Skyline Properties the desk fee office.

In the late 1970s and early 1980s residential Real Estate began taking on a life of it’s own. We’ll discuss the transition from commercial to residential sales in a later post. In North Seattle there was a growing residential sales office presence. Bob Parker, Dick Metzner, Bill Young, and Pat Melton staked out huge swaths of territory in Shoreline north to South Everette. These were on the same business models of a split office where agents split the commissions with the Brokerages, usually 50/50 up to a certain point, before it adjusted to 80/20.

In the mid 1980s, with Windermere recruiting some of the top agents, there was a back lash against the fee structure. Most agents had a set clientèle that they worked with and didn’t see a need for a Brokerage to take 50% of the commission for business they generated. Bill Young broke off a business model of collecting a desk fee and letting agents keep 100% of the commission. It was something ridiculously cheap. Bill however was really only renting out a building he probably owned. He collected the desk fees as a form of rent for the desk space.

The story goes that Bill Young wanted to expand the desk fee concept and sent out a couple of agents to scout office space. After the agents did some searching Bill decided he didn’t want to expand and the agents went ahead and formed their own company, Skyline Properties. They opened an office in Bellevue, and Everett, then one in Northgate followed by Kent. This is where the desk fee concept really took off in the Seattle area.

A desk fee is a kind of you all come in, pay your money, and we will handle the Brokerage end of it. The Brokerage end is making sure the paper work and Earnest Money checks are secure, getting things to escrow, and settling disputes. This is a simplification of Real Estate Brokerage, but at that time it was kind of the business model. These were leased office spaces, with staff. The office needed to get up and running quickly. It was a huge risk, especially considering that split offices were against the idea. Many Brokerages were losing agents to Windermere, and now this.

The road was pretty rocky. Some seasoned agents went to a desk fee, but mostly part time agents went this route. Some people figured out they could get a Real Estate license, pay a desk fee for a couple of months, buy a house to live in, and save the commission. Actually, if you are like a lot of agents who work with investors you only need to do a few deals a year to pay for the desk fees. There again if you are an investor the desk fee more than paid for itself. What made the road particular rocky was that other Brokerages not only didn’t like the desk fee concept, but were also seeing many deals that were written poorly, or liberally, with the terms and conditions.

We’ll talk about investor clients at another time, the ones who make a living out of Real Estate transactions. It should be clear that many of the deals these people put together are not normal. You can ask for anything in a Real Estate transaction, some times you even get what you ask for. What this did was to give Skyline Properties the reputation for flaky deals, deals that would not close. It’s true that the you all come, as long as you pay the desk fee, attracted both amateur as well as professional agents, along with investor want to bes. The reality is that in the process Skyline Properties created a system of checks and balances.

Skyline has the office management that is enviable in other companies. You have in office review by an office management staff, a Broker, and a central office review. Real Estate transactions are cataloged, tracked, kept, and reviewed again. There were many missteps in creating this process. There is no training or office meetings required. This desk fee concept did promote diversity which is something that the Big Brokerages never accomplished.

Other brokerages like RE Max work from a desk fee basis. It’s expensive. Now all Real Estate companies have a desk fee system. They are expensive. Skyline kept the low cost desk fee and based the income they get on volume. It really is a great a beautiful thing that has spawned a lot of other individual agent marketing. I’ll stop short of saying they could be a discount Brokerage because that was never the intent. It is a place where agents can find their own path and personal business model.