RE/MAX CEO Adam Contos knows the very real danger of doing nothing in the face of fear and uncertainty. Before joining the real estate franchisor, the exec served in the U.S. Marine Corps Reserves for six years and then ran a SWAT team for the Douglas County Sheriff’s Office in Colorado.
At the Inman Connect New York 2019 real estate conference on Wednesday morning, he recounted how during a particular SWAT call, he and a partner were throwing concussion grenades into a window when a bullet struck a tree in between them.
Contos told his partner about the shot, but his partner simply replied, “Alright, let’s do our job.”
Contos took a life lesson from the experience that he believes translates to real estate during a time when technology advances seem to be portending doom for agents.
“Don’t get distracted by the things that are thrown at you. Don’t get distracted by the ‘oh my gosh, agents are going to be taken out in this business.’ Or ‘oh my gosh, the computer says this about my house,’” Contos told conference attendees.
“Step up and be the professional and be confident and do your job and execute on it. That’s really what the full-time professional agents focus on. That’s why you can scale your business. You’re getting rid of all the noise and doing what matters.”
When feeling overwhelmed, agents should take a deep breath, step back and ask themselves: What am I here for? What is the mission? What technology, tools and resources will get me to that goal? What interpersonal activities should I engage in to achieve that goal? Contos said.
There are a lot of distractions in the industry right now that are “pulling people away from from their core business fundamentals,” Contos added.
“People saying, ‘Oh, you’re going to be taken out by this app or by that machine or whatever it might be,’” he said.
But new technology is not a threat to agents who understand that it’s a tool to use along with professionalism and people skills, according to Contos.
“I think tech is going to replace the agents that are not good at what they do,” he said.
“The agents that are the full-time professionals, that understand how to leverage what they have, the tools and technology and build those amazing relationships … those agents are safe.”
Contos became RE/MAX’s sole CEO nearly a year ago when both he and former co-CEO David Liniger were under internal investigation for possible ethical and business violations. The probe later found that both men had violated the company’s code of ethics by failing to disclose to the RE/MAX board of directors a $2.4 million loan Liniger gave to Contos for the purchase of a residence.
But that doesn’t appear to have slowed down the publicly-traded company. In its third-quarter earnings report, RE/MAX reported a net income of $8.1 million, more than double its profit from third-quarter 2017. The franchisor’s agent count also rose to 123,905 agents, of which 85,698 are in the United States and Canada.
With the real estate market changing, Contos sees RE/MAX’s role as giving affiliated agents the confidence to do their jobs. A big part of that is communication, according to Contos.
“We know when communication starts slowing down, shutting down, that people start wondering. Because when communication slows down, it leaves an open loop in people’s heads, the ‘what if.’ The ‘what if’ causes people to fill that gap with the worst-case scenario,” he said.
“Our job is to help close that loop with our franchisees and with the agents out there in order to focus them on doing the execution of this business.”
What keeps him up at night is providing clarity to those open loop questions and providing systems and tools so that franchisees can focus on working with the consumer, he added.
Moderator Clelia Warburg Peters, co-founder and partner of MetaProp and president of Warburg Realty, ended the session with a series of “lightning round” questions.
“Is the pure-play brokerage model going to endure or are you going to need to have significant additional sources of revenue to compete over time?” she asked.
The pure-play model will work and do well if the brokerage doesn’t get distracted, but it wouldn’t hurt to see what other sources of revenue to add to its business model to boost profitability, Contos said.
Peters asked, “What do you think: iBuyers, opportunity or foe?”
Contos has already said RE/MAX has no intention of becoming an iBuyer and didn’t offer any surprises.
“I see it as another player in the industry. This is a big pie that we all eat off of a slice of. And there’s a place in the marketplace for them,” he said.
“We have a lot of offices that are iBuyers — ‘Guaranteed sold,’ those types of things. So we’re participating here and there in the marketplace. Are we an iBuyer? No, we’re not, but we’re watching and learning from the process.”
Lastly, Peters asked, “Zillow, friend or foe?”
“I think the portals supply a lot of business to our agents. Our agents are a huge customer of Zillow. The ones that want to continue to help our customers grow in their business I think are relevant in the marketplace,” Contos said.
“Competitors are competitors, but this is a cooperative environment so we all have to figure out a way to work together. They’re here, let’s figure out a way to work together.”