Chip Roach Prudential Fox and Roach

One of the people that Homestore CEO Mike Long paid a personal visit to in his cross-country tour to meet and greet customers over the last three months was Prudential Fox and Roach's Chip Roach. Roach heads one of the largest real estate companies on the east coast with 2,700 agents in 48 offices in Pennsylvania, Delaware, and New Jersey.

To talk to a broker like Roach, who has been a Homestore advocate to the point of providing exclusive access to his sales force resulting in 600 ILEAD Web sites sold, and who buys virtual tours 20,000 at a time, was well worth Long's time.

Fox & Roach has been an evolutionary real estate firm since 1886. Bill Fox's grandfather started the firm in South Philadelphia, where it subsequently went through a series of mergers and acquisitions over the past seven years, including the integration of Roach Brothers Realtors in 1995.

"Our firm is the leader in market share, with something in the mid 20's range," says Roach. "The next closest competitive firm is less than 10%. We have been about this size for three years since we bought the Prudential franchise company here and got into the Prudential system ourselves."

The firm does an annual sales volume of 30,000 transactions per year for a total of $7 billion, ranking the firm eighth in the country in most surveys of broker sales productivity, says Roach.

Yep. Prudential Fox and Roach is big, all right. And Homestore knows it.

All it would take to squash the "New Homestore" would be a cold reception by brokers like Roach, because it is brokers like him that are part of Homestore's new strategy to serve its customers - Realtors - better.

So, when Realty Times published its two-part interview with Long, Roach wrote the editor to comment on his impressions of Long and the New Homestore.

"I have visited with Mike here in my office (what a breath of fresh air that was...to get a call saying, "can I come over to see you?") and found him very candid, experienced at profit making and tough decisions and making a very fast study of our business," wrote Roach. "Your article portrays much of that quality. Thanks for the candid reporting and interviewing skills. We need more people in our world like Mike Long and we are one of his biggest customers and plan to support his efforts." Blanche Evans interviews Chip Roach exclusively for Realty Times.

B.E.: Why did Mike Long come to see you?

C.R.: He was intent on seeing people who were large customers. I had developed a good relationship with Stuart Wolff, and I saw him as a savior for the real estate business in a way that was truly extraordinary. He had the vision but the implementation was lousy. The same thing happened to Billy Chee, he was being sued as a rascal, and now he is regarded as a visionary. It was the first time the whole association took off like a collective group. The RIN debacle is a remarkable recovery story and the same thing will happen with Homestore if Mike can continue to do what he is doing.

B.E.: What were your impressions of Long?

C.R.: Mike can coordinate service and make the enterprise financially sound and has the grey hair to prove it. He is someone with experience. He is going back to the core business and pay more attention to consumers. Mike is walking the talk, he is apologizing and seeking out customers face-to-face and asking what's wrong and what he would like to see happen.

B.E.: What problems did you tell him you were having with Homestore?

C.R.: We have been a big supporter since they began their focus on selling home pages and productivity tools. We have hundreds who have ILEAD packages and Top Producer, and we continue to position Realtor.com as the place where our agents ought to go. Our agents join our site that we have, and we have pages that link to their listings.

But our attempts to integrate all this with Homestore has been a terrible experience. We tried to do several other things with Homestore with regard to redoing our Websites and melding tools like eRealtor, Top Producer and they were unable to coordinate a thoughtful sales approach to us. So we went another direction and have abandoned the transaction platform.

They didn't have a way to integrate it or sell it, none of their disparate leadership met with each other or knew each other well, and it was painful to continue to try to work with them.

B.E.: So you wanted an integrated technology system for your brokerage and Homestore couldn't deliver. What did Long say?

C.R.: He said he would have people from the enterprise melding their products and services and get rid of extraneous companies and concentrate on the few that are likely to succeed to transform into a suite of services that are truly coordinated. That was one of his top priorities and to listen to our feedback and check with us.

B.E.: What about sales to agents?

C.R.: They have changed their approach with their sales people to a more consultative approach to selling and servicing.

I have seen some evidence before Mike came to see me. He doesn't have a ton of salespeople, but since the commission structure was more sell-and-move-on, we had some salespeople who were doing consultative selling and he was thrilled with that. He promised a little more horsepower for a firm of my size. It begs for a bigger solution to come and train my trainers - that is more helpful to me and it's a way of leveraging resources.

B.E.: What did you promise in return?

C.R.: We are providing access to our associates to sell ILEAD and Top Producer, and we are still there. We promised that we would continue to do that to get them in touch with the Internet consumer.

He has some outstanding people like Roger Scommegna, He ran The Enterprise Group and many real estate TV programs in major markets and he worked with Bill Fox. Once that became something he changed and morphed into an internet services company early in the game and sold his company to Homestore. His people were capable - they were one of the companies that weren't coordinated into Homestore in an effective way. He's in charge of sales of products and knows how to coordinate that.

There was a crying need for business people, not scientists, at Homestore. You make an $80 million mistake - you get your feet held to the fire.

The jury is going to be out for a while so our people don't get left holding the bag. I'm holding Long's feet to the fire. I'm welcoming his people on an exclusive basis to my company.

B.E.: Why do you feel it is the right thing to do to give Homestore another chance?

C.R.: We have had good success with them. I have 600 people with ILEAD services we want all 2,700 to have them.

Their approach was here's 800,000 people we can sell to, and they went to the individual sales people. I've spent my whole life trying to communicate with and sell to that group. Now he's more broker-centric, and there is leverage for me and him in reaching my sales people, so I have been able to forge some discounts - I can spread the word and be more effective than he is selling individual agents.

The traffic Homestore has unbelievable, there were only two stations what have that kind of viewership - Homestore and HomeAdvisor. They are like the only two channels on television.

So think of the approach. If we say, 'These people are jerks, and we aren't going to have anything to do with them, where are we as business people? That's not a smart position to take. They did fumble a lot of initiatives, but they are a powerhouse of a company, and you don't want to lose them because they are filling an important place in the landscape. Where do you go? You have this name, listings, where do you go? AOL? Microsoft? Or someone else who isn't bound to the things Homestore is bound to that is a positive for Realtors?

This is an industry where fewer than 400,000 people had fewer than three sales last year. It's time to stop listening to those people and start paying attention to the people who are driving the business.