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The experiences, the connections, the education, the networking – but mostly, the referrals – fuel the bond between these real estate firms
BY GILL SOUTH, PUBLISHED BY INMAN NEWS JULY 12, 2017
Key Takeaways
• Leading Real Estate Companies of the World (LeadingRE) is a community for independent brokerages that seek national and international referrals, an annual conference and a bigger network.
• The organization has an almost 50 percent referral conversion rate compared to the industry standard of 25 percent.
Agents looking to hitch their wagon to the right brokerage might ask about culture, mentorship, educational resources and tech tools — all elements that many independent brokerages have found ways to offer at the same (or even greater) level than their franchise counterparts.
But what about the networking, the cross-country connections and — most importantly — the referrals? Franchises with branches across the nation are naturally equipped to refer leads to one another, a particular advantage when it comes to clients who are relocating.
That’s where Leading Real Estate Companies of the World (LeadingRE) comes in, an organization that describes itself as a selective global community of the highest quality independent real estate companies with over 572 network members worldwide and 130,000 sales associates across 65 countries.
Since it formed in 1997 as the result 50 large brokerages departing from a relocation organization and a merger with the Genesis network (then a referral network made up of indie brokerages), the organization has been filling in that benefit which franchises enjoy as a built-in perk: power in numbers.
There’s a catch, however, and it’s one that strengthens LeadingRE: Not just any indie brokerage can join. Members must rank among the top five independents in their market (and be in the top 10 overall) in either units or volume, and there is often more than one member company in the most populated markets.
How does this intricate web of companies operate, what’s next for this immense organization and who controls it? Here’s a look inside.
Brokers seeking to control their own destiny
The founding 50 brokerages of LeadingRE aimed to control their own destiny and create a network made up of “only the best” locally and regionally branded firms focused on raising the bar in real estate.
The Chicago-based organization is held by 33 shareholder companies today, including Allen Tate, Long & Foster, Howard Hanna, Alain Pinel, Edina Realty, John L. Scott, Michael Saunders, Shorewest and Real Estate One.
Of the 572 network members worldwide, 466 are in the U.S. and Canada, the total generating over 1.1 million transactions annually, with $368 billion in home sales.
LeadingRE connects members with opportunities and people around the globe, supporting them with an international referral network, professional development programs, networking events and connections to people and opportunities worldwide.
The organization’s referral program has an enviable 50 percent conversion rate, compared to the industry standard of closer to 25 percent.
LeadingRE president Pam O’Connor says 14 out of the top 25 Real Trends’ brokerages are LeadingRE members. Members range from companies as big as Howard Hanna, Windermere Real Estate and Edina Realty and as small as a one-office luxury brokerages such as Hilton & Highland in Beverly Hills, California.
Networking opportunities and collaboration happen in the flesh at the organization’s annual U.S. conference, which normally attracts around 2,000 attendees. There are also CEO forums, regional events and a big international get together for those outside the U.S.
Direct competitors willing to share intel
Membership costs come in tiers — expenses range from $3,000 to $4,000 a year for a small market up to the $70,000 to $80,000 range for firms with a number of markets and ZIP codes, as in the case of Long & Foster and Howard Hanna, for instance.
LeadingRE chair Joe Horning, president of Shorewest Realtors, a third generation independent brokerage based in Milwaukee, Wisconsin, likes to describe LeadingRE as the “non-franchise for independents” and says it’s interesting to see former franchise companies he has acquired contrast their experience with LeadingRE at Shorewest.
“With my own firm, we have acquired several companies that were franchises and they all had sour opinions on the franchise model,” he said. “Once they’d become part of this company and experienced LeadingRE, they said it was like night and day. They see all the tools. LeadingRE acts like a real partner — an advocate — not someone just trying to get a commission.”
Horning gets asked all the time in his marketplace to join a franchise, but his thinking is: “You are not growing or expanding; why would I want to be telling your story?” Because they have skin in the game, LeadingRE members are very active participants, willing to share knowledge even if they are direct competitors, said Horning.
What comes with a LeadingRE membership?
Members can attend conferences where brokers passionate about tech tools meet, give guidance and share ideas about marketing and technology.
LeadingRE’s Marketing Technology Advisory Council (MTAC) reviews all programs, provides input for conference content and the vendor partner program, and raises topics for staff to address. The results and findings are shared with the membership at large. They look over vendors to help guide members, attempt to identify the best ones and promote the ones that seem to be the cream of the crop, said Horning.
Many members access the preferred providers promoted at conferences and through the “Solutions Group” vendor partner program, often with preferred pricing or other benefits not available if they ordered on their own.
Former LeadingRE member Liz Nunan has just joined the organization as executive vice president of member services, to be located in Chicago, where close to 100 staff members are based. She was vice president of global business development at New York firm Houlihan Lawrence, which was acquired by HomeServices of America in January this year.
As Houlihan Lawrence is retaining its brand name, it will be able to maintain its membership with LeadingRE as other HomeServices companies have done. Nunan is a big fan of the LeadingRE learning management platform, Institute, which gives members access to a number of educational and agent development opportunities.
