As the real estate market continues down the path to recovery, brokers are looking to bounce back in a big way. For some, this means signing on with a franchise, banking on name recognition and corporate resources to boost marketshare. But others feel that being positioned as an independent, agile real estate firm among a sea of big brands offers an unbeatable advantage. Here, Thaddeus Wong, who, along with Michael Golden, founded the Chicago area’s @properties in 2000, explains why being independent has given his firm the competitive edge.
Maria Patterson: First, please describe @properties’ current position in the marketplace.
Thaddeus Wong: We’re the No. 1 company in the city of Chicago, and the largest independent in the state of Illinois. We have 14 offices, three satellite offices, and our 15th office opening up in East Lincoln Park (at press time). While many companies consolidated, we grew significantly during the downturn and are gathering marketshare quickly. In our markets, we are thought of and positioned as an innovative firm. We are a leader in marketing and technology.
MP: Since opening in 2000, how has the company evolved to adjust to changes in the real estate market?
TW: In 2009, when everyone was swallowed by the downturn, we were positioned differently from our competitors. We had a leg up because we had never taken on any debt and were always profitable. In 2009, we saw a lot of our competitors shuttering offices, reducing salaries, reducing staff, reducing resources and increasing fees. This was the worst time to take such actions, but they were forced to do so in order to keep their companies afloat. We actually opened two offices, one in Bucktown and one on the North Shore in Evanston.
MP: So, when many brokerages were scaling back, @properties was actually expanding in the midst of the downturn. How was this possible?
TW: Throughout the downturn, we opened at least one office every year. All of our downturn expansion had to do with hiring top producers from other companies. Had there not been a downturn, top producers would not have been looking for alternatives. When things are going smoothly, agents are less likely to look for another option. But when a firm reduces resources and increases fees, agents are more willing to look for another solution. Probably the smartest thing we did during the downturn was not follow the trend of contracting. We focused solely on growth.
MP: What was your strategy for growing during this time?
TW: In 2009, we completely focused on improving our internal training and coaching. We decided that one, we could acquire new agents and grow horizontally, and two, we could grow marketshare by improving the quality of our agents through training and coaching. We weren’t aware of how much demand there was for education and training. Through education and higher learning, agents were able to better position themselves with consumers. We were adding layers of professionalism.
MP: How is your market currently faring in terms of the real estate recovery?
TW: The North Side of Chicago is recovering fabulously. The most gentrified and expensive neighborhoods are back to 2006 prices. The North Shore suburbs still need to recover further. The further you get from the city, the slower the recovery. The focus is on strong neighborhoods, good communities and infrastructure, strong transportation and good schools. If you have all three, you are doing great. The markets we are in are doing well, but because of the scarcity of inventory, people aren’t putting their homes on the market until they find something to buy. This is holding back a lot of great, quality product. We also had a very delayed spring market due to the harsh winter.
MP: What advantages does an independent firm such as @properties have over large national brands in this current market environment?
TW: We have local leadership, which makes us much more nimble and agile. Franchises are constantly working on efficiency of costs. They must produce on a national level, yet be able to deliver on a local level. Agents that are part of a franchise brand are working with national products and resources, when real estate is incredibly hyper-local, not just down to a city, but to a local neighborhood. When your operation is local, you can react instantly to make sure the customer is getting an immediate response. Half of the agents at our firm came from a large franchise.
Plus, there’s a huge local movement to keep tax dollars and job creation local. When you’re part of a large franchise, you’re sending significant dollars and jobs out of the community.
MP: How do you promote the advantages of working with an independent firm to agents and consumers?
TW: By eliminating the franchise fee, we can take a larger percentage of our gross commission and invest it in our agents and our clients through print or online marketing and by enhancing our listings on all syndication sites. The added exposure helps reduce market time and increase sales price.
Just because a firm has been acquired by a large franchise brand, doesn’t make it a better company. Real estate consumers are often attracted to franchise firms because of the brand name. But how is that brand going to help sell their home? The name of a company is not going to reduce market time. And it’s tough for the agent, too—if they’re paying a six-percent franchise fee, that’s less money they can invest in promoting a listing and reducing its time on the market.
Real estate is not about a name—it’s about the relationship. Everything is about the consumer, the agent and relationships. Just putting a brand flag out there is not a recipe for success.
MP: What is ultimately most important to today’s real estate consumers in terms of choosing a brokerage firm/agent to work with?
TW: Consumers are looking for value and value doesn’t have anything to do with commission. Value has to do with what the company and the agent bring to the table. Consumers are much smarter than 10 years ago. They go through much more due diligence before choosing a firm, and the agent comes first. If a company is supporting that agent, then the agent can provide the consumer with a higher level of marketing online and in-print.
The consumer doesn’t want their listing used as a vehicle to drive traffic to a real estate company. When a company puts a sign on your home and the number on the sign is the main office number, the company is using the listing to generate leads; they’re driving the consumer to their site to search for homes. That’s why, on all of our signs, the largest text is the agent’s name and the agent’s mobile number. We also add the agent’s email address and the custom website for that listing.
At the end of the day, it boils down to the relationship. Consumers want an agent with strong ability and strong affability—it’s half science and half gift. If an agent is a great listener and has great communication skills, it increases the chances of getting their client’s home sold.
For more information, visit www.atproperties.com.
Maria Patterson is RISMedia’s Executive Editor.