Dave Liniger, co-founder of RE/MAX, gets ready to take center stage at a RE/MAX International conference that starts on Monday at the Colorado Convention Center. The convention will pump $2 million into the economy.
Dave Liniger is making plans to go to Brazil – on his dime.
“When we opened our Brazil, maybe eight months ago, I made a bet with the regional manager in Brazil,” said Liniger, who co-founded RE/MAX International in Denver 37 years ago. “I said that if within a year, you have 100 offices, I will return to Brazil for a speaking tour, and I will pay for it myself. If you don’t have 100 offices, I will still come to Brazil, but you will pay for my entire trip. Well, it’s pretty clear that I lost that bet, so I’m making plans to return to Brazil, probably in February.”
Of course, traveling is nothing new to Liniger, who is on the road 200 to 250 days each year.
RE/MAX conference starts Monday
Liniger spoke to InsideRealEstatenNews on a wide-range of topics on Sunday afternoon at the Colorado Convention Center, as he prepared to welcome about 1,000 RE/MAX officials from a dozen countries, including two fairly recent RE/MAX franchise areas of Brazil and India, to an annual international conference that officially begins on Monday.
Speakers at the conference,include John Featherston, founder of RISMedia; Steve Murray, editor of REALTrends’ and Stefan Swanepoel, a real estate author and motivational speaker, who focuses on trends and future patterns in real estate. They, as long with Margaret Kelly, the CEO of RE/MAX will kick off the conference on a panel that begins at 8:30 a.m. on Monday. The conference is expected to provide a $2 million boost to the Denver-area economy. “We try to hold the conference in Denver every other year,” Liniger said.
About 1,000 people from a dozen countries are attending this three-day RE/MAX conference.
Short sales huge part of conference
In addition to focusing on international markets, number of speakers and seminars will deal with short sales, in which lenders accept less the mortgage amount, typically in lieu of a foreclosure.
Housing recovery may take 5 more years
While the overall U.S. housing market is improving- and the Denver-area market is in better shape than the overall nation – Liniger said it is going to be another three to five years to return to a normal market, in which distressed homes, such as short sales and foreclosures do not make up a large percentage of the deals.
“Frankly, it’s probably going to be closer to five years,” Liniger said. “Each region and area of the country will return to normal at its own rate. Distressed properties still make up half of today’s market, but for every distressed property, there’s a distressed family. We need to help these families by selling their properties as quickly as possible.”
Liniger said that that this is the first of five recessions he has weathered when the number of RE/MAX agents has declined.
“We’re still profitable,” Liniger said about the privately held company. “We have an equity partner that has a small ownership stake, and that has helped us to continue to grow. And because our agents, on average, have 13 years of experience, they have done better during this downturn than people who got into the business as part-timers or because they thought it was a way to make an easy buck. It isn’t.”
Denver corporate office buying regional markets
In 2007, RE/MAX International bought the California RE/MAX region, at the time when the California market had not yet experienced its unprecedented statewide real estate crash.
“It hurt us,” Liniger admitted. “California is still cash-flow positive, but agents saw their incomes decline. Luckily, we have very good agents in California. They were among the first to embrace short-sale education in order to survive in their new environment.”
Liniger said that buying back regional operations is a natural evolution of the franchise company, and it will continue.
“When I started to sell my regional franchise operations, I was in my 20s and most of my regional managers were in their 40s,” Liniger said. “Buying back the regions has always been a retirement strategy, an exit strategy, for the regional owners. The regional owner in California, for example, was 78,” when he sold.
In addition, technology has done away with the need for regional markets, he said.
“Back in 1973, when we started RE/MAX in the Tech Center, there was no Internet, there was no overnight delivery, there was no e-mail,” Liniger said. “The first generation of fax machines were just coming out. Now, you don’t need to create regional ads, or marketing material, in your home state.”
RE/MAX International, now owns about half the RE/MAX regions in the country and expects to buy out the remaining managers in the next five years. And that is good for the Denver-area economy.
“When we buy back a region, we move all of their operations that were handled on the regional level to Denver,” Liniger said. “It is easy enough to do from here. We love our new building (at Belleview Avenue and Interstate 25.) It was designed specifically for us. Before, we were spread out in about a half dozen buildings in the Tech Center. That was not very efficient.”