All members get access to the online courses, which include continuing education, a library and webinars. About a third of the 300-plus proprietary LeadingRE-produced courses are free, and the others have iTunes-like pricing of $7.99 each.
For an extra fee, brokerages can opt for the annual enterprise subscription, which gives their agents access to all at no cost. In many cases, franchises — where relocation referrals flow more abundantly — are better equipped for relocation work than independents. LeadingRE sister company RELO Direct aims to level the playing field as a tool for independent brokerage members, said Nunan, who has a background in corporate relocation.
“At Houlihan Lawrence, if I had a lead with a corporate client that wanted home buyouts, for instance, I could partner with RELO Direct which would help win the business,” said Nunan.
The new EVP sees her role to push more referrals through the network, which has always been the driving force of the network’s foundations.
Next month, LeadingRE will run a referral and relocation forum in Chicago, where all the relocation directors and coordinators will come together to generate more referral business.
Building up international links
With LeadingRE’s U.S. market fairly saturated, building up the international members is a key focus for O’Connor, who is working with staff based in Europe and Asia to identify firms for potential membership and to bolster international referrals.
“Internationally, it is a lot more challenging,” she said. “We have a lot of data to look at in the U.S. to look at performance, whereas overseas it tends to be by recommendation and you have to do due diligence in every market.”
Some opportunities will still pop up in the U.S. for new members. LeadingRE has a year-long contract with each of its members. “Anybody can leave with 90 days’ notice,” said O’Connor.
“We have to perform; they have to perform. We don’t renew probably 15 to 20 companies every year,” she said. “It’s not that they are not good — but they are just not engaged, they don’t come to events, they don’t send referrals.”
Referrals are the bread and butter when it comes to member brokerage ROI, with 35,000 referrals generated a year through the network.
On her part, she says: “We want to continue to be relevant and to meet a need in the market over 20 years that is not being met by franchises. Brokerages want to be independent to be on top of tech, [to be able to face challenges] from Zillow to Opendoor and want to grow the global part of the business.”
The organization has done sessions on succession planning because it is such a big issue with members, she added.
“I think it’s a really good time for independents,” she said. “They have a lot more flexibility, they can take the dollars where they are needed, rather than going to the franchise company for permission.”
LeadingRE’s luxury division: For the $1M and over club
Luxury Portfolio International, LeadingRE’s luxury division, is another major cog in the machine. Set up in 2005 at the urging of its members, it’s headed by Paul Boomsma, Leading RE’s COO who previously managed marketing for a Sotheby’s affiliate. Half of LeadingRE’s members are also Luxury Portfolio members. Brokerages in this niche should be selling properties of $1 million and over, he said.
Luxury members, who already have a presence in the luxury real estate space, gain access to global markets through Luxury Portfolio’s website, advertising programs and global audience.
“Wherever they are looking to market, we have resources,” Boomsma said. “It’s not impossible to do on your own, but it’s incredibly costly.”
By pooling resources, Luxury Portfolio can secure good placements in print and online advertising. Boomsma knows that no one in the luxury field has to buy a home, so the promotion has to tell a story and have impact.
Through surveys and white papers,the luxury division also offers education on what’s going on with today’s affluent buyers and sellers; their wants, needs and concerns, and networking and connections.
Boomsma and the management team recently ran a series of seven broker forums around the country.
“The idea was to bring brokers in to discuss their top concerns and how are they dealing with them, how can we assist. Everything from being recruited against, different technologies, the challenges of low inventory, where they should be focusing their dollars,” Boomsma said.
“Most of our companies — they have charismatic, smart leaders at the helm. It’s not easy times for any of them but they are resourceful.”
Boomsma welcomed the arrival of chief economist Marci Rossell to LeadingRE earlier this year. Rossell is the former chief economist for CNBC and is bringing an understanding of monetary policy and political climates to the organization and its members, and how they affect real estate markets.
Dispatch from Canada
With members all over Europe and in Australia, South Africa and New Zealand, Ron Stader, owner of CIR Realty, based in Calgary, Canada, is chair of LeadingRE’s global advisory board and is also on the main board of LeadingRE.
According to Stader, CIR is the largest brokerage among independents and franchises in Alberta with a sales volume of CA$2.54 billion in 2016. It became a LeadingRE member nine years ago and is also a Luxury Portfolio member.
“Instead of 720 Realtors today, I would say if not for nine years with LeadingRE, we would be 520 realtors and that’s not an exaggeration,” said Stader.
“CIR was big before it became a part of LeadingRE, but when interviewing Realtors about joining us, their reservation was that we weren’t part of something else. What would we do with a referral to Vancouver; what conferences did we have for new ideas? “Those reservations all went away when we became part of LeadingRE. On the flip side, Realtors that used to leave us because they wanted to join a franchise don’t have to leave us anymore. They feel like they are not losing anything.”
Stader also believes the maverick spirit of independents makes their conferences — where you get “unique perspectives on the industry” — more interesting than other industry conferences.
Article image credited to AJ Canaria from PlanOmatic