Real Estate - August 1, 2006 Creating Customers for Life
HSA Home Warranty holds strong through a changing real estate environment
By Stephanie Andre
Survival of the fittest. It’s a phrase often used for any topic related or analogous to evolution and natural selection. However, its use transcends science, also prevalent in the business world—companies that offer better goods and services survive better in the marketplace and tend to accumulate an ever-growing market share.
HSA Home Warranty has survived many changes in the real estate industry in its 20+ years.
“What we’re trying to do is show our customers that through the changing real estate environments—through the ups and downs over the years—HSA has been there for them,” explains Jeff Schafer, vice president of field sales for HSA. “If we weren’t providing great products and service, we wouldn’t have the lasting relationships that we continue to have today.”
Schafer says it is because of the company’s commitment to its philosophy—“Creating Customers for Life”—that it has been able to adapt through the changing markets of the past two decades.
“We want to pay claims and take care of our clients,” says Schafer. “This shows our value to our customers, and if they see that we are worth their hard-earned dollars then they will continue with us even after the first year in their new home.”
Also, “when real estate agents see our commitment to satisfying our customers, they know that their clients are being treated well and are happy,” he adds. “That will help bring those clients back to the real estate agent down the road.”
Schafer acknowledges that in the past, HSA was seen as more of a risk management partner. However, these days, he says the company sees itself as evolving into a referral partner—due in part to its “customers for life” philosophy.
“HSA is committed to providing the best possible products, price and service to ensure repeat business for years to come,” he says. “We have upgraded all of our products in the last 12 months, adding more coverages and enhancements to increase the value of our home warranty to homeowners.”
Fostering Lasting Relationships
Brian Kelly, president of Prudential RealtyCenter in Chattanooga, Tennessee, knows all about HSA’s performance and commitment to its customers. In fact, it’s the reason his company has stayed with the home warranty provider exclusively for more than 10 years—despite a changing market and recent brand switch to Prudential.
“Good performance all around is what HSA is about,” says Kelly. “Bottom line—they take care of their customers and also work very well with our people here. That’s why we stay with them.”
Trust is very important, he adds. “Our customers feel comfortable that HSA is going to have their best interests at heart and protect them when they need it,” Kelly says.
“While money’s always an important factor, there’s something even more important—time,” he continues. “People’s time is invaluable. If you can save them time and guarantee great service, customers will be very satisfied. That happiness is what keeps us with HSA.
“If we’re doing the right things with the right service providers, the money and business will follow,” Kelly says. “With HSA, we’ve gotten the customer feedback—we know we’re doing the right thing.”
For Tom Hosack, chief operating officer of Northwood Realty Services in Pittsburgh, Pennsylvania, HSA’s message is very clear. Indeed, it’s the company’s care for its customers and its hands-on approach with his agents that has kept Northwood with HSA for about 15 years, he says.
“With HSA, we see the people; we know them on a first-name basis; they come to our sales meetings,” he explains. “That type of relationship is priceless.”
Building to More Business
Despite a downshift in sales nationwide, Hosack says HSA’s presence in his office has led to increased home warranty sales. “HSA does most of the selling,” he says. “Our people believe in what they have to offer—that helps sell the product.”
Hosack concedes that typically the most difficult part of selling a home warranty is getting the agents to make that first sell. “Once they do that, they will sell the warranties all the time,” he says. “They’re so afraid of adding another cost for the buyer/seller, but once you look at the cost of the home warranty, compared with other closing costs, it’s very small for what you’re getting.”
“It’s all about trust,” adds Schafer. “Homeowners recognize and appreciate the fact that their agents are providing every service possible to ensure a smooth transaction. They’ll turn to that agent again and again for their real estate needs and will refer him or her to others.”
Giving Great Service to Customers
While at times customers may seem skeptical about purchasing a home warranty, Kelly and Hosack say that if the time should come when they need to use it, customers will be thankful and then realize the value of HSA’s products and services.
“HSA really does a great job with claims and responds right away,” explains Hosack. “They get vendors out to their customers very quickly, which makes for very happy customers.”
In fact, Kelly recently had a client call him to express how happy she was with HSA’s quick service. The client, who purchased her home in May, has already used her policy twice—for a problem with the garage door opener and an overflowing drain that had rotted away, he says.
“The woman was so impressed that she had the option for HSA to call the vendors for her or she could schedule herself,” Kelly says. “HSA quickly responded and promptly handled the communication with the plumber.”
Hosack says he recently received a similar call.
“We had a client—a first-time buyer—who had several problems and had only been in the home for three weeks,” he explains. “She had problems with her garage door opener, a water tank leak and a leak in the roof. However, because she had the HSA warranty, she only paid the low deductible to have all of it fixed. She was both thrilled and relieved.”
What’s more, Hosack says that because HSA is so hands-on with vendors, its customers know that someone reputable will be servicing their home. “It’s nice to have that comfort blanket,” he says. “For the price you pay, the level of comfort you get is invaluable.” RE
COMMENTARY
Budge Huskey
Florida Reacts to Market Changes
As Florida’s largest real estate brokerage company, we have a unique perspective when it comes to assessing the state’s residential and commercial real estate environment and direction. As of mid-year, Florida is mirroring the direction of the country as a whole, with formerly explosive coastal areas in correction and a number of interior markets, which saw only nominal growth during the last few years, enjoying increases in sales activity.
During the last few years, Florida experienced unparalleled growth that was fueled by investor activity in both land speculation and multi-family/condo construction. Diminished activity in this sector thus far in 2006 has led to declines in unit sales, according to MLS figures. As one would expect, the elective and resort markets along our coasts have seen the greatest change in the first half of the year.
