Adam Contos sits down with Inman to discuss challenges in the industry, overcoming unconscious bias and his relationship with RE/MAX co-founder Dave Liniger.
EVENT UPDATE: Adam Contos, CEO of RE/MAX, will take the stage at Inman Connect New York, Jan. 28-31. Discover the future at ICNY. Click here to learn more.
It’s a tall task for many, to follow in the footsteps of legends in the industry, but with nearly two years of sole-chief executive officer experience under his belt, RE/MAX’s Adam Contos has done the job with relentless enthusiasm.
Prior to his appearance at Inman Connect in New York next month, Contos sat down with Inman to discuss trends to watch for in the upcoming year, why his company has invested so heavily in technology development and his relationship with RE/MAX co-founder Dave Liniger.
With all the talk about disruption in the industry, do you think that you are underestimated as a change-maker in the industry? RE/MAX is a legacy brand, but do you think that causes people to underestimate the company’s ability to be a disruptor?
Absolutely. The funny part about that is, I kind of like being underestimated. The challenge with being underestimated is sometimes you have to be more outgoing with your value message in order for people to truly see what they can gain from associating with the organization. But I absolutely do and it excites me that we are, but it also excites me that I have more to say in the market place.
We are underestimated as being a pretty massive disruptor in the space. I think that goes without saying, for anybody. Once you get used to hearing a name, and the success that is tied to that, you almost want to see him knocked off that pedestal and you start discounting the value that they continuously deliver. How many quit saying they love to see the Patriots win the Super Bowl?
A big part of that this year, and over the past 18 months or so has been the acquisition of booj and the development of this platform. Now that you really rolled out the meat of the platform, what has the response been like, in terms of agent adoption and feedback?
I’ll say that you’ve only seen part of the meal. The rest of it will continue to roll out in [the first quarter of 2020] and truly that is where we make our magic, how we touch the consumer. The platform itself has been for us, when you look at a technology launch, it has been an amazing success. Utilizing the interaction between us and our agents or brokers, we’ve been able to work magic in creating something that they absolutely have fallen in love with.
It has massively created a groundswell within the organization, a confidence and excitement in being able to demonstrate that they are the continued growth experts in the space. I don’t want to say that people should use a real estate agent to do their transaction — I want to say that they should use an expert real estate agent. And that’s what we pride ourselves on continuing to develop with the technology, the training, the marketing, the leadership of that nature.
Why invest so much time and money in developing this when there are so many different options for agents on the market? I mean, there are 100 CRM startups, 100 transaction management platforms, they’re all integrated together — why go out of the way to invest all this money and time in this?
There’s never been a singular answer that agents have found to be best for them. All of those platforms are built typically by a startup founder, based upon the dreams of that startup founder. Our platform has been built by a network of experts. And that’s why I think that this is a groundbreaking release in the real estate industry, because the industry built it. The experts in the industry built it because they want to provide the highest level of service to the consumer and the brokers want to provide the highest level of experience to the agent.
So booj didn’t build it. Booj wrote the code for it, but they built it based upon the feedback and the dreams of the users, whereas most startups are built based upon the dreams and feedback of the founder of that startup. I think there’s a there’s a massive difference. It might not be a substantial change visually, but operationally and how the consumer uses it and the user experience if you will, there are major changes because you have to fall in love with your tools as an expert and be able to most effectively deploy them. I think a lot of people when they buy a piece of software, they deploy what they want in it, but they don’t completely fall in love with it. They use it as a stopgap to help them save from something else.
I spoke to [Realogy CEO] Ryan Schneider recently and he had said that competitive pressures in the industry completely shifted in the second half of the year. How have you experienced that? Can you explain what the competitive space is like right now and what you expect in 2020?
When you take a step back and look at the ebb the flow of the competitive space, I think what you realize is the competitive space is always a competitive space. You have to hold up the mirror and look at how you affect that competitive space and that’s what RE/MAX did. We took a look at our technology, we took a look at our leadership, our evolution, our brand and how we impact the consumer experience and the agent experience, as well as how we impact broker profitability. We’ve been attacking all of those different angles in order to focus on not watching and fearing what’s going on in the competitive space, but in going out and attacking the space ourselves.
There’s always going to be somebody out there that is able to poke you or make you question your validity and your value. But true leadership is able to take a step back and say, bring it on. I’m continuing to make myself the best ever. That’s how I look at it. That’s, I believe, a mindset shift that you see a lot of leaders in the space taking. I think that’s probably how [Schneider] sees it as well. He’s a fighter, and I respect that. But we just continue to magnify voices that we should be louder than.
Is there a singular biggest threat you think to the industry right now? Whether it’s other disruptive brokerages, tech business models, the commission lawsuit, regulators looking into how real estate works, what are you identifying as the biggest threat to the ability of your agents to continue to do business the way they’ve been doing for a long time and be successful?
I think you just identified the single biggest threat: It’s mediocrity. I’ve always said that our biggest competitor is ourselves. I’ve been asked that for years. That’s our struggle against mediocrity in the space. Let me take you back to a quote from [RE/MAX co-founder and chairman] Dave Liniger. He said, ‘If you do business today the way you did business yesterday, you will be out of business tomorrow.’ And he has said that the entire time that I’ve been part of the organization, and I’m sure he said it a long time before that. What he’s saying is mediocrity will kill you.
The other thing that will kill you is what you identified in your last question: focusing on the noise instead of focusing on progress. We have to make progress in many different aspects of this business, we have to make progress on continuing to understand the consumer and providing them the greatest experience.
