Home News Brothers Behind $8 Billion Luxury Real Estate Firm Bespoke Cut Commission Rate To 1%

Brothers Behind $8 Billion Luxury Real Estate Firm Bespoke Cut Commission Rate To 1%

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Cody and Zach Vichinsky have transformed Long Island’s luxury real estate game by focusing on real estate worth over $ 10 million. Inheritance And Wall street.. So why is greed no longer good?

To Luisa Kroll

of In August 2021, Bespoke Clear Estate in Water Mill, New York secured the exclusive right to sell a stunning contemporary oceanfront home with an inverted triangular roof in Wainscott, a settlement in Tony East Hampton. did. Founded in 2014 by the brothers Cody and Zach Vichinsky, Bespoke has used its extensive research and extensive database to identify and market other owners of million-dollar homes in Hamptons. .. Within 2 months A gorgeous cameo as a beach house Belongs to the billionaire played by Adrien Brody in the HBO episode InheritanceSigned a deal for $ 45 million.

Cody Vichinsky, a company that represents both buyers and sellers, appreciates Bespoke’s data-driven marketing and predictive analytics for potential buyers who are particularly interested in such modern homes. Another aspect of the transaction, which wasn’t announced at the time, was that Bespoke reduced the seller’s commission rate from the usual 2% to 3% to 1%.

Fee reductions are a practice that Bespoke, which has claimed more than $ 8 billion in real estate transactions since its inception, has been in beta testing for over a year. (The $ 8 billion number is based on the initial listing price. Homes may be sold at prices tens of millions of dollars lower than the initial asking price.) Primarily in Hampton, Manhattan, and South Florida. Companies that sell real estate already sell a handful. At a rate of 1% of the house. “Our overall spirit is to streamline our business and challenge the status quo of why people have settled on existing frameworks. I think the industry as a whole is at the forefront,” said 35-year-old Vichinsky. say. He claims that his company offers the same high level of service despite the low rates.

So, starting this month, Bespoke will go to places where there are few bold luxury real estate companies and officially reduce seller fees to 1% on every transaction. According to Vichinsky, Bespoke has already registered 18 customers, most of which have not yet been announced and will only be charged 1%.

“At the high end, there’s nothing like us. No one offers a standardized list fee of 1%,” he says. Companies with an average selling price of $ 27 million or more and millions of dollars can cost, but could help get a new list not only in Hamptons, but also in new markets such as Manhattan and South Florida. I have.

According to Vichinsky, his company is well compensated at 1% given the high prices of the homes they sell. (Buyer agents are often bespoke, but usually receive 2% to 3%). Another reason to lower commissions is that while few high-end companies advertise it, many are already quietly lowering commissions.

“Luxury real estate companies often end up at that price [1%] “In a closed room,” said Glenn Kelman, CEO of Redfin, one of the first discount brokers to offer sellers a 1% commission. “Promoting it as-is shows how they are helping them accept it and blame it.”

“I told them there are a lot of unfortunate competitors, but I love this model. I love disruptors.”

— Ken Austin, former president of Marquis Jet

Not surprisingly, some wealthy clients are fans of this move. “I told them there are a lot of unfortunate competitors, but I love this model. I love disruptors,” he says. Ken Austin, Former Vice Chairman and President of Marquis Jet, who founded Avion Tequila. He co-founded Conor McGregor’s Proper No. 12 Irish Whiskey. He co-founded Telemana Tequila with Dwayne “The Rock” Johnson. He sold one home at Bespoke at a 1% rate (and a 2% buyer’s commission) and bought two other homes through the company.

Add Gary Garrabrant, a longtime bespoke client. “Cody isn’t afraid to change. I think what they’re doing is devastating. You’ll be very angry with traditional brokerage firms.” Bespoke has long been a partner of Billionaire’s Sam Zell. Helped Garrabrant, now CEO of investment firm Jaguar Growth Partners, and his wife sell a traditional cedar roofing house in Southampton in 2019.

The Vichinsky brothers have already succeeded in shaking the status quo of real estate. Growing up about an hour away from the Hamptons in Stony Brook, New York, the pair grew up with a blue-collar father who worked as a project manager for the construction industry. , Invented Bespoke as a new kind of intermediary. From the beginning, they hired full-time sales and marketing staff to work in housing across the Bespoke portfolio and avoid independent brokers that rely on high fees. “The direct model to our clients is the first and only model in the industry,” says Cody Vichinsky.

To date, they say they have sold hundreds of luxury properties and have boosted billions of dollars in such sales. Among the notable customers over the years is Billionaire Stewartler, whose real estate at Burnt Point in Hamptons was sold for $ 47 million last year (his foundation earned money from the sale). Continental Grain CEO Paul Fribourg; Real Estate Billionaire David Warentas and Fashion Designers Vera Wang and Vince Kamut. Also known as Kircare for the widow of Michael J. Kennedy (2016), a criminal defense attorney famous for representing Ivana Trump in his divorce from Donald Trump. Was sold. Kennedy’s 1879 East Hampton Beach House, owned by her and her deceased husband for decades, she starred in the following films: Wall street When The eternal sun of a stainless heart..

Bespoke’s biggest deal to date is Jules Pond, a 42-acre Southampton property built for Henry Ford’s grandson and known to many as the “summer palace” of the Roy family on HBO. It was the sale of Ford (formerly Ford) in 2021. InheritanceSold for a record $ 105 million home in the East End of Long Island (although the initial $ 175 million list price followed by $ 145 million. It is below).

Wealthy customers may focus on saving millions of dollars in home sales, but not everyone sells at 1% gambling on Vichinskys. “I told them I wouldn’t do that. I said [Cody] You can pay for it if you get really great service. Whether it’s 1% or 4%, it doesn’t change who I go with, “says a longtime customer who has made several deals with Bespoke. “I consider them high-end luxury brands. When you are in a luxury business, you don’t want to lower your prices. Bespoke is a customer who knows what a fair commission is based on a transaction. Must be decided with, “he adds. “If it’s a difficult deal, we may pay more.”

And while Bespoke is undoubtedly on track even during a pandemic, many trophy homes take years to sell. This means working longer than any other company and getting that lower rate. In addition to the points, Vichinsky argues that the motive for reducing charges to 1% is “not related to economics.” Rather, it’s all about keeping these wealthy customers who can afford to wait for the right price. And that’s just part of the bigger plan. For example, the company is putting together an invitation-only VIP program called a private circle. This program gives members access to special events and experiences such as free IV treatment at home and access to Art Basel. “We want to be a company that takes these big risks in the best interests of our clients,” he says.

At least one industry insider is skeptical of 1% at any price. “Note that the Greeks have gifts,” said Donna Olshan, who runs his own boutique real estate company in Manhattan and writes the weekly Olshan Luxury Market Report. ((((Forbes I asked her what she thought about the luxury company, not the custom order, so I cut the commission). “There are people in every industry who always try discount models. It’s like everything else in life. You get what you pay for.”

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