Florida’s inventory levels have risen during the first half of the year, depending upon location. The need to educate customers on changing market dynamics and proper product positioning and pricing is paramount as we move into the second half of the year. Inventories in the new-construction sector have also increased, and builder-developers are updating feasibility analyses for construction projects. Condominium conversions, in high demand during the last two to three years, have slowed and rental strategies are growing in popularity.
Despite this move toward a more-balanced market that offers expanded options for buyers, the statewide year-to-date median sales price is up 15%, according to the Florida Association of Realtors. While prices may trim a bit in the second half of the year, we expect Florida as a whole to experience healthy price growth for the full year, which further dispels the bubble myth of massive devaluations. We also expect commercial to continue to be strong as evidenced by our company’s year-to-date growth in this area.
Real estate companies should look at this period of adjustment as a challenge to position themselves for future success. In addition to an intense focus on recruiting skilled professionals, companies that will be most successful are laser focused on inventory management and enhancing the fundamental sales skills of their business partners through expanded training programs.
Additionally, they must aim to attract, in every way possible, the attention of the online consumer. Companies that have the ability to make investments in Internet technologies and develop strategic partnerships will shine as the consumer trends away from an emphasis on print media. The value of global marketing prowess and a full-service business model is even more apparent now under more stable market conditions, as is the necessity for a fee structure reflective of the significant investments made on the customer’s behalf to ensure their success.
We look toward a variety of other segments to also perform in this current market. Those firms with commercial operations are likely to experience continued growth in that area, and REO business is trending upward due to higher delinquency rates. Also, broker network and third-party relocation relationships are increasingly valuable as a source of consistent and qualified business.
On a macroeconomic level, the fundamental drivers of the Florida real estate business remain strong. Net migration into the state, job creation, employment levels, and interest rates are all favorable and relatively consistent with prior years. Florida remains a primary destination, and our markets, with a traditional, corporate foundation, have demonstrated resiliency. We remain bullish on the long-term performance of real estate in Florida, and view the coming months as an opportunity to be an even stronger force in reshaping the brokerage landscape for the future. RE
Budge Huskey is the president and COO, Coldwell Banker Residential Real Estate, Inc. in Florida.
It Takes a System
In a normalizing market, Weichert Operating Systems plan on making a difference
By Beth McGuire
In real estate offices across the nation, sales agents and management teams are questioning how best to adjust to a marketplace where buyers are taking more time to buy and inventory levels are often rising. According to the franchisees of Weichert Real Estate Affiliates, the franchise arm of Weichert, Realtors®, there is no uncertainty or confusion. Instead, says Martin J. Rueter, company president, there is trust and reliance on Weichert’s precisely structured operating systems that, he says, “work in a great market and work even better in a changing market.”
The Value of Systems
Rueter defines systems by their intended purpose, which is “getting people to do what they should be doing all the time.”
Not only must owners have business procedures in place that are religiously adhered to, he explains, but management must do “what the agent can’t do, won’t do or forgets to do.” That might entail ensuring that Internet leads receive immediate attention, helping customers obtain a mortgage or staying atop sales-contract contingencies to make sure critical deadlines are met.
Says Rueter, “You can’t assume that all agents are equally service-minded or that even your best agents can give 100 percent, 100 percent of the time. Your company’s financial well-being ultimately depends upon having effective systems in place to back up and motivate the agent and ensure the consistency and quality of the customer experience.”
Putting Systems to Work
To build what Rueter calls “businesses worth owning,” Weichert franchisees can plug into highly evolved systems that have proven their worth through the highs and lows of the market cycles. Among these are an agent recruiting program aimed at ensuring a steady infusion of eager new agents; a system for transaction management that alleviates slip-ups and frees up the agent’s time to go after new business; the Weichert Open House Program, which delivers activity for the sellers along with prospective new customers for the agent; and a lead management system that helps agents incubate leads until the customer is ready, willing, and able to act.
For Sales Manager Karen Ryan, co-owner of Weichert, Realtors–Coastal Properties, Hilton Head Island, South Carolina, incorporating Weichert operating systems has been “transforming.” According to Ryan, “What stands out is how smoothly our business is running and how much stronger the communication is with our agents. The bar is higher, and our agents are responding with a new energy now that they have the Weichert systems to propel them along.”
Echoing similar sentiments was Broker/owner Bryan Crabtree of Weichert, Realtors–Dean Kelby, with three offices in the Charleston-Mount Pleasant area of South Carolina. “The Weichert systems are working extremely well for us vis a vis the competition,” he says. “Our agents have really embraced the Weichert listing system, which is doing a tremendous job of convincing sellers of our value.”
With recruiting an even higher priority in a changing market, Crabtree praises the Weichert recruiting system: “Our competitors are starting to have Career Nights, but when I drive by their offices, no one’s there. We have weekly Career Nights following Weichert’s very specific system and nine or 10 prospects typically show up.”
Anticipating that “the normal market we hadn’t seen since the millennium dawned” will persist for the foreseeable future, Rueter says, “Holding your own in this market requires having systems in place and having confidence in those systems. Otherwise, you’d be well advised to re-think your business plan, do some research, and do what your instincts tell you is right and necessary.” RE
BUSINESS TO BUSINESS
By Kim Ades
Business to Business
Nobody does it better…or so you think
“If I want it done right, I have to do it myself. It’s faster and no one can do it as well as I can. Besides, I don’t have time to babysit and I just can’t tolerate all this incompetence!”
