3. RE/MAX brokers and agents But there are no sour grapes
love the company’s advertising reach, from John Piper, owner of the 120- Who is top of mind?
Rea says — and, indeed, brokers and agent Century 21 Champion in San In the first half of 2008,
agents might be a more important tar- Jose, CA. He doesn’t miss seeing RE/MAX led in online ad
get for TV ads than consumers. his brand on TV. impressions, the number of
“I think it’s great,” Piper says. times an ad is actually dis-
Agents the real audience “The timing is perfect. We need to played online.
Greg Herder of Hobbs/Herder go where the consumers are.” RE/MAX: 45%
Advertising in Newport Beach, CA, Century 21’s brand recognition Coldwell Banker: 27%
says the primary audience for already is so high that Piper sees lit- Century 21: 24%
national TV ads always has been tle value in spending for more televi- ERA: 4%
franchisees and their sion advertising. But he Source: Nielsen Media
agents. “The timing is perfect. does see value in using
“I don’t believe it the Internet to generate
We need to go where
really drives that leads and drive business “I’m so confident of the empiri-
the consumers are.”
much business to the to his agents. cal data we’ve collected that I’d be
individual offices,” Century 21’s thrilled if they’re still doing it,” she
Herder says. “What it does is drive Thorne acknowledges that she has says. “I don’t think it’s a cost-effec-
agent retention and recruiting.” heard some gripes from franchisees tive method of marketing, so I’d be
Even so, Herder says he was who like to see their company on TV. happy to have my competitors
“very surprised” to hear Century 21 “I’m not going to kid you,” spend money on it.”
was dropping TV ads. And he Thorne says. “Some brokers are Contacts: Bev Thorne, Century 21,
thinks Century 21 will suffer for calling me and saying, ‘That’s terri- 973-407-5631; David Rea, RE/MAX
abandoning its campaign. ble because my granddaughter can’t International, 303-770-5531; Bob
“I hear it over and over again see me on TV any more.’” Ratliff, RE/MAX Central, 702-807-5528;
from agents,” Herder says. “‘I love But Thorne says she’s con- Greg Herder, Hobbs/Herder Advertising,
seeing my company on TV. I want vinced that RE/MAX is only wast- 949-515-5000; John Piper, Century 21
to be part of something. I want to ing its money on national TV ads. Champion, 408-978-8095. REBI
go to a company I know and
respect.’”
Herder says he wouldn’t be sur-
prised to see Keller Williams or
another national brand step into the
Broker continually pushes agents to improve
opening left by Century 21. web marketing (Continued from page 1)
Of course, it’s the agents them-
selves who ultimately pay the bill Forsman says. “We evaluate it agents are working toward an inte-
for what may be little more than a branch by branch, and we rigorous- grated technology model,” he says.
recruiting tool. ly restate the advantages of doing “But they are independent contrac-
“There is irony in that,” Herder that, so it gets into the culture.” tors, so you can herd them, but if
says. It seems to be working. About you push them too hard, they’ll
Bob Ratliff, an agent at 60 percent of Prudential Georgia push back.”
RE/MAX Central in Las Vegas, says Realty’s listings include 25 photos,
he realizes there has been a “para- Forsman says. Falling costs
digm shift” in the way consumers Not every listing lends itself to Prudential Georgia Realty also
shop for homes. But he supports the full treatment, he acknowledges. offers plenty of training and support
RE/MAX’s heavy investment in TV For instance, there’s no point in for agents who embrace technology.
advertising. posting 25 photos of an empty lot. For instance, the company has an
“It certainly doesn’t hurt,” Forsman also acknowledges arrangement with a production
Ratliff says. “I make a living off the that he can’t force agents to market company to professionally shoot,
RE/MAX name. That’s really the their listings online. narrate, and edit audio slideshows
reason I’m with RE/MAX.” “My job is to ensure that and videos.
