When opportunity knocked, these team leaders answered and turned it into a new way of doing business.
By Tracey C. Velt, editor of publications
Seventeen years ago, after 13 years in an international marketing position, Dar Walden, co-owner of the Dar Walden Team at Keller Williams Realty-Alaska Group, decided it was time for a change. It was then that she met Carol Butler, the No. 1 sales associate at RE/MAX in Alaska. Dar began working with Butler and learning the real estate profession. Three years later, after retiring from the Air Force in 2003, Ed Walden joined the growing team.
“We started in the business back in 2000 with Carol and Blake Butler. We met her [Carol] when we were looking for a property,” says Ed. “Carol had approached us looking for an exit strategy for future retirement,” he says.
Over the next seven years, after agreeing to a buy-sell agreement, the group transitioned from the Butler Team to the Butler Walden Team. Originally, the Butlers and the Waldens hired attorneys to draw up the buy-sell agreement, but the process became lengthy and problematic. “We decided to pull back and negotiate directly with the partners to work it out without attorneys.” The acquisition propelled their business and placed the Butler Walden Team as the top team in Alaska in 2007. That same year, the Butlers retired from RE/MAX, and the team transitioned to the Dar Walden Team.
Since their first acquisition from the Butlers, the Waldens have realized the potential of building their business through acquisitions and have since acquired several other books of business. In 2008, the Dar Walden Team joined Keller Williams Realty-Alaska Group, and the Waldens are now owners of two additional Keller Williams market centers and a business center in Nevada.
“We tried to do a true Keller Williams expansion team and hired a team leader from a different brokerage. We went through the expansion system course. However, it wasn’t the right fit. But, we also didn’t want to start from scratch, so we started looking into partnering or buying other already-developed businesses,” says Ed.
In 2016, two Keller Williams agents were moving out of state, and the Waldens were able to negotiate business acquisitions with both of those agents. “That’s when we realized that our opportunity could be turned into a business model,” says Ed.
By the time the Waldens decided to merge with Madden Real Estate, which would expand their Alaskan reach from Anchorage to Fairbanks, they had become seasoned at mergers and acquisitions.
“Wes Madden ran a seventh-level team, which is a Keller Williams term for a team where the agent can step out, and the team still runs efficiently,” says Ed. “Dar and I don’t have to be in Fairbanks to run the team, although we do go every week to handle leadership activities. Since this was a merger, Steve Murray, founder of REAL Trends, helped us set the guidelines for the purchase. We did an asset purchase, which ensured that we had employment contracts, leases and intellectual property rights to the Madden Real Estate name and website,” says Ed.
Because Fairbanks is a small community, the Waldens chose to keep the name Madden Real Estate and change it from an independent brokerage to a Keller Williams mega-agent office.
Here are the Waldens’ lessons learned for smooth team mergers and acquisitions.
- Put it in writing. “Make sure you have everything defined in writing. You want to preserve the relationship between you and the outgoing person because you will have to work together for a time after the agreement,” says Dar. “It helps if you like and respect the person before ever agreeing to work with them. With the Butlers, it was an easy exit strategy because they retired. With the Madden Group, Wes was moving out of state, which changed his availability for day-to-day management, although he is still able to be involved in a consulting role.” Wes moved to join Sotheby’s Realty in Destin, Fla, but he continues to visit Alaska once a quarter to help the transition move smoothly. According to Ed, “With a purchase agreement, employment contracts are important if the outgoing person will stay a part of the business for a year or so. The contract defines responsibility, so if you negotiate that upfront, everyone stays happy.”
- Go local. While many teams purchase other teams to expand their geographic reach, Ed recommends you go local as much as you can. “In Alaska, there is nothing local; we have to be in Fairbanks every week,” says Ed. “Also, consider your travel time and your time away from your other team members.”
- Put your ego on the back burner. Fact: most real estate teams are successful because the team leader packs a big ego. “But you have to learn to put your ego on the back burner,” says Ed. “When you buy a team, you pay a lot of money and want your name on it. But, you have to be careful because that could cost you money if you’re not known in that area,” he says. That’s why the Waldens chose to keep the Madden branding. “Just going into Fairbanks and changing it to a Keller Williams mega-agent office was enough.” Of course, if you plan to continue the branding, Ed suggests you purchase the intellectual property.
- Be prepared to take a step back. With the new Fairbanks office, the Waldens had to take it a step back to a sixth-level office, which means that the Ed and Dar are managing the office, working through the expenses and budget, handling training and reinstating some of the leadership. “Anchorage is Dar’s team, but we’re both tackling Fairbanks together,” says Ed. Their long-term goal is to centralize leadership, management, systems and operations so that they can expand easier.
For the Waldens, they will continue to expand. “It’s hard in Alaska, but there are still many unchartered territories,” says Ed. They currently have 25 people in Fairbanks and 11 people on the Dar Walden Team in Anchorage. “We have kept that team purposefully smaller to maintain our boutique quality of service,” says Dar. Their son joined the business two years ago, so they are building a succession plan around him. “Our goal isn’t just about us,” says Dar. “We couldn’t do it without the team members, and we want to build their success as well.”
“In every market center, brokerages have people who have life changes. They retire, move, quit the business. And, they all have books of business that are valuable. Rather than just throw that away or give up, we see these as potential business opportunities,” says Ed. “It’s not as difficult as it sounds, and, once you do it a few times, it gets a little easier. Then, you watch your business grow.”
And now, 17 years after Dar’s beginning in real estate, the Waldens are positioned to be the top-producing team in Alaska as well as one of the top-producing teams in the United States.