Sound familiar? Of course it does. You are an entrepreneur with a vision and a gazillion things to do. You are swamped, stressed, and the weight of the world is on your shoulders. You have revenue to generate and expenses to pay. No one understands and no one really cares—after all it’s not their business.
This is exactly the kind of thinking that keeps most entrepreneurs spinning their wheels and struggling to grow. Well, here’s a reality check: you can’t do it all and expect to get anywhere significant. You must transfer your knowledge and your skills to other people in your organization. Your ultimate goal as an entrepreneur is to continuously replace yourself and move toward working on more and more challenging opportunities.
Think about how many things you do each day that you’d rather not be doing—it’s probably overwhelming and even frustrating at times. How much time does that leave for the important stuff? The truth is, there are other people who are just as talented as you (and some are even more talented) who can do those things with greater ease and efficiency. So hire them and let them do it!
You are probably thinking “Yeah, but training someone is not that easy—and it’s time consuming.” You are right—but creating a system for transfer of knowledge and documenting it is the single most important investment you can make. It’s also the single greatest contributor to the resale value of your company. The most amazing part is that when people have an important function they are trusted to do, they truly rise to the challenge and treat your business as their own.
You are building your company to serve you—not the other way around. It’s time to lighten your load, pass things off to other willing candidates and turn your life into the life you imagined having as an entrepreneur. RE
Kim Ades is the president of Opening Doors, a company whose mission is to help vendors blow up their sales to the real estate industry. Kim can be reached at kim@openingdoors.tv.
COMMENTARY
By Margaret Kelly
Industry Norm Now Includes Community Involvement
Real estate professionals provide a unique and powerful service in their communities: they help dreams become reality.
Yes, real estate is a business. Sales agents, brokers, loan officers, appraisers, inspectors and other real estate experts help people acquire and dispose of residential and commercial property. But it’s so much more than that. Finding the perfect home for a budding family is both challenging and rewarding because the future homeowner’s heart and soul are invested in the result.
Beyond that, real estate agents are frequently the first people property buyers meet when moving to a new community. These new arrivals ask about the schools, businesses, cultural offerings and popular social activities. It is part of an agent’s unofficial responsibility to help newcomers feel at home. Real estate investments aren’t simply transactions of business. They are transactions of the heart.
So, it makes sense that real estate professionals actively give to their communities. After all, doing good is good business, which makes cause-marketing a key component of success. Across the industry, brokers and sales agents earmark significant percentages of their commissions to local charities and organizations. They support children’s sports teams or neighborhood events. They also give of their time. They promote important community causes. They serve on government boards. In short, they are truly involved in their communities.
When a sales agent gives $5 or more from each commission check to the neighborhood children’s hospital, for example, it seems a modest donation. When the entire local real estate community gives, it becomes momentous.
I see this impromptu teamwork in the real estate industry every day. It doesn’t stop with a single company or an organized charity event. Real estate professionals consistently make a strong effort to give back to their neighbors, making our industry one to be proud of.
Regardless of the office, system or network with which we are affiliated, we know that our accomplishments are deeply rooted in the success of our communities. And we feel good about nurturing the society that gives us an opportunity to touch our neighbors’ hearts. RE
Margaret Kelly, CRB, is chief executive officer of RE/MAX International. She joined RE/MAX as a financial analyst in 1987.
COMMENTARY
By James Panepinto
The Mortgage Industry: Helping to Rebuild the U.S. Gulf Coast
In the immediate aftermath
of last fall’s devastating hurricanes, a great many lenders, their employees and mortgage industry professionals across the nation responded with compassion and generosity.
As reported on September 16, 2005 in The Chronicle of Philanthropy, Americans contributed nearly $1 billion to help Hurricane Katrina victims within the first two weeks of the disaster. This amount represents monetary donations from businesses, employee-match donation programs and individuals who made donations to nonprofit organizations, large and small.
Within the first month of the disastrous landfalls of hurricanes Katrina, Rita and Wilma, many of the nation’s largest lenders, banks and other financial services companies made very generous monetary commitments to nonprofit organizations. Trade associations, including the Mortgage Bankers Association and the National Association of Mortgage Brokers, encouraged and supported relief efforts among their members. Though it is not possible to put an exact dollar amount on the emergency relief provided, the mortgage industry’s compassionate response to the immediate needs of hurricane-ravaged communities totaled in the millions of dollars.
The spirit of giving and the desire to help others demonstrated in those early days and weeks has not waned over the ensuing months. Many in the mortgage industry continue to participate in the long-term efforts to restore affected areas, particularly in ways that help homeowners.
Rebuilding Lives and Communities
The federal government estimated in its Hurricane Katrina: Lessons Learned report that 300,000 homes were damaged or destroyed by Hurricane Katrina. While many homeowners have been able to repair homes, a great many others continue to need assistance.
The members of the mortgage industry have shown impressive levels of support for two of the nation’s largest nonprofit organizations that focus on housing and low-income homeownership: Rebuilding Together and Habitat for Humanity.
Rebuild 1,000 is the effort by Rebuilding Together that intends to restore 1,000 homes affected by hurricanes Katrina and Rita. The organization’s goal is to raise $4 million for use in this effort. Lead funding for the Rebuild 1,000 campaign is provided by Countrywide Financial Corporation through its Rebuilding With Countrywide Challenge.
Countrywide has pledged $1 million in support and will match donations from other companies, customers and employees, and other concerned donors dollar for dollar, up to an additional $500,000. Individual donations made online at www.RebuildingWithCountry- wide.org automatically qualify for the matching grant. Companies and organizations that have taken the Rebuilding With Countrywide Challenge and made donations toward the effort include the Fannie Mae Foundation, the New Orleans Saints and AARP.
