Today we have a special blog post filled with so many gems. Whether you’re a business person, in real estate or looking to get into brokerage, this post is for you.
Joann and John Nestor are Michael’s aunt & uncle and they run a successful business in Clearwater, Florida. In fact, I even went to visit their establishment and was just so impressed by their successful enterprise.
Not only are they family, they’re very good friends to me. The respect I have for them is huge and they continuously blow me away. Joann is savvy, smart, on the pulse and has taught me how to be an independent woman. John has shown Michael and I how to build businesses based on tenacity, drive & strategy. They’re a force and we’re wildly inspired by them.
With that, let’s welcome John to the blog so we can hear more of his inspiring journey, plus his top real estate tips.
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I’ll start with second best decision of my life, relocating from Buffalo, N.Y. to Clearwater, Florida in 1980. (My best decision was convincing JoAnn to marry me.)
I arrived with no plans for my career and spent the next 15 years with results that a man with no plan should expect; a series of minor business failures and successes.
In 1995 I was introduced to my next ‘adventure’ by a friend who sold real estate. Not just general real estate but specifically H.U.D. (U.S. Dept of Housing and Urban Development) owned foreclosed properties. These were homes that were foreclosed on for failure to pay their mortgage. Typically, these were modest homes in less than up-scale communities. The resale prices were in the range of $45,000 to $70,000. (No high-end properties here.) But H.U.D. did pay a 5% commission and with a dedicated, targeted effort a decent income could be made.
I was able to expand my efforts a bit by hiring two assistants. Since these properties were sold on a sealed bid basis, our marketing was simple. We covered the immediate neighborhood with our homemade signs declaring “3% DOWN…MAKE A BID” as we held Open Houses. Typically, you would see me sitting in front of the subject house greeting the would-be buyers and curious neighbors as they made their inspections. These properties had been closed up for significant periods of time. The result was a very strong aroma of human and animal scents that had been ‘brewing’ in our 94 degree temperatures without the benefit of air conditioning. I stayed outside.
But, buyers did come, they saw, they bid, and they became proud homeowners. I was paid my 5% and on to the next lovely bungalow. But then lighting struck. H.U.D. changed the rules; no more Open Houses and quickly put an end to our business. This turned out to be a seminal, groundbreaking day for me and for the real estate brokerage industry.
Faced again with “what to do next,” I began to analyze the real estate brokerage industry and how it operated. There were about 15 of whom sold the H.U.D. properties and over the years we formed friendly, competitive friendships. The primary takeaway from my conversations with them was their complaint about their Brokers’ commission split. Their Brokers typically deducted 30% to 40% of the commission they earned. Ouch! And they resented it.
With just a few months left until the H.U.D. ‘death sentence’ hit, I had to invent a new venture. My thoughts returned to the disgruntled real estate agents and how a system could eliminate the problem – sharing commissions with their broker. Excel spreadsheet open, I began working on a radically different system. A system without broker commission splits. As with any new business pro forma, I ran hundreds of iterations changing all the variables and assumptions.
Eventually, I decided on a plan that I thought would work, charge a membership fee of $35 a month and a transaction fee of $250. The result: agents could make $5,000, $10,000 or a $100,000 commission and pay Charles Rutenberg Realty $250… not sharing 30-40% with their broker. Life changing for the agent! It would work with one big “if.” I would need at least 500 agents to be comfortably profitable.
At that time, the average real estate brokerage had 8 agents and my goal was 500! A friend looked at my plan and said that he wasn’t sure it would work but if it did I should wear a Kevlar vest… the traditional brokers would not be happy.
Monday, January 3, 2000. D-Day for Charles Rutenberg Realty (Charles Rutenberg was a highly regarded Florida home builder, well known in the community. I licensed Charlie’s name). The doors opened in our second floor office in a class C building. It was me and a part-time assistant.
We began hand writing post cards to agents offering our ‘radical’, new concept. Progress was slow, but we created a lot of reaction from the traditional brokerages: “It’s a scam” or “It can’t work” or “They won’t be in business for 6 months.” From the attention we were drawing, agents began to notice us and sign-on with us. Six months later we had a day where 5 agents joined us! I hugged JoAnn and said, “this is going to work.”
As the company grew to 500, 800, 1000 agents in our single, Clearwater office we decided to open offices in Chicago, Ft. Lauderdale and Orlando with license agreements with offices in Manhattan and Long Island. (Curiously, everywhere JoAnn likes to shop.) We have sold our Chicago and Ft. Lauderdale offices and today remain closely involved with our two premier offices: Clearwater and Orlando.
