Coffee Break with Susan Pearce
DMAR: Can you tell us about yourself and how you got into real estate?
Susan: I grew up in Oklahoma, but my mother is from here. I graduated from CU Boulder with a teaching and English degree and went on to teach. Around 1994 or so, I was teaching privately with no benefits and no retirement plan, so my husband and I thought it would be best if I got a more lucrative job. My husband said, "You'd be great at real estate," and I went, "Are you crazy?" and he said, "No. I think you can do this.” So I took the classes, took the test and went into real estate. 1996 was the first year I practiced.
D: As a managing broker, how would you describe your job?
S: Well, at Preferred Properties there are three owners, including myself, and we all manage and we all practice. I am pretty strong in my belief that a managing broker needs to be out there with his/her own clients and needs to be doing real deals in order to have a sense of what his/her agents are going through. Is it a tight market? Did your deals fall apart? What lending regulations are impacting them? If you don't have your own clients and you're not practicing, I'm not sure you're as effective as a managing broker.
D: Is it hard to find a balance between managing agents and managing clients?
S: Some weeks. You never know when the crises are going to hit and grab three or four hours of time that you maybe had set for showings and looking at properties for your clients. Usually when that happens you just stay up late (laughs).
D: How would you describe your management style?
S: I come from a teaching background so I definitely consider myself a mentor. I enjoy it. And everybody learns differently, so I think the teaching background plays into my ability to coach new agents or even agents who have been around a long time. I enjoy teaching and mentoring a lot.
D: What do you think is the key to running a successful brokerage?
S: Tons of patience, a good sense of humor - maybe sort of an offbeat sense of humor - and being open to new ideas. The industry is changing. How we recruited new agents five years ago probably isn’t as successful now. I think you have to look at your financials every year and say, "We need to be stronger in this area and we need to upgrade in this area." For management, there's always something that needs to be done because if you're not moving forward, you're actually going backwards. You're not standing still. And I believe we must continue to learn and keep making the office a good place for agents to work. We cannot afford to fall behind in technology or equipment or anything that agents need to make them successful.
[TWEET THIS] "For management, there's always something that needs to be done because if you're not moving forward, you're actually going backwards."
D: How would you describe the company culture and the atmosphere in your office?
S: Well, if you come in to interview at our company, the first words out of our mouth are, "This is really a family." And we're small enough to remain a family. We want everybody who's with us to have a place in the office for the first year so that they get to know the systems and everybody else and all the owners. It's definitely a supportive atmosphere. The three owners are in the office almost every day. If you really have a problem or you have great idea, you find one of us and talk it through and then we'll talk it through. There's not a corporate structure to make decisions, so there's not a big time lap. We can get things done right in house. So I'd say the culture of our company is very family-oriented.
D: You've been very active in the Association world for a while having served on the Denver Board and chairing several committees. How did you first decide to join an Association?
S: Well, if you want to use the MLS in Denver, it's required. But I will say that I have always believed that if you're a part of a group, you need to come into that group and volunteer some time to that group. When you're a part of something, you should find some way to give back. I grew up that way. So when I went into real estate and was asked if I'd run for Director of the Denver Board, I was happy to do it. Through that type of volunteer work and being active in the Government Affairs Committee, I met other people in the Association. I've really learned a lot more about being a REALTOR® - the ethics, the training, and so on. The government affairs piece is what really drew me in, though. I had no idea the issues that REALTORS® are involved in until I joined that committee.
D: A lot of our agents, especially the newer ones, join an Association simply because it's required. Do you educate the agents in your office about the benefits of joining and/or why it’s important?
S: Honestly, we probably don't focus on that enough because I hate to keep beating people over the head about it. I feel like if they're not interested, you can only say so much. But I think we should keep trying. You never know who's going to be attracted by a different issue, so we just have to keep getting the word out.
D: Do you think being active in the Association has helped your business?
S: Absolutely! When you spend time with other REALTORS®, you're not getting clients, but you are getting to know a lot more people. I know if I submit an offer to somebody I've met through the Association that it will be thoroughly considered. They know I'm a good agent and I know they're a good agent. So I think when you're having to look at 18 offers, either coming or going, and you see a name that you know it doesn't mean they’re going to get the property, but it does mean you're going to look very hard at their offer because you know they're a good agent.
On the management side, sometimes things go wrong. People make mistakes and if you know the manager from the other office, it's a much easier conversation to call them up and say, "Oh my gosh, our seller signed by accident," and get it corrected because they know that you're honest and not trying to pull something. It just goes a lot better if an issue arises and you know the other person and respect them. Knowing people helps.
D: Clearly you’re passionate about political advocacy and the Government Affairs Committee. Why do you think it’s important for REALTORS® to be involved in advocacy issues and stay up-to-date with what's going on in the industry?