Rebuilding Together’s mission is to preserve and revitalize houses and communities, assuring that low-income homeowners—from the elderly and disabled to families with children—live in warmth, safety and independence. In partnership with communities, our goal is to make a sustainable impact.
Operation Home Delivery is Habitat for Humanity’s campaign for areas affected by last year’s hurricanes. Operation Home Delivery’s activities include a large nationwide effort that brings community members together to frame exterior and interior walls that are shipped to the Gulf Coast and assembled into permanent homes. The organization is evolving this short-term response into the Habitat’s traditional on-site construction.
Among the many organizations supporting Operation Home Delivery is the Mortgage Bankers Association, which contributed $500,000 to underwrite a program management office for the Hurricane Katrina rebuilding efforts. The 12-person office is intended to lay the groundwork for a five-year recovery plan, as well as direct volunteer-driven construction.
Monetary donations will continue to make rebuilding efforts like those just mentioned possible.
Volunteerism and More
As private individuals, many people employed in the lending, home building and real estate industries have collectively donated thousands of volunteer hours in communities throughout the Gulf Coast. In addition, the National Association of Home Builders has encouraged its members to donate products and building materials through donation conduits such as Gifts In Kind International.
The industry has also recognized that it’s important to think about the homeowners who, faced with imminent danger, left the Gulf Coast region and have not yet been able to return to their homes. For many, the traumatic upheaval continues to impact all aspects of their lives, including their personal finances. With a home representing a family or individual’s largest financial asset, it is important that homeowners take steps to protect their asset, even if a home was destroyed.
Working with nonprofit organizations, lenders are attempting to reach homeowners who have not yet contacted their lenders. One effort is underway through the Association of Community Organizations for Reform Now (ACORN). The organization has set up The ACORN Housing Hotline, intended to help homeowners work with their lenders. In another example, Countrywide and ACORN are working together to canvas impacted neighborhoods in New Orleans, as well as rental properties in Dallas, Houston and San Antonio—prominent relocation cities for hurricane victims—to help locate displaced homeowners.
There are no easy answers to restoring the Gulf Coast communities and helping residents put their lives back together. The storms directly affected 1.5 million people and an area of about 90,000 square miles which, as the Office of the Federal Coordinator for Gulf Coast Rebuilding points out, is roughly the size of Great Britain. I am confident that the mortgage industry will continue to do its part in helping to rebuild and restore these communities. RE
James Panepinto is executive vice president, Strategic Business Alliances for Countrywide Home Loans. For more information about Countrywide’s Strategic Business Alliances, call 800-401-3402.
Marketing Goes Mobile
Realtors gain competitive advantage through moving-van advertising
By John Voket
When it comes to making first impressions, it is critical for real estate professionals in increasingly crowded and
competitive regions to rise head and shoulders above their competitors. And with the help of On The Move, Inc., an increasing contingent of agents and brokers are doing just that…while moving through traffic at the same time!
In communities like Alexandria, Virginia; Crown Point, Indiana; and Rochester, New York, real estate agents are utilizing virtually every inch of exterior space on self-contained On The Move moving vans to promote their brands and themselves—eight to 10 feet tall in some cases. At the same time, many are creating a significant return on their “mobile marketing program” by renting space to local industry partners, often zeroing out any costs and in some cases, even making a few dollars of positive cash flow in the process.
Boasting the fourth-largest rental fleet in the United States, On The Move has proliferated in just about 15 years with more than 4,200 vehicles on the road and over 2,000 satisfied clients to date, according to the company’s Web site.
The company, based in San Antonio, Texas, supplies the trucks either through purchase or lease programs. With a turnkey approach, On The Move makes it as easy as possible for even independent operators to get started by offering a variety of supplemental services and related equipment including an unbeatable insurance program with $5 million liability, hand trucks, furniture pads, rental forms and a personalized level of customer support that many clients say is unsurpassed.
“Our truck specialists will put you in the right truck, coordinate ordering, graphics, delivery and any other assistance you need,” Kirk W. Nash, the company’s president and CEO explains. “Many of our customers—Realtors and storage companies—have sent us testimonials about how their trucks pay for themselves, and not just in rental fees.”
Many agents sell additional advertising on their trucks for related businesses. Jana Caudill of Keller Williams Realty even discovered how to tuck a few important promotional messages inside, as important reminders for family and friends helping with the moving as they make trip after trip to the back of the van.
“According to On The Move, we were the first clients to put advertising and marketing inside the van,” says Caudill. While she sells ad space to a local builder, title company, carpet cleaning service, interior decorator and several lenders in rotating placements for $70-$80 per month, per advertiser, she has cleverly tapped the front, sides and inside for herself.
Using a high-impact graphic design featuring a “peeled-back” treatment, Caudill stands in front of an image of one of her homes for sale. She has transferred a copy of her own Indiana license plate “ISELL4U” 3 feet high and 8 feet wide above the cab, and has tucked several weatherproof signs inside reminding the movers that her team is there for them, that she appreciates their referrals, and to remind friends, family and co-workers that hers is the first company in her market to provide a rent-free moving van to any customer past or current.
“The only charge to anyone using the van is a modest one-time fee to cover comp/collision insurance for the day,” Caudill says. “We want it out all the time, so we allow past clients to use it anytime after their initial move as long as it is available. We also lend it to local charities. Last month we provided the truck to the March of Dimes to haul all their equipment for the local WalkAmerica event.”
