RISMEDIA, November 12, 2010—Part realist, part philosopher, but true believer through and through, Ron Phipps brings a strong mix of hands-on leadership and long-term vision to his role as 2011 president of the National Association of Realtors® (NAR). Principal broker at Phipps Realty in Warwick, Rhode Island, Phipps grew up in real estate and has risen through the ranks of association leadership to now lead Realtors at the national level. In this exclusive interview, see how the dynamic leader plans on helping Realtors move forward despite difficult times.
Maria Patterson: Please briefly synopsize your career path in the real estate industry.
Ron Phipps: I am the third of a four-generation family tradition in real estate, starting with my grandfather who was an appraiser in California. When I was growing up, my father worked for Colgate-Palmolive and he was transferred every two years, first up and down the West Coast and then to New England. In 1976, on April Fool’s Day, my family started a relocation company in Rhode Island; no one was doing relocation at the time. I came into the business in earnest in 1980, viewing it as a transition while I figured out what I wanted to do when I grew up…and I’m still doing it.
MP: What are the advantages of being part of a family-run business?
RP: The gift of a family business is that you get to be close to the people you care most about. In the ’90s, my father joined the business and worked there until he passed in 2003. My wife, Susan, and I got our licenses while we were dating and she made me promise to tell your readers that she scored higher in the standardized test than I did. She then went on to get her master’s degree in secondary education and taught for several years before coming back into the family business, where she now works doing appraisals. My sons, Matt and Ian, also work in our family business.
Today, Phipps Realty is a tiny firm with 10 licensees. What I love about this business is that it really encourages creativity and entrepreneurship.
MP: What do you consider to be among the most significant changes to the real estate business over the years?
RP: Change happens so quickly right now that sometimes we are not even aware of it. The industry has changed in every way, shape and form except one. The availability of information has changed, the way we finance has changed, the way we negotiate, the way we broker, and the way we market. But what hasn’t changed is that, at the end of the day, this is still a relationship business. While I am much more efficient and can do more work because of technology, what people really need me to do is look at the data, analyze it and give them great advice. My role 30 years ago was very similar to what it is now—even though my behaviors today may be different.
The challenges of the last five or six years really demonstrate how important our advice is and that speaks volumes. Sure, a buyer can find a house online, but the Internet doesn’t tell you whether it’s a good investment or not for your family. The Internet doesn’t provide the metrics to evaluate the strength of that opportunity for your family.
MP: In your opinion, why is it important for brokers and Realtors to become involved in their local, state, and/or national associations?
RP: I started working as a volunteer on the local level when I first came into the business in the early 1980s, then started working on the state level in the mid 1980s. I became state president of Rhode Island in 2000 and eventually first vice president of NAR in 2009.
Real estate and politics are very similar in that they’re both local. But it became very apparent to me that the national decisions that are made impact me directly here in Warwick, Rhode Island. I had assumed that the decisions that impacted me were made on the local level, but learned that it’s really about what’s being done on a national level. There has been a centralization of authority in this country, which means more is happening on a national level than ever before. The buyers and sellers you are working with in your community are directly impacted by lots of larger issues.
I believe it’s also important to be involved because we are part of an organization with over one million members, meaning we have a real ability to influence decisions. Being involved in NAR also provides me the chance to work with peers who make me so much better for my customers and clients, who benefit from the experience of all the people I interact with through the association. When you travel at this level, you can see the ideas and approaches that are working and say, “I can definitely bring this to my market area.”
MP: What are your thoughts upon stepping into the role of NAR president for 2011?
RP: Clearly, we are in the throes of a real economic challenge. At NAR’s recent Leadership Summit, we made the point that we’ve been the voice of real estate for a long time and in order to be the architects and engineers of the future, we need to be engaged in conversations with each other and outside entities to create it. One of the themes of NAR this year is “Seize the Day.” I think we need to be responsible for the steps we take in our lives, so I think this is a very good philosophy to live by.
MP: What are the first items on your agenda?
RP: We have been meeting with Fannie Mae and Freddie Mac and the leading lending institutions to free up lending for home buyers. We cannot get buyers into homes until funds for lending open up. This is the most pressing challenge we face.
Looking at the year ahead, I’m really excited about Realtor University—I’m very excited about the dividends of professionalism it will produce. The other issue we’re working on is Realtor Wellness. Realtors today not only have to deal with their own personal stress and strife but have to take on the stress and strife of their clients as well, and there’s a human cost involved in that. We are focused on reminding Realtors that they cannot work all the time and they cannot fix everyone’s problems. They have a responsibility to themselves and their families to remain firmly on the ground. And right now, that’s a real challenge.
MP: How do you advise Realtors to talk about the market with clients and consumers?
RP: We need to start by having a conversation that reminds everyone that all real estate is local. The problem is, the media is not. In a good portion of the country, we are at the bottom and in many areas the numbers are improving. In San Francisco, for example, the numbers have increased 20% year-over-year—in my mind, that’s a recovered market.
Buyers are looking for great value and sellers are deciding that they’re not willing to engage. This suggests a stabilizing market. The real challenge is making sure there’s a common sense, efficient mortgage approval in place. The majority of the markets have sufficient demand to absorb inventory, but a lot of the people who aren’t engaged in purchasing real estate are the people who are qualified to and should be stepping up.
MP: What do today’s real estate consumers need most from their Realtor?
RP: The personal relationship they have with the face they interface with is really important. We were concerned for a time that we would be disintermediated by raw data, but that’s unlikely because the vast majority of people need someone to explain the deluge of information they’re looking at and say, “this is important” and “this is not.” That requirement from the consumer is high. They have one absolute—they need to see value from the Realtor they’re dealing with. They’re willing to pay for it so that’s a fair expectation.
MP: What resources is NAR providing to help Realtors better connect with consumers?
RP: I’m very excited about the Realtors Property Resource (RPR), which will make Realtors so much more efficient with consumers. RPR will have an automated valuation that will be really reliable and will reduce the instance of Realtors coming in and getting a ridiculous value in either direction. Sometimes, you don’t know the nuances of a market and this is going to give you a double-check to make sure your value is within the realm of reasonable. Sometimes listings are taken without an appreciation of the fundamentals of the market and price is way over the market value, which causes the property to languish. In this market, the single biggest motivator is price. If price was dealt with more universally, then more inventory would be sold. This tool will help us collectively come to a reasonable range.
MP: What are your overall goals for your tenure as president of NAR?
RP: It’s really the goals of the organization and the team—I am one link in the chain of leadership. But what’s really cool about it is the chain is really strong and it is my hope that we further the positive future of real estate and Realtors. The most important goal for me is that we, as an organization, persuasively articulate the value of homeownership for all citizens, all families and all people. At the end of the day, we are involved in the shelter business and owning your shelter is still better than renting it.
While embarking on all these ambitious and powerful goals for next year, what speaks most directly to people is the notion of homeownership. I take exception to those who say homeownership is not and should not be the American Dream. If we are effective as an organization, then we will embrace our code of ethics with the concept that sustainable homeownership is good for everyone. We should not let the mistakes of five years ago change the tradition. While Thomas Jefferson talked about life, liberty and the pursuit of happiness, in Britain, they talk about life, liberty and property. I want to acknowledge that the pursuit of happiness includes homeownership.
Our job as leaders is to identify and train future leaders. We have done that so well that the hole I leave when my tenure as president is up, is just like the hole I leave when I get out of the swimming pool—one that fills up instantly. Our organization has an incredible breadth of talent and I am truly surrounded by the best and the brightest.
For more information, visit www.nar.org.