The Broker Glut

Photo: Joshua Lutz/Redux for New York Magazine

Robert S. Broder is teaching his students at the New York Real Estate Institute how to KISS. “Keep It Simple,” he recites, pausing for effect. “Sweetheart.” Feet shuffle, pens scribble, and the odd cell phone chirps. In the third row of the packed house (pictured), a guy in a Polo shirt and flip-flops sits slumped, looking like a frat boy after a long night. But if he passes the licensing test, he’ll be on his way to handling someone’s multi-million-dollar sale.

Everyone, it seems, wants to get into the real-estate business. According to the Department of State, as of June, there are 27,081 licensed agents and brokers in Manhattan, up 1,491 from 2004 and 4,268 from ’03. “We’re graduating well over 100 students a week,” says NYREI’s president, Richard Levine. “You could hire a new person almost every second,” confirms Halstead president Diane Ramirez. And brokers and customers are starting to say the system is flooded with neophytes.

Some rookie gaffes are merely annoying. “I told this one guy I wanted an elevator building, and he kept showing me walk-ups,” says renter Tula Karras, who’s also met agents who forgot keys and couldn’t answer basic questions. Other mistakes are more grievous, costing clients time and money. Charles Rosenzweig says he and his wife wasted six months last year trying to snag a Gramercy co-op. They’d submitted an offer through the seller’s agent, who assured them there would be “no problems.” But as they prepared their board application, the broker, a Brooklyn agent new to Manhattan, “gave us no direction and didn’t even give us an offering plan,” says Rosenzweig, his voice rising to a shout. “She was totally inept.” And she’s hardly alone. “I get calls all the time from consumers with problems with their agents,” says Laura Rubinfeld of the Manhattan Association of Realtors. (The Rosenzweigs were rejected by the co-op; they say they’re far happier with their new broker, Bellmarc’s Susan Orbach Scott.)

Maybe all this was inevitable. Selling real estate offers people with modest credentials the prospect of high financial return. That makes the field attractive to go-getters—but also to dilettantes. “In New York, anyone can become a broker,” says Joseph Benz, general manager of Metro Spire. “The test in Manhattan is identical to the test given to wannabes in Ithaca.” New York agents need only 45 hours of classes—Miami requires 72—and even then there are cheats. One student says he routinely sees classmates sign in, then walk out. Corcoran’s David Allouch, a former Wall Streeter, notes that the Series 7—the big exam for stockbrokers—is much harder, and that the real-estate classes are cursory. “The instructor would say, This part you need to know for the test, the rest you don’t,” he remembers. “It’s about getting the answers, not about training professionals.”

An overcrowded field can have other effects. “Some seasoned brokers may have too many clients,” says veteran Klara Madlin. On the other hand, “sometimes a new broker can be good because they’re anxious to please.” (Hungry, too: Brokers’ income varies widely, since most work on commission with no salary, but newbies typically end up at the low end of the professional ranks, well under $50,000 per year.) Corcoran chief Pamela Liebman adds that the nature of the business eventually filters out the losers: “Free-market forces won’t allow [them] to survive.”

Until then, though, there will always be dreamers like Keith Fiocca, a former Broadway usher who hopes to make it big in real estate. “It’s scary to think that you’ll be dealing with that kind of money,” he says. “But you can’t show fear.”

Today’s Real-Estate News
While tabloids and blogs continue to speculate over the stability of Matt Lauer’s marriage to ex-model Annette Roque Lauer, the Today show’s co-host has been quietly dabbling in the real-estate market. Records show he recently sold an East 57th Street co-op (apparently two apartments combined into one) he has owned since 1997 for an undisclosed amount. Lauer, said by “Page Six” to be bunking in a two-bedroom at Trump Park Avenue while he and his wife figure things out, appears to still own the twelve-room apartment in the East Sixties where he lives—or, if the scuttlebutt’s to be believed, lived—with Roque Lauer. (One real-estate source familiar with the situation insists the two are still together, however.) NBC’s Lauren Kapp says Lauer has no comment on anything involving his personal life, realty-related or otherwise.

The Broker Glut