S: I’m very passionate about government affairs. Some agents don’t understand how the advocacy groups within the REALTOR® organization are protecting their business. This year, we had a big win - not a complete win - in construction defects. I don't think they understand that groups of people within the Association get together and study those issues and act on their behalf. At the city, county and state level we have a pretty strong group of people who can sit down with a council person or a state legislator and say, "Have you thought about this?" Because I think, honestly, who wouldn't vote for something like Construction Defects Legislation, which was originally called "The Homeowner's Bill of Rights"? It did have some unintended consequences that we pointed out, but they really didn't show up because of the recession. And once they showed up, the REALTOR® Association was able to talk to people. And again, it's not a complete fix this year, but it's a start.
D: What do you think is the importance of the REALTOR® Political Action Committee (RPAC)?
S: Well, it's unfortunately important because our RPAC money can be used to support candidates and issues that support REALTORS®. When I first joined Government Affairs - and I think a lot of people don't know this - I learned that we interview every candidate for City Council and every candidate for Board of Education. Now that the Association has grown, every county commissioners' office, mayors, city councils and other jurisdictions. And it is not partisan. Everybody who's interviewed is asked a very strict set of questions relating to real estate. And if money is donated to a campaign, those donations are based on how people feel about REALTOR® issues. For example, property rights and eminent domain are major issues. So it's absolutely not partisan; we're focused on how open a person might to visiting with the REALTOR® community when issues come up that we're interested in.
[TWEET THIS] "... it's absolutely not partisan; we're focused on how open a person might to visiting with the REALTOR® community when issues come up that we're interested in."
And the unfortunate thing about politics these days is they maybe sit up and notice when you give a contribution to their campaigns. When I started, we used to give $25 contributions. And now with increased RPAC money, we're able to give several hundred dollars… so not huge amounts by any stretch, but more than we gave previously. And I think the people we support do notice that and notice that we're participating, which is good.
Issues is another big piece. There have been some issues around the metro area that are going to deeply impact how we develop and how we work. Sometimes we need to get involved in those issues or campaigns where we have strong beliefs about how it should go one way or another. So, that's where your RPAC money goes.
D: Some of the other state Associations, such as California, have made the voluntary RPAC contribution a mandatory one. That’s obviously not the case in Colorado, but what are your thoughts on that model?
S: I support it. If it could be $5 or $10 on everybody's dues that would be great. What's happening now is that maybe 35 percent of members (I forget the exact participation numbers) donate and that money is being used to represent 100 percent of the membership. Personally, I feel like that's probably not fair and that we would just have broader understanding of advocacy issues if everyone had to make a contribution. And I'm not saying thousands of dollars, I'm saying $5 or $10 dollars to say, "Yes, I support REALTOR® issues, NAR and REALTOR® ethics," and that kind of thing. I think that would be a big improvement. And remember, not everybody's a REALTOR®. So the people who are brokers are benefiting from our activism too, but I can't get to them.
D: Switching gears a bit, we wanted to congratulate you again on your win at this year’s Excellence Awards. Was it a big surprise to receive the Broker Manager of the Year award?
S: Yes, absolutely (laughs). A good surprise.
D: How did you feel accepting the award?
S: Well, first of all, we're a really small office and I think that award generally goes to managers of larger offices. I knew I had been nominated because people in my office kept asking, "Do you have your ticket? Do you have your ticket? Do you have your ticket?" (laughs). And I always go to the event every year. And then someone finally broke down and said, "Well, you were nominated." That made me cry because when you're nominated by your office and have that level of respect from your coworkers... in a way you don't really need anything else.
I thought, “I’ll never win. That's lovely, I appreciate my office so much, but it won't happen." But I walked into the luncheon and I would say almost 100 percent of our office was there and I was beginning to go, "Oh, this might really happen." Then my husband walked in and I was like, "Oh my gosh," and I was totally frozen… I couldn't think of a thing to say. But it's a great honor. It's a great Association with lots of good people. I've done deals with a lot of them and I've managed two other offices, so I've managed a fair number of people. I was really stunned and pleased.
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D: What does the Excellence Awards mean to you?
S: Well, I think the awards that people are nominated for are really special. I mean, the production ones are amazing, too. People who can do that level of production, especially without a team, are amazing. I honestly don't know how they do it. I've worked with quite a few of those agents and they're not only good producers, they're good agents. I think that recognizing their hard work is great.
But the nominated awards - when it's from your peers in the industry - that's really special because there are so many good people in the industry. Even just being nominated is an honor, which you don't know about because it's a complete secret. So whether someone receives an award, is an honoree or is simply nominated, I think the Excellence Awards is a great way to recognize each other for both participation and production, especially since we're so busy all year and don’t always take the time to do so.
