"If It's Broken, Fix It!" ... David Frosh, President of Sperry Van Ness, believes that the traditional brokerage business is obsolete. "It's broken for the brokerage firm, the broker and the client." His argument: Brokerage firms face high operating expenses (with desk costs in the $50-125k per broker range). Assuming the normal 80-20 rule (20% earn 80% of the revenue), senior brokers don't receive fair compensation. And given the historic tendency of brokers not to cooperate, properties don't receive wide enough exposure to achieve the maximum sales price.

So about a year and a half ago, Sperry Van Ness (SVN), which started in Southern California in 1987, launched a national expansion program based on a different business model. In a nutshell, here's how it works: SVN contracts with seasoned brokers, who lease their own space and pay their own expenses. SVN provides centralized corporate services like marketing, accounting and technology support. If brokers use SVN's Agent Support Center, which develops marketing presentations and prepares offering packages, they pay for this service.

With commission splits reaching 80-95% (depending upon volume), SVN has recruited 85 senior brokers in the last year to bring its total to 225 total brokers covering 44 markets. Each Monday most agents participate in an online conference using a VPN (Virtual Private Network) to brief each other on the latest listings. To promote external cooperation, SVN organizes monthly Broker Forums for outside brokers. Finally, to maximize the exposure of listed properties, SVN maintains a database of 90,000 brokers for mailings. After talking with Frosh, you sure get his message loud and clear: "SVN will do its share to make the real estate market more efficient."

--Peter Pike