According to On the Move, the back door alone can be divided into at least six spaces, each renting for as much as $100 to $300 per month. Or, in the case of Alan Wood of Realty USA in Pittsford, New York, he trades ad space on his vehicle to a local auto repair shop in exchange for oil changes, brake jobs and tires.
So, while agents and other program clients are getting added exposure as their truck travels all over town, they are also making money as a moving advertisement for others in their circle of local business associates.
Wood says the majority of his advertisers get plenty of feedback from customers who see their company represented in big, bold letters on the back of the brightly colored truck.
“They enjoy the recognition, but they also benefit from me sending referrals to them,” Wood explains. “These are not only my primary referrals for each of these lines of work. While I typically provide two or three or more referrals when customers or clients ask, these are what I call my preferred vendors.”
Realty USA provides their advertisers with size options for their tailgate ads ranging from $100-$250 per month. Wood is happy to accommodate his marketing partners by allowing them to use their own branding, pictures and logos when needed.
As far as he is concerned, Wood thinks there is no better way to go for high profile advertising for Realty USA.
“I thought it was a great idea when I heard of it,” he explains. “So many agents are spending hundreds of dollars a week on ads in the paper for a tiny ad—thousands a month. This is a lot less expensive; people tell me they see it all over the place.”
In his current arrangement with On The Move, Wood pays about $760 per month for his lease program, then the sale of ad revenue zeros out his expense.
“I don’t think anyone will have any problem selling the ads, and it can be a great opportunity for trade for services,” he says. Realty USA also makes the truck available to many nonprofit causes in the greater Rochester area.
“Half the use of the truck is for charities, which really gets my name out there in the communities,” Wood continues. “We just got it back from Camp Good Days and Special Times, a program for families dealing with cancer. They use it for different events moving items for fundraising events. Another group transports furniture for a benefit tag sale and their annual plant sale to move the supplies. I’ve even offered the truck to schools where they take the winning science fair projects to larger regional competitions.”
Keith L. Whited, an agent affiliate of Alexandria-based RE/MAX Allegiance, even gets a good return from his On The Move investment when it’s standing still. The Virginia Realtor has made an arrangement with a local health club to provide a rolling advertisement on his truck’s tailgate.
In exchange, the advertiser simply lets Whited park it in the front of the club—on one of the busiest commercial intersections in the entire county.
“It was a no-brainer,” Whited claims. “I provide the ad at no cost, trading the ad space for a parking space on one of the most high traveled locations along Richmond Highway, Route 1 in Alexandria.”
Like his On The Move associates in New York and Indiana, Whited believes the tie-ins between his advertisers and the charities he donates the truck to are a huge added value beyond the indirect referrals they enjoy as people see their ad moving through traffic.
“The advertisers tell me they are getting more and more indirect referrals,” he says. “The more business I do, the more filters down to them. It’s great goodwill advertising for them as well, because over their ads on the lift gate, I’ve printed: ‘This truck is offered to community and charity organizations thanks to the generous cooperation of these advertisers.’ ”
Like Caudill says, no matter how you mark it up, her On The Move truck is her biggest marketing asset.
“It reminds both our contacts and our team that the truck is available,” she says. “Since we’re competing with 2,400 other Realtors in our area, we think it’s a huge advantage that we were the first to provide a free moving truck as an added value service. A lot of Realtors may think it’s expensive, but it really makes my company unique, because no matter where they see the truck, or the ads inside or out, it constantly reminds people that we are with them for the long haul.” RE
BROKER SPOTLIGHTS
Bringing Diversity to the Masses
Pat Hoferkamp
President and COO
Burgdorff, Realtors ERA
Parsippany, New Jersey
Years in real estate: 28 Career Path: “After graduating from college, I went into banking but quickly realized it was not my passion. Having an aunt in real estate encouraged me to become a professional real estate sales associate, and I quickly found myself immersed in the excitement and challenge of it.” Number of offices: 15 Number of agents: 750 Average home price in your market: $625,000 Average listing time: 60 days Best thing about Northern New Jersey: “The quality of life is wonderful because we have the best of both worlds. For example, the accessibility—you can be in New York City in 30-45 minutes to enjoy all the city has to offer. But you can also get to the Jersey Shore in 60 minutes, and we’re convenient to Pennsylvania and Connecticut.”
You have people from more than 50 different nationalities working at Burgdorff—can you talk about that diversity and how it plays into your business? We feel very strongly that we need to mirror our community. It’s important to understand all different cultures. The best way to do that is to have sales associates who are from all of those different communities. It’s also an education for us.
You are now doing work with NRT’s Diversity Council. Can you explain the Diversity Council and your work with it? The council is really looking at how to bring diversity to NRT’s real estate companies. It’s a three-pronged approach—employees, sales associates and the community. We’ve been brainstorming about how best to accomplish these goals. We’ve also realized that we need to take a grass-roots approach—get into the community; identify local organizations and how to be a part of them. It’s tough to identify with people when there’s a language barrier and we aim to ensure that people are not intimidated about things like buying and financing. Our ultimate goal is to bring the American dream of owning a home to everyone.
How far is the Diversity Council in its goals? The council is a year old, and within this time, we have been instrumental in making an effort to adjust and address the needs in our local communities. We’re also reaching out to local leaders to understand the different needs people may have in pursuing homeownership and how we can be of service. For Burgdorff ERA, we need to ensure that our products and services meet the needs of the changing demographic community. We’ve done all the back work. Now, we are moving forward.
