As the leader of Prudential CA/NV/TX Realty, Ed Krafchow knows a thing or two about hard work and perseverance. He remains at the same company he joined 25 years ago.
Entering the industry as an agent, Krafchow said he got his start in the industry "for all the wrong reasons." He set out to make a little extra money for other entrepreneurial endeavors, but it didn’t take him long to realize his potential in real estate. Soon he was working double-time — 80 hours a week. He had discovered he loved the business.
Krafchow moved up the ranks as manager, general manger and chief operating manager to the role of president, owner and CEO. He has served as president for a decade. Inman News has recognized Krafchow, who holds a bachelor’s degree and a master’s degree from the University of California, Los Angeles, as one of the industry’s 100 Most Influential Real Estate Leaders.
The California Association of Realtors trade group names Krafchow as one of the state’s top brokers, and the Employee Relocation Council identified him as a technology leader. Along with Prudential California Chairman Dave Cobo, Krafchow has taken the company to new heights — the company’s assets have quadrupled since 1991.
Prudential California Realty and its sister affiliations in Nevada and Texas were founded in 1887 under the name Mason-McDuffie Real Estate and switched to the Prudential name in 1997. The company includes Prudential California Realty, Prudential Nevada Realty, Prudential Texas Properties and Prudential Texas Realty. It is now the eighth-largest national real estate brokerage with about 2,400 agents in 61 offices. Prudential California/Nevada/Texas Realty ranked 21st in transaction volume in the Real Trends 500 list for 2007 (see Inman News article). Real Trends ranked the company 39th in transaction sides.
"I don’t think there is another industry like this industry," Krafchow said. "It’s so strongly relationship-driven. Because it’s filled within independent contractors it’s a parade without a leader. It’s a fun place to be, during good times and during bad times."
This is clearly a unique moment in real estate history, but because of current financial instability Krafchow said he believes the real estate brokerage business is being viewed through an obscured lens. Troubles on Wall Street are impacting the housing market more now than at any time in our history, he said. With the market facing difficult times at this point, Krafchow sees it as a challenge, not an obstruction, that the industry can withstand.
"I’m a great believer in capitalism. I don’t really like regulations too much, but I think the logic of returning to some old ways of doing business would be helpful at this point. The value of having local community banks that lend on value in their community was one of things that kept the business vital and logical. The further we get from local real estate business, the more difficult and more regulated it’s going to need to be," he said.
Krafchow notes that taking initiative is instrumental to success, and it does no one any good to complain about the market — that’s why he believes that agents need to learn how to drivetheir business rather than sit and wait for business to come to them.
"They need to learn to work with reluctant buyers and difficult sellers all over again," he said. "Last and not least the industry has not learned how to celebrate this market. In other words, we are all happy when it’s going up but the market offers great opportunity for buyers. The industry seems glum about that fact."
Krafchow applies this philosophy to his company’s goals as well. Right now the target is to focus on where the market is, how to tap into that market, and supporting agents in that market.
In the quarter century that he has been in the business, he doesn’t think the relationship between brokers and agents has changed, let alone progressed. Various parties have antipathy toward each other. Forming strategic partnerships — not only with agents and brokers, but with vendors and other industry participants — is the best way to improve current conditions, he said.
Within the traditions of the business there must be room for malleability, he said, adding that the shift in focus needs to be placed on the consumer when it comes to Internet and technology.
"What is it that the consumer is experiencing when they go to (real estate Web) sites today and what would it take to have a better experience? That’s the question that needs to be answered."
Ten years ago, Prudential California/Nevada/Texas Realty offered one of the industry’s first Web-based intranet sites, a fully integrated technology platform called WebTop — a lead generation and management system. The technology was created to direct leads to agents and to provide consumers with real-time real estate information.
"In a nutshell, Ed is one of the most creative and original thinkers in the entire industry," said Joel S. Singer, executive vice president of the California Association of Realtors trade group. "I’m always fascinated to hear his take on the business in general or on a new product. Nor is his thinking purely theoretical — Ed is able to absorb and evaluate new ideas and often be the first to successfully bring them to market."
