We caught up with the brilliant and insightful Paul Ekstrom a few weeks ago and have shared our conversation below.
Paul, thanks for joining us, excited to have you contributing your stories and insights. Let’s start big picture – what are some of biggest trends you are seeing in your industry?
The Real Estate Industry, like most industries today, have been converting from a traditional brick & mortar brokerage to a virtual brokerage and broker model. One of my biggest frustrations today is a lack of professionalism in the Real Estate Industry. This “Trend” started 2018-2019 and has been trending down ever since. I started in Real Estate in 2007 during the biggest housing crash since the Great Depression. We lost thousands of agents during this downturn in the market which is not a bad thing. We talk a lot about the 80/20 rule in Real Estate whereby 20% of the agents sell 80% of the homes sold annually in the US. Losing a large population of Realtors during this time raised the bar of professionalism in the Real Estate Industry during 2010-2018.
Unfortunately, the perception of being a Realtor is one of glamor, wealth and independence. One doesn’t need a college degree, previous work experience, small out of pocket investment to become a Realtor. Our industry does not do a good job of educating the general public about the true nuances of becoming a Realtor. You need financial capital, thick skin, a commitment of working for today for a payday tomorrow. We saw a huge increase in new Realtors entering the market from 2018 through today. While there were a lot of new agents who took their craft seriously and have been great additions to the R.E. Industry, there also have been many more Realtors who are unsupervised, uneducated, unprepared and have been the main reason for the bar of professionalism being lowered to the level it is today.
Virtual brokers and brokerages have contributed to these changes by employing large groups of agents who are literally unsupervised and are relying on advice from other virtual, unsupervised agents. The virtual brokers are running at a rate of 1 broker for up to 2 thousand agents. The national average in the US is 14 agents for 1 broker/brokerage. In my opinion, virtual brokerages, are unable to provide the Realtors with supervision, support and training that Realtors need to better protect the buyers and sellers who employ these agents.
I chose being a brick & mortar broker/brokerage with the main driving principal to help the Realtors I employ to be better versions of themselves. Teach them to always put the clients first and never make it about the commission. Teach them the Code of Ethics that are the guiding principals Realtors follow. Teach them how to build their own business based on a strong foundation of knowledge, education, rule-following and under-promise/over-deliver mentality.
Paul, love having you share your insights with us. Before we ask you more questions, maybe you can take a moment to introduce yourself to our readers who might have missed our earlier conversations?
I started in Real Estate in 2007 just as the housing industry was collapsing. It was really tough getting a loan then. Most purchases were cash or FHA//VA loans. House prices were declining 10% +/- monthly. We had a bunch of sellers who were under water on their mortgages. Many homeowners just stopped making payments and let their home go back to the banks. It was a great time to be an investor.
I built my business of being a Realtor based on a series of principals I employed from my past work experience. I started selling cars when I was 21 years old and by the time I was 30 I was a General Manage of a large auto dealership employing 140 people.
My underlying principals are:
Outwork my competition
Constantly improving my systems, processes and knowledge
Challenging and motivating my staff to be opportunistic
Always under-promising and over=delivering
Be state of the art in everything we do
In 2017 I was approached by Realty ONE Group Inc. about purchasing a franchise. In 2018 we opened our first office in Andover, Mn. Today we have 2 offices, staff of 8 and 114 agents. Our sales in 2022 was $350M. My goal is to open our 3rd office in the eastern Twin Cities in 2024.
Realty ONE group Choice offers residential sales, property management/leasing and commercial sales.
Can you share a story from your journey that illustrates your resilience?
In 2021 we closed the most transaction in the 5 year history of Realty ONE Group Choice. In 2022 we saw our sales drop by 38% from 2021. Interest rates went from 3% to 7% in 60 days. Coupled with a shortage of inventory, the buyers and sellers jumped on the fence and decided to wait out the Federal Reserve
Everything reminded me of 2007 when I got into Real Estate. I built my business on doing the right thing. Out-work, out-hustle and provide a level of service superior to my competition. I decided to teach my agents how to do the same. I built 8 Platforms for Real Estate Success and we built all our training around this platform.
I’m proud to say in 2023 we gained back the sales we lost from 2022. We also grew our agent count in a time many agents were getting out of our industry. By doing things the right way, we also kept the bar of professionalism high in our company and we hope that this also has rubbed off on other agents not employed at Realty ONE Group Choice.
Can you open up about a time when you had a really close call with the business?
There were many instances during our first few years in business where I made sure all my staff were paid by not taking a payroll myself. I did things a not typical of other companies starting out. My business plan was to provide services for my agents that typically were only seen in larger, more established brokerages. I sacrificed my compensation and profits to achieve growth faster. We grew at an average of 25-30 agents annually and today are one of the top producing brokerages in our market area.
I have had a great relationship with my Bank and have had credit lines we have used, as needed, over the years. I truly believe in over communicating and over delivering when it comes to the banking relationship I have today.
Contact Info:
- Website: www.ROGChoice.com
- Instagram: https://www.instagram.com/realtyonegroupchoice/
- Facebook: https://www.facebook.com/RealtyONEGroup
- Linkedin: https://www.linkedin.com/company/10136838/admin/feed/posts/
- Twitter: https://twitter.com/ROGChoice
- Youtube: https://www.youtube.com/@realtyonegroupchoice
- Yelp: https://www.yelp.com/biz/realty-one-group-choice-andover?osq=realty+one+group+choice
- Other: Tik Tok https://www.tiktok.com/@realtyonegroupchoice