RISMEDIA, April 4, 2009-There’s no question that by the time 2008 ended, the world was a different place. The economic decline of the fourth quarter brought with it more challenges than probably anyone could have predicted. However, with the bad comes the strong. This year’s Power Broker Survey results demonstrate that even in the worst economy since Eisenhower, basic fundamentals and a strong will are more powerful than ever. There’s no denying the tough road ahead, but there are brokers who are preparing and ready for a fight-still stressing a positive attitude, a strong will and a plan for coming out on the other side of this downturn. And as economists agree, the rebound of the real estate market is central to the repair of the economy as a whole.
RISMedia’s 21st Annual Power Broker Survey echoes these trends. With more than 950 responses, this year’s results demonstrate that brokers are eager to show their strength. “We do not focus on problems; we focus on solutions,” explains Tami Bonnell, president of U.S. operations for EXIT Realty Corp.
Some firms have their business models to thank for their strength in difficult times. “Our company came out of Texas during one of the hardest economic times in real estate (1983),” says Mary Tennant, president and COO of Keller Williams Realty. “Our economic model was designed to thrive in a difficult market. We were born and bred in the briar patch and we’re right back in the briar patch; but now we have a little more of a comfort zone for it.”
In an industry full of proven survivors, brokers are adamant about encouraging their agents, educating consumers, streamlining costs and consolidating where it makes sense in terms of greater efficiency.
“We were very, very reality-based,” explains Ron Peltier, chairman and CEO of the No. 2-ranking HomeServices of America. “This was a year for us to revisit all aspects of our business. We put ourselves into a position for being successful moving forward.”
Without a doubt, these market changes are reflected in this year’s Power Broker Survey results, with the total number of transactions down from 2,322,210 in 2007 to 1,925,374 in 2008. On average, real estate firms did over 550 fewer transactions in 2008 compared to 2007. Total sales volume in 2008 was down more than $175,000,000,000 from $749,201,552,294 in ’07 to $573,924,667,880 in ’08.
“A big part of [getting through this market] is being proactive,” explains Joe Horning, president, Shorewest Realtors, which ranked No. 30 this year. “When you’re being reactive-it’s panic. We’ve been proactive with what we do and our planning.”
For Peltier, as for many brokers, it’s really more about efficiency than cutting back. “We eliminated a lot of bricks and mortar as well as programs that were no longer relevant, particularly in the areas of print advertising. We are focusing more and more on the Internet.”
Indeed, like Peltier, the majority of brokers have had to make tough decisions over the past 18-24 months. However, brokers have also kept a strong focus on the road ahead.
“While we can’t change the market, we can have an influence-a positive influence-on the market,” says Jim Fite, president of the No. 53-ranking Century 21 Judge Fite. “We choose not to take the negative route. And so, from there, everything’s communicated as the truth.”
“We have to stay positive,” agrees Candace Adams, president of the No. 32-ranking Prudential Connecticut Realty, “but also focused. It’s important to streamline initiatives and have a back-to-basics strategy.”
Chuck McNeal, chairman and CEO of No. 94-ranking The Group, Inc. Real Estate, agrees: “Productivity is key within our business model, and with there still being plenty of business out there, we worked to provide a high level of service to our agents so they could provide a high level of service to their customers.”
At nine-month-old Better Homes and Gardens Real Estate-Realogy’s new brand-President & CEO Sherry Chris is helping brokers focus on what they can and can’t control. “It’s easy to stray and start worrying about things that aren’t in your control,” says Chris. “What I try to emphasize and say is, ‘Look at what you can do and what you can control, and you’ll come out on the other side of this mess’-that’s true whether you’re a broker or an agent. “Brokers are doing the things they need to do; things they never dreamed they’d be dealing with-cutbacks, consolidations, etc.,” she adds. “The bonus-if you want to call it that-is that those who succeed in this time will emerge as very strong companies when we come out of this.”
Educating the Masses
One central theme among Power Brokers is the value of education-not just for their agents, but consumers as well. The right recipe, according to Power Brokers, is a mix of old-school tactics and new-school technology.
“We educate, educate, educate from every angle-webinars, teleconferences, live training, interactive training,” explains Bonnell. “I also go out and give a state-of-the-union to our franchises. Last year, I spoke in 46 states-to cut the records, you have to play more gigs.”
Adams, whose company completed 8,723 transactions in ’08, adds: “Pricing properties is one of the most important things we do. We have a pricing strategy class right now that’s standing-room only.”
“We must equip agents with the skills and tools they need,” says Tennant. “Our agent productivity actually went up dramatically in 2008, and education is the reason why.”
According to Horning, educating consumers might just be the key. “You really need to be out with the consumer,” he says, “because a lot of people are on the fence, especially with the stimulus, so we’ve been promoting it on the website, saying, ‘now that it’s been signed, here are the benefits.'”
Regardless of region, ranking or results, Power Brokers all know that this too shall pass. But it’s the getting there that they acknowledge is the most difficult part.
“At the end of the day, it is all about consumer confidence,” concludes Bob Leighton, president and COO, Jack Gaughen Realtor ERA. “We have survived and prospered through markets like this before and this market is full of great opportunities for those who are serious about the business.”
Maria Patterson, Kayla O’Brien and Paige Tepping contributed to this article. To read the entire story and to view a complete list of those who ranked in this year’s Power Broker Survey, click here.