Start With A Win - The Original Disruptor: Interview with RE/MAX Co-Founder Dave Liniger (Part 1 of 3)

Episode Date: January 25, 2019

Our guest on this episode of the Start with a Win podcast is RE/MAX Co-founder and Chairman of the Board, Dave Liniger. Dave got his start in real estate by flipping houses to earn some extra money while he was stationed with the military in Arizona. He soon decided to get his real estate license in order to save some money on his house flipping, and he observed the activity of the other agents. When his time with the military was completed, he moved to Denver and applied for real estate jobs. He worked with agencies that used the 50%/50% concept and the 100% concept, and he realized that he liked elements of both setups.He soon decided to create his own company with the goal of becoming a worldwide real estate agency which would combine the freedom of a 100% agency and the stability of a 50%/50% agency in the best possible way, and in January 1973, his dream was born. Most real estate agents at that time were white-haired men, but Dave was an advocate for recruiting women to be agents, despite the prejudices of the industry. This model worked very well for RE/MAX, and by the end of the 5th year, 80% of the agents were women and RE/MAX was #1 in Colorado in listings, sales, and commissions.When it came to naming the company, Dave didn’t like the idea of using his own name. The idea of “real estate maximums” came up during a brainstorming session, and the team decided to shorten it to RE/MAX to be more catchy while still keeping the heart of the concept. In those early years, there were many sleepless nights and very few days off, but their hard work paid off and they were able to meet their goals. Dave’s main challenges of lack of management ability and resistance to the basis of the company from the rest of the industry were overcome by the institution of effective systems and processes. Dave also surrounded himself with the best team he could and made sure that they all focused on being persistent and purposeful.Links:Dave Liniger’s Bio: https://www.remax.com/newsroom/company-info/officer-bios/board-of-directors-of-remax-holdings-inc/dave-liniger-chairman-and-co-founder.htm Connect with Adam:https://www.startwithawin.com/https://www.facebook.com/adamcontosREMAXCEO/https://twitter.com/REMAXAdamContoshttps://www.instagram.com/REMAXadamcontos/

At top of the 12th floor of the RE-MAX World Headquarters, you're listening to Start With a Win with CEO Adam Kantos. And hello from top of the 12th floor here at RE-MAX World Headquarters in Denver, Colorado. It's Adam Kantos with Start With Win, and a very, very special guest with me here today. I have an icon in the industry, basically the guy who transformed the real estate industry into the way that it is today and continues to build upon the real estate industry, the co-founder, chairman of the board, and grand poobah of Remax, Mr. Dave Linegar. Welcome to the show. Thanks, Adam.

We're super honored to have you here today. And we look forward to kind of talking through basically some of the history of Remax, some of the wisdom that you've gained in growing this business from back in 1973. So why don't you take us back? Why did you start REMAX? What got you into this? It's really a long story. I'll try to make it as quick as I can. I started flipping houses in the 1960s.

I was in the United States Air Force, first stationed in Tucson, Davis-Monthan Air Force Base, later stationed in Arizona, Mesa, Tempe, at Arizona State University as an ROTC instructor. And so when you're a sergeant making $99 a month in the Air Force, that's not much of a living. And I had read books on buying, selling, and fixing up houses. And I actually started doing so. The first one was $10,000. Six months later, I made a $5,000 profit on it. Well, that just beat the heck out of $99 a month. So somewhere along the line, I decided I ought to get a real estate license, not to be a real estate agent. I was very shy, farm boy from Indiana, but I wanted to save the commission on my own personal investments. And I ended up placing my license with a company called Ed Thurkill Realty, and they had lots of branches throughout the Phoenix area.

But really, I was just putting the license on ice. But I watched a lot of these people, and they weren't very productive. But every two or three months, somebody would make a sale. And it was interesting how old they were. Some of them were in their 50s and 60s, which to me seemed like ancient history. I was in my late 18 or 19 years old or so. And I started thinking, well, maybe I could sell. I struggled. I tried. I was a part-timer. But eventually, hit my stride, did extremely well. I moved from that 50-50 company to Realty Executives for three months. Realty Executives was the original rent-a-desk, 100% concept. And then I made a decision to leave the desert when I got out of the military. I hated the desert, and I'd heard

about God's country, which was Denver. And we moved up here. With my sales record, I interviewed with nine or 10 companies, got selected by all of them. The best company was VanScock and Company, and I worked for them for a year. It was interesting. I had enjoyed the freedom of the 100% concept, but I loved the structure of VanScock. They were incredibly successful. Average man made $50,000 a year on a 50-50 split in 1971. And that's when the average full-time realtor in the United States made $5,000 a year. But after a year with him, I just kept remembering the freedom I had to set my own commission rate, do my own marketing campaigns, pay the bill myself, but keep more of the money for myself.

