Cody and Zach Vichinsky changed the luxury real estate game on Long Island by specializing in properties worth more than $10 million, including homes seen on Succession and in Wall Street. So why is greed no longer good?
By Luisa Kroll
In August 2021, Bespoke Real Estate of Water Mill, New York secured the exclusive rights to sell a dazzling contemporary oceanfront home with an inverted triangle roof in Wainscott, a tony East Hampton hamlet. Founded in 2014 by brothers Cody and Zach Vichinsky, Bespoke used its extensive research and vast database to identify and feature other owners of multi-million dollar homes in the Hamptons. To see also : Welcome to Real Estate Friday!. Within two months, the property, which had a glamorous cameo as a beach house belonging to a billionaire played by Adrien Brody in an episode of HBO’s The Inheritance, went under contract for $45 million.
Cody Vichinsky, whose firm represented both the buyer and the seller, credits Bespoke’s data-driven marketing and predictive analytics for potential buyers specifically interested in such quick-sale modern homes. Another aspect of this transaction that was not publicly disclosed at the time: Bespoke reduced the seller’s commission rate to 1%, from the typical 2% to 3%.
“We didn’t grow up in this world,” says Cody Vichinsky, 35, who came to the Hamptons a decade ago to flip houses and now runs one of the top real estate firms in the Hamptons.
The commission reduction is a practice that Bespoke, which has claimed more than $8 billion in real estate transactions since its inception, has been beta testing for more than a year. (The $8 billion figure is based on starting prices; homes sometimes sell for tens of millions of dollars less than the first asking price.) The firm, which sells properties mostly in the Hamptons, Manhattan and South Florida, has already sold several homes at a rate of 1 %. “Our whole ethos is to simplify business and challenge the status quo why people have settled for the existing framework. We think the whole industry is at a peak,” says Vichinsky, 35, who insists his firm offers the same high level of service despite the lower fees.
So, starting this month, Bespoke is going where few high-end real estate firms have ventured and is officially reducing its seller’s commission to 1% on every transaction. According to Vichinsky, Bespoke has already signed up 18 customers, with most yet to be announced, who will be charged just 1%.
“At a high level, there’s nothing like us. “No one is giving a standardized listing fee of 1%,” he says. That will likely cost the company, whose average sales price is more than $27 million, many millions of dollars, but it could also help it win new listings not just in the Hamptons, but in newer markets like Manhattan and South Florida.
The Glass House: In an episode of The Succession, the Roy family visits this spectacular home in the Hamptons, which features a 80-foot-tall great room framed by floor-to-ceiling windows. In real life, it sold for $45 million last year.
According to Vichinsky, his firm has a hefty 1% fee given the high prices of the homes they sell. (The buyer’s agent, who is often also Bespoke, still typically receives 2% to 3%). Another reason for the commission cut: While a few top firms advertise it, a number are already quietly lowering their fees.
“Luxury real estate firms often end up at that price [1%] behind closed doors,” says Glenn Kelman, CEO of Redfin, one of the first discount brokerages to offer sellers a 1% fee. “Advertising it for what it is shows how they accept it and help destigmatize it.”
“I told them you’re going to have a lot of unhappy competitors, but I love this model. I love disruptors”
Of course, some well-heeled clients love this move. “I told them you’re going to have a lot of unhappy competitors, but I love this model. I love disruptors,” says Ken Austin, former vice president and president of Marquis Jet, who founded Avion Tequila; co-founder of Irish whiskey Conor McGregor’s Proper No. 12; and co-founded Teremana Tequila with Dwayne “The Rock” Johnson. He sold one house with Bespoke for 1% (plus a 2% buyer’s fee) and bought two others through the firm: “I don’t want to go back with a broker.”
Adds longtime Bespoke client Gary Garrabrant: “Cody is not afraid of change. I think what they are doing is disruptive. It’s going to be so disruptive to traditional brokerage.” Bespoke helped Garrabrant, who was a partner of billionaire Sam Zell for many years and is now chief executive of investment firm Jaguar Growth Partners, and his wife to sell their traditional cedar home in Southampton in 2019.
Eleanora and Michael Kennedy bought this 19th century house in 1975. She put it on the market for $55 million shortly after her husband’s death in 2016. It finally sold in 2020 for less than half that amount.
