Coming in at No. 22 by closed transaction sides on the 2020 REAL Trends 500 top brokerages, RE/MAX Gold has grown considerably. Hear from CEO James O’Bryon about how he built a leadership team of believers and how his avoidance of fads and misdirects keeps his company strong.
Tracey Velt:
This is Tracey Velt, editor-in-chief of content for REAL Trends. We’re speaking to the top brokers in the country to take a peek at how they built their businesses. We’ll talk about lessons learned, personal passions, and their top strategies for recruiting and retaining productive agents. Today we’re speaking with James O’Bryon, CEO of RE/MAX Gold in California. Welcome, James.
James O’Bryon:
Thank you, Tracey. Thank you for having me.
Tracey Velt:
Yeah, this is wonderful. Tell me a little bit about how you got started into the business and ultimately came to run your brokerage and also about how many offices and agents you have.
James O’Bryon:
In the late 1980s, Tracey, I had a sister, still have her, but at that time she was one of the first female general contractors in a little rural county outside of Sacramento, California called El Dorado County. I would visit her on her construction sites and there would be several things that would stand out to me.
Number one, she was leading in an industry where women were not in leadership positions typically and she was doing so so elegantly and so flawlessly. The other thing is I just really liked the environment. At that time I was working for a division of the Carnation Company, enjoyed visiting her, liked the smell and the sights and the sounds of the construction sites.
James O’Bryon:
So I decided I’d go ahead and get my real estate broker’s license, which I did in 1987, and started my first real estate brokerage with a single shingle out in front of the building at 579 Main Street in Placerville, California, where you can now buy delicious sweet rolls, it’s called Sweetie Pies, no longer a real estate office. And put a shingle out in front that said J. E. O’Bryon Real Estate Brokerage, Colleen Malone Construction, but it said Colleen Malone Construction on top. So I began my business by working with my sister, Colleen.
Tracey Velt:
Okay, great. Tell me how many offices and agents you have today.
James O’Bryon:
There are total in our system now 80 brokerage offices, that’s throughout California, about half of which are complete full-service offices, the other half of which are satellites.
Tracey Velt:
Okay, great. So obviously every-
James O’Bryon:
Agent-
Tracey Velt:
Oh, go ahead.
James O’Bryon:
Agent population is right at 1,800.
Tracey Velt:
Okay, perfect. Obviously every entrepreneur learn some lessons while building their businesses. What are the top two lessons you learned through the process?
James O’Bryon:
Probably the first and the biggest lesson was to make sure that we built the business with leadership comprised of true believers in what it is that we were doing. I think a lot of times people look at leadership positions in our industry and think to themselves that for whatever reason it might be an improvement over being an agent, but what we recognized early on is that it’s not an improvement over being an agent, it’s just a different channel than agent thing within our industry.
Finding leadership that really wants to build and wants to teach and wants to protect the agents who are our population, that was probably the biggest lesson.
James O’Bryon:
I’d say secondarily, when I first began, we would hire new agents or agents who had been recently licensed and it was my desire and expectation that we could put a fire in their bellies. What I discovered pretty early on is that it made a lot more sense to hire agents who were experienced and productive and help them improve their business rather than betting on individuals who had not yet made a full commitment to the business.
Tracey Velt:
Okay. That sounds a little bit like an aha moment and we’re going to go into that next. What was really your aha moment? I’m sure you’ve had many, but tell me the one that really stands out in your mind as it pertains to growing your brokerage.
James O’Bryon:
The biggest aha was probably the first time that I recognized that chasing fads or chasing major misdirects within the industry ended up wasting a lot of time and energy as opposed to simply defining what we were as an organization and then sticking with it. Which is not the same as saying don’t bend as the market changes or as the regulatory climate changes, but rather define what it is that you are as a company and stick with it.
I think there’s been a tendency in our industry to take a look at something, which for lack of a better term I’d call a fad or a misdirect and head in that direction. I think I used to do that, but we stopped doing that probably 15 years ago and it made a huge difference.
Tracey Velt:
Okay, great. Do you have a specific example of one time that you did follow something that was kind of a turning point for you?
James O’Bryon:
A number of years ago there was a multilevel marketing plan for the industry, which seemed extremely attractive at the time. We took a pretty serious look at it and took one step in that direction and then recognized pretty quickly that that just was not us. It might be some companies, but it just didn’t define us. That really stands out as one of those times where we used what we had accrued as knowledge to say, “No, we don’t want to do that. That’s not what we are.”
Tracey Velt:
Okay, makes a lot of sense. Obviously, most brokers build their business with a strategic mix of organic growth and M&A. Tell me how you grew your business, and was there one year that you just made a really big growth leap or was your growth pretty progressive?
James O’Bryon:
The growth was super progressive up until 2006, because RE/MAX Gold was born in 1994 and the growth was extremely progressive and progressively more each year up until 2006. 2006 was the first year where California and most of the U.S. began to feel the recession. From 2007 to 2011 we were in a position, as most of the industry was, where we were playing a lot of defense and the growth, it was in retrograde along with the economy.
James O’Bryon:
Since 2012, and I kind of divide the our history into increments and the latest increment is 2012 to 2020, since 2012, it’s been fairly consistent at between five and $600 million a year in sales volume, with the exception of 2018 when we partnered up with RE/MAX One in Southern California and became a statewide organization. That year it was well north of a billion dollars in sales growth. So 2018 was definitely the standout year.
Tracey Velt:
Yeah.
