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REAL Trending Special Edition: Leading Through A Challenging Market

Jun 26, 2020 6:00:00 AM

Tommy Brigham and Beau Bevis, co-founders, ARC Realty, Alabama

Focusing on agents first allowed Brigham and Bevis to retain quality agents while dealing with stay-at-home orders. Now that their market is opening up, it's paid huge dividends in business volume. Find out more about their retention and recruiting strategy in this podcast.

Tracey Velt:

In this special edition of the REAL Trending podcast, we're speaking to real estate leaders on how their businesses are adapting to the new market, their keys to success, and more. This is Tracey Velt, editor-in-chief of content for REAL Trends. Today we're speaking to Tommy Brigham and Beau Bevis, co-founders of ARC Realty in Birmingham, Alabama. Welcome Tommy and Beau.

Beau Bevis:

Thank you.

Tommy Brigham:

Thank you, Tracey.

Tracey Velt:

Yeah. So we'll start at the beginning. Tell me a little bit about your background and your brokerage and your geographic footprint.

Tommy Brigham:

I'll start and Beau, you can go from there. My background is I started in the real estate business in 1974 and was originally involved in the resort industry and became part of onsite sales and resort development in the skiing industry, and in 1979 moved back to Birmingham, my original hometown, and started selling real estate in Birmingham.

In '82, I started my first company called Brigham-Williams, and we grew over a period of time and eventually Brigham-Williams and another company called Johnson-Rast & Hays formed RealtySouth in the late '90s, 1998, and RealtySouth at that time was the largest residential company in Alabama.

Tommy Brigham:

My partner unfortunately got sick with pancreatic cancer and we ended up selling the company in 2002 to home services, and I stayed with home services running RealtySouth for five years and at the end of my five years decided I really wanted to do something different, so took some time off with had a noncompete and did some other things in the real estate business, more in the investment side, and then Beau and I got together with another woman named Mechelle Wilder and a man named Dale McIntyre and the four of us founded ARC Realty and really launched in January 1st, 2013 and we are now in Montgomery, Alabama.

We have two locations in the central part of Alabama in the River Region and have five locations in Metro Birmingham and we're pushing up towards 400 agents at this point in time, and so we're in kind of a new season in life for both of us.

Tracey Velt:

Okay, great. Beau, tell me a little bit about yourself.

Beau Bevis:

Thank you. I've been in the business about 25 years now, and I started in the new construction world, new construction sales, site selection, site development, those aspects of it, and then moved more into this resale part of the business and was then moved into brokerage and started.

Tommy actually hired me and I was a broker for him at RealtySouth for a number of years, and then we started ARC Realty together. So it's amazing how fast 25 years have passed.

Tracey Velt:

Yeah, that's wonderful. Obviously COVID-19 happened and the country's starting to reopen. Tell me a little bit about how your business was impacted and how you're doing today.

Tommy Brigham:

You take that, Beau.

Beau Bevis:

Okay. When COVID started, mid-March for us in central Alabama is really when we started seeing the impacts, we had two great weeks of March and then things started significantly slowing down with municipalities starting to close. Fortunately, for us in Alabama, we were deemed essential so we never really had to close real estate transactions.

We did close our offices and went remote with our staff for about eight weeks, so during that time we were as a company and an MLS, we were up over 20% in closed volume year-to-date on the second week of March. April came. We were down as a company about 25% in closings. The MLS was a little bit over 30%. Then our listing count was down about 30% in April. May came. We were down about 25% in closed volume from previous May. MLS was down about 38%, and our listings as a company were down about 38%.

Beau Bevis:

June is a real bright spot for us. June, we will be 25% over our last June, and the question that Tommy and I keep asking ourselves, is this pent up demand from what didn't happen in April and May? Or is this this new trend of real estate with people taking advantage of these low interest rates? And July we feel like will really tell the story for the rest of the year.

Currently as a company, our July numbers appear to be about flat with where they were last year, so we're very positive in what we're seeing as far as a trend goes. The market as a whole, we have just a significant shortage of inventory. We are right at three months of inventory, maybe a little under that. Multiple offer situations are just an issue everyday with buyers trying to get in and having 19 showings the first day on the market and 13 offers and things like that, so our market is extremely hot from a buyer standpoint.

Tracey Velt:

That's great. It sounds like you guys are recovering quickly. I'm glad to hear that. Obviously some things have changed though, and a lot of brokers are putting new protocols into place, like showing protocols that require masks or gloves or possibly continuing Zoom meetings or Zoom one-on-ones with agents. Tell me some of the things that you're doing that are different than pre COVID-19.

