Editor’s Note: This is the cover story in the April 2020 issue of RISMedia’s Real Estate magazine. Subscribe today.
While much of the narrative surrounding the real estate landscape today is dominated by tech start-ups and corporate- or venture-funded companies, this industry’s roots were planted by entrepreneurs—those who started out with a couple of agents, a meager office and a big dream for their family.
Many of those fledgling founders turned their humble beginnings into powerful, independent family firms, then exponentially expanded their reach and potential by joining the Leading Real Estate Companies of the World® (LeadingRE) network.
“The list of LeadingRE family companies is long,” explains LeadingRE President and CEO Paul Boomsma. “Real Estate One, Baird & Warner, John L. Scott Real Estate, Watson Realty Corp., The Keyes Company, Shorewest REALTORS®, Sibcy Cline REALTORS®…and many more. We are inspired by how these one-time ‘start-ups’ continue to innovate, adapt and thrive, and we are honored to be a part of their story.”
According to Boomsma, multi-generational firms are often uniquely positioned to withstand the changeable nature of the real estate business. “The cyclical nature of our industry attracts new people and new models when times are good—and often loses them when the market turns,” he explains. “Companies with staying power are equipped to succeed in all types of markets. Often, these companies are family firms—strengthened by their deep roots in the community and the historical perspective to respond to the inevitable shifts in the market.”
So much more than a succession plan, bringing family into the fold has provided these firms with a rare continuity of leadership and culture, an environment of trust, and a built-in ability to remain relevant as younger generations take the helm.
It’s a rare formula that’s more valuable than ever before.
The Family Path
Many family firms didn’t start out with a concrete strategy for building a legacy, but rather, let nature take its course.
In 1976, Saeed Nourmand founded Nourmand & Associates in Beverly Hills. Today, the company is run by his son, President Michael Nourmand. “My parents were optimistic that Nourmand & Associates would become a long-standing, family-run business, but there was never any pressure for me or my siblings to take over the business,” he explains. “I went to USC’s Marshall School of Business and had paid close attention to the business over the years, so I ran with it and never looked back.”
As Hoby Hanna, president of the three-generation regional powerhouse Howard Hanna Real Estate Services (ranked fifth in transactions, according to RISMedia’s 2020 Power Broker Report), explains, “Family-owned and -operated businesses are often started to support one family, and from that, many families can flourish and can continue to grow.”
Howard Hanna Jr., who celebrated his 100th birthday in February, used a modest dividend check to found the firm in Pittsburgh in 1957.
“He’s not surprised that we’ve remained family-owned and -operated,” adds Hanna.
Some founders were intentional about creating a business that would live on through the generations to come, like Bill Raveis, who launched William Raveis Real Estate in an office over a grocery store in Fairfield, Conn., 46 years ago. When the opportunity to sell the company arose decades later, Raveis approached his sons to gauge their interest.
“We both felt strongly that we wanted to carry on the family legacy,” says Ryan Raveis, co-president of William Raveis Inc., who joined the firm, along with his brother, Chris, in the early 2000s. “We were given a few conditions, however: We weren’t going to sell the company and we needed to triple the size of it to make it worthwhile for all of us. He also told us we couldn’t work at the company until we had outside professional experiences.”
Similarly, at Long Island, N.Y.’s Coach REALTORS®, the strategy was thoughtfully developed.
“Our parents (Lawrence and Georgianna Finn, who founded the firm in 1954) wanted our taking over the business to be our decision, not just theirs,” explains Broker/Owner Whitney Finn LaCosta, who has stepped into a leadership and ownership role, along with her brother LP Finn and her husband, Robert LaCosta. “They felt it was essential that we pursued our personal education and experienced some degree of career success outside the real estate industry. They worked on the plan for succession and willingly stepped away to help us gain the knowledge, skills, confidence and respect we needed to take on these roles.”
The Advantages of a Family Culture
Running the business as a family affair has enabled many multi-generational firms to create and sustain an invaluable culture, one that gives them a unique advantage in the market, and positively impacts their bottom lines.
Fazendin REALTORS® in Minnetonka, Minn., for example, was founded by Roger Fazendin in 1965.
