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Real Estate News and Advice |
November 20, 2009 |
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 The Galvanization of the Independent Broker
by Blanche Evans
According to data compiled by Real Trends in 2001 for its "500 Largest Brokers In The U.S.” survey, independent brokers were either the number one in transaction side units or sales volume in over half the top 80 markets surveyed, says Pam O’Connor, president and CEO of RELO, a networking group of top brokers. Not only were the champion brokers RELO members, points out O’Connor, but these independent brokers collectively pulled in over $252 billion in sales in 2001, according to data compiled from the Real Trends survey and the organization’s own network survey. She says that while other networks don’t publish their volume, “we were able to estimate it pretty closely based on the Real Trends volume/agent count to get an average per agent and projecting that across these networks. Based on that, it appears that RE/MAX in the U.S. is pretty comparable to our numbers, but that the other networks are a good bit lower: Coldwell Banker - $163 billion, Prudential - $101 billion, etc.” While she stresses that these figures are estimates, the figures strongly hint that independent brokers aren’t laying down in their markets to be steamrolled over by bigger, better-capitalized stock-controlled giants. Instead of going the way of the Dodo bird, as some industry analysts predicted, some independent brokers have used the entrance of large stock-owned companies such as Coldwell Banker Residential Brokerage into their markets as strong motivation to take a long hard look at their operations. Says John Fitzpatrick, managing partner of the Kentwood Company, “It was a good wake-up call for some. It sure was for me. We looked at our business model - how do we avoid becoming absorbed? We aren’t big enough to be on their radar screen, but we are the largest independent in Colorado. What changes did Fitzpatrick make? “We got bigger,” replies Fitzpatrick, “expanded, got away from the perception of the boutique, and we evolved to a full-service brokerage. We strengthened the relocation department, moved out our Web site faster than they did. When you’re smaller, you are faster.” According to an NRT spokesperson, what Coldwell Banker offers to recruit agents is access to systems and resources they wouldn’t have otherwise. “We have programs and systems that help you as a sales associate or allow you as a manager to more efficiently run your part of the organization,” he says. ”All those systems we have, too,” says Wes Foster, principal of independent Long & Foster. “If they have something we don’t have, we go out and get it.” Foster says that large stock-owned outfits weren’t the first big threat. “When RE/MAX came on the scene with the 100 percent concept, we offered the same program, and now that’s gone away as a threat because we offer it too. We are totally competitive.’ Adds Paul Gale, manager of Long & Foster McLean, “Stock companies are difficult, you work for the stock holders and there are a lot of things you can’t do. If I want to pick up the phone and talk to Wes Foster, I can. You can call the president of the metro area with a stock company, and he can he do everything that Wes can do, but he’s not the final word. Wes is the final word.” Jim Schiefelbein, vice president of marketing for Chicago’s Baird & Warner says that when he first came to Baird & Warner from a stock-controlled company, it was his job to get sales from $2 billion in 1996 to $5 billion in 2002. The company got its brand together. ”Baird & Warner wasn’t on the radar screen,” says Schiefelbein, “but now it is. It is a great source of pride that we are a threat - that we have raised the competitive level that a local independent can be as competitive as a major well-capitalized huge company.” How did Baird & Warner change to compete? “We went into the luxury realm,” says Schiefelbein. “It was a market where we didn’t play, and today, we are dominant. We have the most expensive listings in Illinois history. That was truly due to marketing, that’s the only way to reinvent yourself and you have to do that constantly.” ”We pay particular heed to the local consumer, and that does give us an edge,” says Schiefelbein. “They are operating on economy of scale. What gets lost is the more tightly defined local focus sensitivity. Those things are secondary to overriding corporate doctrine, or business plan. Because we are only local, we can respond precisely and sensitively to the local marketplace. That has appeal in the real estate business because it is all local.” Published: January 17, 2003 Use of this article without permission is a violation of federal copyright laws. 
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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.