Please discuss your firm’s work in specialized markets—specifically the 50+ market. Implementing ERA Franchise’s 55+ marketing and training tools, our focus this year is to concentrate on serving the 55 and over market. This group is growing in large numbers every day. Based on the ERA survey on today’s mature market, we’re now working on how we want to target this market—what’s the best way to reach out? This group is made up of all different tiers: younger, but working; assisted living; those who own two homes; the list goes on. We feel it is important to be a part of this emerging market.
—Stephanie Andre
Realtors Running the Show
Bob Russo
Broker/owner
Help-U-Sell Impulse Realty
Pinal County, Arizona
Career path: As a licensed broker; Russo sold real estate part time in the late 1970s and early 1980s in Connecticut, all the while still working full-time in his career—which was in the semiconductor industry (managing the sales and marketing of computer chip-making equipment). A few years ago, after his retirement from that industry at age 61, he decided to give real estate another shot. Number of offices: First office is opening soon (as of press time) Number of agents: Five Average home price in your market: $229,000 Average listing time: 52 days Best thing about Arizona: Arizona offers great weather to do a lot of outdoor activities and has a fantastic business climate that draws clients.
You recently left a successful career as a top agent with another real estate firm to join a different franchise—were you worried about taking such a big risk? No, I wasn’t worried. I look at selling as a profession and a skill. I don’t look at it as being some used-car salesman. At my level—because I believe I have a skill—I can sell most any product or service. I have developed that skill set. While I believe that I would do well anywhere, being with Help-U-Sell, I know I can do even better. They also understand the need to spend time with clients face to face, not just on a computer. Also, I feel good knowing that Realtors run this company. From a management point of view, in my opinion, upper management should have real estate experience—not just any business experience. The management at Help-U-Sell talks the lingo and understands the business. They just get it.
What led you to Help-U-Sell? This company has all of the proven techniques that work. It has proven marketing. Everything about Help-U-Sell meets my profile. I’m a marketing person. I believe everything needs to be done through marketing. The company’s name branding is phenomenal. Plus, of course, there’s a set fee—no 6% commission. Clients now want value, but do they feel like they’re getting enough value to pay 6% to their Realtor? With a set fee, they look and say, “your set fee gives me the value I’m looking for.” It saves people money. Help-U-Sell gives so much to its clients. It’s about building a rapport between the agent, buyer and seller, having that direct contact and opening up the lines of communication.
What have been the biggest challenges thus far? For me so far, it’s been more about finding an actual space to lease than anything else. You wouldn’t believe how difficult it is to find the right size space here. I’m trying to find the proper visibility. Most places I’ve seen that have a lot of visibility are too big. Our model fits a 750- to 1,000-square-foot space, not 1,000 to 2,000 square feet. I’m looking in areas that are growing very quickly in terms of real estate and people moving in. However, the infrastructure to support small offices is still being built.
—Stephanie Andre
Quality Over Quantity
Ravath “RP” Pok
President, CEO & Principal Broker
Signature Group Real Estate
Salt Lake & Park City, Utah
Years in real estate: Close to 19 years. “For the first seven years I owned a real estate marketing group called Jungle Solutions.” Career path: “From 1985-1992, I ran Jungle Solutions and did phenomenally well. It was Jungle Solutions along with Hobbs Herder that really developed personal marketing strategies for Realtors. Because the marketing firm did so well for other Realtors I decided to start my own real estate company.” Number of offices: Two, with two more scheduled to open in the third quarter of this year. Region served: Salt Lake, Summit, and Washington counties, which cover most of the state of Utah. Average sales price: $200,000 is the Utah average. Signature Group averages closer to $280,000 per home sold.
When and how did your firm start? I opened this firm, Signature Group Real Estate in 2001. I prefer to be an independent because I believe I can give the best service that way. My mission statement is “quality not quantity.” I believe that quality is part of the culture. It’s a passion for the culture that is passed on from the top down. We have a Nordstrom’s mentality.
How do you use The Real Estate Book in your marketing? I have been in this business a long time and have used a lot of different marketing tools and did not want to use The Real Estate Book at first. But it has paid off for me. Because I am an independent The Real Estate Book gives us a national presence and the ability to compete with nationally branded firms. The book gives us a competitive advantage. Because we are the largest advertiser in The Real Estate Book in Utah we really stand out.
In your opinion, what differentiates your marketplace? You don’t have a choice when you come to Utah. It is conservative here. But in some respect the conservative nature keeps it manageable and not frenzied. People who first come here complain that there is no nightlife and we tell them that it’s OK because there are so many outdoor activities during the day; mountain biking, skiing, hiking, boating…you name it, we have it! And so we do so much during the day we are tired at night and so it’s OK that there is no nightlife. Also, that enriches a family.
How would you describe the demographics of your clientele? Because of our price range, I would say younger, successful professionals—30-40s, six-figure income people.
What’s one of the most creative things you’ve ever done to sell a home? We do things that are upscale. The most fun I have ever had was when we had a very big elegant home for sale and we hired a piano player and a catering company. They came into the home, which had a fabulous art collection. So we treated it more like a big art gallery show. We believe you have to spend money to make money. So if you take a look at our marketing its expensive. But it works!
—Lesley Geary
A Passion for Real Estate
Beverly Godfrey
President & CEO
Coldwell Banker Triad
Winston-Salem, North Carolina
Number of offices: 8 Number of agents: About 325 Average sales price: $170,000 Average listing time: 92 days I’ve worked in real estate for…: “My entire life—I’m a second generation Realtor. Growing up, if I wanted my allowance I had to work at the family company!” If I wasn’t in real estate, I’d probably be: A builder and/or interior designer In my spare time: “I’m sort of a Martha Stewart type. I have a large garden and I love to grow flowers and vegetables. I recently learned to make pickles. They’re a big hit with my teenage sons.” The best professional advice I’ve ever received is…: “We spend more of our waking hours at work than at home; so make it a good place to work—look after the people in your company.”