“We emphasize a culture that supports creativity, collaboration, accountability and mutual respect,” says Broker/Owner R. Andy Fazendin, Roger Fazendin’s grandson, who assumed the role when his father, Dan Fazendin, retired. “I believe our family-owned character builds trust and confidence in agents and consumers.”
A family culture has also been key to the success of Premier Realty Group in Stuart, Fla. The firm was founded in 1958 by Trude Kennedy Neese and is today run by her granddaughter, Broker/Owner Jessica D. Bohner.
“Family is at the heart of our culture and our client experience, which has always been a competitive advantage for us,” says Bohner. “Our agents and staff tout the familial environment as a significant reason they choose to work at Premier. Clients are treated like family, allowing us to help them achieve their dreams by experiencing more moments of vulnerability and openness throughout the process.”
Ryan Raveis agrees. “Though William Raveis has grown exponentially (the eighth-largest firm in the U.S. by sales volume, according to RISMedia’s 2020 Power Broker Report), our company’s strong ethos, rooted in family values, has never wavered,” he explains. “We believe that lasting relationships come from care, courtesy and commitment to our agents, their clients and the community.”
For Hanna, agents and clients are members of the Hannas’ extended family…and they know it. “We are 100 percent in it with them,” he says. “People can feel that level of support and care in every home we sell. We think this means something in this day and age. We are open, interested and accessible…and we listen to what consumers—and agents—want.”
LaCosta concurs and emphasizes the ability to expedite decision-making. “Being a family-run organization, a business with the face and voice of the owners, gives everyone access to each other,” she explains. “Agents’ access to owners gives them a feeling of worth, a seat at the table, and the knowledge that they can ask for help and give input.”
Raveis echoes that sentiment. “Our leadership team is approachable and makes decisions quickly, which sets us apart from large corporate real estate companies with shareholders and multiple layers of decision-making.”
Community Connections Like No Other
Being a family business also provides these firms with unparalleled ties to the communities they serve.
“In our market, there is always a new flavor of the week, yet very few companies stand the test of time,” says Nourmand. “In LA, we are the longest-running independent boutique of our size. My experience has been that people prefer to work with local, family businesses. We’ve been involved in charities, local communities and schools for decades. We do it because we want to make a difference, but it has definitely helped us grow.”
“One of our greatest advantages is that we have long-established roots in local communities and, therefore, more inherent trust than our more recently arrived competition,” agrees Fazendin. “We compete against mostly large franchises that are less interested in community involvement and reinvestment.”
Raveis agrees. “We think of our company as more than just a real estate, mortgage and insurance company: It is a foundation to serve our communities,” he explains. “We have an underlying commitment to care that is often lacking in this cutthroat real estate environment—and that drives everything we do.”
Bohner values the level of trust the firm has built. “Our roots run deep in the communities we serve,” she explains. “We are passionate about being involved and giving back through time, treasure and talent.”
And for the Hannas, community ties grow ever deeper as the firm’s generational presence expands. “Our grandmother instilled the importance of being part of the community and giving back at a very young age,” explains Hanna. “This is authentic and part of who we are. We can only hope this realness gives us the edge.”
A Continuum of Innovation
While some may perceive a family business as dated or behind the curve, the exact opposite is usually the case.
As Hanna says, “Family business doesn’t have to mean old business. Our family leadership team of owner operators spans from 100 years old to 29. This gives us an unparalleled multi-generational advantage. Each generation has been driven to innovate.”
LaCosta agrees: Being a multi-generational firm paves the way for ongoing innovation. “Having the second generation—a younger generation—has kept the leadership in step with the next generation of customers, clients and leaders,” she explains. “We understand that change is essential to longevity.”
“As my father likes to say, ‘If you don’t innovate, you’re dead,'” says Raveis. “We constantly invest in new resources and services for our agents, like state-of-the-art technology, tools and marketing. We also provide top-tier coaching and training to offer fresh perspectives and new opportunities for success.”
At Fazendin, staying involved in local, state and national real estate organizations, like LeadingRE and MLSs, has helped the firm keep up with change. “This has given us a glimpse of upcoming trends and has helped us develop productive relationships with other brokers,” says Fazendin.