REAL ESTATE BROKER’S INSIDER www.BrokersInsider.com MARCH 15, 2009 3
4. Pulling out all the technological the agent’s competition is, and be wants to be,” Forsman says.
stops makes sense now that videos better than them.” Other Prudential Georgia Realty
and audio slide- Floyd says it efforts include:
shows are so much hasn’t been difficult • Listing distribution that syndi-
Embracing online marketing
cheaper to produce, to persuade agents cates properties to 115 real estate
says Tony Floyd, How Prudential Georgia Real- that times have websites.
senior vice presi- ty stays ahead of the market- changed. • Listings appear as “showcase”
dent at Prudential ing curve: “If you’re still or “featured” listings on major sites
Georgia Realty. • Encourages agents to post doing real estate the including Realtor.com, Yahoo Real
“What once 25 photos for each listing. way you did it 10 Estate, Trulia.com, Frontdoor.com,
cost thousands if • Teaches agents how to tell years ago and it’s and AJCHomefinder.com.
not many hundreds each listing’s unique story working for you, • An inventory of stock photog-
of dollars, we can online. fine,” Floyd says. raphy to help agents provide 25
now get for $150,” “More often than high-quality photos for each listing.
• Has an arrangement with a
Floyd says. not, what worked Search engine optimization and
marketing company that
But technology five or 10 years ago search engine marketing that move
creates professionally pro-
without training is isn’t working listings up in results on Google,
duced photos and video.
dangerous. today.” Yahoo, AOL, and MSN. For phrases
“We have spent Once Prudential such as “Atlanta real estate” and
a lot of time teaching our agents Georgia Realty’s online marketing “Atlanta new homes,” Prudential
how to discover what’s unique about generates leads, agents’ work has Georgia Realty appears among the
a property and to tell that story,” just begun. The company has a pro- top five organic results.
Floyd says. gram it calls “rapid response real A multimedia advertising
While agents often balk at the estate” that aims to quickly respond approach that includes banner ads,
cost of multimedia marketing, Floyd to leads. behavior-targeted online ads, social
does his best to convince them that Forsman focuses on sending networking, blogging, TV ads,
marketing makes sense, especially leads directly to agents rather than online videos, and print ads.
in today’s market. to a call center. He says call center Prudential Georgia Realty has
“Agents will tend to look at the conversion rates are too low. 23 offices and 1,200 agents.
cost,” Floyd says. “So we’ll encour- “I’m not a call center junkie Contact: Dan Forsman, Tony Floyd,
age our agents to figure out who the — which might not be consistent Prudential Georgia Realty, 770-992-
property’s competition is and who with where the rest of the world 4100, www.prudentialgeorgia.com. REBI
Business Strategies tic and complete picture of the mar-
ket, Evers says. One agent might be
To set prices in buyer’s market, broker relies more familiar than the listing agent
with a similar property that recently
on wisdom of crowds sold.
When sellers list with Evers & At one listing visited by a group And, Evers says, sellers love
Co. Real Estate, they can expect a of Evers & Co. agents, the price the attention.
whole crowd of agents to traipse suggestions came in between “They want to hear what you
through the house on the following $725,000 and $760,000. For the have to say,” Evers says. “They
Tuesday. most part, the suggestions are with- want to hear the reasons for the
That’s because every Tuesday, in 5 percent of each other. high number and the low number.”
Evers & Co. owner Donna Evers If there are strong disagree- While sellers ultimately decide
leads agents on tours of three to six ments, Evers says, “We argue it the list price, having two dozen
recent listings. through. We talk about it in a agents put in their two cents lets
“As many as 25 or 30 of us will group.” sellers know that the price sugges-
show up to price a property,” Evers Putting multiple eyes on one tion isn’t simply a number pulled
says. property helps give a seller a realis- out of the air.
4 MARCH 15, 2009 www.BrokersInsider.com REAL ESTATE BROKER’S INSIDER
5. “We spend a lot of time with pricing is just one creative way Jumping on the green band-
sellers going through their house,” Evers is tackling a difficult market. wagon, Evers has been encourag-
Evers says. “Sellers really appreci- She notes the ing agents to use
ate that.” “huge” drop in sales in the EcoBroker
“We can do better if
Wise sellers understand that the past few years. designation.
we all pitch in and
they’re not objective about the value “Volume is down “The younger peo-
of their property. 42 percent, but we still pool our resources.” ple are very interested
“They’re very involved in their have about as many in this,” Evers says.
property and they have a very per- real estate agents,” she says. “To First-time buyers are especially
sonal view of it,” Evers says. “We’re stay the same, you have to do concerned about how much their
looking at it as we must, which is as more. The business isn’t just auto- utility bills will be. And Maryland’s
a product.” matically there when you have that Montgomery County recently
Evers says she has little trouble kind of drop in volume.” required sellers to disclose utility
getting her 70 agents to participate So Evers has been training bills to buyers.
in the group pricing exercises. agents to contact more prospective “This really brings the con-
“Everybody is very good about clients and to spend more time with sciousness to a new level,” Evers
doing their part,” she says. “When buyers and sellers on weekends. says.
it’s their turn to price a property, the “The experienced agents under- In another effort to keep
other agents will pitch in for them.” stand that they have to expand,” clients happy, Evers & Co. offers
The practice helps keep agents Evers says. “And we realized we sellers free staging services. It
in touch with the market. had to expand to survive.” moves accessories and furniture
“It’s great for us, because we While many brokers have cut into houses to create a better first
learn so much that way,” she says. overhead, Evers has weathered the impression.
