RISMEDIA, May 12, 2011—As brokers, most of us have reined in spending over the last couple of years—pared travel expenses, consolidated office space, out-sourced some basic services. We’ve been doing what it takes to stay afloat in a down market aggravated by what seems like a prolonged poor economy. But there are those of us who have grown and prospered even in these trying times. So if, in fact, we are growing, how, exactly are we doing it? This and other questions were recently asked of leading real estate executives by Charlie Oppler, Special Liaison for Large Firm Relations, NAR, in RISMedia’s May Power Broker Roundtable. The following industry leaders participated this month:
Moderator: Charlie Oppler, Special Liaison for Large Firm Relations, NAR
Rick Haase, President, Latter & Blum, Inc., New Orleans, Louisiana
Joan Docktor, EVP of Sales, Prudential Fox & Roach Real Estate, New Jersey/Pennsylvania
Bob Peltier, President and CEO, Edina Realty, Edina, Minnesota
Charlie Oppler: The CEO of a large travel conglomerate told Chief Executive magazine recently that the secret to growing in tough times lies in a contrarian attitude, the art of anticipation, and an ever-changing strategy. That’s a lot to reflect on. So today we’ve invited three industry executives to give their input on that statement—and reveal something about how their own changing strategies are keeping their companies safely in the black. Rick, let’s start with you. How do you see this provocative advice, and how closely do you follow it?
Rick Haase: I like it, Charlie—and I wholeheartedly agree. We’ve leaned out plenty over the past few years, consolidating office space and putting our money in the things that bring more business to our agents—like mobile technology and enhanced lead generation. But at the same time, in the last year, we bought out our third largest competitor—and some might consider that kind of expense a contrarian notion in today’s challenging market.
Joan Docktor: Maybe—but the part of the statement I relate to is the piece about “the art of anticipation.” One of the things we take pride in at our company is a visionary approach—because the market will improve and change, and we need to position ourselves to be there ahead of the need. We believe, for example, that consumers today are exhibiting a “flight to quality.” They are, and will continue to gravitate to the most knowledgeable and best prepared agents, who can give them the information and advice they need, how and when they want it—and so we’re putting our money into the human and technological systems that will ensure our agents continue to fill that bill.
Bob Peltier: Another piece of that would be diversifying your strategy to make the most of alternate streams of income. In our case, for example, we’ve had to carefully analyze whether third party companies are delivering…and we’re doing more business on the title side—and expanding nationally. We know we can simply do it better than so many smaller companies, and we’re aggressively going after that business.
Joan Docktor: As are we, via our mortgage, title, and insurance business. We are the third largest privately-held insurer in the nation today, and part of our growth strategy has been to develop joint ventures with REALTORS® who can benefit from that.
Charlie Oppler: So if I’m reading you right, it’s as much about growing out of the box as it is about maximizing what’s in it.
Rick Haase: I would say so, because all the while we’ve been consolidating, we’ve also been anticipating the future, as Joan suggested. We’ve vastly trimmed our square footage per agent, but the new, compact space we have is state-of-the art in terms of mobile capabilities, high tech and human support.
Bob Peltier: The real estate world is decidedly changing. We’ve gone from 92 offices to 59, but the new, combined space is exciting to both our customers and sales associates. We’re utilizing a variety of communication tools—Facebook, YouTube videos, Android and iPhone applications—everything people might need or want to stay ahead of the information curve. But at the same time, we know that people are social animals. The brick-and-mortar space we do maintain has to foster the agent synergy and networking potential that have always been a hallmark of our company.
Rick Haase: That’s the silver lining in our recent acquisition. It’s brought in a good group of agents, increased our synergies, and provided lots of new opportunity to expand market share.
Joan Docktor: When all is said and done, the one constant is that a real estate business is built on relationships. The next generation, like the present generation, will succeed or fail on their ability to develop and make the most of relationships. Our job is to give them the tools they need to do that.
Charlie Oppler: I think what we’re saying is that when times are tough, we need to make financial, cost cutting decisions judiciously, in the most efficient way possible, all the while anticipating—and preparing for—tomorrow’s market environment…even when it means more expense.
Bob Peltier: And swimming against the tide sometimes to combine the best of yesterday’s strategy with whatever we see coming down the pike.
Rick Haase: It’s never easy in the best of times. But for those of us who like a good challenge, this is a fun time to be in business.