September 4, 2019
One of the most common questions we get from clients is, “How do you guys make money?” Yoreevo is charging commissions significantly less than other brokers in a market where the #8 NYC residential real estate broker, Town Residential, shut down its residential resale and rental operations in early 2018. Town’s founder explained, “it is simply impossible [to] profit from those lines of business”.
So how can Yoreevo afford commission rebates and low listing fees yet still remain profitable? Let’s look at the numbers.
If you’ve ever seen Million Dollar Listing, you might think NYC real estate agents are running around from appointment to appointment, getting into arguments with other agents and doing deals around the clock. Unfortunately, the reality is a little different than reality TV.
Douglas Elliman is part of the public company, Vector Group, which publishes SEC filings each year. In those filings, we get tons of statistics about Douglas Elliman including its NYC operations specifically so we know exactly what the average agent at the city’s most active real estate brokerage produces each year. Believe it or not, the average Douglas Elliman NYC agent does 2.4 deals per year.
Regardless of how much time you assume the average deal takes, the average real estate agent spends a lot of time waiting. This is the #1 problem, by far, with the typical real estate brokerage model - most agents spend very little time actually working on transactions. The vast majority of a real estate agent’s time is spent looking for clients, not working with them. Yoreevo does things differently.
Yoreevo’s business is built on efficiency and flips the economics of a typical real estate brokerage around. Our agents spend significantly more time with clients and very little time finding them. In other words, rather than waiting for the phone to ring, our agents are assisting transactions and generating revenue.
Yoreevo sets a target of 20-25 deals per year for our agents. As we grow and continue to get even more efficient, we hope to increase that further. At ~10x the volume, we can charge one-third the price, invest significantly more in our agents and operations and remain profitable.
Aside from the obvious financial benefit, our clients benefit from Yoreevo’s significant deal flow. By doing more deals, we’re seeing more properties, talking to more agents and gathering more data about the market. As a collaborative team, Yoreevo’s agents share insights about properties they have seen, experiences they have had and pitfalls to avoid.
We strongly believe Yoreevo’s low commission business model is the future of real estate and will continue to implement every technology and streamline every operation to improve real estate transactions, save our clients money and deliver a better experience.