Property Grunt

Friday, March 04, 2005

Beating a Dead Horse: Citi-Habitats on the ropes?

Recently Curbed broke a story about Andrew Heiberger’s surprise departure and problems with the merging of the Citi-Habitats and Corcoran database. According to Curbed the database has not been updated since February 8 and CH agents have been working with old listings. The Grunt was going to sit on the sidelines since Curbed did such a great job in covering the story so it felt rendundant to jump. Until a recent development occured regarding the database. Besides a battlefield analysis was too strong for the Grunt to resist.

It has been reported to the Grunt that because of this fubar agents are getting updates of new listings via email which has proved inefficient since it requires agents to log into their computers and agents are barraged with tons of listing emails.

As Curbed pointed out this may be the reason for Andy’s hasty exit. However the Grunt has learned from another source he wanted to split because of some development deals he was working on. Which is plausible.
The Grunt has analyzed the response email from Pam Leibman that Curbed published and would like to share his interpretation of it.
Pam was smart to send this email since it squelches any rumors of any other exits by management and maintains the morale of the agents in general. Also this group is probably the best qualified to run the CH operations and searching for a new executive team could be a long and lengthy process and with the spring and summer rental season around the corner it could be disastrous for the company. Also Andy most likely signed a non-compete clause that probably included that he would not take his best and brightest with him.
But I do disagree that they will continue with the same business model which is the hybrid agent model where agents do rental deals during the summer and focus on sales during the winter. Either way agents are always working throughout the year.
I see the model being disbanded in the near future if it hasn’t been disbanded already. Sales are Corcoran’s forte and given the opportunity they will handicap the competition in even if it is one of their own.
The future I foresee for Citi-Habitats is that it will be treated as a farm team. Brand new fresh-faced agents will be thrown into rentals to get experience and will have to prove themselves worthy if they wish to do sales. A policy could also be instituted where CH agents would have to refer any buyers or sales listings to Corcoran agents in exchange for a referral fee.
Corcoran could treat the farm team as their own talent pool picking out the best and brightest agents and assistants. Being promoted as a Corcoran agent would be the carrot to motivate Citi-Habitats agents to close deals and stick it out in the rental business.
Sound far-fetched? Within the first week of the buy out, Corcoran immediately disbanded the Solofts brand and absorbed their agents into their fold.
Despite an official suspension on any agent changeover between the two companies, Corcoran has already poached several high rolling Citi-Habitats agents by offering more resources and higher commission splits.
It seems like the Corcoran agents have the home team advantage since they are the ones making the rules. But if I was a Corcoran agent I would be a little concerned. Citi-habitats could be used as the proverbial glue factory for Corcoran agents who are not producing. If your not pulling your weight perhaps the threat of being demoted would serve to motivate and you might be more useful doing rentals than sales.

A transfer could be also be used as a disciplinary action against Corcoran agents who have been malicious or negligent in their duties or a way to knee cap a high producer on the verge of defecting to another agency by lowering their prestige to sellers and buyers with a CH transfer. It would definitely be seen as a demotion for a Corcoran agent to be transferred to Citi-Habitats.

At this point this is all speculation. Let's see what happens in the next 5 years.