RISMEDIA, December 2, 2009—This year will be remembered by many of residential real estate’s full-service brokerage owners and their full-time professional sales associates as the year that wasn’t. There’s no mistaking the fact that many of the economic struggles our industry saw in 2009 will still be prevalent in 2010. Power Brokers believe that short sales will continue, pricing will still be key and the road ahead will not be without its bumps.
Power Brokers admit, however, that there is some guarded optimism for the next year. From coast to coast—specifically California, Las Vegas and Florida, three of the hardest-hit areas of the downturn—brokers are looking back at the past to make sure it’s no longer part of their future.
Here, three leading Prudential Real Estate brokers talk lessons learned, the importance of recruiting and financial management and how they are moving with the times, changing their brokerages to reflect a new market that is here to stay.
The Florida Forecast—Sunny, with a Chance of Increased Transactions
The minute you meet Rei Mesa, you like him. Armed with an optimistic outlook and a love of life—and real estate—the Prudential Florida Realty president and COO is shrewd, market savvy and focused on the future. Here, he breaks down his business plan for 2010, forecasts what the Florida market will look like and explains how he plans to increase his consumer reach.
Stephanie Andre: Well, 2009 is certainly one for the record books—and not in a good way. Can you talk about your company’s plans for 2010?
Rei Mesa: For 2010, we are forecasting an increase in transactions and a continued increase in affordability in the state of Florida. Together with historically low interest rates, Florida offers great opportunities for those in the market to buy.
Additionally, our company is planning for an increase in short sales and REO business. Lenders will need to be more focused on assisting current homeowners, specifically with short sales. In turn, we should see an increase in short sale conversions that result in closings. We are also putting together a new process to make short sales more streamlined, similar to a BPO (broker price opinion), and we’ll be doing BPOs as well.
As a company, we have to continue exceeding customer expectations by delivering a great experience for their real estate needs. A big focus for us is to continue to leverage RISMedia’s Top 5 in Real Estate Network® as an integral part of our 2010 business plan and marketing plan.
SA: What has changed for your sales associates?
RM: As a company, we now have more sales associates who specialize in short sales and REOs as buyer’s agents. It’s a great opportunity to represent buyers. We are creating that specialization through training and certification that we are handling as an individual affiliate.
SA: Where is your focus for the next year?
RM: We will continue to right size and implement additional efficiencies through operations. We have already increased the usage of our family of services: Florida Home Finance Group, which is an affiliate of Wells Fargo; Florida Title and Guarantee; Florida Home & General Lines Insurance and Home Warranty.
SA: What have you learned from the market shift?
RM: Florida has been in this paradigm shift since 2006. One of the lessons we’ve learned is to be extremely disciplined with our expenses. We put a strong focus on retention of producers and recruiting and being able to provide consumers with information through vehicles such as RISMedia’s Real Estate Information Network® (see sidebar p. 69) and Top 5. We’re truly an information business in addition to being a service business.
SA: What’s on the horizon for the future of real estate in the Sunshine State?
RM: I continue to see Florida’s future as a bright one. Long-term investors are starting to come back, buying REO properties and short sales with a long-term view of their investments, which is a very good thing.
Additionally, the state continues to rank high in business polls, ranking in the top 10 in technology and innovation. We are third overall in business growth and jobs. We still have our wonderful weather and we are most certainly a destination state for people in the U.S. and all over the world. This market will be strong with its real estate market opportunities.
Budget with Pessimism, Lead with Optimism
Prudential Americana Group CEO and Owner Mark Stark is the quintessential optimist. The Las Vegas-based broker is focused on finding a solution rather than dwelling on the problems that brought you there. In this exclusive interview, Stark talks living in today’s “normal,” watching the cash flow with a careful eye and admits something you might not want to hear—that 2010 may look very similar to 2009.
SA: What lessons have you taken from the market downturn?
Mark Stark: Let me say this: I think the number one thing that concerns me with different brokers is that some tend to build plans on what they hope will be or what their hypothesis of the market will be, instead of what it actually is.
They don’t say, “how can my company exist and be healthy in this environment?” Running a business this way will never help them get any better. When you ask yourself that question and run your organization that way, it helps you succeed.
We manage and lead with a very positive attitude, but we look at our budgeting from a different point of view—with more of a pessimistic angle. I don’t see enough people doing that.
SA: Where is your company and your market now?
MS: For us, it’s all about market share and growth—and managing cash. Your budget is important, but not as important as a healthy cash flow. We have a cash management strategy. You need to use it in this environment.
I get a cash report daily. That is something we are very sensitive to and have been for some time. Knowing how much cash your company has needs to be in your face on a consistent basis. People think, “I’ll just make more. I don’t have to have cash today.” That’s ridiculous—you can never have too much cash.
SA: Where do you see your market in the next 12 months?
MS: Unfortunately, I think 2010 is going to look a lot like 2009. I don’t see any change happening. It’s already very difficult here; I think we’re going to get worse in the commercial area. There’s already been an incredible barrage of commercial foreclosures; numerous bank institutions are gone.
A bright spot for us, however, is some of our individual sales executives; they will surpass what they did in 2009—they treat their business like a business.
SA: What are you doing in terms of recruiting?