James O’Bryon:
As far as organic versus merger acquisition, the vast majority of this company has been bootstrapped with organic growth, other than the partnering up with RE/MAX One. There were a number of small mergers and acquisitions, but nothing of nearly as great significance.
Tracey Velt:
Okay. Okay, great. What do you see as your greatest challenge in the business?
James O’Bryon:
As I’ve been in the business for a long time, I’ve had the opportunity to see a lot of challenges. I mentioned a moment ago the economic challenge of the 2006 to the 2011 period, but I would say none of them rival the challenge of the contraction of the brokerage’s margin over the period of time since the late 1980s. There was a time where miraculously brokerages worked on a 40 to 45% gross margin.
Today, the industry average is closer to 15, one five, which is really … It’s quite an amazing thing that companies have been able to survive that kind of contraction in terms of margin. That challenge and the challenge that goes along with that, which is providing a premier experience for our agents and for their clients on that contracting margin, is probably the biggest challenge that I’ve seen.
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Tracey Velt:
Yeah, that is a huge challenge. I know Steve does seem to think that it’s leveling out. There was another contraction I think in the past year, but he doesn’t really feel like it could go any lower than it already is. So, yeah.
James O’Bryon:
Right.
Tracey Velt:
Well, let’s flip that. Where do you see the most opportunity in real estate brokerage?
James O’Bryon:
Oh, see, that’s the crazy thing, Tracey. I see the greatest opportunity going directly with the greatest challenge, because that market and margin contraction not only has affected us with scale, but it also has affected small to medium-sized brokerages unless their owners also sell real estate.
There are many owner brokers in this industry who are looking at the economic realities of the industry and thinking to themselves, “If I sell real estate, am I better off than if I run a brokerage?” Many of them are heading in the direction of becoming extraordinary agents within the industry and looking for a home for their small to medium-sized brokerages.
James O’Bryon:
A company of scale, such as ours, has a tremendous opportunity in terms of merging those smaller brokerages into our systems and having them take advantage of our scale. Jeff Bezos, one of his famous quotes, and I’m paraphrasing here, was your margin is my opportunity. I think to some extent that is becoming true in our industry.
Tracey Velt:
Yeah, that’s great. We have our one last question and then I want to get into a couple of more personal questions. Let’s talk about recruiting. Obviously, that is a huge challenge for a lot of brokers. What are some of the lessons learned that you’ve found figuring out the puzzle of recruiting?
James O’Bryon:
First thing on recruiting, and most important thing, is you have to build an extraordinary company. If you don’t, then whatever it is that you’re attempting to present to agents who work for other companies, some of which are extraordinary, is not going to have any great listening ear. So number one, you have to remember that the quality is what begets the quantity as opposed to vice versa.
Then after you do that, then, going back to one of our earlier questions, you have to find leadership that truly believes in the mission of your organization and sees offering the opportunity to work with your company as more of a gift than a selling process. I’ve shared this so many times with our leadership group. When you tell an agent about working with RE/MAX Gold in the north or RE/MAX One in the south, what you’re telling them about and sharing with them about is an opportunity for them and their family. You’re not trying to sell them anything.
James O’Bryon:
When you’re giving somebody a gift, if it’s truly a gift and if they don’t want it, you don’t have to feel rejected by that because it’s just something that doesn’t work for them at time. It’s a real philosophical approach where first you have to build something extraordinary and then you have to make sure that the people who are presenting it believe in it.
Tracey Velt:
Yeah, that makes a lot of sense. Then building the relationships to make that all work. So, yeah.
James O’Bryon:
That’s a huge part of it.
Tracey Velt:
Yep. Tell me, what or who inspires you?
James O’Bryon:
I’m probably most inspired by grateful people. We’re in an industry where so often we’re in the presence of such abundance, and not only in terms of the population that works in our industry, but also the clients who retain the people who work in our industry. I’m so gratified when I’m among people who recognize how fortunate we really are. So I’d say number one would be grateful people.
James O’Bryon:
Then I’d also say resilient people, because another component of our industry is you have to be able to take defeat, get back up, go back to work and act as if you learned from the defeat but you’re not going to let it destroy your plans for the future. That combination, and we see a lot of that in our industry where people are both grateful and resilient, it’s the bifecta.
Tracey Velt:
Yeah. Yeah, definitely. My final question, and I ask this of all the leaders who I interview because I find that there is some type of experience that really shapes you, tell me about a childhood or teenage experience that really shaped the person you are today.
James O’Bryon:
I grew up, Tracey, in Stockton, California in a 1,250-square foot, three-bedroom, one-bath house with eight kids and my parents. My mom and dad were both college professors, and when I was growing up, college professors were not highly paid. It was a beautiful environment and an intellectually-challenging environment, but it was also we didn’t have much money. Five of us slept in one bedroom, and even the dinner table ended up being just a major competition. I was also the fifth brother, so there was that as well.
James O’Bryon:
Bottom line is this, it was a loving but very competitive family. I know for certain that, as among the youngest in that family, a good deal of my competitive nature was born of my childhood. I wouldn’t change a thing about it because I really do believe it has shaped a lot of how I see the world.
Tracey Velt:
Yeah, family tends to do that. Yeah, that’s a wonderful story. Well, James, thank you so much for joining the REAL Trends podcast and congratulations on your ranking. I appreciate your time.
James O’Bryon:
Okay, well, I’m super honored that you included me, Tracey. Thank you for taking the time.
Tracey Velt:
Yeah.