Beau Bevis:

Tommy, you want me to run through that?

Tommy Brigham:

Yeah. Go.

Beau Bevis:

New protocols that we put in place. It's been an amazing experiment of forcing people to use technology. We see our agents that were a bit resistant to just for example paperless pipeline in turning in documents to the office and using DocuSign to communicate with buyers and sellers.

If you want to be in business right now, you've had to adapt to those new systems. So it's been a good thing in a lot of ways that it has forced people to learn new technology skills.

Beau Bevis:

We have put in a pretty strict showing protocol. We want to stay deemed I guess better said essential in the state of Alabama as real estate professionals, so all of our agents carry a card with them and leave behind in the house that they show that we wore gloves, we wore masks, we had hand sanitizer, and the protocols as a company that we use when we show property. Coming out of this too, we are asking ourselves, Tommy and I were sitting in 10,000 square feet, and there's probably 15 people here today.

So we're realizing that we can do business a little more virtual and be just as efficient in that. As far as our office and sales business meetings go, we are cold Zoom. We do everything with Zoom. We average, depending on the week, about a hundred people on our sales calls. Training is about half that. Do a training call every afternoon at 2:00, and it's just various topics. Sales meetings once a week at 9:00 AM on Tuesdays and the attendance to those is very good. We have no plans in the near term to have any in person meetings.

Tracey Velt:

Okay, great. Now I know this answer will be different for each of you and I'm sure you've learned a lot of lessons adapting to a virtual market, but you've likely learned some lessons along the way while building, well for Tommy, multiple brokerages. So tell me, what are one of your top lessons learned for each of you?

Tommy Brigham:

This is Tommy. Yeah, I would say that first and foremost, it's not really a lesson learned but it just ratifies what you already knew and that's that this is a relationship business, and our focus has been on our agents and how we create that strong relational fabric and give them the tools and the technology virtually so that they can be the best they can be in the field, and so I think it's just really ratified what we already knew that we are a relationship driven business, that it's all about your culture, and if you're focused on your culture and your relationships internally, that externally manifests itself in a way that allows you to have a level of success that you hope for, but is obvious now that we've gone through this pandemic and it's still going through the pandemic that we've been able to strengthen our culture and strengthen our relationships in a way that I wouldn't say it's surprised me, but it just really ratified what we internally knew.

Tommy Brigham:

But candidly, to me it just gives me a great deal of joy to see that our industry is so strong because of the strength of the personal relationships and ARC stands for A Relationship Company anyway. That's an acronym. So we're driven by the fact that we are committed to our relational fabric, both civically and obviously internally with our agent population.

Tracey Velt:

Great. Beau, what about you? Lessons learned?

Beau Bevis:

Well, I'll give Tommy a lot of credit in this. When we started the company, his MO, and our letterhead should say this. It doesn't, but it is "the agent is our customer," and that is one thing that he drilled in my head. The agent is our customer. So when you look at transactions, we'll do 36, 3,700 transactions this year.

Tommy and I will just be a handful of those transactions, but we see our agents every day and it's our job to treat that agent just as if they were one of those 3,600 transactions, and they are our customer. So that puts the pressure on us to supply what they need, and at the end of the day none of us in the brokerage world like to say this, but we're a marketing company, and we just so happen to have a really good culture in our marketing company.

Beau Bevis:

So we took the direction a few years ago and we hired a chief marketing officer who's done a tremendous job. As an independent brokerage, we create our own content and it's up to us to educate our agents in how to use the latest technology and how to stay, you know, the basis of our company.

ARC, A Relationship Company. How do we train everyday for agents to stay in front of their database? And at the end of the day too, all we've got left really is the relationship with the client.

Tracey Velt:

Yeah, absolutely. Tommy, I'm going to start with you on this next one. What was your aha moment as it pertains to growing? It doesn't necessarily mean this brokerage, but any of the brokerages that you helped grow.

Tommy Brigham:

Well, that's an easy one. When I was selling real estate, like so many of my generation that started in the '70s, here's the phone, here's the desk. Good luck, kid. There wasn't much training. There wasn't any technology. So you had to really get out there and figure out how to do it yourself. Along the lines of that period of time, it began to dawn on me that the broker really didn't have that much interaction with the public.

It was really the salespeople that had the interaction with the public, so in my first start with the first company I started in '82, we had this cheesy little sign in the office that said, "The agent is my customer, and trust is something you earn."

Tommy Brigham:

And they were actually, I think we trademarked them, and you'd walk in the office and what my aha was is that if we focused on that agent development, where the agent was our customer, was my customer in that context, and provided the training, the backroom platforms. Back then it was different than today. All those ancillary commitments to helping them be the most successful they could be, that it would provide the platform for real growth.