How are you changing your marketing efforts to stay competitive? Our major focus is on expanding our Internet exposure. With 79% of buyers starting their home search online our goal is to facilitate their efforts and give our sellers optimum exposure. Each year our budget for Internet marketing has increased. These are truly the best dollars we spend and, in my opinion, the wave of the future. Our Web site is consistently attracting over 50,000 unique visitors each month—far outranking many local advertising mediums who want to sell us advertising space.
Is your market up or down from this time last year? Our market is actually down slightly, however, our numbers are up over this time last year. We are fortunate to be in an area that is growing economically. Although nationwide they love to talk about a “bubble”—the only bubble in our marketplace is the result of the changes in interest rates nationally and the individuals in the lower price range who have been squeezed out of the buying market.
What is the biggest challenge you face in growing your company? While we are always looking for opportunities to expand our business through acquisitions we do not rely on this. We have a long history of growing our company by recruiting and training highly capable individuals by focusing on increasing professionalism, knowledge and success of all our associates through ongoing training and innovative technology. And we’re very successful in doing so!
What’s your most successful recruiting method? We use a combination of efforts in recruiting new sales associates, from our online “Test Drive a Career in Real Estate” to utilizing an in-house recruiting director. Our biggest draw as a company is our training program—the strongest in our region. Our trainers travel throughout the southeast to train other Coldwell Banker associates outside of our company. However, our best recruits come from the efforts of our own sales associates who are actively involved in the process.
—John Voket
Second-Home Haven
Dougan Jones
CEO/Owner
Prudential Utah Real Estate
Park City, Utah
Number of offices: 17 Number of agents: 550 Regions served: Park City, Utah Average sales price: $507,000 Average listing time: Five days Years in real estate: Almost 30 Started in the business…: As an agent and was known as the “For Sale By Owner Listing Leader.” My career path included…: “Group therapist and crisis intervention counselor, which prepared me well for a career in real estate and management.” Most creative thing you ever did to market a home: “I had a charity fundraising event for children at an open house.” If I wasn’t in real estate I’d probably be…: A sommelier In my spare time…: “I fly fish, ski, hike, and enjoy the outdoors.”
How has the general market in your region been changing over the past three to five years? Lifestyle and quality of life are becoming primary concerns for many people today. Home buyers are increasingly sensitive to issues such as a quality environment and proximity to outdoor recreation. As Baby Boomers reach retirement age, they’re finding they want to maintain or even increase their active lifestyle. For many, living in an area with year-round recreational sports, diverse and quality restaurants, as well as an entertaining and culturally stimulating nightlife is part of a lifelong dream.
Why are primary home buyers relocating to your market versus looking for a second home? Undoubtedly, one of the reasons primary home buyers are moving to Utah is because the price of real estate remains undervalued by national standards. Families have found that Utah provides an active outdoor lifestyle, a child-friendly environment and varied career opportunities. For home buyers, we are becoming much more competitive in price in recent years, but those who may have invested five to 10 years ago are seeing substantial appreciation in their home values.
Can you talk about the things that are attracting investors in second homes to your region? The second home market in Park City is still undervalued when compared to other resort markets. This situation creates the potential for appreciation in the future, making real estate an attractive investment opportunity. And we shouldn’t rule out the more affluent investors who are, and have looked to our region for even third or winter vacation-home opportunities. This continues to be a growing segment of our buyers’ market.
What is driving the high-end segment of your market? The region hosted the 2002 Winter Olympics, which provided a huge amount of international focus on our area. That level of coverage has certainly helped drive new home buyers and investors to the market. We are also a prime international destination because the venues for these Olympic-level competitions remain available for all the serious winter sports enthusiasts to use.
—John Voket
Ready for Change?
Prepare for a Shifting Market at RISMedia’s 17th Annual Leadership Conference
The 17th Annual Leadership Conference, scheduled
for September 27-28 at The Roosevelt Hotel in New York City, will focus on educating attendees on how to position their businesses for long-term
success in the real estate industry.
Presented by RISMedia and sponsored advertisers of RISMedia’s Real Estate magazine, the conference focuses on building stronger real estate and relocation businesses and the future of our industry.
The conference will begin with an Opening Session for both real estate and relocation professionals—“The Changing Face of Real Estate”—at which real estate leaders will discuss the changing shape of the industry and how to move with those changes.
That evening, a Welcome Reception will be held to kick off the event for all attendees, sponsors and VIP guests.
The following day, a full lineup of sessions will include discussion on important issues and new trends—with a choice of interactive breakout sessions that will focus on relocation, broker/owners, sales associates and technology.
At the close of the conference, a Networking Reception will be held at which attendees are invited to mingle with colleagues. —Stephanie Andre
The following speakers have been confirmed:
John Tucillo, JTA, LLC
Sherry Chris, Prudential CA/NV/TX Realty
Gregg Larson, Clareity Consulting
Jeffrey Arouh, Holland & Knight, LLP
Larry Liebross, Parkside Properties
Bob Hale, Houston Association of Realtors
Tom Tognoli, Intero Real Estate
Carter Murdoch, Bank of America
Stefan Swanepoel, RealtyU Group
Lennox Scott, John L. Scott Real Estate
Renwick Congdon, Imprev, Inc.
