ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Sunday, January 26, 1997 TAG: 9701270017
SECTION: CURRENT PAGE: NRV-3 EDITION: NEW RIVER VALLEY
DATELINE: BLACKSBURG
SOURCE: KENNETH SINGLETARY STAFF WRITER
A new type of real estate firm in the New River Valley means many of the area's most experienced agents now work under the same roof.
The RE/MAX Gallery franchise that opened Jan.1 is a "radically different approach to real estate" that is probably overdue in the valley, said Jeanne Stosser, a developer and property manager who is principal owner of the franchise.
RE/MAX agents are "in business for themselves, but not by themselves," said Alene Danby, principal broker and office manager. Agents keep all of their commissions and can work as much or as little as they want. They share an office, clerical help and support services from the franchise and parent company, and pay for their share of the expenses, plus any extra options they want.
Their new jobs could mean more money for the firm's seven veteran agents, who have a combined 109 years experience, they say. (Stosser is principal franchise owner but not an agent with the firm, and Danby is broker and office manager, but not an agent.)
Agents also say their new jobs could mean better service for their clients and customers. No more having to split commissions. No more hand-holding of younger, less experienced agents. No more having to adhere to agency guidelines and policies that are often meant to help and monitor the kids in the office, the agents said.
"I think it was one of the best ideas that has ever come about," said Pat Collins, a RE/MAX agent. With 21 years' experience as a real estate agent, Collins previously was president of Gallery Properties. "The agents are more motivated because they in a sense have their own little businesses set up."
Other real estate agencies say competition is part of the business and can be good.
"My attitude on any new competitor is the same - it's that any good company is good for the marketplace. It hones everybody and makes everybody good on the job," said Joe Jones, principal broker at Raines Real Estate in Blacksburg, who has seen three of his top agents join RE/MAX.
In traditional real estate offices, the broker or owner will keep up to 50 percent of the agents' commissions to pay for advertising, office expenses and other costs. More experienced agents keep more of their commissions, perhaps as much as 80 percent.
But the down side to remaining at such a brokerage is experienced agents must spend time helping less-experienced agents; they have little control over advertising and promotions; they must adhere to procedures they may have outgrown; and the revenue they bring to the agency may subsidize other agents' income.
"There was no place to go once an agent had achieved a certain level of expertise in their career.... The only thing to do was to break away and go into business by themselves," Danby said.
In a little more than 20 years, the RE/MAX chain has become one of the nation's largest real estate companies, with more than 2,800 franchises and 45,000 agents in several parts of the world. Agents in the United States earn an average of $60,000 a year, compared to the industry average of $25,000, according to the company.
Local RE/MAX agents, all of whom do mostly residential transactions, are careful not to discuss their commissions, for fear of violating industry ethical guidelines and federal anti-trust and price-fixing laws.
Stosser said standard commission for a newly constructed building is 5 percent of the construction cost. Commissions for commercial real estate transactions range from 1 percent to 10 percent, while residential commissions may vary widely. Stosser would not say what she pays RE/MAX to operate a franchise.
Earlier in its history, RE/MAX was criticized for "raiding" other real estate agencies, but the practice of a firm attracting agents from its competition has become more common.
Real estate agents are independent contractors who "are supposed to be able to come and go as they choose," Stosser said. "It simply is a business opportunity that is made available to people who can make up their own mind on how they want to operate."
Three of the new RE/MAX agents moved from Raines Real Estate in Blacksburg. Those agents are Linda Deemer, who has 18 years experience and who was a platinum-level sales production award winner from the New River Valley Association of Realtors, representing between $3 and $4 million in sales in 1995 ; Priscilla Morris, who has seven years experience and was a diamond-level winner in 1995, the highest level, representing more than $4 million in sales; and Jim Danby, Alene Danby's husband, who is a retired U.S. Army lieutenant colonel and was broker and owner of a RE/MAX franchise in Fairfax County before coming to the New River Valley three years ago. He has 14 years experience, is a state certified real estate instructor and member of the NRVAR's board of directors. He did not apply for an award from the association.
"Competition is always healthy. It keeps us on our toes. We're looking forward to having a good year in 1997," said Mike Eggleston, co-owner and broker at Townside.
Coming from Townside are Nancy Agee and Kay Stratton. Agee has 23 years experience and was a silver award winner, representing $1.5-$2 million in sales. Stratton has eight years experience and was a diamond-award winner.
"We hate to see those people go. But our 20 years experience has shown from time to time people do move on," Eggleston said, adding that his firm has 28 agents, and "someone is always available to pick up any void."
Also at RE/MAX is Shirlee Loan, previously with Maddy Realty, who has 18 years experience and was a silver-award winner.
Collins has 21 years experience and was a bronze-award winner, representing $1-$1.5 million in sales.
All RE/MAX agents are required to be Realtors, meaning they are licensed by the National Association of Realtors. Not all real estate agents are Realtors.
Still, though the RE/MAX agents might be their own bosses now, things may not be any easier for them. They still work in a intensely competitive profession. They still may be required to put in long hours only to have a buyer or seller pull out at the last moment.
But keeping them going is not only the chance for a commission. Also coming into play is the "psychic income," Jim Danby said, referring to the pleasure he receives from the completion of a complicated deal.
"Anybody who thinks all we do is go out and sell houses has no clue in the world what we do. Houses sell themselves," he said, meaning that, ultimately, buyers decide for themselves what property they will purchase.
The Realtor's work "starts with the contract," he said. It's up to the real estate agent to orchestrate the dozen or more people involved in a real estate transaction. Those people include the lenders, lawyers, inspectors, surveyors, insurance agents, contractors and others.
"The real estate agent is the only person common to everyone," Jim Danby said.
Problems always come up. It's the job of the real estate agent to anticipate and avoid problems, and when they nevertheless arise, to find solutions.
Modern real estate transactions are a "horribly complex process," Danby said. "If you aren't equipped with background knowledge to handle those things, you are doing a disservice, not a service, to the public."
LENGTH: Long : 133 lines ILLUSTRATION: PHOTO: ALAN KIM/Staff. Alene Danby, principal broker and officeby CNBmanager of RE/MAX
Gallery. color.