Whatever happened to the local real estate agent? Most likely, he's joined a national corporation
Richard Currier opened his real estate office in Cambridge, Mass., 10 years ago. Since then, there have never been more than 10 agents working for Currier Associates. Right now, Mr. Currier has five agents, though he considers eight about ideal. Just three years before Currier opened his doors, William M. Raveis started his real estate company in Fairfield, Conn. Since then, William Raveis Real Estate has become the largest realty firm in Connecticut, with 42 offices and more than 1,200 agents.Skip to next paragraph
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While their histories have taken distinctly different paths, both men have one thing very much in common: a determination to remain independent, not to join one of the large national firms whose influence on the real estate business has dramatically altered the landscape for buying and selling homes since the 1970s.
They may be swimming against the tide.
In the 1970s, a business that belonged almost exclusively to the local entrepreneur - someone many people in town knew personally - met Corporate America. Lawns began sprouting signs with names like Century 21, ERA, and RE/MAX. Later, they were joined by signs from Merrill Lynch, Better Homes & Gardens, and Coldwell Banker.
In the 1980s, real estate met the age of acquisition and the computer. Last week, for instance, Coldwell Banker, a division of Sears, Roebuck & Co., bought real estate companies in Boston; Columbus, Ohio; and Louisville, Ky. Its Boston purchase of Foster & Foster Inc. gave Coldwell 15 offices in the western suburbs.
In the last 60 days, the company has acquired seven real estate firms with a total of 41 offices in the United States, says Joe H. Hanauer, chairman of Coldwell's residential group. With over 2,000 offices, Coldwell is the second-largest residential real estate company in the US, though it is still well behind the leader, the Century 21 division of Metropolitan Life Insurance Company. Century 21 has about 6,800 franchised offices.
Meanwhile, real estate offices around the country are unpacking new computer screens, keyboards, and printers. Agents and brokers who had used nothing more technical than a business calculator now have to learn to use software that will provide them screens full of information about houses on the market, including price, size, and the location of nearby schools and churches.
Some agents are also using computers to ``qualify'' buyers to see how much house they can afford, find the most attractive mortgages, and compare prices of recently sold homes to find a fair price for a house that's about to go on the market. The computers also help with an office's accounting, billing, and letter writing.
Next year, Century 21 will start giving its agents laptop computers so they can do all of this in a customer's home, says Marv Hart, Century 21's executive vice-president.
Eventually, almost every real estate office will have to have some computer capability. And with more affordable computers, that is already possible for many small companies, like Currier Associates in Cambridge.
The real battle for these companies, indeed for everyone in the real estate business, will be for market share. It will be a battle that pits major national corporations against independent companies ranging in size from one or two agents to those with a thousand or more. For now, the independents are holding their own.
``Some of the franchises haven't done as much lately, but some of the independents are growing very rapidly, says Stephen E. Roulac, president of the Roulac Real Estate Consulting Group of Deloitte, Haskins & Sells. ``I'm talking about chains with $50 million to $100 million in revenues. They are getting to be major players.'' Raveis's company had $40 million in revenues last year.
``In general, though, what you're seeing is a movement to larger firms overall,'' Mr. Roulac says. ``This size gives them more of an ability to provide the economy of service and power of service you get with a bigger scale.'' The larger firms, Roulac believes, can be more efficient, more automated, and can give customers a wider variety of the latest financing instruments.
While real estate is still a highly fragmented business, it is becoming less so all the time. Last year, there were about 15,000 active brokerage firms in the US. They accounted for $500 billion in transactions, but the 32 largest franchised and nonfranchised firms handled $252 billion, or over half of the total, according to Roulac. Just eight companies were responsible for more than 13 percent of the industry's commissions in 1986.
For some independent real estate companies, this kind of power is hard to resist. For several years, Joe Klock managed to resist the urgings of several national firms to buy his chain of offices in Miami. Some of the suitors were rejected, Mr. Klock says, because ``they weren't run by real estate people and didn't seem to have real estate as a top priority.''