Ken Baris, Jordan Baris, Inc., Realtors
Steve Damman, QuantumMail
Brian Wildermuth, SharperAgent
Laura Rubinfeld, Manhattan Association of Realtors
Richard Nacht, Blogging Systems
David Charron, MRIS, Inc.
Mike Schlott, Randall Realtors, GMAC
Helen Hanna-Casey, Howard Hanna Company
Joseph E. Mottola, Long Island Board of Realtors & Long Island MLS
For more information or to register, visit www.realestateleadership.com. For conference questions, contact Donna Malin at donna@rismedia.comor (203) 855-1234 x120.
VIEWPOINTS
As the real estate industry continues to evolve, in order to thrive, real estate professionals will need to adapt to the changing marketplace. From evolving technology to upward inventory levels, it’s imperative that you change with the times. Here, three industry pros give their take on what changes they’ve noticed in the marketplace.
What trends have you seen emerge in the first half of 2006 and how are they affecting the industry?
Looking Down
the Road
Sherry Chris
Chief Operating Officer
Prudential California/Texas/Nevada Realty
www.prurealty.com
Adaptation and change is a critical part of the growth process for any company and industry and it is vital that we recognize, accept and adapt to the changes quickly approaching us. From wireless devices to the endless array of online information libraries, smart brokers and agents must see that what’s ahead for the real estate industry is a tech-heavy, fast-paced world. Sink or swim, here some of the key trends to watch:
1. Shift from agent focus to a consumer-driven world—Once agent-centric, the industry must now refocus on consumers’ wants and needs, including communicating to target consumers based on age group and habits. For example, agent Web sites allow real estate professionals to provide more information to consumers about demographics, area schools, comparable prices and general neighborhood information that will help a buyer or seller in the complicated transaction.
2. New advertising models for an online world—With newspaper readership on the decline and use of the Internet growing exponentially, brokers must adapt advertising models to reflect the shift in media consumption. Recognizing this change is key to targeting and servicing younger, more tech-savvy homebuyers and sellers. Ideally, new advertising models, which include online advertising, will increase traffic to broker/agent Web sites.
3. Technology for a connected world—According to an NAR study, half of agents this year are responding to online inquiries within two hours, a marked difference to 2004’s figure that had 27% of agents responding to online inquiries in eight hours or less. Evidence that as a new generation of home buyers and sellers emerge, consumers will demand that their brokers and agents stay well informed and ever accessible via technology and client support systems, ensuring timely and accurate communication of information.
4. Training for a new world—New agents are constantly entering the industry, with over half of current agents having been in real estate for less than five years. These newer agents have not yet experienced the demands of a rapidly changing market. As industry leaders and experienced brokers and agents, we must inform, train and coach our agents on how to deal with buyers and sellers as the market balances and a new generation of consumers enters the real estate world.
5. Consolidation for a changing world—With less activity and decreasing unit sales in several markets, smaller to midsize brokers are feeling the effects of a slower market. Although larger companies and small specialty firms will be able to adapt and survive, midsize companies will be hurt by the increased costs. There will likely be continued consolidation as the market changes.
With a consumer pool divided by generational preferences, traditional boomers and tech-savvy Echo Boomers significantly affect the way that real estate professionals approach homeowners and sellers. It will be the agents and brokers who recognize and embrace the timely communication of information through client support systems that will thrive in the coming years.
Inventory on the Rise
Greg Robertson
Executive Vice President, Sales Marketing
eNeighborhoods, Inc.
www.eneighborhoods.com
We are seeing inventory levels rise in MLS systems all around the
country. This happened rather quickly. The jump really started at the beginning of the summer recess for schools. When you combine
that with longer “days on market” cycles, in many areas, you see the inventory starting to reach levels unseen for the past couple years.
This rise in inventory also means agents have to work harder to sell homes. This is creating a really competitive market in a lot of areas of the country. Agents have to ask themselves questions like, “How am I going to get this property to stand out?” and “How am I going to get these buyers to make an offer?”
Another trend is a greater interest in MLS providers across the country creating alliances to share access to MLS inventory with each other. This typically happens with several MLS providers who are in a close geographic area. It is not unusual for bordering cities to be on two types of MLS systems.
This type of agreement allows each MLS to keep its independence and cater to the local membership while creating one common search interface for all the participating MLS providers. MLS alliances allow listings to be exposed to a broader geographic audience of potential buyers, which becomes all the more important as the market continues its shift away from a seller’s market.
Proper Pricing is Key
Paul A. Leys
Co-owner
Gustave White Sotheby’s International Realty
www.sothebysrealty.com
Now that we are in the second half of 2006, I am somewhat happy and surprised by the statistics of my own company. In general terms, after experiencing a record-smashing 2005 in gross dollar volume, I wasn’t expecting to match those numbers but in fact we are.
I believe that the “feeding frenzy” that sellers have enjoyed since 2000 has subsided and that houses selling with multiple offers and over the asking price are not as common in today’s market—but that is not necessarily a bad thing.
Yes, inventory has increased, days on the market have as well, and buyers probably have a bit more time to make a decision as opposed to writing up an offer on the hood of their Realtor’s car. The bottom line is—properly priced homes are selling, just like they always have.
I believe that overpriced listings are affecting the market, but it is certainly a trend that can be adjusted and fixed. Pricing a home is the toughest job for Realtors today. Pricing certainly isn’t—and never will be—an exact science, but with the appreciation rates of the past five to six years being what they were and present sellers wanting to see those rates continue, pricing is an extremely difficult task to complete. This is evident by the increasing amount of inventory that is taking longer to sell. |
