Coffee Break with Steve Blank
► Psst... After you enjoy the full interview, be sure to watch Steve answer even more questions in the Xpresso Round Video.
DMAR: Can you tell us a little bit about yourself and how you got into the real estate industry?
Steve: I grew up in real estate. I had my brokers license in Pennsylvania at the age of 18 and then I came out here, went to DU, graduated and took my finals the same week I took the real estate test. I slept for about a week straight after that (laughs) and then went right into real estate.
D: Did you always know you wanted to do real estate or were there other industries that appealed to you?
S: I always knew it was business. I wasn't positive, but I was pretty sure I’d do something real estate related.
D: Can you tell us about your first transaction?
S: Are you kidding me?! In 1975?
D: Do you remember it?
S: (laughs) Yeah, actually I think I do. It was in Congress Park, the 700 block of Columbine. I was working with a buyer - a single woman who was a little bit older than myself - and she didn't know - and probably to this day still doesn’t - that it was my first transaction.
D: Did it go smoothly?
S: I didn't think so at the time, but looking back at it I would say it did go smoothly. I had good guidance back then.
D: What did you learn from that first experience?
S: I learned where all the holes are. The more you know, the more you know what you don't know. Very similar to the adage of, “you don't know what you don't know.” Our job is to make it a pleasant experience, but believe me, when I first started in the mid-1970s, the contract was one-page. Literally, one-page... and there was just a little bit of room at the bottom of it for additional provisions. Nobody even knew how to spell the word addendum (laughs); there was no such thing. And now we're up to what, 16 or 17 pages with probably three or four addendums? Just goes to show how the industry has changed.
D: As a managing broker, how would you describe what you do?
S: I'm a little bit of an anomaly. My son - who is an architect, but got tired of sitting in front of computer - started working with me five or six years ago. Then I opened up the office downtown, and I was pretty much able to manage a small office with 22 brokers (which is manageable to me) and I also get to work with my son on the sales side. At this point in my career, I really enjoy not only being able to be out there on the streets with everybody else, but also hiring people and helping them develop. I have people in my office from their mid-20s to their early 70s. I've known some of them 30, 40 years, and some of them just for two or three, but it's a great blend. I love developing this office just as much as anything else I've done.
D: How would you describe your management style?
S: I would say supportive. I joke with some of my brokers that I'm like their “business uncle” (laughs). They know that they can depend on me and that I'll back them up… and that's important.
D: How would you describe the culture of your office?
S: Honestly, it’s one of the most open, friendliest cultures. Everyone is very supportive of one another. It's a small office, so I'm very careful about the culture and the personality of everyone. Before I ever hire someone, I'll have two other brokers meet with them as well. We just renovated the office and I have a community table now where brokers come in, maybe three or four of them, and sit with their computers. There are only two doors in the entire office: one is to my office, in case of a private meeting, and the other is to the conference room. That's it. Then I have some glass doors. But that's for brokers with multiple people in the office.
D: In general, how would you describe the role of a managing broker?
S: I think being a mentor is very important, but that obviously depends on the age of your brokers. I can be a mentor for those in their 20s to 40s, and maybe for some who are a little older than that. But I think the most important role of a managing broker is to be there for support. I don't consider myself their boss. A lot of my agents will jokingly call me "Boss Man," and I've never looked at myself as their boss. I’m there to help them grow and reach a level where they're able to do well and continue to get better.
I look at what they did last year compared to this year, but I don't have any rules regarding how much they have to make. That's really up to them. I just want to help them achieve what they want to achieve. My only “rule” is that this be their full-time career. If they want to go to part-time, they're not in my office. This is not a job, it's a career. Being a REALTOR® is difficult, it's challenging and it simply takes too much time to do it part-time. You really have to be focused and committed in order to make this work. I always tell my brokers, short-term thinking is it's a job, long-term thinking is it's a career. And hopefully I've been able to help people with that.
[Tweet this] "This is not a job, it's a career. Being a REALTOR® is difficult, it's challenging and it simply takes too much time to do it part-time."
D: Walk us through a typical day in your life.
