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Mar. 24, 2008
Copyright © Las Vegas Review-Journal HOUSING SLUMP: Brokers unbroken With new tactics and leaner staffs, real estate agencies weather downturn 
Photo by Sara Tramiel/Review-Journal Billy O'Keefe recognizes that real estate agents rank among the least-respected professionals on the planet. For one thing, the barrier to entry is low. Because it's relatively easy to get a license, you have the "stripper/Realtor" and "plumber/Realtor," said O'Keefe, who recently opened O'Keefe Casto Residential Brokerage in Las Vegas. Realtors get paid the same commission when they close a transaction no matter how good or how bad they were at the job, he added. O'Keefe is operating under a different business model at his brokerage, one that holds agents accountable for their competency and guarantees money-back customer satisfaction. "Our guarantee states that if you're not happy and don't think we earned our money at closing, we will not charge you," O'Keefe said. "It's risky. We've got brokers who think we're out of our minds." O'Keefe Casto is recruiting real estate agents at a time when other brokerages have laid off staff or closed the doors. Their office at 7230 W. Lake Mead Blvd. was formerly occupied by Century 21 MoneyWorld. Mike West, president of Century 21 MoneyWorld, said he's had to shut down two of his four offices and reduce staff to 250 from a peak of 357 agents. "Us and every other company," he said. "Liberty (Realty) closed three out of their four offices. You've got some in bankruptcy. Several ReMax offices have closed or merged." Most of Century 21 MoneyWorld's growth was between 1999 and 2001 before the market exploded, West said. Too many companies overextended themselves during the boom, he said. "Probably the biggest differentiation between us and other companies is we were fiscally conservative and didn't overexpand and didn't accrue any debt and we put money away for a rainy day," West said. Prudential Americana and Century 21 Advantage Gold both filed for Chapter 11 bankruptcy in 2007. Prudential Americana owner Mark Stark had borrowed $22.5 million to buy the firm, which was Prudential's seventh-largest brokerage in the nation with 1,200 agents. Century 21 Advantage Gold, with about 500 agents, saw gross income fall from $55 million in 2005 to $16 million through the first eight months of 2007. Irene Vogel, executive vice president of the Greater Las Vegas Association of Realtors, said she was "pleasantly surprised" to have nearly 15,000 agents renew their membership or join the association, down by about 1,000 from a year ago. "That's a very uplifting number for me," she said. "I think what we're seeing is some of the branch offices have closed, but the bottom line is we're not seeing any real significant drop." West said many people got into real estate part-time during the boom years and kept their job as a dealer or waiter. Only a few of them may have surrendered their license, he said. Despite the tough housing market in Las Vegas, O'Keefe believes he can grow his new office from 17 licensed agents to 90 or 100 by offering them training and coaching to help them achieve greater results. He'll even give them a "test run" if they're still with another broker. "You get some leadership and office support at other places," O'Keefe said. "They promise you this and promise you that, but when you come down to it, you do your own thing. Agents need hard-core accountability. If you're going to work for us, you have to participate in the coaching program, which creates accountability. We get agents to understand that throughout your life, it's about your word." Agents at O'Keefe Casto have already outperformed the Multiple Listing Service with higher list-to-sale price ratios and fewer expirations, O'Keefe said. Things will get better for Realtors, Vogel said, and hopefully they built enough equity when the market was up to survive the downturn. "I know our inventory is moving. We're seeing a lot more activity," she said. Home sales rose 11.7 percent in February from the previous month, but are still down 22 percent from the same month a year ago, the Realtors association reported. Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.
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