“It’s like doctors making rounds, downturn by adding it. The compa- “We’re charging a lot of money
and the house is the patient.” ny grew from 30 agents and two to sell their home, and we want to
offices in 2005 to 70 agents and offer the best services we can,”
Team approach three offices now. Evers says.
The group-pricing exercise also “We’ve been steadily growing Contact: Donna Evers, Evers
gives sellers a feeling that they have — and consciously growing,” & Co. Real Estate, 202-364-1700,
more than just one agent working Evers says. devers@eversco.com.llquote:
REBI
for them.
“We want them to know we’re
all here for them,” Evers says.
Groupthink has become trendy
Selling
in recent years, as evidenced by top-
selling books like The Wisdom of
Crowds, Crowdsourcing, and We Are
In today’s market, cater to bulls and owls,
Smarter Than Me. not lambs and tigers
“We can do better if we all pitch
in and pool our resources,” Evers Miami condo broker Craig Studnicky, president of International
says. Studnicky long has subscribed to Sales Group. “Right now, it’s all
And smarter pricing is crucial in the personality profiling that divides about the deal.”
today’s buyer’s market. A property buyers into four types of animals — The bulls, owls, lambs, and
that’s mispriced when it debuts on bulls, owls, lambs, and tigers. tigers, or BOLT, theory was devel-
the market is marked with a stigma. During Miami’s condo boom, oped by sales consultant Charles
“Nobody can risk making a big emotional lambs and tigers ruled. Clarke. Here’s how the types break
mistake these days,” Evers says. “If Now, though, deal-driven bulls and down:
you come out the door with a price owls dominate the market. • Bulls are focused on the bot-
that’s too high, you’re going to pay “I try to teach my salespeople tom line and getting to the point.
for that mistake.” to sell everybody as if they’re sell- Used to taking charge, bulls seek to
The crowdsourcing approach to ing to those two types,” says control the negotiations. They’re
REAL ESTATE BROKER’S INSIDER www.BrokersInsider.com MARCH 15, 2009 5
6. smart, brand-conscious, and status- Economic Trends
conscious.
• Owls are analytical, logical, Realogy suffers big loss, but commission rates
and detail-oriented. They’re typi-
cally professionals such as lawyers,
tick upward
accountants, or engineers. They For Realogy Corp., the nation’s up from 2.47 percent in 2007.
love to fixate on price per square largest real estate broker, 2008 Realogy also pointed to fran-
foot as a measure of value. brought a flood of red ink and chise growth. In 2008, it signed
• Lambs are people pleasers some glimmers of hope. deals with brokers who generated
who avoid conflict and make deci- Realogy, owner of the Cold- $420 million in gross commission
sions slowly. Lambs are very con- well Banker, Century 21, ERA, income, Smith said.
cerned about security and their Sotheby’s, and Better Homes and Meanwhile, Realogy said its
neighbors. Lambs tend to be older. Gardens brands, lost $1.9 billion in owner, buyout firm Apollo Manage-
• Tigers are expressive, fun- 2008 as revenue, transactions, and ment, agreed to provide Realogy
loving, and impulsive. They buy commission income slumped. with a $150 million cash infusion if
based on lifestyle considerations. As a result of the weak hous- it’s needed.
They tend to be younger, and in ing market, Realogy wrote down “This is very powerful support
Studnicky’s home market of South $1.8 billion of goodwill — but to us during these challenging times
Florida, many tigers are Hispanics. Chief Executive Officer Richard A. and is not available to most compa-
Studnicky’s firm focuses on Smith stressed that the
selling new condos, and in 2004 impairment doesn’t Realogy’s average commission side, by year
through 2006, International Sales affect the company’s 2.70%
Group’s marketing focused on health.