And as we began to communicate that in my early phase in real estate development, you know, agents talk to other agents. They become your megaphone in the marketplace, and our growth was a lot more organic growth than merger and acquisition growth because of agent to agent saying, you know, "This is a great experience. Come over here and work in this culture."

Tommy Brigham:

And as you know, recruiting is pretty fierce in this business so it helps when your agents are happy campers and they know that you really love them and care for them, and that manifests itself in a way in the marketplace that it's kind of hard to quantify really. And so that to me was my aha moment was recognizing the agent really was my customer.

Tracey Velt:

Okay, great. Beau, what about you?

Beau Bevis:

I really echo everything Tommy said. I think the only thing I can add to that for me more on the operations side of things, the aha moment I realized a few years ago is we were spending so much money really branding the company in the marketplace, and I realized once we started getting some size that our best branding was our yard sign and our directional, and let's take some of those dollars that we were spending on branding and create those platforms for agents to then plug in their database to, and that allowed us to hire more people in our marketing department to really create custom pieces and pieces just for the brokerage in general for the agent to touch their customer.

Tracey Velt:

Okay, great. You said that you built your business mostly with organic growth. Have you done any mergers and acquisitions and how has your growth strategy evolved through the years? Tommy, we'll start with you.

Tommy Brigham:

That's a great question. You know, with my first start with Brigham-Williams, that was really organic growth. We did some very, very small what I call tuck-ins, and then of course when we formed RealtySouth in 1998, we had about 250 agents and I think Johnson-Rast had 400, so we instantly became a fairly sizable organization and from that, we ended up merging with the next largest company in Birmingham, First Real Estate, and another smaller company in a niche market, and so we ended up around 1,000 agents through merger/acquisition development, and I guess when I left we had about 1,400 agents in 28 locations so it was pretty sizable company.

Tommy Brigham:

When I stepped away, it was really interesting to look back and say, "Well, what did I do right? What did I do wrong? What are the lessons learned?" Because there's nothing like being able to do some self evaluation when you've got three years on the sidelines, and I realized that the real way to grow an organization to me is that organic growth where you're establishing the value of your culture, and people are either going to be attracted to that culture or they're not, but if they come into that culture and they really enjoy working in a environment and a culture where you're really putting them ahead of yourself.

Tommy Brigham:

I tell the agents all the time that we have a basic philosophy, we're going to do nothing out of selfish ambition or vain conceit, but in humility we'll serve them above ourselves. If we ever quit doing that then we'll lose our compass, and they have the right and permission to come in Beau's and my office anytime and say, "Hey, we're getting off base of what the core values are," and I think that to me is a lesson that I learned in this sort of long journey over 40 some odd years.

Tommy Brigham:

That being said, we had an opportunity to do an acquisition down in Montgomery several years ago and we took advantage of doing that as an acquisition and added about 100 agents to our platform and we're the number one company in the Montgomery River Region by a fair amount, and so that helped us in this particular strategic way, but it was really out of our indigenous market which is Metro Birmingham by going into the Montgomery market.

Beau Bevis:

The only thing I would add to that is when we started looking and had some opportunities for mergers, the aha moment or the piece of advice just in growing was truly find that like kind culture, and culture is something that's very hard to change and just grow to grow was not our goal. We didn't necessarily want to be the biggest.

We just wanted to be the best. So I think we have chosen our opportunities very wisely and have got some really good partnerships in how we have grown and merged with other companies, particularly in that Montgomery market.

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Tracey Velt:

Okay, great. Let's talk about challenges and Beau, I'll start with you. What is your greatest challenge in the business?

Beau Bevis:

I think our greatest challenge in the business is truly, how do we provide the level of service that the agents expect and demand, and at the same time give them the splits in their commission splits that they want? That is a hard balance in us because the agents, the pressure of the competing brokerages just locally and nationally is to give that higher split, higher split, and then bill back services.

Well we try not to build any services back to our agents, but I would say, we have so much pressure on company dollar to produce internally material and staff services to the agents, and then we also have competitors knocking on our door, "Hey, if you come over here, we'll give you a higher split." So Tommy and I both say, we're never going to be the cheapest deal in town. We do think you get the most for your buck here, but if it's just about price, we may not be your brokerage. I think that's one of the constant challenges that we have.

Tracey Velt:

Okay. Tommy, you have anything to add to that?

Tommy Brigham:

I think he said it perfectly well. I would say that that is the single biggest challenge, pressure on company dollar, and that's why for us to be successful in this industry you have to have ancillary businesses like mortgage and title and other related services.

