Lew Sichelman is a seasoned writer with 50 years of covering the housing and mortgage markets under his belt. His biweekly Inman column publishes on Tuesdays.
Fifty-years ago, five real estate professionals in the Minneapolis area came together with the idea that a real estate firm was no greater than the sum of its parts. So they formed what amounted to a cooperative in which the real estate agents are equal partners who share in the firm’s profits. Except there are no profits.
Today, Counselor Realty has 16 offices throughout Minnesota and Wisconsin and nearly 225 agents. Not all agents are stockholders in the agency, which is set up so it breaks even at the end of each fiscal year. But most are, and whatever fees they pay the company are returned to them in the form of services such as websites, technology tools and staff hours.
Andy Barnes
“Everybody who buys stock becomes an equal partner,” Counselor Realty president and CEO Andy Barnes said. “We’re not truly a cooperative, but that’s the model we follow. Not one person makes money off another agent.”
If not unique, the company that was started in 1964 by Ken Kunzman is certainly unusual, not just according to the standards of 55 years ago but even today. Only one other firm, The Group in Denver, which was started in 1976 by a dozen agents, seems to come even close in its modus operandi in that everyone is an equal owner.
In 1964, the then 25-year-old Kunzman was a freshly-minted broker who convinced four other like-minded professionals that he had a better idea. As Barnes describes the concept, “everyone should share in each other’s success.”
In some ways, Counselor Realty operates much like a law firm. But rather than pay monetary dividends to each shareholder – 96 of the company’s agents are shareholder-partners – it pays dividends in the form of services.
“If they gave money back, it would be taxable, so they decided to take it in the form of services,” Barnes explains. “By trying to break even, we can each serve our clients better and charge fees that are commensurate to their needs.”
Barnes joined the firm in 2003, and was elevated to its presidency and the broker-of-record post five years ago. “I’ve never been with any other firm,” he boasts proudly. “There’s not a lot of turnover in our company, except for retirement.”
Counselor’s agents work in eight corporately-owned offices and eight franchised stores, with most on a 100 percent commission. To become a partner, an agent must be voted in. All office managers are full-time agents who list and sell alongside their offices’ other agents.
Indeed, Barnes himself still works as an agent, as do the company’s other executive officers. Each officer is paid a small amount for performing their executive duties.
Together, the firm’s agents have an average tenure with the company of 12 years and earn an average of $42,500 annually. That compares favorably with 10 years experience and an average income of $39,000 for the typical agent, according to the National Association of Realtors 2018 Member Profile.
All agents pay corporate and office fees, just like those with other firms. But Barnes says they are “much lower” than average.
“The amount of money they put into the company is vastly lower than our competitors, and the number of their transactions is above average,” he says. “We are all here to help each other. It’s not a competition. We offer a family dynamic where everyone can succeed.”
At one time, Counselor Realty had more than 500 agents — and then the recession hit. That, plus a change in leadership – Kunzman retired, then passed away, leaving only one of the original partners, Paul Johnson, an octogenarian who is in failing health and no longer active, still alive – and what Barnes calls “a change of direction.”
“We’re not as large as we were before 2006,” he says. “We were quite a bit larger back then. So there’s a lot of room for growth.”
Nick Dreher
Toward that end, the company recently hired a director of growth and development to strengthen its profile in the Minnesota and Wisconsin markets. In his new post, Nick Dreher is charged with re-energizing the brand, both internally as a culture leader and externally as a company ambassador.
“We needed one person to tell our story and help our company grow,” Barnes said. “He’ll also make sure our agents are trained and prosper.”
For one thing, Dreher, who has worked mostly on the mortgage side of the housing business since he found real estate in 2001, will do a lot more one-on-one classroom training, concentrating on technology. “You can have all the technology in the world,” Barnes says, “but if agents don’t use it or don’t know how to use it, it’s worthless.”
For his part, Dreher says the company has not given him a certain goal to reach in the form of agent growth. But at the same time, he hopes to bring 35 agents on board this year and boost the total count to the 300-350 range over the next few years. Then, he suggests, there’s a possibility of extending the Counselor Realty concept nationally.
“We have a corporate model that is compelling,” he says. “We offer a lot of value to agents. [Our] model is unmatched in the Twin Cities and nobody knows about it. By building the brand, we hope to show customers and prospective agents how unique and rewarding being a part of Counselor can be.”
Lew Sichelman is a seasoned writer with 50 years of covering the housing and mortgage markets under his belt. His biweekly Inman column publishes on Tuesdays.
