Connect the Speakers: Kendall Butler on future-proofing your business through different market cycles

How to keep innovating while the market shifts all around you

Kendall Butler, the broker-owner at F.L.I. Properties, is analytical by nature; her past career as an engineer in operations management has given her the ability to see beneath the surface environment and plan for the future. After opening the brokerage in 2006, Butler has made a point to keep her REO segment of the business operating even in recent boom times — because she knew that the cyclical nature of markets would bring things back around sooner or later.

She’ll be participating in a panel about how to keep innovating while the market shifts all around you at Inman Connect New York, January 29 through February 1 at the Marriott Marquis Times Square. And she sat down with Inman to talk about four areas of opportunity she’ll be working on in 2019 and how she plans for the future.

Tell us a little more about your session. How will it address how the industry can embrace the shifting market?

What’s key is for all brokers and agents to think strategically and more long-term than most have been thinking. All markets are cyclical, and so when we opened our business in 2006, it was the tail end of a good market, but I was brand-new so I didn’t really get to take advantage of that. I was just building up my business. I started out thinking I was going to do new construction and then the market turned, and we got very knowledgeable on foreclosures and grew our foreclosure business. Right now it costs me money to keep the Fannie Mae accounts and to list for VA and 20 to 30 other companies in the foreclosures — but I continue to keep my REO team and figure out how to be more efficient in doing that, and I’m keeping that department because I know there will be another downturn and that foreclosure business will be so important. I’m thinking about how these larger companies are going to shift if there is another downturn, and what can we do in our REO department that could transition into other business besides just REO business, and how will I compete with the larger companies when there is that shift if they start turning to the same thing.

What we’re really concentrating on right now is creating a strategy for regional market expertise that’s difficult to replicate, and we’re making sure it’s driven by consumer-focused, very detailed, systematic analysis. We’re looking at what the consumer needs and what are all of the systematic analytics we can do to inform our consumers and maintain and grow our regional market dominance. When we do that, the bigger national companies and these corporate companies — they aren’t ultra-local or regional. They do their analytics but they don’t get down to the level that we do or know the community like we do.

What do you think are the biggest opportunities to focus on in the real estate industry right now?

There are really four things we’re working on. First, we’re concentrating on the transfer of knowledge and expertise to all of our agents. The real estate industry is such a has-been in that the majority of agents are very protectionary. Your best agents want to stay at the top of the market and they really don’t want to share their expertise, knowledge and processes to help newer agents get into the market. They’re going to teach the minimum to their direct team and hires and employees, but there’s a lot of online training, mentorship and other things they could be doing. What I’ve found is it’s really not a true sharing of information to build up other agents. We grew our business from me being a top producer in Georgia, growing that and trying to turn that into a brokerage. I am an expert in the market, so I’m sharing that knowledge with our agents through very systematic group training, recording videos, and making sure that they have a portal to study.

The second thing is, we’re creating physical inventory. One of the biggest issues we’ve had is not enough inventory to sell and I don’t think that’s going to change. Even with a downturn, all the markets in metro Atlanta are significantly down in new construction, and so you’ve got 80 percent reduction still in new construction in this decade compared to the decade previously. Even with the resales and the markets slowing down, there’s still not enough good inventory. So the market is going to slow some, but it’s not going to come to a stop. There’s fear in the market but there’s not a lot of statistical evidence that there should be based on inventory levels. We’re developing 92 more lots in our current subdivision and doing it in phases. We’re creating the inventory and selling those lots, developing them and selling them to builders, keeping availability for them to be able to build locally.

The third thing is that we’re providing solutions for workforce development. This is a big issue and it’s continuing to be a big issue. When you have such a tight market for employees, you have to sell a community before you can sell a house, and before you can recruit a person to come work for that company, they have to be sold on the lifestyle. So we’re creating solutions for those employers for how to recruit employees to the region in each community.

And we’re creating content — super local content through blog-writing and videos.

To stay competitive, agents, brokers and companies need to execute quickly. What do you feel are key areas where quick execution can vastly improve the customer experience?

What we have learned in our company, and we’re extremely process-oriented, is that the agent has to be the expert and understand the whole process, and they have to set out expectations from the very beginning. The very first time we talk to someone, we have to prove our value. If they’re on a portal, they’re probably talking to multiple agents, so we have to prove our value from the very first time we talk at them. My expectation is that we have a homebuyer session that lasts for an hour to an hour and a half that talks about the local market, the expectations and the home buying process, and how we operate.

If someone calls and isn’t pre-qualified, we give them several companies that we know do a good job. We’re involved in that — we don’t just send them out to do it. If they say they’re pre-qualified and they’re working with someone I don’t know, I’ll tell them to work with whoever they want and also give them examples of why it’s important to have someone you know and trust on the mortgage side. We’ll explain how we’re going to view homes, how frequently to expect emails and contact, and then once they’re under contract, we have a process to be in touch with the lawyer, the other agent, the bank, all weekly, and give them updates. We let them know that buying a home is stressful but our job is to make it as least stressful as possible.

The disrupters are trying to focus on making that transaction quicker or less painful, but we’re doing what we’re doing because the disrupters are trying to make the process appear cheaper, faster, easier for the consumer. For some people that’ll work; if you’re an investor, a repeat buyer, or you already know the market, it might work. You can make things easier through innovation but you just can’t replicate that human emotion connection. The buying process is extremely emotional for most buyers, it’s not just a transaction. With our company, it’s all about the buyer’s family, their investment and their future. The majority of clients want a trusted educator to work with them throughout the process. You also have to be a problem-solver — you have to be able to prove your value as a listing agent and your market expertise when a home is sitting on the market.

What are your hopes for the next 12 months, and what will you be working on?

We’re focusing on our regional growth through those four areas of focus. We’re pushing into new markets and expanding opening new offices.

Dig deeper into how to fail smarter and discover the opportunities in a changing market at Inman Connect New York, January 29 – February 1. Jumpstart 2019 with tactical takeaways, unlimited networking and thought-provoking speakers. Learn more.

Thinking about bringing your team? You may qualify for special group perks! Contact us to learn more.