By Maria Patterson
RISMEDIA, Oct. 16, 2008-Back in January of this year, James Crumbaugh took his 35 years of real estate industry experience and translated it into a concept he believes top-producing agents have long been waiting for-the virtual real estate company. As a former Realtor and owner of a six-office franchise operation, Crumbaugh knew the woes of profitability all too well. With the creation of Allison James Estates & Homes, however, Crumbaugh has devised a way for agents to keep the money they make-all of it, in fact-by eliminating the expenses that go hand-in-hand with the traditional brick-and-mortar real estate standard.
Here, Crumbaugh and Chief Financial Officer Dave Powell explain exactly why the Allison James model is being embraced, and how they’ve powered the company to operate seamlessly…despite four walls.
Real Estate magazine: How would you characterize the company’s progress thus far?
Dave Powell: At this point, we’re moving along fairly well. We have over 200 agents at this point (mid-August) and our goal by the end of the summer was to be around 300 agents, so we’re moving along quite well.
Jim Crumbaugh: We launched on January 3, so those numbers are pretty good. We just affiliated with a company in Southwest Florida and haven’t finalized all those agents yet. New York state is ready to open any day-we’re just waiting for the final paperwork (New York officially opened in September). We’ve gotten Missouri on board this month and two more states to follow shortly.
RE: What most attracts agents to the Allison James model?
JC: The biggest appeal has always been that they get to keep 100% of their commission. A lot of REO Realtors, because they’re making a lot of money, see the benefit of working with us. Also, we have no hidden charges. Almost every other 100% company out there is operating with brick-and-mortar offices and needs to charge hidden fees to make ends meet.
For some of our Realtors, it’s the first time they can control their career. Realtors are very independent and a lot of them work out of the home. They are very impressed with how we do things electronically-all of our training is online, for example. They are enjoying and responding to the technology.
RE: Are you seeing a big response from younger agents who might be more at home with technology?
DP: There is interest from the younger demographic-the generation who was born with an iPod in their pocket. They take to our business model quite readily.
JC: But we don’t go after the brand-new agents. We go after the experienced agents who want to stand on their own.
RE: Is this because younger agents tend to need more guidance from a manager or broker?
DP: Yes, absolutely. The newbie needs someone looking over their shoulder and guiding them every step of the way. Our model is for agents who have grown to a point where having an office isn’t important to them-those agents who are growing their business through their own efforts.
RE: Tell us how you’re able to facilitate the back-end operation needed to carry off the Allison James model.
DP: We’ve had a couple of things that have helped us along the way-one of which is really good advice from tech people! We’re also fortunate enough that our people have gotten us hooked up as a Microsoft partner using Microsoft software. That’s to our advantage because it’s an evolutionary business. As we find out new things, we have to make sure we have the software to support it.
JC: Also, our backup is triple redundant.
DP: Our company has backup facilities in Baltimore and Las Vegas-that way we’re backed up in two remote places far away from us here in Florida. We back up our data every 15 minutes. We are never more than 15 minutes out of sync.
RE: How are you able to hire and supervise a sales force on a national basis?
JC: We play the role of Realtor liaison and try to touch every one of our Realtors nationally three times a week-at least twice by e-mail and at least once with a phone call. By touching them so often we circumvent a lot of the problems because we become aware of those problems immediately. We can handle things quickly and it keeps everyone happy. Everyone knows they can pick up the phone and call me personally. In the typical brick-and-mortar office, communication wasn’t set up that well-there was no way we spoke to our Realtors every week.
DP: What we do does not substitute for the broker, however; the broker is still responsible for supervising agents. We supplement the broker’s role.
RE: How do you get brokers and agents up to speed on operating within the Allison James model?
JC: We train online. Up to 15 Realtors can call in at a time. We also do a lot of training on the Internet, showing agents how to drop files into the system and get them used to the system.
RE: What measures are built into your back-end system to ensure secure transactions and confidentiality with contracts?
DP: Our system for storing contracts has different levels so when an agent puts a file into his broker’s folder, he can no longer retrieve anything from that folder-he can only retrieve his own documents; he can’t retrieve anyone else’s. Documents are filed as PDFs and cannot be altered. If you negotiate and a price change takes place, you can file the new document on top of the original and all the history is there.
RE: How does the company’s technology make for a more efficient real estate process?
JC: If you think back, not too many years ago, typically there would be banker’s boxes where we’d file all the files and store it in a rental locker somewhere. If someone needed a file from four years ago for a lawsuit, they’d have to go digging to find the file. The electronic system has files cross-referenced in a dozen different ways so you can pull it up by buyer, by city, by state. In the old days, a Realtor would work with a file, write an offer, and nine out of 10 times, the contract would lie on the broker’s desk for days. Now, documents can be scanned and shot over to us so that the information is available instantly.
RE: How does being an Allison James agent benefit the Realtor during the transaction process?
JC: Our Realtors have freedom. Say they’re negotiating on a home and the buyer and seller are $5,000 apart. Typically, in a brick-and-mortar real estate company, the Realtor would have to meet with the broker and ask, “What can we do to make this work?” Here, we allow the Realtor total freedom to make that decision. They don’t have to clear a reduction in commission with the broker or with corporate. Here, they can put the transaction together fast.
RE: Do you find a lot of your agents drop their commissions to make the deal, then?
JC: Because of the quality of Realtors we attract, I haven’t noticed them negotiating away their commissions. They’re getting the standard commission payment.
RE: How do you recommend that Allison James agents promote themselves in today’s market?
JC: Our agents get to keep 100% of their commission and get to keep whatever transaction fee they may have. This allows them to take their marketing dollars wherever they feel it’s most effective. In one market that might be T.V.; in another market that might be magazines; in another market it might be local newspapers.
RE: Do you have any competitors or do you really stand alone in the marketplace?
JC: We are so unique-the longer I’m in this, the more I realize how unique we are. We are the only company I know of that truly doesn’t have brick-and-mortar offices or hidden fees. Our agents literally work for us for free.
For more information, please visit www.allisonjamesinc.com.