Remaining independent is something family firms take seriously. That’s why being part of LeadingRE’s network of 565 independent firms in 70-plus countries around the world is a cornerstone of their ongoing success.
As Boomsma says, “Independence is the very essence of our organization. Whether a company is in its fourth generation of family leadership or its second, that spirit of independence is deeply woven into the company culture. Through LeadingRE, these firms align with like-minded companies and extend what they have achieved at the local level on a national and global scale.”
For LaCosta, the value of independence boils down to two things: the ability to control your own destiny, and not being held back by outside decision-makers.
“By staying independent, we have the ability to differentiate ourselves in our marketplace,” she explains, “and our affiliation with world-class brokerage networks, such as LeadingRE, provides our agents with real advantages over other brokerages.”
Independence allows Nourmand to focus on what’s best for agents without having to answer to a higher power. “We can create our marketing without having to follow a franchise’s marketing rules, and we can spend money on things that matter to us,” he says. “LeadingRE provides national and international marketing, referral business and vital information that helps us succeed.”
Independence also allows for maximum flexibility. “We have chosen to remain an independent, family-owned and -run firm so we can stay agile and nimble, constantly innovate and deliver superior service,” explains Raveis. “With LeadingRE’s Luxury Portfolio International®, our listings are broadcast to the best brokers and the most affluent buyers around the world.”
Bohner agrees. “In a world of consolidation of brands, and the ease of use of the internet, we believe having a strong, independent brand powered by LeadingRE provides us the best of options,” she explains. “We are able to make decisions quickly without layers of red tape so we can remain relevant with ease.”
For independent, family-run firms, LeadingRE can also serve as an important, objective sounding board. “We are a family who can get in the weeds of a topic or model,” says Hanna. “Our relationships inside LeadingRE can act like an independent board and incubator for ideas and innovation.”
“The connections made through LeadingRE have provided expanded reach and expedited decision-making, as the caliber and openness of the group is unparalleled in our industry,” adds Bohner.
For Fazendin, there are countless reasons for remaining independent. “Being able to make one’s own decisions is at the top of the list. Perpetuating a brand we believe in is another. Having the freedom to take risks and reap the rewards while not paying franchise fees is something we appreciate as well,” he says. “LeadingRE is supportive of the independent broker by providing data, information and opportunities for collaboration with other brokers.”
Strong Roots Nurture Sustained Growth
As new business models and technology investments continue to change the dynamics of the real estate industry, these family firms explain that they’re better equipped than most to compete.
“Our biggest concern now is the erosion of the retained company dollar and the competition from business models that are funded by outside capital and can remain unprofitable,” says LaCosta. “Our advantage is our ability to be nimble and move with flexibility.”
According to Hanna, family-run businesses like his offer the support necessary in the highly emotional home-buying or -selling process—something a tech model cannot do. “We believe this will always be a people business and that the majority of the world wants to hire a person to market their home,” he says. “We don’t think any tech can take the place of the real estate agent. Rather, we use technology to support the people at Howard Hanna.”
Fazendin says that, for many, the appreciation of a family-run business has grown in the midst of the often impersonal tech environment. “Currently, there is a lot of ‘noise’ in the real estate industry,” he explains. “Some of this noise is legitimate, much of it is a distraction. Keeping up can be challenging for sure, but it is also exciting and pushes me to become a better broker.”
Raveis agrees, adding that, ultimately, due to technology’s prevalence, real estate firms can’t compete on tech. “The differentiator in this business will be service,” he says. “Our values are etched in the culture of the company with long-term employees who care deeply about their jobs and the customers they serve. We also aren’t concerned with short-term share price or value, and can focus 100 percent on the needs of our customers. As a multi-generational family business, we will win this game because we play for the long term.”
According to Boomsma, the combination of family roots paired with LeadingRE’s global resources is tough to beat.
“With deep legacies that continue to evolve, these companies are the envy of many in the industry. Our job is to support them as they look to the future—fostering success not only for today, but also for generations to come.”
For more information, please visit www.leadingre.com.
Maria Patterson is RISMedia’s executive editor. Email her your real estate news ideas at firstname.lastname@example.org.