the country: concierge real estate companies.
These companies focus on the pain points that every real estate consumer faces: finding a reputable agent, understanding the buying process, and avoiding scams. These are the three ways concierge services are changing high end real estate:
There is almost a mystical quality to good real estate agents in markets like New York, San Francisco, and Miami. Just watch an episode of Million Dollar Listing. Of course there are other high powered agents that are not on Bravo, and concierge companies make it their mission to find them.
In other words, concierge companies want you to be friends with your realtor. And that is a growing trend in real estate. A quick survey of Google search results shows a slew of companies trying to play on the same idea. Agentmatchme.com, homeagentmatch.com, agentpronto.com and others all tout their ability to pair consumers with a compatible agent. Unfortunately, realtor matchmaking sites are frequently just lead generation companies run by realtors themselves.
That is why concierge companies are fundamentally changing the matchmaking model. Consider City Raven, a concierge company that just launched in New York City. They do not allow brokers to pay to be on their list of partners. Instead, realtors have to apply and pass a rigorous background check and interview process. It is the consumer who pays a fee to access the service, turning City Raven from a lead generation company for real estate agents into a neutral matchmaking organization.
"We use a proprietary algorithm to match our customers with our list of curated agents," says Valeri Tsanev, CEO and Founder of City Raven. "These agents are the top 1% in their field and we want our clients to find a perfect match. A concierge company does more than pair you with an agent who works in your area, they find someone you are compatible with. It's really the next level of real estate service."
2. Consumer Advocacy
The third party aspect of a concierge service is one of its largest benefits as real estate agents, even the best ones, are working for their own bottom line. Encouraging a client to take a deal that is over their asking price earns the realtor a larger commission. Likewise, encouraging a client to take a lowball deal could mean a faster paycheck and the opportunity to work on new business. Concierge companies are there to provide expert counsel to clients without conflicting incentives.
Membership with City Raven includes a whole collection of educational resources and, of course, the consultation of in-house professionals. The goal is for clients to have an expert, neutral partner to consult them along the way.
Even veteran home buyers and sellers can make mistakes. There is a lot to know and it is not enough to have a real estate agent who knows what they are doing. Aspects of the process require calculated decisions and knowledge of how the system works. Concierge companies are emerging as the sounding board for real estate consumers.
Concierge companies all work differently, but at the core of their business is curation. At City Raven, agents are pre-qualified by a rigorous background assessment and interview process.
The goal is to verify a longstanding track record of closing deals, strong ties within the real estate industry, outstanding recommendations, and the inter-personal skills that are required when working with clients who want a professional experience. Of the thousands of realtors in the city, City Raven says it will work with less than 100.
Realtors can be better at selling themselves than they are at selling homes, which means their clients are on the short of the stick. Unfortunately, most people are not experts in the industry and do not know how to identify a salesman. Concierge companies that curate realtors are an invaluable filter for the average consumer.
Time will tell if concierge real estate services will gain traction. City Raven opened its doors for business in May with plans to add a matchmaking app later this summer