Brokes better at short sales
At the agent level, most brokers were not very efficient at selling short sales, until recently, said Liniger.
More than a year ago, Liniger encouraged RE/MAX agents to earn the Certified Distressed Property Expert designation. Now, about 15,000 RE/MAX agents have the designation and 8,000 from other companies, he said. In addition, the National Association of Realtors has launched its own certification program called SFR, or Short Sales and Foreclosure, and Liniger estimates that perhaps 75,000 agents are now SFR-certified.
“Realtors weren’t very well prepared to handle short sales when the crisis began,” Liniger said. “And that means their clients, home buyers and sellers, weren’t very well prepared. Consumers need agents to educate them. Now, many agents are much better educated when it comes to short sales and are much better to help buyers and sellers. It’s still more difficult and time-consuming than anybody wants, but it is getting better. It’s a lot better than than it was 12 months or 18 months ago.”
RE/Max growing
Overall, RE/MAX is growing from 2009, which is generally regarded as the worst year for real estate sales on record.
In the first seven months of the year, RE/MAX has sold 378 franchises – 102 of them in the U.S., 102 of them in Europe and the rest throughout the world, said Shawn White, spokesman for RE/MAX.
“Our India growth is unbelievable,” White said. “It is up something like 600 percent in the 18 months or so since it opened.” Overall all franchise growth is up 11.2 percent from the first seven months in 2009, he said.
World-wide real estate woes persist
Although India and Brazil are bright spots, there are other countries whose housing woes are probably worse than the U.S. experienced, Liniger indicated. He anticipates that about a third of the company’s growth will occur overseas.
“Worldwide, Spain is horrible, Ireland is horrible, Greece is terrible, and Portugal has had problems, but not quite as bad,” Liniger said. “China’s real estate market peaked at the same time as the Olympics, as the country took measures to try to calm its hyper-growth and hyper-real estate markets. South Africa is in shambles, despite the World Cup. Canada did pretty well, though. They didn’t experience the subprime mortgage market like we did. They saw a bit of a downturn, but it was nothing like what happened here.”
One thing that is not on Liniger’s radar is taking RE/MAX public.
“We’ve been in business now pushing 38 years,” Liniger said. “I have a board of 40 officers, and the average age of an officer is 40 years old, and the average number of years they have been with the company is 20. I have a very good succession plan.”
That said, in some distant time period, perhaps five or 10 years, it might make sense to go public, he said.
“We’ll just have to see what the market conditions are in the future, and whether selling stock or taking some other step makes sense,” Liniger said. “But today, I can say that we are in no way considering that possibility anywhere near what you would describe as in the near term, or in the foreseeable future.”
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865
Excellent interview.
Ditto!
From Fox31 at 2103 on 10AUG2010
“The Denver Post published an article Tuesday evening, reporting that the Republican Party is courting ReMax founder Dave Liniger to replace Scott McInnis on the gubernatorial ticket, assuming McInnis wins. FOX31 News, however, spoke with former Gov. Bill Owens who says the report is not true.”
Lininger is a genius, of course.
He is a man to be admired. Had a dream, followed it and made it real.
Randy
As a former RE/MAX franchise owner for more than 15 years, in a resort community, I admire Mr. Liniger and his visions. The franchise business is cyclical just like everything else. In these economic time, franchises seem to have lost their value to the franchisees, and just add significant costs to our agents and company. For us, going independent was the best thing we ever did, and has allowed our company to be much more competitive in the current market. Every real estate franchise offers what REMAX offers now, and the internet can provide what they ALL offer at no additional charges. I have stopped drinking the franchise “coolaid”! Feels so good…..
As a former RE/MAX franchise owner for more than 15 years, in a resort community, I admire Mr. Liniger and his visions. The franchise business is cyclical just like everything else. Every real estate franchise offers what REMAX offers now, and the internet can provide what they ALL offer at no additional charges. I have stopped drinking the franchise “coolaid” and gone independent! Feels so good…..
Why, Sweetie, I have no idea what you were doing when you were writing your comment that made you feel so good! Would bet you though, that you needed that cool-aid before you could get to feel so GOOD….! Now that you have the world so well in hand, all you have to worry about are all of those Re/Max newbie’s chasing you. Good luck!