2.65%
lambs and especially tigers. “Goodwill is sim-
2.60%
“We used to throw these ply the difference
incredibly lavish parties, and we’d between the price paid 2.55%
hire these sexy models,” Studnicky for a company in an 2.50%
acquisition and the 2.45%
says. “That type of buyer is not
most current value of
buying real estate right now.” 2.40%
its assets,” Smith said
It’s not just the parties that 2.35%
in a conference call in 2002 2003 2004 2005 2006 2007 2008
were axed. International Sales
late February. “To be
Group has shrunk from 300 nies or our competitors,” Chief
clear, these non-cash charges have
employees in 2005 to 75 employ- Financial Officer Anthony E. Hull
absolutely no impact whatsoever on
ees now, and it has closed a num- the company’s day-to-day opera- said in a conference call.
ber of offices. tions, its cash position, liquidity, During the same conference
“It’s unfortunate, but I had to credit agreements, or viability.” call, Smith said Realogy is not fil-
stay alive,” Studnicky says. Amid all the red ink, Realogy ing for bankruptcy.
Still, Studnicky holds out hope also reported bits of good news. In “That is completely false and
that things will get better in 2009. one example, commissions began without merit,” Smith said. “It is a
With prices dropping and mort- to bounce back after steadily self-serving notion promoted by the
gage rates flirting with record falling during the boom. popular press and some of our unin-
lows, he thinks buyers will come The average commission side formed competitors and is evidence
back. for Realogy’s franchised broker- of their attempt to promote their
“You’ve got to sell with enthu- ages climbed to 2.52 percent in businesses through the unwarranted
siasm, and you’ve got to sell with 2008, up from 2.49 percent in 2007 criticism of others as opposed to
urgency,” he says. “Where the hell and 2.47 percent in 2006. relying on the values of their busi-
was the urgency last year?” For Realogy’s corporate- ness models, many of which are fail-
Contact: Craig Studnicky, Interna- owned offices, the commission ing in this market.”
tional Sales Group, 305-931-6511, increase was more modest. Its Contact: Realogy Corp., www.real-
www.intlsalesgroup.com. REBI average was 2.48 percent in 2008, ogy.com. REBI
6 MARCH 15, 2009 www.BrokersInsider.com REAL ESTATE BROKER’S INSIDER
7. Business Models “In commercial, we’re just going
over the edge now,” Huang says.
Broker combines residential and commercial As Huang looks to expand,
don’t expect to see BRC pursue
businesses, shuns franchises franchising. He calls national fran-
Los Angeles broker James California, and he plans to open chising “outdated” and “ineffective.”
Huang runs a company that does a three more in 2009: one in Southern “Brokers and agents rely on lav-
bit of everything. California, one in Northern Califor- ish marketing campaigns and costly
His firm, BRC Advisors, has nia, and one in Chicago. franchise fees to lure clients, tactics
200 residential agents who focus on Those will be that will not work in
buying and selling homes. BRC has small offices that an environment
Broker Bio
110 commercial agents who focus initially will focus plagued by foreclo-
on office, industrial, and retail deals. on commercial The broker: James sures, high unem-
Huang, BRC Advisors ployment, and a
BRC’s investment arm even is business, Huang
buying foreclosed properties and says. The model: Residential, general freeze in
listing them for sale with its own He’s expan- commercial, and invest- lending,” he says.
agents. sion-minded, but ment deals under one roof. “In a good economy,
“Each part is helping the rest of he’s not blind to What’s next: Huang plans there may be re-
the company through the down- the problems in to open offices in Northern wards for everyone.
turn,” he says. the market. The California and Chicago. But in this market-
Huang is founder and chief National Associa- place, this formula
executive officer of five-year-old tion of Realtors in February said the is a recipe for disaster.”
BRC, and he’s expanding aggres- credit crunch and the recession will Contact: James Huang, BRC Advi-
sively in spite of the downturn. make 2009 a difficult year for the sors, 213-226-8700, www.brcadvisors.
