RISMEDIA, August 16, 2010—As the housing market continues its sluggish recovery, brokers should still focus on the basics of recruiting and retaining—but also must take back training and be prepared to work within the distressed property market if they want to succeed in the next three to five years. That was the message delivered to brokers by Dave Liniger, RE/MAX International’s Chairman and Co-Founder, at this year’s annual RE/MAX Broker Owner Conference.
More than 700 RE/MAX broker/owners from around the United States and the company’s international markets, gathered for the three-day educational event, held last week at the Colorado Convention Center in Denver, with special networking events held at Liniger’s Wildlife Experience museum in Parker, CO and his exclusive Sanctuary golf course in Sedalia, CO.
In traditional RE/MAX spirit, the opening session kicked off with an energizing performance to get brokers pumped up – this year by “Paint Jam” acclaimed artist Dan Dunn, who wowed the audience with his unique approach to painting using music and wide brush strokes over a moving canvas. First, a detailed portrait of Ray Charles, followed by a home for sale under a giant RE/MAX balloon and for-sale sign, emerged unknowingly right before attendees’ eyes. The paintings were auctioned off later that evening, with proceeds going to the Susan G. Komen For the Cure foundation. RE/MAX of Texas’ Richard Filip took home the balloon painting with his top bid of ,000.
Economic Outlook by Margaret Kelly
RE/MAX CEO Margaret Kelly continued the session, offering brokers an economic overview of the current U.S., Canadian and International markets.
Kelly, who also is a member of the Federal Reserve Board in Kansas City, said the economy right now offers, “…the good, the bad and the ugly. There is a little bit of everything out there right now,” she said.
“The number one factor affecting the economy right now is unemployment,” Kelly said. “Housing can’t recover until unemployment numbers improve. We have extremely fragile consumer confidence right now. Seventy percent of the GDP (Gross Domestic Product) is based on consumer spending, so if consumers aren’t spending and they’re not confident to be spending, we’re seeing a slow recovery right now and we’re sort of bouncing along the bottom for a little bit.”
The Good News
The good news for RE/MAX agents however, she said, is that historically low interest rates are still in play as well as a large inventory, which is optimal for buyers. “There is a lot of business out there. Now more than ever, [consumers] need you. They need a Realtor to help them through the complex buying and selling of distressed properties, foreclosures and regular sales. There’s a lot of good happening; we just have to take advantage of it. Our goal is to get you as much of this business as possible.”
A poll question to the audience, which used keypads to respond, about what next year’s economy will look like, revealed that 54 percent thought it would stay the same; 35 percent said it would get better and 11 percent thought it would get worse.
“Despite the fact that we may have a sluggish economy, RE/MAX continues to shine,” Kelly continued. “According to RISMedia’s Power Broker Survey, which ranks the nation’s top 300 brokers, RE/MAX companies accounted for 69 of the top 300; that’s 25% of that list. We have the most productive agents. Our competition says we don’t understand why RE/MAX doesn’t use those numbers more – that’s our ammunition. What agent wouldn’t want to join a company that brings more business to you.”
Canada to the Rescue
Kelly also noted some impressive economic and housing statistics coming out of RE/MAX’s Canadian markets. “Canada’s unemployment rate is 7.9 percent and dropping. They created 93,000 jobs in the first quarter alone. The average transaction price is 0,000, which is up almost 14 percent. That’s incredible.”
When polling Canadian brokers with the same question on the future of the economy in 2011, 81 percent of brokers said next year’s economic outlook would be better in that country.
“We have had recessions in the past and the company grew because of our friends in Canada,” Kelly said.
Internationally RE/MAX has expanded to 80 countries now, each with its own economic issues, she added, however, “RE/MAX continues to grow in all of them. What happens globally affects us locally.” She noted that two companies recently opened in Brazil and India, in particular are growing rapidly and doing well. The India company, which opened just 18 months ago already has sold 25 regions and 70 offices, she said.