D: As someone who has been in the industry for a good amount of time, what are the biggest changes that you've seen?
S: Denver is completely different now. But in terms of industry changes, there have been many. First of all, CTM eContracts have made a huge difference in how we can perform our job and serve our clients. I used to have clients who would be in the airport and I'd say, "Well, when do you get to your hotel? I need to send you a fax and you need to send it back." So CTM eContracts for that is a huge change.
I think the use of email and text is another big change. Is it good? Sometimes. But sometimes I tell my agents, "This is an idea that cannot be sent in a text. You have to call up your client." I think the unfortunate side effect of relying on text or email is less face-to-face and interpersonal interaction... and I think that's where deals sometimes go wrong, either between agents or between an agent and a client. You send an email that you think is perfectly innocuous and somebody comes back to you and says, "You don't want me as your client anymore?" As an agent, you need to use those things, but be careful. Sometimes a phone call or a face-to-face meeting is best.
Training is another big change because you can do so much online now. And from a management perspective, I do not find agents coming to me with the level of training that they used to come to me with. I mean, yes, they pass the test, but the sense of how a real estate deal goes and the timing and what happens here and what happens there… they are not coming to me with that. That's a training issue. If someone is thinking about entering the industry, I think they need to take at least some of their classes in an actual classroom because at least they’ll get the cross-conversation and hopefully some real-life anecdotes. But I don't think the training is as good as it used to be.
D: What do you think is the biggest threat to the industry?
S: The idea that a real estate transaction doesn't require any skill or that it doesn't take time so it's not necessary to pay a buyer's agent or a lister is a threat. That mindset has caused companies to come into the industry with less-than-normal commissions. I feel badly for clients when the deal gets in trouble and you're on the other side. I don't know of any deal that was “easy” and I don't know any deal that doesn't take quite a few hours. Right now, with buyers, I don't have single person in my database who's an active buyer that I've written less than three contracts for. I'll probably get them into something at six contracts and I, myself will preview, 50, 60 maybe 100 houses. I don't think people understand that about the industry. We make it look easy because that's our job. But I think because it looks easy, there's some business models coming in that will not allow agents to make a living and that worries me.
[TWEET THIS] "The idea that a real estate transaction doesn't require any skill or that it doesn't take time so it's not necessary to pay a buyer's agent or a lister is a threat."
D: I'm sure you're familiar with the new Zillow model where you can just bypass the agents and basically do the transaction yourself. What are your thoughts on that?
S: I actually know of a deal right now, and this is the second one this year, where the renter decided to buy the house of the owner and decided not to use a REALTOR®. I think a lot of REALTORS®, like myself, do a minimal commission if the buyer and seller have found each other, but they take care of crossing all the T's and dotting all the I's. Neither one of these deals is going to close. One is already three weeks past closing, the other is two weeks past, lenders have been switched out... When you're online with Zillow and a problem comes up, nobody really knows what's right and how to handle it.
Buyers and sellers can definitely get along, I'm not saying they can't, but they can also make agreements that are unclear or just bad agreements. They’ll meet on the front sidewalk and the buyer might say, "Oh, I love your table," and the seller says, "You can have it. It doesn't fit in my new place." Well, the seller is thinking they're getting compensation for it while the buyer is thinking it's free. You get down to two days before closing and everything erupts because there was a misunderstanding and it's not in writing. I think when buyers and sellers go directly to each other they leaves themselves open for disappointment because it's so complicated and so litigious.
D: What do you think is an area of opportunity for the industry?
S: That’s a hard one, partly because our market is kind of in a gridlock. You really have to be patient, sell yourself and sell your company. I think we can all be better at explaining what we do as REALTORS®, the service we provide and how we get paid. I think that might be our biggest opportunity. We know people go online looking for houses and we also know that most of those people get a REALTOR® by word-of-mouth when they're ready to buy. So I think we need to be more proactive and tell people that they will definitely benefit from using an experienced REALTOR®.
[TWEET THIS] "I think we can all be better at explaining what we do as REALTORS®, the service we provide and how we get paid."
D: What are some of your favorite activities outside of work?
S: I love to read, love to garden, love to be outside and, as was mentioned at the Excellence Awards, I love the Broncos. Anyone who knows me knows not to call me during a Broncos game. All of my agents have learned this. Or during a major tennis final because unless it's a real emergency, I'm going to be a little peeved about the whole thing (laughs).
D: And the last question, which we ask to everyone because it's Coffee Break, how would you describe your relationship with coffee?
S: Oh my god, I love coffee! My favorite coffee shop in Denver just closed, it was on Holly. They still have a Park Hill location, but Holly was closest to me. And I actually like where we are today, Steam Espresso. Whenever I'm in Platt Park, I come either to Steam or a coffee shop across from Harvard Gulch Park.
WATCH: Xpresso Round