BRC has six offices in Southern commercial real estate industry. com. REBI
Technology nology continues to evolve. For
instance, a significant number of
Video, photos gain importance in search consumers are using iPhones and
BlackBerry devices not just to read
engine results basic listing information but to
To make listings stand out As part of that intelligence, view videos and listen to audios.
online, agents must post video and search engines are looking at multi- Emmendorfer sees one big
audio as part of their online market- media information such as videos, advantage for agents who stay
abreast of the changes: They’ll set
ing materials, says Tom Emmendor- audio, and photos. One tip: If
themselves apart.
fer of Showcase Technologies. agents are uploading property pho-
Agents should stress to sellers
“Listings are 50 times more tos to a website, they should be sure
that tech-savvy professionals give
likely to show up in search results to change the name of the photo to them a big edge in marketing their
if there’s multimedia information the address of the property. That’s homes.
on the page,” Emmendorfer says. because search engines now are So in your listing presentation,
Showcase Technologies has looking at names of digital photos let sellers know about the wide
partnered with the Exit Realty sys- when judging how to rank pages. variety of real estate sites. And let
tem and with First Weber Realtors “All of that data has just been for-sale-by-owner sellers know that
of Wisconsin to help agents learn started to be mined by Google in a sign in the yard and a cut-rate
to navigate the fast-changing world the last month or two,” Emmendor- listing in the MLS no longer carries
of online marketing. fer says. the marketing weight it once did.
“Search engines are already so Too many agents are just now Contact: Tom Emmendorfer, Show-
much more intelligent than they were catching up with technology, and case Technologies, 573-334-9452,
six months ago,” Emmendorfer says. they don’t realize how quickly tech- tom@showcasetech.net. REBI
REAL ESTATE BROKER’S INSIDER www.BrokersInsider.com MARCH 15, 2009 7
8. CLOSINGS
Realogy posts listings on Affordability soars as prices fall
Homes.com A silver lining in the cloudy housing market: Housing affordability
Realogy Corporation has surged in the fourth quarter of 2008 to its highest level in at least five
entered a distribution agreement years.
with Homes.com that puts the list- That’s according to the National Association of Home Builders/
ings of Better Homes and Gardens Wells Fargo Housing Opportunity Index.
Real Estate, Coldwell Banker, and According to the index, 62.4 percent of all new and existing homes
ERA on the Homes.com site. sold in the final quarter of 2008 were affordable to families earning
Century 21 listings already were the national median income of $61,500.
on Homes.com, and in December That’s up from the 56.1 percent of homes that were affordable to
that site generated 1.3 million page typical families in the third quarter. And in 2006, only 40 percent of
views of listings and some 240,000 homes were in reach of typical families.
clicks to the Century 21 site, Realo- “Falling home prices and very favorable mortgage rates both con-
gy says. tributed to the housing affordability gains we saw in the fourth quarter
Homes.com is a division of of 2008,” says NAHB Chairman Joe Robson.
Dominion Enterprises. Indianapolis, where 93 percent of homes are affordable, was the
Contact: www.realogy.com. nation’s most affordable major housing market. New York, where
fewer than 14 percent of homes were affordable, was the priciest
market.
RE/MAX LeadStreet brings Contact: National Association of Home Builders, www.nahb.org/hoi.
in 6 million leads
RE/MAX International says Web Extras: To see a chart of housing affordability over the past 16
its lead management system, years, go to www.BrokersInsider.com and click on “Web Extras.”
LeadStreet, has generated 6 mil-
lion unique leads for RE/MAX
agents.
RE/MAX charges no referral In 2008, Sotheby’s added 19 home price for all housing types
fees for the leads. LeadStreet sends companies, and 30 firms already was $170,300 in January, down
leads to agents by email, which associated with the franchise 14.8 percent from a year earlier
means they can receive a lead on opened new offices. when the median was $199,800.
any mobile device. Contact: www.sothebysrealty.com. Total housing inventory at the
Contact: www.remax.com. end of January dipped 2.7 percent
to 3.60 million existing homes for
Home prices down 14.8%, sale.
Sotheby’s adds offices, NAR says While national sales slowed,
agents Home sales and prices contin- volumes rose in hard-hit states
Despite — or perhaps because ued to fall in January, the National such as California and Florida. In
of — the real estate downturn, Association of Realtors says. Florida, sales spiked 24 percent
Sotheby’s International Realty Existing-home sales fell from January 2008 to January
Affiliates says it expanded its office 5.3 percent to a seasonally adjusted 2009, the Florida Association of
count by 10.7 percent in 2008. annual rate of 4.49 million units in Realtors said.
Sotheby’s, a division of Realo- January, down from 4.74 million Contact: National Association of
gy Corp., ended the year with units in December and 4.91 million Realtors, www.realtor.org; Florida
10,750 agents in more than 500 units in January 2008. Association of Realtors, media.
offices worldwide. The national median existing- living.net. REBI
8 MARCH 15, 2009 www.BrokersInsider.com REAL ESTATE BROKER’S INSIDER