The Vichinsky brothers have already managed to shake up the status quo in real estate. The couple, who grew up about an hour away from the Hamptons in Stony Brook, New York with their blue-collar father who worked as a construction project manager, envisioned Bespoke as a new kind of brokerage. From the start, they hired a full-time sales and marketing staff, who work on homes across the Bespoke portfolio, avoiding independent brokers who rely on large commissions. “Our direct-to-client model is the first and only of its kind in the industry,” says Cody Vichinsky.
To date, they say they have sold hundreds of prime properties and facilitated billions of dollars in such sales. Among his notable buyers over the years: billionaire Stewart Rahr, whose Burnt Point estate in the Hamptons sold for $47 million last year (his foundation received the proceeds from the sale); Continental Grain Managing Director Paul Fribourg; real estate billionaire David Walentas and reportedly fashion designers Vera Wang and Vince Camuto. He also sold the historic house known as Kilkare to Eleanor Kennedy, widow of criminal lawyer Michael J. Kennedy (d. 2016), who famously represented Ivana Trump in her divorce from Donald Trump. Kennedy’s 1879 East Hampton beach house, which she and her late husband owned for decades, has appeared in movies like Wall Street and Eternal Sunshine of the Spotless Mind.
Bespoke’s biggest deal to date has been its sale of Jule Pond (formerly Fordune), the 42-acre Southampton estate built for Henry Ford’s grandson and known to many as the Roy family’s “Summer Palace” from HBO’s The Succession in 2021; it sold for $105 million, a record price for a home on Long Island’s East End (though below the original asking price of $175 million and later $145 million).
While high-net-worth clients might appreciate saving millions on a home sale, not everyone is sold on the Vichinskys’ 1% gamble. “I told them I wouldn’t do it. I told [Cody] I don’t mind paying if I get really great service. Whether it’s 1% or 4% it’s not going to change who I go with,” says one longtime customer who has done several deals with Bespoke. “I look at them as a top luxury brand. When you’re in the luxury business, you don’t want to cut corners. Bespoke should decide with their clients what a fair commission would be based on the transaction,” he adds. “If it’s hard work, we might pay more.”
Green Acreage: The Jule Pond estate in Southampton, New York borders three lakes and was built for Henry Ford’s family in 1960.
And while Bespoke has undoubtedly been on the road – even during the pandemic – many trophy homes take years to sell, meaning they work longer than other firms to earn a lower rate. That’s besides the point, says Vichinsky, who insists the motivation for cutting fees to 1% “has nothing to do with the economy.” Rather, it’s about retaining these wealthy buyers who can afford to wait for the right price. And that’s just one part of a bigger plan. In the works, for example: the firm is putting together an invitation-only VIP program called Private Circle that will give members access to exclusive events and experiences like a free at-home IV treatment or access to Art Basel. “We want to be a firm that takes these big risks that are in the best interest of clients,” he says.
At least one industry insider is skeptical of 1% at any cost. “Beware of gift-bearing Greeks,” quipped Donna Olshan, who runs her own boutique real estate firm in Manhattan and writes the weekly Olshan Luxury Market Report. (Forbes asked her what she thought about luxury firms, not Bespoke, about cutting commission). “No matter what industry you’re in, you’re always going to have people trying the discount model. It’s like everything else in life. You get what you pay for.”
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There has been a shake-up in the top 10 this year, with only the two biggest property owners – China’s Evergrande Real Estate ($273.8 billion) and Canada’s Brookfield Asset Management ($256.3 billion) – maintaining their positions.
Ben Caballero is the current Guinness World Record holder and #1 ranked single real estate agent in the US Ben Caballero set a new home sales record last year. He individually sold 6,438 homes worth more than $2.46 billion in 2020.
How much do the agents make on Million Dollar Listing?
Who is the most successful in real estate? Ben Caballero is the most productive real estate agent in the world, ranked #1 in America since 2013, according to REAL Trends published in the Wall Street Journal.
Where is Top Million Dollar Agent filmed?
One thing to note: the show’s description says it’s "based on the lives" Toronto Realtors. I’m not sure if it was there originally. In other words, it’s completely fake, except for the agents themselves. And on a related note, agents can’t seem to speak without using scripted lines.
Are the agents on Million Dollar Listing real?
How can a real estate agent make a million dollars? To make a million dollars a year as a real estate agent, you have to sell a lot of houses. However, how many houses you have to sell depends on how expensive the houses you are selling are. If your average sales price is $1 million, you only need to sell 50 homes a year to make $1 million a year.