We have to focus on being good to society, as kind, caring human beings and helping society grow from a perspective of kindness and good humanity, across the board, from fair housing to diversity and inclusion to environmental care to business regulation and ensuring that everything is handled in a trustworthy, transparent, fair manner for society.
All of those things need to be what we focus on because if you continue to raise the bar, a rising tide raises all ships. Unfortunately, you get some bad ships in there as well. We need to understand which those are, and if they’re not willing to contribute to the wholesome goodness of the industry and society, then instead of us saying they’re a competitor, or they’re a distractor, we need to say they’re not welcome in our space.
That dovetails into the Newsday report on discrimination from real estate agents, which included some RE/MAX agents. As a leader in the industry, what is your first reaction to seeing that report?
We focus at RE/MAX and at headquarters on understanding unconscious bias which unfortunately happens in society. We as an industry need to make this one of the key aspects of our focus. We can’t say Fair Housing, if we don’t act Fair Housing. That’s why we require membership and [the National Association of Realtors] because there’s a code of ethics that you subscribe to.
People are going to make mistakes, and we need to look at these as educational opportunities, but we also need to understand that we shouldn’t wait for something to go wrong in order to attack education opportunities. We need to make them a priority and unconscious bias has to be a priority, not just in the real estate industry, but we need to be leaders in society demonstrating that, that is an important part of our organizations our industry and in society as a whole.
Is it more difficult as the CEO a franchising business that you’re not like the direct broker in charge of agents and oversight in that manner? Does it feel like it’s harder to have oversight on the day-to-day agents with that layer of separation, not just with the fair housing violations, but the mediocrity you talked about before?
Franchising and the independent contractor space has always been interesting in that manner. You could call it a challenge, yes, I think it’s the nature of the beast. Having separated layers of control, where, you’re right, each office is independently owned and operated and each of the agents in the offices are independent contractors under an [independent contractor agreement] with that brokerage.
So there potentially could be gaps in communication in an effort or focus. I think that that’s human nature. It’s got to be a focus of all of us to keep this front and center in the industry, which is why we have amazing organizations that do champion those causes within the space. We need to all make sure that we don’t wake up in the morning without thinking about others.
What industry trends are you keeping an eye on for 2020 and which ones from 2019 won’t carry through into the new year?
We’ve been seeing a major shift in RE/MAX towards being more outwardly, demonstrating excellence — excellence in the space, excellence in humanity and kindness, excellence in professionalism. And I think we will continue to see as I have talked about at past Inman events, a separation of agents who are interested in being excellent, versus those who are showing up to feed at the trough.
It’s up to us to push that excellence and ask those that are desiring to be part of that to help us with either raising the bar for everybody, or asking those that choose not to be excellent not to be in our space. Because this is an important business and we have to make sure that we’re delivering the trust and transparency and caring that the community desires when doing business with an organization and an industry, as opposed to just a big business.
So I think we’re going to start seeing more of our agents, in the industry with that call to action, and I think that probably is reflective of what Ryan said as well and you printed. I will say, though, that he talked about a flight to excellence. There has been a flight to excellence. I think we have demonstrated that over the past 46 years. I think we need to focus on excellence as opposed to so much focus on, how many agents do you have? That’s what it boils down to. I don’t care how many you’ve got. I want to know that they’re good.
You took the CEO role from somebody that’s such a legend and an icon in the industry – is it more difficult to step into somebody’s shoes, especially when he’s still the chairman of the board? Does it ever feel like you’ve kind of got the guy that built everything looking over your shoulder? How much is he still involved in decision making at a high level?
We certainly pay attention to the wisdom that Dave brings to the table, the history. He is, I tell people, for lack of a better term, the Jedi master of our space, the Yoda, the Obo Wan Kenobi, and brings some amazing wisdom to the table. For anybody to ignore the opportunity to hear from founding fathers in the industry, I think you’re delinquent as a leader, if you don’t listen.
That being said, the beauty of conversation with him, and we do have conversation a fair amount, is he listens as well. The man is amazing because he recognizes what he understands and he recognizes new territory to him. So he absolutely has insight in the organization and provides leadership and guidance where necessary, but he allows me and my executive team to run the organization. He is the largest shareholder, and he’s also the chairman of the board. But he is respectful of the leaders of the organization and lets us run to grow the business in an aggressive and enthusiastic way.
At times, 2019 was problematic in terms of the housing market. What do you expect out of the housing market in 2020? Do you think that the presidential election might play a big factor in slowing things down since it will be the focus for a lot of the year?
What we have said quite a few times, is there’s no better time to buy or sell house than there is now. I don’t believe that the presidential election is going to have a negative impact on the housing market. I think the presidential election will create confusion in sentiment of consumers because of the volume of marketing that occurs during the presidential election. That is what’s going to cause the greatest challenge for real estate agents — to gain and keep the attention of the consumer.
Interest rates are at historic lows, and we now have a generation who has not seen double-digit interest rates as a massive part of the real estate industry. My encouragement to that generation is take advantage of these interest rates while you can. Traditionally, they have never stayed single digits for a long period of time, and this is a great opportunity right now.
You mentioned the problems of the housing market. I think the housing market is what we call the housing market. And to say it’s problematic will adds a level of skepticism for some of those that convince themselves it’s problematic. I see it as a huge opportunity.
Create your own success story at Inman Connect New York, Jan. 28-31, where over 4,000 industry professionals gather to forge new relationships, share tactical takeaways and discover the latest technology to boost their bottom line.
Thinking of bringing your team? There are special onsite perks and discounts when you buy tickets together. Contact us to find out more.