I thought about starting my own one or two person company, but I realized that's kind of a dead end. And that's kind of the transition most people made. You get into business. If you were around a couple of years later, you started thinking 50% of the commission isn't very fair. It doesn't cost much to open your own business. And so you'd start your own small business, but you lost brand, market share, camaraderie, all the big tools you got with the big company. And so from the first day, I said we were going to create the largest real estate company in the history of the industry, that we were going to be a hybrid. We were going to take the best concepts of the Renodesk, which was negotiate your own commissions, build your own marketing campaign, run your own business your way, and keep the profits for yourself. But I wanted to add to it

the tremendous management and leadership that the Van Scott Company had, which was home trade programs, training programs, major advertising campaigns, lead generation, and we're off and running. That's amazing. So you've combined some of the best concepts together in the real estate industry, but you touched on a point I want to dig a little bit deeper on here. You talked about the men of the Van Scott Company, and you've been monumental in opening up the real estate industry to more than just the men that were doing the business in 1971. Tell us a little bit about that. Well, women were just starting to come into the real estate industry in the early 1970s. Before that, it was primarily a sport that was participated in by older, white-haired, retired, second-career men.

They left the military. They left teaching. They left government. They had a steady paycheck. They could afford to work on a commission. And so in a 10-year period of time, starting late 60s, NAR went from virtually very few women to within a decade, 65% of the sales force was female. The old line companies were at first very much against women coming in the business.

They kidded about it. They said they were part-time housewives. They really weren't serious about the business. But in reality, the business was great for women. A lot of times, women graduated from college, and if they were in medicine, they became a nurse, not a doctor. If they were in law, they became a paralegal, not an attorney. And obviously, over the last four or five decades, that's entirely reversed. Now, over 50% of the doctors, 50% of the engineers, 50% of the attorneys are

all women. So the world changed. But back then, very prejudiced as an industry against women to begin with. I did not understand that. My wife was a woman. I loved her. My sisters were women. My mother was a woman. And I just couldn't understand prejudice of any kind. And so we openly embrace women coming into the business. Whereas the biggest two companies in town refused to hire any women for over five years after I started Remax. And the women that you brought into Remax started going out and really taking over the business, right? They were really serious about the business. We didn't have part-time housewives.

We had a lot of single women that had children that had to make good money to have a living. And they were darn serious about the business. And obviously the statistics proved that full-time people, male or female, make virtually the same incomes if they're top producers. It was a difficult concept to push. Everybody looked at me and said, well, it sounds great on paper, but you're awful young. We've never seen it work before. If it works, we'll join you someday. But if everybody sits on the sideline, it's kind of a disaster. You've got to have some people take the chance with you, right? And a lot of times, it wasn't the best producers.

It were the mavericks, the entrepreneurs, the misfits, or whatever it might be. Amazing. So, incredible, challenging first beginning. Let me ask you a question. A lot of people ask this. Why REMAX? What's the name stand for? And how did you get to that?

Oh, I thought it was very unprofessional to call a company after yourself. I look at car dealerships and they all want to be their own name. Watched a lot of realtors. They all want to be their own name. I watched a lot of realtors. They all want to be their own name. The situation we were creating was we were going to create the most successful real estate company in the history of the world. We planned on being worldwide, and we planned on getting a name that we could trademark that really did not stand for an individual, but for a concept. We sat around brainstorming.

The story's very true. We had a bottle of tequila, some salt and some lime, and we kept trying to say, what do we call this thing? Nobody thought Dave Linegar was a good idea, including myself. We started coming up with real estate maximums because we were going to pay the maximum commission to the agent, maximum service to the customer because we'd all be full-time, maximum recruiting ability for the broker. And we thought that's too long. We shortened it down to

RE-MAX. And we started thinking, well, people still think that's somebody's name. And at that time, one of the oil companies had just changed their name to Exxon. My research into naming came from a newspaper article on Exxon choosing that name. It was short. It was grabby. It was whatever. It was five or six words. Nobody had ever used it before. And so we shortened real estate maximums to REMAX.

Threw in a slash. We were all Vietnam vets. And so red, white, and blue sign. And off we went. Awesome. So RE-MAX was born and started gaining a little bit of momentum here. But you faced a lot of challenges in those early years. What are some of the key challenges that you faced in getting

this company moving? The biggest challenge of all was my own lack of education and management ability. I had learned leadership in the military, but I certainly didn't understand proper business practices. I knew how to sell real estate. I knew how to set goals, how to set up systems, how to give customer service. But that's a big leap from being a salesperson to running a whole group of good salespeople. And so that was probably the toughest thing. But then, of course, the industry hated the concept. The powers to be, the biggest brokers in town felt that we were a real threat.

They were only paying 50-50 commission splits, and here we were offering to pay almost the whole thing. And some of them, very professional, thought that we would just be in the desk. We weren't going to be part of the professional community. That wasn't true. We ran our company just like the most professional companies they were. And then, of course, undercapitalized, a lot of pushback, couldn't get anybody to join the company. The bills mounted up with that poor financial reputation, which brokers could use against us when we tried to recruit agents.

