zipRealty.com isn't the first company to try salaried agents. They aren't the first to offer virtual agency. But they may be the first to successfully launch the virtual brokerage business model.

As brokerages struggle with rising costs, agency issues, market share, and agent fee structures, zipRealty believes it has found the answer. Serve an emerging market - the Internet Demand consumer. This consumer occupies a unique demographic - professional, busy, mobile, and they favor low touch-high-tech communications. To serve this segment, zipRealty clearly wont' appeal to everyone, it may easily find its niche among home buyers and sellers who value high speed connections over hand-holding.

Scott Kucirek, president, and Juan Mini, CEO, first got the idea to launch a virtual agency while exploring international relocation as a possible business. After meeting in graduate school and experimenting with several business models, the two men attended a Real Connect conference in 1998 and observed that most service organizations were moving to the Internet with the exception of brokers and their agents. And that is where they saw opportunity.

With $1.7 million in venture capital money from Vanguard Venture Partners, Kucirek and Mini, hired two brokers and opened the headquarters in San Francisco. In less than four months the agency has grown to over 20 professionals. A California roll-out is anticipated by the end of 1999, and by New Year's 2000, the company plans to be nationwide, operating from the San Francisco Bay area office.

"Our purpose is to deliver online real estate services to home buyers and sellers providing them with online solutions to buy and sell their homes," says Kucirek. "The Web site, combined with the assistance of licensed real estate agents will be more effective and the savings will be passed on to customers."

How does virtual agency work for agents? By offering something other brokerage houses don't - salaries, employment benefits including insurance, vacation time, performance bonuses and stock options, and a team-player environment. zipRealty offers three kinds of employment for agents - brokers who are willing to be licensed in multiple states, online agents and field agents. Online agents have at least five years of experience and handle the buyer and seller communications, the contract, and information management online. Field agents start with less than two years of experience and serve as assistants to the online brokers and agents.

Ed Nieman, broker of record, has recruited agents with as much as 12 years of experience. Getting them to join an upstart proved less than difficult. Why? Excitement.

"They know this industry is going to change," says Kucirek. "The Internet is causing this industry to change. When we explain how we see the future of this industry, a light bulb goes off in their heads. We feel our team is our number one asset, and they realize that this is the future and they want to be part of it."

Is switching agents from commission to salaries a problem? "We looked at what people were making and did a basic financial analysis," explains Kucirek. "But this is a future trend. They aren't coming for the money. They like the stock options, and they like working on the Internet and being part of a team. They like not having to market themselves. Even if you are in a franchise, you are still competing with everyone around you. Here everyone is committed to making the customer happy. A lot of agents we talk to are interested in that type of environment."

Agents begin with an extensive training period in which they learn zipRealty's proprietary software system. Every step is handled through the Internet. Over 90% of communications are handled by email, surprising customers with the speed of response.

"We can do that because we work in teams. All the agents can access your file. Another agent on the team can assist you if you need help and all the information is right there," says Kucirek. "We are leveraging the power of many instead of the efficiency of one."

Agency relationships are handled in the standard way according to California laws. When the site rolls out nationwide, zipRealty will follow the regulations within each state. Next year, zipRealty will operate in 15 states, and 26 major metropolitan areas. The company is setting up an extensive referral system to accommodate customers for whom their services are not a match or where zipRealty isn't offered.

"We have a new way of doing business," says Kucirek. "A lot of clients aren't right for us and we aren't right for them. This is a new segment of the market, and we just want to make sure that the home buyers and sellers get the best agent for them. Sometimes that will be zipRealty and other times it will be a traditional agent."

Published: September 13, 1999

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.