Tommy Brigham:

I'd say the other part is that technology is always changing and it puts pressure on you to adapt to that technology, and with the outside aggregators out there aggregating data, we try and tell our agents, "They're never going to aggregate the data exactly right, and everything is local and everything's relational, so you have to be the single best interpreter of that data."

But the challenge is always helping them understand how to interpret the data and put themselves in a position with the way technology comes at such a fast pace in your life.

Tracey Velt:

Yeah, that makes a lot of sense. You touched a little bit about recruiting earlier. Obviously finding good agents and keeping them is vital to your business, so what is your philosophy? And tell me what you're doing to recruit and retain great agents.

Tommy Brigham:

I'll take that initially. You know, again, it's going to get back to what we talked about earlier. I think your culture is your best, best recruiter, and if the agent population are happy campers and they know that you're doing everything you can to provide them the tools and the technology and the background services that allow them to be successful, they'll be your megaphone in the marketplace.

As they're interacting in co-op situations, invariably agents talk to agents and so we found our best way of recruiting has been agent-to-agent relationships and so philosophically, we focus on first and foremost our internal agents there who we recruit all the time. We're recruiting them 24/7, because we want them to know we love them, care for them, and that they're the most important thing in our business success.

And from that, parenthetically, they go out and literally, and I say it all the time. "You are our megaphone and whatever you say good or bad is going to be a reflection of who we really are," and I think our growth is a testimony to our agents being really great recruiters for us.

Tracey Velt:

Yeah, definitely. Beau, you have anything to add to that?

Beau Bevis:

Well, just a quick thing. When Tommy and I have the opportunity to recruit somebody, we've had a lot of success in recruiting from outside of our industry. Former medical people, former educators. We have a number of retired principals and teachers in our company that have done extremely well.

We have a few attorneys that have left the legal world to come into real estate, and Tommy and I made some pretty big commitments to these people for them to leave that steady income. We've had to for a few of them guarantee the fact that hey, if you make less than what you did in your previous career, we'll bridge the difference.

That was a big commitment on our part to get some of these people to make the jump from their steady paycheck to get into a commission-based sales situation.

Beau Bevis:

As far as retention goes, I think today's a great example for us. We try to create opportunities for our agents constantly to touch their database, and we have today 1,300 watermelons are delivered to our office and it's an opportunity for the agents to come by and pick up those watermelons and do that pop by with the magnet stuck to the side of the watermelon and leave it on their client's door, and so when they get home from their day they see something that's positive and happy and not a bill in the mailbox, but yet somebody thought enough of me to leave me something positive.

Beau Bevis:

That's just a great example of how we retain is we are constantly trying to create opportunities for the agents to stay in touch with their database.

Tracey Velt:

Okay, great. My final question is where do we go from here? Where do you see the most opportunity in real estate brokerage in the coming year?

Tommy Brigham:

Well, purely from just an overall standpoint, from what we're trying to accomplish is we need to start developing more depth in our ancillary services. We have a title company. We're getting ready to start a mortgage company.

Those businesses will be very, very important to our success because of the ability to create ancillary cashflow in order to support what you really love to do and that's residential real estate business, and we have a small commercial arm that's also engaged in the Birmingham area but really I see our opportunity being focused on developing our ancillary businesses and to continue what we do and focus on the agent is our customer.

Tracey Velt:

Okay. Beau?

Beau Bevis:

I think an opportunity for us is what we're seeing within our country right now. So many communities trying to support local businesses, and we are a locally owned business.

We're the largest locally owned real estate brokerage in the state of Alabama, so I think that's a big attractor for a lot of agents to want to work for somebody that the dollars stay in Alabama, and I think there's a large number of buyers and sellers that want to work with a brokerage that is owned in Alabama and the same goes for them. Those dollars will be kept in Alabama, what the company generates.

Beau Bevis:

It is an opportunity in the marketplace. I think there's such vertical integration in our business and that's what Tommy was talking about. The agent and the consumer, the fewer people they have to interact with in a real estate transaction the better, and if we have that streamlined closing operation, title operation, mortgage operation, it run properly, it can be a very streamlined or not quite as much stress on the agent and the consumer when you have those services.

Tracey Velt:

Okay. Great. Well, it sounds like you guys have a lot going on. Thank you for joining the REAL Trends podcast today. You've offered some great information. I think brokers will really benefit from hearing some of what you've been through and what you're doing, so I appreciate you sharing that.

Tommy Brigham:

We appreciate you having us on.

Beau Bevis:

We are an open book.

Tommy Brigham:

We are indeed.

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