Dave Liniger

LAS VEGAS — Re/Max founder and Chairman Dave Liniger first got his real estate license back in 1968 because he wanted to save on commissions. He’d been buying and selling fixer-uppers for two years as a supplement to his income from the U.S. Air Force.

Five years later, at 27, he decided to start his own real estate company, Re/Max Inc. — a name derived from "real estate" and "maximums." His first employee was his future wife, Gail Main.

"I had worked for three different companies and felt I had a better idea," Liniger said. "At the time, virtually all real estate companies split their commissions with their agents, usually 50-50. We decided we could run the company as a co-op where we could share expenses but agents could keep the bulk of the money for themselves."

He founded the company at a time when other national real estate companies were popping up: Red Carpet in 1966, Century 21 in 1971, ERA Real Estate in 1972. Liniger felt what differentiated Re/Max, and continues to do so today, was the quality of the sales associates.

"The vast majority of the industry hired huge numbers of beginners and part-timers. Our fee structure means agents have to have a certain amount of experience and productivity to be able to pay their own way. Our agents work as partners in our offices," Liniger said.

Agents have to pay overhead, advertising, multiple listing service fees and Realtor dues in advance, but keep most of their commissions from sales. Though the company began with a 100 percent commission model, the company now allows its brokers to set their own commission policies within certain parameters.

In 2010, Re/Max agents had an average of 14 years of experience in the industry. That compares with 10 years of experience for a typical Realtor, according to the National Association of Realtors’ 2010 Member Profile.

Re/Max offices comprise nearly a quarter (122 out of 500) of the largest brokerages in the country by transaction sides tracked by Real Trends — the largest share among franchisors.

At the end of its first year, 1973, Re/Max had 21 sales associates and eight offices. By the end of 1975, the company had 88 associates. Two years later, the company had 480 associates and opened its first Canadian franchise. In 1978, the company had 122 offices and 1,180 agents.

That same year, the Re/Max hot air balloon became the company’s corporate logo after its debut at Albuquerque’s International Balloon Fiesta. The company now owns a fleet of more than 120 hot air balloons.

Margaret M. Kelly

When Margaret Kelly went to work for Re/Max as a financial analyst in 1987, the company had more than 14,000 sales associates and more than 1,000 offices. She had worked as a financial analyst at a Detroit hospital before coming to Re/Max and was looking for "a low-stress job." Nearly a dozen promotions later, she’s the company’s CEO.

"I know from the grassroots how this company works because I’ve lived it," Kelly said.

She was named vice president in 1992, president in 2002, and became CEO in October 2005.

She came to Re/Max when the company was not yet in all 50 states and was not yet truly a global brand. Back then, the company’s biggest concern was brand identification: "Having people understand what Re/Max stood for: quality agents, quality service," Kelly said.

More than 20 years and a severe housing downturn later, Kelly is most worried about the market.

"The single biggest (concern) right now is the glut of this unknown shadow inventory. We have no problem anymore getting listings — we just have to find buyers," she said.

"We have this known and unknown inventory and we have to be able to find enough buyers to absorb it, and the key to that is investors. The people who can’t buy a house right now are going to be in rentals," Kelly said.

At Re/Max’s annual convention in Las Vegas earlier this month, Liniger told attendees the worst of the housing crisis had passed.

"There will be more foreclosures this year, but the worst is behind us and we need to turn our focus to the future," he said.

"I don’t think anybody could have predicted how deep (the downturn) went," Kelly said. "But we did what we told our brokers to do: ‘Cut back on expenses, get lean, get smart.’ If distressed properties and investors are going to be part of our market, then how do we teach our agents to deal with (them)?"

Re/Max decided the way to deal was through education. In March 2007, the company announced the launch of Re/Max University, an online training platform available at all times via the company’s intranet.

The platform includes live classes, satellite broadcasts and a video library. Starting in 2009, Re/Max focused much of the platform’s content on distressed properties and partnered with trainers to offer agents several related designations, including certified investor agent specialist (CIAS), short sales and foreclosure resource (SFR), and certified distressed-property expert (CDPE). In 2010, the company released a Re/Max University mobile application.

"If an agent kind of buries her head in the sand, saying this distressed-properties thing will go away," that’s the wrong approach to surviving the current market, Kelly said.

"Dealing with distressed homes and families is different. (I) would recommend that every agent become a distressed-property expert. Any education you can get in the real estate industry will always serve you well. I’ve had agents who did luxury (real estate) now (work on) short sales. They said, ‘This is what my market is. I’m embracing it. Let’s go.’ "

There are opportunities for Re/Max agents to help the market advance by helping distressed homeowners through the system, she said.

"For every foreclosed home, there is obviously a foreclosed family. Most people really don’t know what a short sale is. There is a high percentage of people who go into foreclosure and have never called their banker: seven out of 10," Kelly said.

She gave an example of a Re/Max agent who was able to sell a family’s home as a short sale and helped the family avoid bankruptcy.

"We can’t save everybody, but if we can help them avoid bankruptcy and go into the next step, that’s rewarding," Kelly said.

The role of technology has changed drastically since Liniger founded the company in 1973.

"There was no Internet, no e-mail, no overnight mail. The fax machine was just coming into existence. Almost no one had cell phones. We kept telling everybody that real estate agents didn’t need technology — they needed leads. At the time, technology was only of value to good producers because they needed secretaries. Now technology is a huge lead-generator," Liniger said.

For example, the company has a Web-based geotargeting platform where lenders and servicers can search a database of profiles for agents with particular expertise.

"So if you’re looking for an agent in Kansas City … who is an expert in short sales, who’s at a certain performance level, who’s bilingual with a military background, (and) in a certain ZIP code, it’s just a quick way for us to locate these agents who have that expertise that are located in that area," said Shaun White, a company spokesperson.

While some agents worried that technology would make real estate agents go the way of the travel agent, both Liniger and Kelly say technology will never replace a real estate agent.

"It’s still a highly complex transaction to buy or sell a house. (Technology) is a godsend to our business and does not replace us. Forty years ago, MLSs had come into being and the first MLSs were 5-by-7 tear sheets," Liniger said.

"Realtors spent half their time putting their binders together. Then came books and booklets. Then along comes the Internet — we didn’t have to get a book once a week that was always out of date within an hour after we got it," he said.

"It’s still a relationship business," Kelly added. "I don’t care how much research you do, you still have to walk through the house with an experienced person saying, ‘Did you see this? Did you see that?’ Consumers can have raw data. Raw data doesn’t work. The real estate agent … can help (consumers) utilize that information to make it work for them."

She compared the process to visiting an online health and medical information site, and said consumers run the risk of misdiagnosing themselves.

The company’s agents have embraced social media the most, Kelly said, though that comes with its own challenges.

"One of the changes we are seeing is utilizing social media properly and not getting bogged down where that’s all you’re doing instead of going out and doing your business. The best technology that any agent can use is the telephone: Calling up and prospecting," Kelly said.

"Eighty percent of business is repeat and referral. Agents have to constantly remind their clients who they are."

While technology changes constantly, the company’s focus has not changed since its founding, Liniger said.

"Our industry is incredibly competitive. How do you give your agents the most competitive advantages to win? How do you generate the most leads? How do you train them better? How do you give them a leg up on the competition? (The goal) hasn’t changed in 40 years: It’s who can do the best job," Liniger said."

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