@properties Christie’s International Real Estate is going into wartime mode with a new fee on agent commissions, The Real Deal has learned.
The Chicago-based brokerage’s co-CEOs Thad Wong and Mike Golden told agents Wednesday it’s tacking on an agent services fee of 1 percent of gross commission income, according to a company-wide email reviewed by TRD.
The move applies to all transactions closed on or after April 1, and comes during a sustained market slowdown in an era of high-interest rates, an environment in which many residential brokerages have been pushed into tough decisions.
“Brokerage revenues are down, and expenses are way up,” Golden and Wong said in the company-wide email. “Inflation has hit everyone, including @properties, and today it costs significantly more to run a large brokerage firm than it did just a couple of years ago.”
The agent services fee will come off the top of all transactions and will be shared between the agent and the company depending on previously established splits. For example, if the commission was $100, the additional fee would be $1, but if the agent’s split is 75/25, the agent would only pay 75 cents.
“While we never thought we would have to institute a fee, it is the most responsible thing we can do, and we think it is very fair given the value @properties provides,” the email said. “We also worked incredibly hard to keep this fee as low as possible.”
The fee only applies to company-owned @properties offices, not its franchises or franchisees of Christie’s International Real Estate, whose brand rights are owned by @properties.
In an interview Thursday, Wong said the company is preparing for a declining market.
“I don’t know if we’ve seen the worst, or if the worst is coming — you have to be prepared,” he said. “If you’re not talking about your plans when things slow down, you’re making a mistake.”
“[Fees are] not uncommon in the industry — it’s uncommon for us,” he added.
The company is also increasing its MLS fee for transactions that include an outside broker to $495 from $250, a move which @properties says will bring it in line with other brokerages. The MLS fee for transactions with the company’s agents on both sides remains at $250.
This earnings season has shown how great the challenge is for residential brokerages.
Anywhere Real Estate — the parent company of Corcoran, Coldwell Banker, Century 21 and Sotheby’s International Realty — and Redfin posted big losses in the fourth quarter, with signals that the first quarter this year will be much of the same. Compass posted a net loss of $158 million in the fourth quarter, up from $154 million in the third quarter but slightly improved over the $175 million lost in the same period of 2021.
Source: @properties Implements 1% Broker Fee On Transactions