S: Well, let’s be clear… there are no typical days. If this was a “typical” day I probably wouldn't be here (laughs). Every day is a little different. I come in most mornings and, unfortunately, sit in front of the computer for about a half hour to an hour. I handle any broker needs or issues and just make sure the office is running well. I probably spend the same amount of time going out with my brokers for lunch or coffee as I do clients. Usually you graduate from one to the other… but I feel quite lucky to be able to do both.
Every other week I hold a class at the office, which is voluntary, but I get about half the office to come. We just go over different skills or mind sets. I'm a strong believer that it’s not what you do, but what your thought process is in order to accomplish whatever is important to you.
D: As someone with substantial experience in the business, how have you seen the industry change in the past five or 10 years?
S: I think it has become much more consumer-oriented, and by that I mean much more buyer-oriented. Somebody was joking with me not too long ago that all the contingencies in contracts are for buyers. There really aren’t any for sellers. And then someone described it as a “consumer-oriented contract.” That made me wonder, aren't sellers consumers, too? Yet, it's really buyer-oriented; every contingency is for the buyer. There's really nothing for the seller.
So it’s a little bit top-heavy in that way. If you're a buyer, you can look up a listing history and find out how long it has been on the market, if it went on and off the market, if the price was lowered… you can find out all these things. The seller, on the other hand, can't find out anything about the buyer except that a lender says he or she is qualified. And you hope that they're working with a broker who’s honest and knows what they're doing so something can actually come together.
Back in the late 1970s, early 1980s a lot of people were predicting that by the year 2000, brokers would no longer be in existence. But you know what? It's a people business. I think that nine out of 10 times people want that personal connection. When you buy in your area, you want to know what you’re supposed to be looking for and when you find something, you want someone to help you decide if it’s a good investment. You want to know what the hell an HOA is, how to know if an HOA is a good one and how much money they should have in their reserve. So our job is really to educate more than ever. I always say, “I can't sell you anything, but I can educate you into making a good decision.”
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D: Do you think that it's buyer-oriented even in such a seller’s market?
S: Well, it’s only a seller's market depending on the price range. In the upper-end price range, it's a very balanced market. For anything below $400,000, chances are you're looking at multiple offers. My son and I just put something on the market for $385,000 and we had six offers and it went for $405,000. We're putting one on tomorrow for $285,000 and I anticipate a lot of activity and multiple offers.
There are definitely some sellers who will put something on the market because they think a buyer will pay anything. They read the papers and see stories about lack of inventory and multiple offers. And all those things are true, but it's very geared towards under $400,000 or $500,000. Once you get above $500,000 to say $1 million, that's actually a nice, balanced market - perhaps still a seller’s market depending on the area, but only slightly.
Denver is one of the healthiest markets in the whole country, by a long shot!
D: In terms of the market, what do you think is the biggest challenge for Denver right now?
S: Lack of inventory is the obvious answer, but I would say affordability is the biggest challenge right now. If prices keep going up and then interest rates go up, we’re going to knock out a lot of people. In order for people to be able to break into the market, we need new developments to include more affordable options. I think part of the answer is developing a way to educate people. We need to educate brokers in the right way so they are then able to educate the public. You have to start at a grassroots level.
[Tweet this] "If prices keep going up and then interest rates go up, we’re going to knock out a lot of people. In order for people to be able to break into the market, we need new developments to include more affordable options."
But it’s hard, right? How do we change society? I think it really starts with elementary schools. For about six years I was the Denver Board of REALTORS®’ chairman of the Denver Public Schools committee. I worked with principals in elementary schools throughout Denver to set up programs and events such as a “REALTOR® Day,” which was basically an open house where we had the opportunity to help educate people.
D: What do you think is the biggest area of opportunity for Denver?
S: The fact that the construction defects laws are about to change, which will promote more high density and more infill projects, is definitely an area of opportunity. All of the construction has been apartments, so we do need to have some more condominiums and/or multi-housing, mixed developments. I think we're going to see a lot more of that and I think that's what creates communities.
D: Do you think the cost of living in Denver inhibits people from being able to buy something? Especially those who are first-time homebuyers?