As technology advances, it’s key that the industry and its workforce adapt, Krafchow said, though he noted that technological innovation should aid consumers, not confuse them. While real estate information at your fingertips is helpful, knowing where to look and how to use that information is key, he said.
"Anybody who is moving toward developing a consumer experience is going to be a leader in the business. We have been in a 10-year battle over content (real estate information). I think that battle is over and we are going to need to learn how to present context, not content." Interactive mapping and other types of virtual experiences are more important than simple data dumps to the consumer, he said.
While searching for properties, consumers will be looking for more information that is relevant to their everyday lives. To match that interest, companies and tools will have to give the user the ability to understand where the house is and not just what it looks like — not just the price of the house but a picture of the neighborhood, and not just a picture of road but the speed limit of the road, as examples.
"Although the industry is going through very difficult spasms right now this is probably the best time for a startup. It gives the opportunity to work from the bottom up instead of coming into a fast industry. Most of the industry leaders came in a bad market. Most brokers need to continue to experiment, go forward and not just freeze up and hold onto what they have. Tech innovators will continue to come, and they will add value to the industry."
Cathy Harrington, director of marketing at Prudential CA/NV/TX Realty, said, "Several years ago, when I first began working here, Ed had a phrase that he used quite often: ‘WIIFM.’ It means, ‘What’s in it for me.’ He used this acronym internally because he wanted us to become a company that understood the needs and wants of the consumer. He knew that the Internet was changing the tide and that if we could help our agents to become consumer-centric they would ultimately succeed because they would get and retain clients for life."
When he is not overseeing the company, Krafchow enjoys spending time with family and spending time at a home he owns in Hawaii. He owns five acres in Maui and is creating a "green, self-sustaining environment" where he raises chickens and a variety of exotic fruits. His philosophy for this island getaway: "Eat your landscaping."
"I have six children and very little time for hobbies," he said. "I am very passionate about gardening and maintaining a ‘green’ lifestyle. I (grow) 20 varieties of bananas, passion fruit and taro."
His wife, Kathy Ollerton, founded the World Transformation Center, a nonprofit that has supported World Trade Center workers after the Sept. 11, 2001, terrorist attacks, mentored high school students in the high school next to the World Trade Center, built a school in Afghanistan, and is currently building a hospital in Afghanistan. Realtors in and outside of Prudential California Realty are involved in the organization.
"I am very proud of this work and my family’s involvement and commitment," said Krafchow.
Krafchow also initiated a Hispanic outreach effort and this year launched a property listings magazine called Palacio that features a mixture of Spanish- and English-language content. He said the publication supports the Hispanic community in achieving home ownership.
"It is a new adventure for me and is currently published in five cities: Oakland, Denver, Seattle, Hartford, and Long Beach, with 30 other cities under contract to produce magazines," he said.
Krafchow plays a significant role in the statewide multiple listing service consolidation conversation in California. He is part of the board of MLSListings.com, a consolidated MLS that brought together two San Francisco Bay Area MLSs. He belongs to a large brokers’ group created by the National Association of Realtors and regularly attends NAR meetings. Krafchow also facilitates an advisory board for the new technology company CyberCity3D. As a business coach, he mentors individuals within his organization.
Larry Knapp, president of Alain Pinel, has known Krafchow for most of his time in the industry.
"I’ve known Ed for a long time — more than 20 years," said Knapp. "I’ve always admired him as a competitor and enjoyed working with him to address the challenges of our industry. He is a visionary person who is adept at strategic thinking and problem solving.
"And he’s a nice guy," Knapp added.
Over the years, Krafchow has seen the ups and downs of the real estate industry and the continuous change and possibilities real estate offers has kept him interested.
"I have been given so much by this industry that I cannot figure out how to retire!" Krafchow said. "I do want to give back for what I have been given."
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