Jeff Culbertson is the Executive Vice President of the Southwest Region of Coldwell Banker Residential Brokerage offices. first tuesday’s Jeffery Marino caught up with Mr. Culbertson to pick his brain about training, education, competitive advantage and the current state of California’s real estate market.
ft: Coldwell Banker’s corporate and franchise structure is a bit labyrinthine. Can you take a moment to explain how it all works, and what your role is?
JC: The Coldwell Banker brand is wholly owned by the publicly held company, Realogy. Realogy has four divisions:
- NRT, which operates our corporately owned real estate brokerages, primarily under the Coldwell Banker brand;
- the Realogy Franchise Group (RFG) which manages our brands (Coldwell Banker, Century 21, ERA, Better Homes and Gardens and Sotheby’s, to name a few);
- Cartus, which is our relocation division; and
- the Title Resources Group (TRG), which owns and operates several title and escrow companies throughout the country.
I work for NRT. My responsibility is to oversee the Coldwell Banker offices owned by NRT in Southern California and Arizona.
ft: NRT and Coldwell Banker made our 2013 Top 10 Largest California Brokerages list. What’s the secret to Coldwell Banker’s success in recruiting and sales in this tumultuous market place?
JC: One of the main reasons so many agents choose to associate with us is longevity of brand. Coldwell Banker’s been around for over 100 years.
The other key is sheer size. Years ago, I remember hearing somebody saying the future of real estate business is that you’re going to have to either be really big or really small. Our size gives us certain synergies, like better training for our agents and a wide array of marketing tools. This gives our agents an edge when it comes to their presentations.
For instance, in So Cal our primary vehicle is a magazine that we distribute through the L.A. Times, San Diego Union-Tribune, O.C. Register and various smaller publications in the desert. We do about 16 million copies each year. If I still had my old company in Silicon Valley there’s no way I could have afforded to do something like that. And the response rates that we get on our print are tremendous. Paired with our online presence, there’s no other company that can expose the properties as quickly or to as many outlets.
ft: So training and education are important at Coldwell Banker. Can you share what you do to prepare your associates for success in the field?
JC: That’s always a big question for real estate brokers: how can I make sure my agents have the tools they need, and use them to full advantage? It all boils down to training. Our goal with Coldwell Banker is to build an industry-wide reputation for having great training. We offer our agents classroom training, online training and in-office training on anything from how to read a contract and better explain it to your buyers, to how to use social media.
In my division I have five full-time salaried trainers. My Training Director’s job is to make sure that our agents have knowledge, from understanding the deposit receipt to being able to educate the seller on the advantages of going with Coldwell Banker.
ft: With an organization your size, some might argue that it is a sheer numbers game. Simply get as many agents in the field as possible and see what sticks.
JC: There are different models out there and everybody has to choose who it is they want to be. What you’re referring to is called a body shop. Sure, you can get away with churning through new agents every month, and without relentlessly training the basics of writing a purchase agreement. That’s just not how Coldwell Banker works. There is a certain truth to the saying that large armies win battles, but we believe that well-trained armies will win the war.
ft: You’ve personally been in the real estate industry for 36 years. What’s your take on the current California real estate market?
JC: After the frenzied market we experienced in the first half of 2013 transitioned to a more normal market, someone asked me what I thought was going to happen. I’ll tell you what I said to them: don’t be surprised if for the first time in 9 to 10 years seasonality plays a substantial role in our business.
When I started in ’79, people used to say that the buying season started after the Super Bowl. And yeah, I agreed with that. But here’s a phenomenon that’s occurred over the last 15 to 20 years that a lot of people missed: when I started selling homes 20 years ago, it wasn’t uncommon for one spouse to stay home. If both worked, they usually got home at 4 or 5 o’clock. Now everyone works and when they get home, it’s at 6 or 7 o’clock. So I think daylight savings time will play a bigger role than the Super Bowl because it’s hard to see homes at 7 when it’s dark.
What I mean here is that markets shift, and you have to be ready for it. Look at the harried market from 2000 to 2005. Back then, the number one questions our agents were asked by buyers was, “Can I afford the monthly payments?” But now, when you see 20% price increases in some markets, buyers are asking “Can you justify the value before I write an offer?” I’ve been through these cycles, you get to a place where a buyer says “No, that’s too high.” That’s when we’re back to a more normal market, when negotiating sets prices, not fear of losing the deal.
Another thing to keep an eye on is employment and income. We haven’t seen an improvement in median income in a while. As long as interest rates stay down, it won’t hurt demand to have stagnant incomes. It’s a different story once interest rates start to move upwards. That’s an obvious concern that every broker should have.
ft: From our perspective, the California real estate market is suffering from a dangerous lack of demand. What are some of your concerns about California’s real estate market, going forward?
JC: One of the challenges we had when interest rates were at their bottom was that we couldn’t get anyone qualified because of an overly conservative approach to underwriting. I think that’s getting a little better.
Another one of our concerns here in the higher-end markets in southern California is that we don’t see a lot of employers opening new businesses here. What we are hearing is more like, “My god, it is so hard for me to do business here.” We’re concerned about the Texas effect. Our business depends on a good economy, high-paying jobs; we’re hoping the state becomes more business friendly.
I’m very concerned about how the new generation of homebuyer is going to afford to buy. We used to tell people to some degree that we pay in sunshine, at some point that doesn’t cut it.
ft: What advice do you have to people considering a career in real estate or existing agents who want to be more successful?
JC: I get asked that a lot. The number one decision you have to make is the manager/broker with whom you associate. You need to feel comfortable with that person. You need guidance. It’s not like in the ‘80s when you just knocked doors and the purchase agreement was one page.
Call it a mentor, call it whatever you want. They’re someone who brings you in and says, “Here’s a variety of training vehicles and a variety of education vehicles — and by the way I’d love to spend time with you every day until you’re up and running.” If you can’t find that, my opinion is your chances of success are very slim.
ft: Okay, how about a shout-out to your mentor?
My mentor was Tom Sphear. I wake up everyday and I thank god for Tom Sphear.