S: The hardest thing is for people to save. And they usually take too long. Let's say they want to buy something for $300,000; they can probably get in with $15,000 down. But if you’re making $60,000 a year, how long is it going take to save $15,000? A long time. So most people, especially Millennials, are going to their parents to get help on the down payment or get a loan from them. I mean how else do you do it? Unless there's a dual income situation. I would say I’m pretty creative and I've done some pretty good things, but the buyer still needs to have sources in order to gain that opportunity. How you work with those sources can be different but the sources need to be there.
D: We wanted to talk a little bit about your recent win at the Excellence Awards. Were you surprised? How did you feel accepting the award on behalf of your office?
S: I knew we had a pretty strong office so I was hopeful. We'd come in second before. Coming in first is not the most important thing to me, but it's certainly a nice icing on the cake. And it's obviously nice to get it as opposed to not getting it (laughs).
D: In your opinion, what does the Excellence Awards represent?
S: To me winning at the awards, in general, means you're doing something right. Personally, winning isn’t everything but I was proud of my group. I would say that it established us for at least a little while as one of the leaders in the industry. Everybody in my office is really committed to the industry. Being recognized at such a prestigious event makes me feel like we're growing in the right areas.
D: What advice would you give to someone who's just entering the industry and wants to be a top producer?
S: Don't try to keep a part-time job or have any other jobs while you try to get your real estate career going. It's too hard, it really is. It doesn't take a rocket scientist, but it does take commitment. If you’re serious, you cannot do something else, too.
There used to be a lot of people who would get into this business and think, "I'm going to try this, I hope it works, but if it doesn't I'll do something else." I would tell them to not even join an Association, don’t even bother - you're not going to make it. This might be an old statistic, but supposedly 50 percent of the people who get into this business don’t last more than a year, and 80 percent don’t make it more than two. So why waste a year of your life if you’re not ready to roll up your sleeves and do what it takes?
[Tweet this] "... why waste a year of your life if you’re not ready to roll up your sleeves and do what it takes?"
Don't think that just because you have a buyer or because you know people that you're going to do well. I think that's one of the biggest things. Knowing a lot of people doesn't translate to you being successful. And for the first two years, don't expect to get any referrals because it's not likely. Your friends and your family want you to do well, but they don't want to be guinea pigs for your success.
D: Do you think it's harder now since there are so many people entering the industry?
S: You know it's easy to say yes, but I think it has always been that way. I think the turnover is about the same, maybe a little more now. I can't say to you, " Okay, if you do A, B and C, and you follow this program, you are going to be successful." You're not like her, or him. Okay? What makes you successful and what your strengths and weaknesses are, is different than anyone else.
D: Is there someone you would say you respect most in the industry? Or someone that you look up to?
S: There are a few people I have a lot of respect for. One would be the owner of my company. I've known him for 20 years, and he's quite the owner; he has moved forward when a lot of people wouldn't or couldn't. So I respect that. I also have a lot of respect for the first manager I ever had. He was tough on me but he helped me and gave me the best platform to learn from.
Finding mentors and people to learn from in this industry is crucial. I tell my brokers, “You’re going to get information and style from me, and going to get it from other people, too.” I'm a combination of probably a half a dozen other people who I really admire and who I learned from. Find those people for yourself. Maybe I'm one of them, maybe I'm not. It doesn’t matter, just find them.
[Tweet this] "I'm a combination of probably a half a dozen other people who I really admire and who I learned from. Find those people for yourself."
D: Do you have some websites that you visit daily for industry news that are your go-to sites?
D: What are your favorite activities outside of work?
S: I like going to sporting events and hanging out with friends. I travel more now than I used to and I enjoy that. I like doing things with my wife and I get to work with my son, which is wonderful. His wife is pregnant, so I'll probably be too much fun as a grandfather (laughs).
D: Because this is the coffee break series, we have to ask, how would you describe your relationship with coffee?
S: I have one cup of coffee every morning before I leave the house. And then I have probably three or four quarter cups of coffee during the rest of the day. I don't like to drink it when it's cold, and I don't drink it fast, but I like to sip on it for a good part of the day.