Editor’s note: The following Q-and-A interview with Larry Mayall, a broker-owner in Tennessee is a part of the "To Be a Broker" editorial project that highlights broker challenges and strategies for success. Click here for more info.
Name: Larry Mayall
Years as a broker: 12
Number of sales agents who you supervise: 235
Years working in the real estate industry: 15
Q: What is the biggest change you have made to the brokerage in the past year, and what prompted this change? How has this change impacted the bottom line, if at all? What has changed about your service offering in the past year?
A: We introduced many different changes in the last year, but the primary change we introduced was from a contract phone center to a Web site link to schedule showings, and a link to submit offers.
When (one of our agents) finds the property through the search function, we provide summary information on the property — which also includes number of offers worked and the number of offers that are currently active. The request is added to the property file, which is on our proprietary Web-based property management software. The offer documents are submitted and also become part of the digital property file.
We believed that by introducing this, we would meet the objective of creating better time and cost efficiencies. It has reduced phone traffic and has made our system much more agent-friendly. We’ve realized cost savings of more than $1,000 a month in the contract phone center alone.
A: I believe that my principal objective is to empower agents. I think a broker is a resource for the agent. The challenge of today is to ensure that the agent is equipped with every advantage. The broker’s relevance is based on the ability to give agents the tools to deliver to buyers and sellers the most efficient services. The successful agent today understands the use of the Internet for information, data, research, communication, etc.
Q: Are brokers more or less relevant to consumers these days than they were five years ago? Why or why not?
A: It seems to me that with the dominance of the Internet, and the opportunity that it provides individual agents to brand and promote themselves, that the relevance of the broker in the marketplace is minimized significantly. The distinction of an agent professional who has the flexibility to deliver customer satisfaction as an entrepreneurial business owner is the reality. It’s the agent, not the broker, (that matters) when it comes to the consumer.
Q: What changes, if any, have you observed in the structure of real estate commissions/compensation/fees in the past year, and what has caused those changes?
A: For agents and brokerages it is all about survival. It is confusing and insensitive that membership organizations have increased fees because of a loss of members and fee-related income. Brokerages have increased some fees and some have increased the agent’s commission split. There doesn’t seem to be any consistent effort to "save" the agent.
I have had an increase of agent census because of our flat-fee, 100 percent commission plan. We, in fact, in November 2007 reduced our monthly fee 25 percent for the duration of this downturn to simply say that "we feel your pain." …CONTINUED
I think there is opportunity in adapting a big-box retail approach to real estate brokerage. The challenge is that there is no textbook that provides the pattern. The book "Building the Bridge As You Walk On It" by Robert E. Quinn is a recent discovery for me, and he captures the essence of what we do.
I am a dreamer and an entrepreneur who finds fulfillment in the journey. The destination isn’t the reward. It seems to me that large firms will need to be some form of a flat-fee, 100 percent commission (model). The Internet has become the "broker." The agent is the critical element in the real estate enterprise. So the future is likely (to be populated by very large brokerage companies) with an economy of scale, or small, niche-oriented, specialty firms.
Q: What are the most vital services, in your opinion, that you provide?
A: Equipping the real estate agent with the training and resources to compete in a virtual world, challenging the status quo, thinking outside the box, and creating business-planning objectives for the agents.
Q: What would your agents say are the most vital services that you provide to them? What would consumers say are the most vital services that you provide to them?
A: I have made a (concerted) effort to enhance time and cost efficiency through the development and implementation of technology resources. This includes the leveraging of the Internet as the most cost-efficient medium for marketing and communication. Agent branding is critical from both a personal and professional perspective.
Q: What is the latest trend with home sales in your market area? Short-sale listings and sales? Bank-owned (REO) listings and sales? Purchases by first-time buyers? What is the latest trend with home prices? Offers?
A: REO listings and sales are 50 percent of the activity in the market right now. That trend is projected to continue for another 12 to 24 months. Short sales are projected to become a growing activity as well. We believe that in our market, home prices will probably drop another 8 to 10 percent in 2010.
Q: What are buyers’ primary concerns these days? Has this changed in recent months?
A: Buyers are value-driven more than ever. And they are more open to consider a property that may need repair.
Q: What is the largest investment you have made in technology in the past year, and has it paid off?
A: My investment in technology is ongoing. We tend to build proprietary systems. I have a programmer in Ukraine who has worked for me for eight years. He is the lead and contracts others as we need. We always push for the edge competitively.
Q: In which areas have you reduced costs in the past year, and what has been the business impact of those cuts? …CONTINUED
A: Reducing costs is always the challenge. I avoid the thinking that we deserve luxuries. We have never borrowed money to operate the business.
Q: What is your forecast for the real estate market in 2010?
A: I think the market will be very similar to the market we’ve experienced in 2009.
Q: What is the single biggest challenge that you face as a broker? What is the biggest worry these days about the state of the housing market and economy? About your brokerage?
A: The ability to "read" a crystal ball about how the business may evolve over the next couple of years is an ongoing, intense concern. We have had to understand that both the housing market and economy are difficult, and adapt to the reality that they simply are what they are. Planning has to be hopeful, but practical and flexible. The challenge and opportunity is to dare tradition.
Q: Briefly describe a typical day for you, and what duties occupy the most and least time.
A: I am very involved in all aspects of my business. I have recruiting interviews. I manage an active e-mail flow. I have two offices and am the managing broker for both. I am energized by the opportunity to influence others.
Q: What is most misunderstood, by agents and/or by consumers, about the work that you perform?
A: As a broker there seems to be a perception that I am the referee and judge of all actions of an agent. While I certainly understand the legal responsibilities I have related to agents, I encourage agents to use or develop the skills to work through issues and grow professionally.
Q: Feel free to comment on any other aspect of your work as a broker that you think would be relevant and helpful for other brokers.
A: I have found that my real value in the marketplace is being available. Agents know that I am responsive. I answer my phone. I reply to e-mail or text quickly. My relationship with agents is as a resource. My relationship tends to be more informal and casual with agents.
Larry Mayall is broker-owner of First National Realty Inc., based in Memphis, Tenn.
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