Every week, we ask an Atlanta real estate professional for their thoughts on the top trends in Atlanta real estate.
This week, we talked with Mike Prewett is the president of Century 21 Connect Realty in Atlanta, and before that was the president of Southern REO Associates, a full-service provider that covers more than 246 ZIP codes and 23 counties in Georgia, and sold more than 13,000 properties. A vendor approved real estate brokerage, Southern REO worked with more than 90 clients including Fannie Mae, Freddie Mac, HUD, Wells Fargo, Bank of America, Chase, HSBC, Suntrust, NationStar and RBC.
Atlanta Agent (AA): What’s the current status of Atlanta’s REO market?
Mike Prewett (MP): REO inventory in Atlanta has fallen dramatically. Lenders have moved through a good part of their distressed portfolios, and institutional investors have bought up most of the properties. Those two trends working together have lowered the REO inventory dramatically both in Atlanta and other metro areas. As a result, there are 75 percent fewer REO properties on Atlanta’s market then there was a year ago.
That’s a great thing for the market, although it does mean the available inventory for purchase in Atlanta is very low. As a result, prices have increased, and the intense competition for available inventory only encourages prices to rise further. That will allow more people to be able to move. We still have a large number of homeowners who want to move, but they have not recovered the equity to do so. Anyone who bought in 2004 is probably not back in an equity position to move.
AA: What kinds of challenges are you facing as you develop a market presence for Century 21?
MP: It centers around one thing – providing an alternative model to agents with the new Century 21. We could go out and duplicate the models that have been in existence for decades, or we could introduce a different type of model. I come to this from an agent’s perspective, not a big-company perspective. I worked as a high-volume agent, and with that perspective, I think about what I would like from the company; therefore, the No. 1 thing we have built around is productivity training. We offer coaching, training and mentoring to our associates to increase their transactional volume.
The No. 2 thing is helping our agents achieve a healthy work-life balance, which is desperately needed in real estate. When we do get our businesses to the point where they are healthy and productive, we are working all the time, and our families and personal lives suffer as a result. I worked 28 years as a high-volume agent. In 2011, we did 1,504 transaction sides. I did that working between four and four-and-a-half days a week. How do you do that? How do you build a solid transactional-side business and maintain healthy work-life balance? That’s what we’re focused on.
It really is the disease in our industry, how work-life balance – in addition to productive sales skills – are not being taught to agents. The reason for that is because the people who run most real estate companies never learned it themselves. Lee Trevino has a line he used in his golf career: “I don’t take advice from anybody who can’t beat me.” My point as an agent is, if you have not sold homes at a relatively high level, I do not want to hear your opinion. I do not want to rely on theory.
AA: What changes do you see coming to real estate in Atlanta?
MP: It’s about transparency everywhere you look. Technology will allow consumers to make a more informed choice about which agent they work with. The Internet is not replacing the agent, and I do not think brokerages will go the way of travel agencies. Instead, the consumer is going to have much more information available about who they are and are not willing to work with.
The agents themselves, then, will be more demanding on what their companies offer them. They will demand their companies be a partner with them in their business, rather than a mere fee or commission collector. And technology is going to increase transparency for the agent as well. They will make better-informed decisions on the brokerages they want to work with. When it comes to younger agents, brokerages will have to demonstrate real, tangible value. Younger agents are less willing to buy into catch phrases and slogans, and are instead much more inquisitive about how brokerages are going to help them in their every day business.
The key fact is that consumers no longer need the agents to find a house. Therefore, the agents who can explain why the consumer still needs their assistance are going to thrive, and the ones who cannot are going to find it very tough; it’s going to be very difficult for the part-time/un-engaged agent to compete.