MS: Recruiting and retention is imperative. Our model at Prudential Americana is that we’re set up as business executives. We don’t make money because of bodies; we need productive sales executives.
SA: What changes have you made/are making at Prudential Americana?
MS: A couple of things, but most of it was done in 2006-2007, using the market to get as efficient as we could. We pick up top talent, renegotiate anything we think might be able to be adjusted and consolidate when it makes good sense.
The Next-Gen Agent: On the Go and Paper Free
When one uses the term “visionary” in real estate, Ed Krafchow’s name immediately comes to mind. Ever the consummate professional, the Prudential California/Nevada president and CEO is a big believer in technology and is always on the lookout for what’s next. Here, Krafchow prognosticates on the year ahead, going green—even in this economy—and what the agent of the future looks like.
SA: How has the downturn affected how/what you’ve done with your planning for 2010?
Ed Krafchow: We have a tremendous focus on training. One-third of our company is currently working or has already attained NAR’s certification on short sales. We have training that takes place three days a week at our corporate headquarters. We feature timely topics that are needed for this market.
There’s still a market, but it’s a difficult one. If agents today are not trained, they will become very inefficient.
SA: What, if anything, have you added to your business plan?
EK: We’ve added Top 5 to our plan for 2010; we believe that in the next market, agents will have and need greater portability and that’s something that Top 5 offers. Agents can brand themselves individually and with our company. It enhances their own brand—locally and in the community. That’s very positive for our company.
We are also becoming a completely paperless company. Our agents will be able to see every vendor partner, help clients go right to their smartphone and see how their transaction is running. This move is very important because we are going green as a company and it gives us the ability to provide a very high level of customer service.
SA: What does the San Francisco market of 2010 look like?
EK: It’s a market that is still consolidating. In 2010, we will no longer see the swings in average sales price that we’ve seen in the past. The market’s been reset; our company has been reset. Agents have even reset themselves. Now, it’s a matter of who is going to invest in their business. By the end of next year, we will have formed a base for the next market. If you haven’t done prospecting or developed your business, you will be left out of that market. It will be dangerous for those who haven’t progressed. RE
Moving the Model – RISMedia Looks Ahead to Meet the Future of Real Estate
Like many Power Brokers and leaders in real estate, RISMedia is looking ahead to 2010. A leader in the real estate space for nearly 30 years, RISMedia will soon bring the power of its content to brokers, providing a new program that industry leaders can use to offer maximum information to consumers, which, in turn, should help them increase business and margins.
RISMedia’s Real Estate Information Network®, scheduled to launch in early 2010, is a platform for brokers to help them:
Leverage the power of the RISMedia audience
Capitalize on the RISMedia Web presence
Benefit from RISMedia content and resources
Connect with Power Brokers across the U.S.
Enhance Web ranking, recruiting and productivity
Introduce social networking strategies
“By leveraging RISMedia’s extensive content and relationships, this platform is going to help the broker’s visibility by providing relevant and important consumer news—enhancing the value of broker leadership within their local market,” explains Steve Hundley, president and CEO of 1parkplace, Inc. “The localizable news and videos from experts at RISMedia will assist to position the brokerage as a knowledgeable resource in the community while improving search engine rankings of the broker’s website all at the same time.”
As a result, membership in RISMedia’s Real Estate Information Network® will increase the broker’s value to the agent community as well, thereby, helping as a recruitment tool. Because membership is exclusive to one broker per MSA, it will be a true differentiator in the broker’s local marketplace.
“When you have such a valuable asset in recruiting, agents realize that the broker is truly unique and has the wherewithal and vision to forge ahead, even through this market,” says Prudential Florida’s Rei Mesa. “A solution like this can help the broker be more selective in recruiting.”
Besides the content, networking opportunities and market differentiation, membership in the new network will also serve as a boost to the broker’s website with relevant and timely news information, increasing its search engine ranking. In fact, because of RISMedia.com’s high SEO ranking, the RISMedia online network now boasts more than 70,000 indexed pages of content all positioned to help the broker’s reach out to the community and help their website rankings increase at the same time.
“We’re not throwing random content up on our site; we will be providing market updates and great information for our consumers and using different tools—that’s what we’re excited about,” says Mark Stark of Prudential Americana Group. “We are excited about working with RISMedia and leveraging the power and credibility of the company.
“I do lots of things well,” continues Stark. “However, one thing I am very bad at is telling people about it. We feel this will be a great way for us to provide great content, while also getting our name out there and telling people what we do.”
For Mesa, the ability to communicate with both Realtors and consumers through articles and his company’s website was a no-brainer.
“We are leveraging the value of RISMedia and its historical credibility while becoming a company information resource for both our agents and consumers,” says Mesa. “In fact, we are even including Top 5 and this new broker network into our 2010 Business Plan.”
Ed Krafchow, of Prudential California/Nevada Realty, believes RISMedia is on the same path—and leading the way—toward the morphing of the real estate industry.
“I would acknowledge that RISMedia has moved the model of what the company is to meet the future of the real estate business,” says Krafchow. “In that context, I look forward to seeing what they do. In order to succeed in this business, you have to change and move with the industry, and sometimes you have to add to your business model. That’s what they are doing—and that is commendable from all points of view.”
For more information, please contact RISMedia Executive Vice President Darryl MacPherson at email@example.com.