Introducing RE/MAX Chairman and Co-Founder Dave Liniger, Kelly urged brokers to “get back to basics, use your ammunition and dust off that old technology called the telephone” to keep business moving ahead. “Three years ago we weren’t sure what was happening in the economy. We didn’t know how bad things would or could get. [Dave Liniger] warned us what may happen if we weren’t prepared for the coming years.”
Preparing Now for the Future
Liniger took the stage to a standing ovation and moved quickly to an overview of the distressed properties market and how several new partnerships RE/MAX has announced, are positioning the company for future growth in that area.
“The market we’ve been in we’ll continue to be in for another three to five years,” he said. “This whole thing was caused by the subprime mess. Right now we have millions of homes in foreclosure and millions more that will soon be in foreclosure or distressed status. There is enough business out there; we just have to take it away from someone else.”
Currently, he announced, RE/MAX has developed new partnerships with Equator, Res.net, the National Real Estate Investors Association, Personal Real Estate Investor Magazine and Real Property Management, all in support of the company’s focus on the distressed properties market.
Liniger also talked about the investor market as a serious growth area that brokers should be connected with, and used the example of a surge in Canadian investments in Arizona distressed properties.
“The biggest purchasers of properties in Arizona, other than Arizonans themselves are Canadians,” Liniger said. “Many are buying future retirement homes. The question is how big is the investor market in the United States? What percent of buyers are investors?
He answered that 20 percent of all listings being sold now are sold to investors, and that buyers are not “big-time” investors buying malls or large properties. “They are people buying first or second rental properties to have cash flow or sell in the future.
“Fifty percent of all properties on the market are distressed property,” Liniger noted. “Fifty-five to sixty percent of all investment purchases are distressed properties. Does that tell you about the leadership and training we must provide our agents in this area?”
Cautioning brokers that they need to think “beyond the business of real estate,” Liniger then turned his attention to three key areas that brokers must focus on to succeed: retention, training and recruiting.
“If you’re competing today, you must be in two businesses – in the agent business and the real estate business,” he said. “Wearing your hat in the top-producing agent business, you have to focus on these key areas.”
Liniger outlined the following:
Focus a majority of your time on four key results areas:
Personal leadership – “We have to provide more than ever today. Today agents are working harder than ever before and a key aspect of leadership is you have to provide that spark plug – have to provide the attitude and enthusiasm.”
Worth ethic – “I’m in my office every day at 5:30 a.m. I’m not saying you have to be a workaholic, but if you wander in at 9 a.m., everyone else will wander in at 9 a.m. If you set the stage as a leader and manager, if you’re the one turning the lights off at night, that’s the leadership you have to have.”
Personal appearance and dress – and personal behavior – “You can’t have agents coming in wearing Bermuda shorts and flip flops. If they are they need to change that and set the stage.”
Focus on office environment:
– Create an efficient and caring support staff. “If you lose one lead you’re in lot of trouble,” he said.
– Build cooperative team spirit
– Create a high-producing, goal-oriented and active office
– Support services are key to allow sales associate to focus on sales
Focus on coaching and training:
Liniger also said that brokers need to take back coaching. “Coaches do an admirable job, and the reason they came about is because brokers stopped doing training,” he said. “Brokers don’t have time to do it, so agents are willing to pay thousands of dollars a year for it. In this market we have to be the trainers.”
Final Thoughts on Recruiting
Liniger wrapped up this year’s broker keynote focusing on recruiting as a focal point and announced two new campaigns the company is rolling out to support it—a 120-day “Race to Recruit” challenge and a video campaign aimed specifically at Gen X and Gen Y agents.
“We tell people combine your success and hard work with our value proposition,” he said. “The person you are trying to recruit today has different needs than four years ago. What does every real estate agent need? Leads! That’s it. We are the number-one, lead-generating real estate company in the business, an icon of the industry. Brand is important—it pre-sells the consumer and is a lead-generating system for agents. The RE/MAX Value Proposition—you can’t take away the power of the brand.”
In response to a poll question to brokers on how much of their time will spend on recruiting in the next year, the majority said 26-40 percent of their time will focus on those efforts.
“Still, the business won’t just come to you,” Liniger cautioned. “You have to use all the tools you have at your disposal and keep at it. This is a continual contact sport.”