Michael Nourmand is the president and broker-owner of Nourmand & Associates, a boutique residential real estate brokerage firm that has 175 agents across three offices in Beverly Hills, Brentwood and Hollywood.
The company was founded by Nourmand’s dad, Saeed Nourmand, in 1976. His mom, one of the firm’s still-top-sellers, Myra Nourmand, later joined, making it one of Los Angeles’ oldest family-owned brokerages. While not involved in the day-to-day operations, his two siblings are shareholders.
This year, the firm reported an 18.7% increase in sales volume and an 11% increase in average home sales price.
Michael Nourmand sat down with the Business Journal to discuss his role in the company, leading a family business, the benefits of staying boutique and his thoughts on expansion.
As president of the company, are you still selling real estate yourself?
The short answer is yes. Sort of the evolution was, back in the day, you had a brokerage, the leads kind of came into the brokerage, the broker-owner doled out the leads (and) the splits were much more favorable for the brokerage than they are now, let’s say, 50/50 splits. And what happened over time is that agents started having their own relationships and their own book of business, so the splits became more favorable for agents, with the agent getting a higher percentage and the brokerage getting a smaller percentage. Agents are totally okay with broker-owners selling, provided that they don’t feel that it takes away from the resources, that it doesn’t take away from their clientele and that it’s a net positive.
The splits are too high as a generalization for the broker-owners not to sell, the model is hard. The margins are thin so it’s hard to make it work. If you look at all of the boutiques (brokerages) right now, I really can’t think of one where the broker-owner doesn’t sell…it does a handful of things. First off, it keeps the owner’s skill set sharp because they’re going through the motions. They’re dealing with a lot of things the agents are dealing with. They can give advice there. They know what comps are, they know what the trends are. And then, like I said, if it’s a net positive for agents, meaning that there’s business that’s shared, the agents are in favor of it. If no business is shared, then it becomes a little more of a topic for the agent to consider.
What types of properties does Nourmand & Associates specialize in? What about which submarkets?
Our average deal size through the end of November this year was about $2 million. We started off on the Westside, then we started doing business on the Eastside. Then, when prices in Los Angeles went crazy, we started doing a lot of business in the Valley. Most recently, we’ve started doing a lot of business in the Tri-Cities. All of a sudden, we’re doing a lot of business in Glendale. We do stuff all over the place. We do entry level places, we do $10 million-plus, $20 million-plus deals as well, but I think if you looked at average price point, $2 million in Los Angeles County is probably a good assessment.
What’s it like running an independent brokerage and working for a family business? How does Nourmand & Associates set itself apart from its bigger competitors?
I grew up in the business, I had some really good mentors. I’m also obsessed with family businesses. I have a passion for family businesses. I try to attend seminars, I try to read articles about it, I try to understand it so that, that way, I can model our family after others that have been very successful.
It’ll be 50 years in 2026 where we’ve been a relevant and established regional player in Los Angeles, and I think that really speaks volumes. We’ve managed to change with the times – we’ve updated our brand, we’ve updated our image, we’ve changed all that stuff so that we would appeal to millennials and agents getting (started) in the business.
All of my stuff is Los Angeles-based. I don’t have to roll it out to different markets. I don’t have a corporate overlord in New York or New Jersey or some other market telling me what to do so I can do the things that I think are for the best interest of the company. I don’t have quarterly earnings. I don’t have debt. I don’t have outside investors to answer to. In my opinion, and I’m biased, we run a very well-run and clean brokerage. We’ve played fair. I didn’t recruit viciously. I recruited people that wanted to join.
Since the start of your tenure, how has the company grown?
When I started, I think we had maybe 75 agents and two offices, give or take, definitely under 100. Now, we’re three offices and over 175 agents. (In terms of sales volume), I think (when I started) we were doing a few hundred million, maybe $200 million to $250 million (per year). In our best year, we did $1.3 billion and, in most years, we’re around $1 billion. This year, with the market being a bit tougher, we’ll probably come in close to $850 million, but I think this upcoming year my goal would be to hit $1 billion. But if not, we should be very close to it.
Given the number of high-profile agent moves we’ve seen lately, how do you attract and retain talent?
One funny thing that I think kind of tells you what you need to know about different brokerages is onboarding. When a company has an onboarding team that should tell you everything you need to know about that company, and I don’t mean that in a flattering way. The challenge with recruiting is that they (new agents) don’t know how good your management team is. Like they don’t know that my TC (transaction coordinator), Karla Cruz, has been with us for 25 years unless they’re at our company. I also think (things like) taking a call at 10 p.m. on a Sunday night, covering an inspection because an agent’s out of town, covering for somebody while they’re on their honeymoon, sharing business – I think those are all things that we do for retention. And then attracting top agents, yes, culture and services, but what’s worked the best for us is helping them create a brand to sort of not be in the world of conformity where everything looks and feels the same. If you’re at a very large company, the idea that two agents are going to pitch on the exact same listing with the exact same marketing materials, I think that doesn’t excite a lot of people.
What’s your opinion on the NAR settlement? How does it affect you and your agents? The settlement, which took effect on Aug. 17, is a $418 million accord to resolve antitrust claims that will change how real estate agents are paid and who pays them. It requires written buyer agreements that detail agent compensation.
I’m actually more favorable to it, I think, than other brokerage owners. I think in Los Angeles people always knew commissions were negotiable and I think that the National Association of Realtors as a generalization has done a good job protecting real property rights (and) trying to lobby for things that are favorable for the real estate industry. I think that there’s a lot of good that they’ve done. California Association of Realtors has standardized forms, the boards provide an arbitration if there’s a dispute over commissions between brokerages.
I think there’s a lot of good (but) I think, with that, there was also some bad as well. The way they spent money, the sexual harassment and culture that allegedly has been discussed in the press – which, assuming it’s true or partially true, is very toxic and concerning – but I also understand they had a business decision to make, and that bankrupting (would have been bad). With the actual rules that transpired, I like that it forces more of a conversation with buyers. I think that they should understand it should be more of a presentation and a conversation and more formal than it was. I think the idea of decoupling the fees and that that was going to compress fees to real estate agents, that has not been the case. I think the fee structure has been very similar. So, for me, the most frustrating part of the new rules is that it’s more paperwork. It’s more explanation.
Do you have any plans to expand into other markets or open additional offices?
My plan is to continue to add great agents to our three offices. I would consider opening another office if there was a great opportunity that presented itself, meaning like (if) I got a call and someone’s like, ‘I have 25 agents and somebody to manage the place, and we need you to open it and to oversee it,’ something like that I’d consider. The other thing I’d consider is an acquisition. Usually, acquisitions are better in down markets – I had one early in my career…and it helped me build my office in Hollywood. That was a big part of the foundation of that office, but in terms of like franchising or opening 10 offices, I like being a boutique. I like knowing all my agents by name. I like knowing about them, where they went to school, their kids’ names, where they grew up, the markets that they specialize in. I think that’s a big advantage where I’m boots on the ground and able to go to all three offices in a day.