While the traditional brokerages dismissed my concept and laughed at a projection of 500 agents, they no longer do so. Our Tampa Bay office (Clearwater) has 2,419 agents and Orlando (Winter Park) office has 1,380 agents. Both offices command major market shares in their markets and are among the largest single-office companies in the country.
Charles Rutenberg Realty has been a great experience, working with the best professionals on our management teams and agents dedicated to serving and enriching their clients’ lives. Our business model has helped thousands of agents to succeed. It has benefited thousands of lives. We are blessed to leave that legacy.
If there is anything anecdotal about the Charles Rutenberg Realty story? I started with $20,000 borrowed against a credit card and I introduced a radically new concept that everyone said would fail. I was 55 years old in 2000 and faced the uncertainty any new start up does. Looking back, I would only say “Don’t stop swinging” and “It’s never too late.” And, that one of your ideas might have a significant impact on your life and the lives of others.
My nephew said that I was just a late ‘bloomer’. Well, late or early, I think we should all just strive to bloom.
Charles Rutenberg Realty Tampa Bay office (Clearwater) and Central Florida (Winter Park) continue to grow and thrive. With great management teams at the helm, I’ m excited to see them evolve and continue to be the best in the business… The Standard of Excellence.
Expert Real Estate Tips For Buyers & Sellers
♡ What are your top 3 tips for buying a home?
John Nestor: here are our top 3:
- Be prepared to act fast. In today’s market homes are still moving quickly.
- Get pre-approved. You want to be prepared to make an offer when you find a great deal.
- Be flexible. Most of the time regardless of the price point you won’t get everything you want in a new home. Don’t pass up a deal just because you cant get everything.
♡ What advice would you give a first-time home buyer?
JN: We always want people to know:
- Remember location, location, location. You can remodel the home, but you cant pick the home up and move it to a new location.
- Don’t pass up a diamond in the rough. Most great deals just need a little work. When you fall into the trap of going after the pretty home you run the risk of multiple offers.
- Set a budget and stick to it. Extending yourself is so easy to do.
♡ What advice would you give to a seller?
JN: It helps to do these things:
- Like your home…never love it. It’s an investment. Be prepared to let it go for the right price.
- Declutter and depersonalize your home. You want your home to feel as spacious as possible. When buyers are in your home you want them to envision themselves there and it’s hard to go when they look at every wall and see nothing but you.
- Have a pre inspection. I would rather the seller find the repairs before the buyers do. Remember a $50 repair to a seller could be a $5,000 repair to a buyer.
♡ Scams that take place?
One of the biggest scams that currently happens is after closing. You will get a letter in the mail saying they can provide you with your warranty deed for a fee. $50 to $100. The scammer simply goes online and prints one off and mails it to you. The warranty deed will be mailed to you from title normally 30 days after closing. Don’t pay this, it’s a huge scam. If after closing you get anything that you have questions on call your agent, lender and title.
Another scam is after closing you will get a letter informing you that your mortgage has been sold and you will now make payments to a new lender. Never ever make payments to someone new until you have called your old lender and verify that the mortgage has been sold and confirm who the new lender is.
♡ What are some things people should look for when buying?
Normally buyers are all caught up in the new appliances or upgrades. I encourage buyers stop and take the time to really look at the quality of work done. Walk around outside of the home and look for defects and don’t forget to spend time driving your potentially new neighborhood at different times of the day.
♡ What are the keys to finding a good real estate agent?
You can start with asking for referrals from friends. That can get you started on your journey. When you find an agent to make sure they are the one, consider it like going on a date. Do I connect with this person? Do they listen to my needs and wants? How is their communication?
If you can find someone that fits your needs and wants then give that agent 100% precent as you would expect them to give you.
♡ What questions should you be asking?
How old is the roof? Is this home on septic or city? Are those solar panels leased or owned? When is the last time the pool was resurfaced? Is this home in a flood zone?
Most of the time the biggest question that is asked is, why are they selling? Now although you can ask this question surprisingly enough a seller doesn’t need to disclose this information. If they do then consider that bonus.
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Be sure to checkout John’s website and stalk our other posts on real estate here.
x, Lauryn
+ stalk these productivity tips.
++ to learn more about investing, check out this post.
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