Rosehip Partners: A Fresh Approach
 Kate Maier
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(12/10/2008) Joseph Kazickas and James Young, veteran brokers, knew even before the steep downturn in a once-vibrant East End real estate market that the way to do business in their world was changing. When they started their fledgling company, Rosehip Partners, in July, their vision was to revolutionize the way the business is run, with a heavy emphasis on the Internet and a new model for the way their agents are paid.
“We both felt like the legacy real estate business model was highly inefficient, and that those highly inefficient business practices were borne on the shoulders of the agents,” Mr. Young said in a chic and cozy meeting room in the duo’s off-the-beaten-path office on Pantigo Road in East Hampton.
The “legacy” model Mr. Young referred to could also be called the Main Street approach — characterized by highly visible offices with lots of overhead expenses, where there could be “30 or 40 desks” occupied by a handful of brokers on any given day. Those overhead expenses could translate to lower commissions for agents.
According to his partner, Mr. Kazickas, the model is obsolete. “People don’t shop walking down Main Street anymore. In reality, it’s all happening in the bedroom, on the laptop, before you go to sleep,” he said, citing statistics from the National Association of Realtors that suggest that more than 85 percent of real estate searches start on the Internet.
“We’re really on the cusp of the Internet, really going mainstream, when it’s just the way that things are done,” Mr. Kazickas said.
With social networking sites like Facebook and YouTube providing a new way for people to transfer ideas, Mr. Young predicted, the Internet will have dominated every aspect of communication, including business transactions, “within the next two to three years.”
Rosehip Partners is nestled behind another residence-turned-office beside Cherrystones on Pantigo Road. “In our little space right here, this is all that we need to operate a company that could be as big as any other company out here,” Mr. Kazickas said. His experience in the business extends back to 1992, when he first made a name for himself on the East End by starting a company called Dunemere Associates. By the time he sold it to Brown Harris Stevens in 2004, the company had grown from a four-person team to a small empire of five offices.
While their first year hasn’t been especially active, Mr. Young, who spent years working in the technology industry for Oracle Software before returning to his hometown and going to work for Brown Harris Stevens, considers this almost fortuitous. “This is a good time for us to focus on data collection. The industry is reeling right now, but it’s probably not a bad time to start a business if you have a different approach.”
With plenty of spare time as the market recovers, Rosehip Partners is working on its first phase of development, a Web site launched in October called hamptonsrentals.com. As far as Internet domain names go, the two know how fortunate they were to acquire this one. “The name is basically a keyword in itself,” Mr. Kazickas said.
Anyone can log on to www.hamptons rentals.com and list their property for free. And technologically challenged landlords who have trouble uploading digital photos can get help from Rosehip.
But what’s different about the site is a sharing model not typical in a business in which fierce competition over listings makes brokers less apt to tell their competition about them. Rosehip regularly sends competing brokerages e-mail blasts, and agents know they can check the site to see updates that come directly from a property’s owner.
“Sometimes homeowners complain, especially in the Hamptons, about the lack of sharing of information. There is no M.L.S. system out here,” Mr. Young said, referring to a multiple listing service. “We architected this Web site and really on a philosophical level dispelled the owner-controlling concept: Put the homeowner in charge. We’re convinced we’ll become the hub for all rental information and data if they use our Web site. We’re sharing this information rather than trying to hoard it ourselves.”
“It’s interesting to see how there’s no marketer that’s better than an owner,” added Mr. Kazickas. “People really care about how they present the property. These listings are actually really quite beautiful when you get down to the quality.”
With property owners managing their own listings, “the agent can focus on the real value of the transaction, which is negotiating and local knowledge,” Mr. Young said. “The agent comes in in the value position of putting the deal together.”
Rentals aren’t the gravy transactions in real estate, but by developing the Web site in the spirit of “co-opetition” with other brokers, Mr. Young and Mr. Kazickas hope to make a name for themselves and their full-service brokerage firm.
“You’re not really going to make a fortune doing rentals. What you do get is people who may become buyers,” Mr. Kazickas said. “If we could come up with a way of getting first dibs on the marketplace, we’re getting a competitive advantage.”
Another advantage Rosehip hopes to achieve is attracting experienced brokers with a payout system based largely on the number of transactions, as opposed to the dollar value of sales. In addition, “Our opening commission split is the maximum that other brokers offer to their rainmakers,” Mr. Kazickas said.
“Our rainmakers are going to make more than their rainmakers do. We’re saving more and using our brains to generate business in a cost-effective way. It’s our goal to give real estate professionals out there an honest shot at making a living.”
As compared to the corporate model, in which negotiations need to be approved by company higher-ups, Rosehip agents will have control over the sale.
“It’s all push-and-pull and give-and-take, and now the agent really has control over that,” Mr. Young said. “What does the seller want, representation from a big fancy brand or an agent that’s really empowered to get down and dirty and make a deal?”
“With the Web site, we’ve taken a business process, a whole business flow, and we’ve automated that business flow through our Web site,” Mr. Young said. “Right now we’re really focusing on building out our database. Once we can demonstrate to the brokers that we’re getting business, they will come.”