But we stuck to it. At the end of the first year, we actually had 22 agents. And it almost doubled every year. Year number two, we got to 44. Three to 84. Four to 134. And the fifth year, 289. In the fifth year with 289 agents, we were number one in listings, number one in sales,

number one in commissions in the entire state of Colorado. And that's a pretty major accomplishment against two of the most successful real estate companies in history. Interesting sidelight, at that point, we were approximately 80% female. accomplishment against two of the most successful real estate companies in history. Interesting sidelight, at that point, we were approximately 80% female. Not one man from the top two companies had joined us yet. They were all on the sidelines. And when we started our campaigns and our advertising, we were now number one. And then the next year, 200 men from the competing companies joined my very band of ladies who had kicked their butts and had taken over as number one in the state.

I love it. I love it. What a great story, Dave. The challenges that you faced were many. And it looks like you took and you set some goals and you broke down those goals to accomplish that. You mentioned five years, 289 agents. I know you had a five-year goal of 300 agents. Is that correct?

Yes. I sat with my banker the first day I started the company, January of 73. And I said, you know, if I could recruit five agents a month, in a year I'd have 60. In five years I'd have 300. And with the productivity per agent we thought we'd have, 300 agents would make us the number one company in the state. He wrote those figures on the back of an envelope, and he actually has that framed in his office to this day. Wow. And so the thing that's

interesting about it was we didn't get five a month at first and then we had turnover obviously and so you have to make up for the ones you lose plus net the gain of five but if you look at it 60 months 289 was darn close to 300. Very close. Very, very close. So to get to that number and facing the headwinds that you faced, be it the industry, be it competition, the podcast doesn't do service to the challenges that you faced on a daily basis. And the stories are many about you working through the night many, many nights, and you didn't know what a weekend was then. And frankly, you still don't know what a weekend is. You still work on weekends.

What kept you focused on getting this going, and what systems and processes did you put in place that you feel made a big difference? Well, just like in real estate sales and listings, I kept great statistics. I kept track of every person I spoke to. And I could tell you that the first month I interviewed 204 people and not a single top producer joined me. I got four marginal producers. At the end of the five years when we announced my 289 agents were number one, I went back and we figured out that 74 of the original 204 had joined us in the fifth or sixth year. And so just the persistence, stayed in touch, didn't pester, just kept proving ourselves, was very active on the board, just set my goals, got up every morning knowing what I had to do, how many calls I had to make to get X many appointments, how many appointments I had to make to get somebody to sign up.

So I think the first thing was goal setting, but behind the goal setting, it's very important to understand that just being passionate about a goal does not necessarily mean you're going to accomplish it. Read a book recently where somebody said, hey, there's hundreds of people that are out there worldwide, thousands, trying to get a gold medal in the Olympics. They're all passionate. Most of them are willing to work five, six hours a day for years. But just being passionate and going after the goal doesn't mean that you will get there. People fall off. They can't handle the sheer boredom of doing the same exercises hour to hour, day after day, year after year. And so we set up systems. We had systems for follow-up.

We had systems at how we could prospect. We knew what we did to get to the conventions, to the major real estate meetings, the places where realtors were gathered. And we worked the system. The second thing that was very, very important was I had a great support group. My first employee was a woman by the name of Gail Main. Interesting enough, 12 years later or so, it was Gail Linegar. But the first years were not romantically involved. She had just become married and then moved to Denver as a trailing spouse. Her husband was a business person who and then moved to Denver as a trailing spouse.

Her husband was a business person who got relocated to Denver. And she didn't think she was ever going to stay with Remax more than six months or a year. But I was a pretty good salesman and told her that we would divide the duties up. She could manage and run the business. Her job was to find office space, buy the furniture, design them, interior design, hire the secretaries, the administrative people, coordinate with legal accounting and all that. She had a marketing degree, management background. My job was to be a sales manager. And as a sales manager, two things, recruit and train, or maybe I should say three, and retain.

And so by my focusing on recruiting, training, and retaining, that's how we marketed a company. She concentrated on systems and processes of building the business and started out as a vice president of administration. By the 10-year mark, she was president and CEO of the company. I was traveling nonstop 250 days a year, and so somebody had to manage the business. And it worked out as a great partnership. She took the weight of all the day-to-day management off of my back and allowed me to concentrate and focus on recruiting, retention, and training. That's awesome.

And Gail is an amazing woman, has done so much for this organization that we're super grateful for. So you guys have just made an incredible team in growing up the business over the years. So amazing times in the early years. And we appreciate you taking us through that, Dave. So next time on Start With A Win, we're going to continue this conversation with Dave Linegar. We're going to dive into when did Dave hit stride in the company and the growth of the organization when that growth really started heating up? And what were his key influences, moments and milestones in that? So we'll talk to you soon on the next episode of Start With A Win when we bring back co-founder of Remax,

Dave Linegar. Thank you so much for joining us today. Make sure to head over to startwithawin.com to get more great content. Please subscribe and rate the show on iTunes or wherever you get your podcasts. Follow Adam on Twitter, Facebook, and Instagram. And remember, start with a win.