Editor’s note: The following Q&A interview with Mike Reidmann, a broker in Nebraska, is featured as part of the "To Be a Broker" editorial project that highlights broker challenges and strategies for success. Click here for more info.
Name: Mike Reidmann
Company name: NP Dodge Co.
Years as a broker: 22.
Number of sales agents who you supervise: 13 office managers, 500 sales associates.
Years working in the real estate industry: 33.
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) reduced our print marketing budget and increased our online efforts. We now distribute our listings to 57 different online amalgamators; we increased our purchase of keywords from search engines and began monitoring e-mail inquiries in real time through our business development department. We added live chat to our home page and launched a mobile solution for smartphones. Our overall expenditure on marketing decreased and our conversion rates have increased. Leads are incubated, then referred to our "e-team" sales associates. Our bottom line has been positively impacted and our customer service has improved.
Q: Are brokers more or less relevant to sales associates in the current housing market than they were five years ago? Why or why not?
A: More. The sales associates are looking to the broker for education and lead generation.
Q: Are brokers more or less relevant to consumers these days than they were five years ago? Why or why not?
A: More. Consumers recognize the value of full-service brokers and their ability to generate buyer leads. They also need the broker’s knowledge and ability to handle challenging financial situations such as short sales.
Q: What changes, if any, have you observed in the structure of real estate compensation in the past year, and what has caused those changes?
A: We are seeing less pressure to discount our brokerage fees because the sellers recognize the value we bring to the transaction. However, there is more pressure to negotiate sales associate splits. Because of lower sales volume, and our sliding scale based on volume for commission payout, sales associates are averse to accepting a drop in commission payout.
Q: What are the most vital services, in your opinion, that you provide?
A: Our ability to attract and convert buyer leads for our sellers.
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? …CONTINUED
A: Sales associates and sellers would say buyer lead generation and our ability to bring a sale to a successful conclusion (are most vital).
Q: What is the latest trend with home sales in your market area? Short-sale listings and sales? REO listings and sales? Purchases by first-time buyers? What is the latest trend with home prices? Offers?
First-time homebuyers are the stimulus of our market. We are getting some move-up activity as sellers are able to move their existing homes. Prices are firming up, though most sellers are being asked to make concessions for buyer closing costs.
Q: What are buyers’ primary concerns these days? Has this changed in recent months?
A: Buyers worry about their ability to secure financing and a downpayment, and to pay closing costs.
Q: What are sellers’ primary concerns these days? Has this changed in recent months?
A: The sellers worry about pricing the property properly so that it sells and does not become stagnant on the market, causing a loss of value.
Q: Is the demographic of buyers changing?
A: Mostly young buyers are purchasing modest-priced homes.
Q: What types of properties are selling fastest in your market area and why?
A: Single-family detached (homes priced between) $130,000 to $160,000 (are selling fastest because of the) availability of FHA-insured financing.
Q: What types of properties are selling slowest and why?
A: The higher-end new-construction move-up market (is moving most slowly because of) tight financing for construction loans and the availability of jumbo takeout loans. Banks (are) requiring buyers to have the existing home sold and closed before funding the new-construction loan.
Q: What is the largest investment you have made in technology in the past year, and has it paid off? …CONTINUED
A: (Our largest investment is a) mapping solution in the rebuilding of our Web site. Traffic has increased and the time "on site" has increased as a result of offering more robust search options.
Q: In which areas have you reduced costs in the past year, and what has been the business impact of those cuts?
A: We reduced our marketing expenses by 50 percent with no appreciable impact on production and a positive impact on our bottom line.
Q: What is your forecast for the real estate market in 2010?
A: (I expect a) slow recovery due to continued tight credit conditions and lack of confidence in the markets. Most business will be done in the first quarter due to the tax credits.
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: Our biggest challenge is keeping our sales associates satisfied through an extended slow period. I do not believe we have seen any fix to the financial markets, particularly Fannie Mae and Freddie Mac, that gives us confidence that we will have a fluid mortgage market, particularly in the new-home market.
Q: Briefly describe a typical day for you, and what duties occupy the most and least time.
A: I begin the day at our corporate office to check e-mails, talk with staff, review reports and return calls. Typically I try to visit one of the branches before or after lunch. (Then) it’s back to the office to return e-mail and calls, check in with managers, and check the schedule for the next day. Each month I have two manager meetings, an agent advisory meeting, a marketing meeting, and a budget strategic plan meeting with the owners.
Q: What is most misunderstood, by agents and/or by consumers, about the work that you perform?
A: For the sales associates, how much work we do in the background to make their jobs easier (is most misunderstood), and for the consumers, (they often don’t understand) how much time is spent to provide the level of service available to them for a very small percent of the total commission that the broker keeps.
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: We reduced our marketing expenditures by 50 percent two years in a row by educating the sales associates on the value of a strong online presence. We generated electronic fliers for their listing presentations that emphasize the value of online marketing to eliminate objections by the sellers, and we turned it into a positive.
Mike Reidmann is broker for NP Dodge Real Estate, based in Omaha, Neb.
What’s your opinion? Leave your comments below or send a letter to the editor.