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 in Water Mill, New York, secured the exclusive rights to sell a dazzling contemporary oceanfront home with an inverted triangle roof in Wainscott, a hamlet of tony East Hampton. Bespoke, which was founded in 2014 by brothers Cody and Zach Vichinsky, had been using its extensive research and vast database to identify and pitch other owners of multimillion-dollar homes in the Hamptons. 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 Succession, went into contract for $45 million.
Cody Vichinsky, whose firm represented both the buyer and seller, credits Bespoke’s data-driven marketing and predictive analysis of potential buyers specifically interested in such modern homes for the quick sale. One other aspect of this transaction that wasn’t publicly disclosed at the time: Bespoke had reduced the seller’s commission rate to 1%, down from the typical 2% to 3%.
Lowering its commission is a practice that Bespoke, which claims more than $8 billion in real estate transactions since its founding, has been beta testing for more than a year. (The $8 billion figure is based on initial listing prices; homes sometimes sell for tens of millions of dollars less than the first asking price.) It has already sold a handful of properties at the 1% rate. “Our entire ethos is to streamline the business and challenge the status quo of why people have settled for the existing framework. We think the whole industry is on the tipping edge,” says the 35-year-old Vichinsky, who insists that his firm offers the same high level of service despite the lower fee.
So beginning this month, Bespoke is going where few high-end real estate firms have dared and is officially cutting its seller’s commission to 1% on every transaction. According to Vichinsky, Bespoke has already signed up 18 customers, most still to be announced, who will only be charged the 1% rate.
“On the high end, there is nothing like us. No one is providing a 1% standardized list fee,” he says. It will likely cost the firm, whose average sale 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.
According to Vichinsky, his firm is amply compensated at 1% given the high prices of the homes they sell. (The buyer’s agent, which is often Bespoke as well, will still typically receive 2% to 3%). The other reason to lower the commission: while few high-end firms advertise it, a number have already been 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 brokerage firms to offer sellers a 1% fee. “To advertise it as they are shows how they are embracing it and helping destigmatize it.”
“I told them you are going to have a lot of unhappy competitors, but I love this model. I love disruptors”
Naturally, some well-heeled clients are fans of the move. “I told them you are going to have a lot of unhappy competitors, but I love this model. I love disruptors,” says Ken Austin, the former vice chairman and president of Marquis Jet, who founded Avion Tequila; cofounded Conor McGregor’s Proper No. 12 Irish whiskey; and cofounded Teremana Tequila with Dwayne “The Rock” Johnson. He sold one home with Bespoke at the 1% rate (plus the 2% buyer’s fee) and bought two others through the firm: “I don’t want to go back and forth with a broker.”
Adds longtime Bespoke client Gary Garrabrant: “Cody isn’t afraid to change. I think what they are doing is disruptive. It’s going to be so upsetting to traditional brokerage.” Bespoke helped Garrabrant, who was billionaire Sam Zell’s partner for many years and is now CEO of investment firm Jaguar Growth Partners, and his wife sell their traditional cedar-shingle home in Southampton in 2019.
The Vichinsky brothers have already had success at shaking up the status quo in real estate. The pair, who grew up about an hour away from the Hamptons in Stony Brook, New York with their blue collar father who worked as a project manager on construction jobs, conceived Bespoke as a new kind of brokerage. From the outset, they hired a full-time sales and marketing staff, which works on homes across the Bespoke portfolio, eschewing independent brokers who rely on hefty commissions.
To date, they say they have sold hundreds of high-end properties and facilitated billions of dollars in such sales. Among its notable customers over the years: billionaire Stewart Rahr, whose Burnt Point estate in the Hamptons sold for $47 million last year (his foundation got proceeds from the sale); Continental Grain CEO Paul Fribourg; real estate billionaire David Walentas and reportedly fashion designers Vera Wang and Vince Camuto. It also sold a historic home known as Kilkare for Eleanora Kennedy, the widow of criminal defense attorney 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 had owned for decades, appeared in such movies as Wall Street and Eternal Sunshine of the Spotless Mind.
Bespoke’s biggest deal yet was its 2021 sale of Jule Pond (formerly known as 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 Succession; it sold for $105 million, a record price for a single home on Long Island’s East End (though below the initial $175 million listing price and later, the $145 million price).
While high-net-worth clients might value 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% is 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 high-end luxury brand. When you are in the luxury business you don’t want to cut your price. Bespoke should decide with their customers what the fair commission is based on the transaction,” he adds. “If it’s a tough deal, we might pay more.”
And while Bespoke has undoubtedly been on a roll—even during the pandemic—many trophy homes take years to sell, which means working longer than other firms to earn that lower rate. That’s besides the point, says Vichinsky, who insists the motivation to cut fees to 1% has “zero to do with economics.” Rather it’s all about the retention of these wealthy customers who can afford to wait for the right price. And it’s just one piece of a bigger plan. In the works, for instance: the firm is putting together an invite-only VIP program called Private Circle that will give members access to exclusive events and experiences like complimentary at home IV treatment or access to Art Basel. “We want to be the firm that takes these big risks that are in the best interest of the clients,” he says.
At least one industry insider is skeptical of the 1% at any price. “Beware of Greeks bearing gifts,” quipped Donna Olshan, who runs her own boutique real estate firm in Manhattan and writes the weekly Olshan Luxury Market Report. (Forbes had asked her what she thought of luxury firms, not Bespoke specifically, cutting the commission). “No matter what industry you are in, you will always have people trying the discount model. It’s like everything else in life. You get what you pay for.”