Tuesday, February 21 2006 @ 11:09 AM UTC
Contributed by: jron
Some people have a new business idea and run with it, with great success, this is the case certainly for 34-year-old Stephen E. Johnston, who was the most successful real estate agent in Tampa in 2005. He sold 958 homes for $191,661,087. The second place spot sold $59 million.
And he's increasing his area soon to Manatee, Sarasota and Charlotte counties, and just about everywhere else.
The former roof cleaner, now owner of Johnston’s Home Discovery Real Estate Services is ranked #2 in the market, only second to Coldwell Banker. Johnston describes himself as a ‘serial entrepreneur.’
Three years ago, he owned a small roof cleaning business, then sold it on a 100 percent owner financed contract. After that Johnston did what others hadn’t done in the past.
He created a new model for home real estate sales, with a flat 2 percent commission, and got big-bucks financing from his investor, Chris Sullivan, chairman of Tampa-based Outback Steakhouses.
Johnston, unlike most realtors, doesn’t pay commissions. Instead, he pays salaries, bonuses and a lot of perks.
His top earners got new Chrysler 300’s, gone are the ‘desk rental fees’, and his realtors get benefits such as medical. He even gives gasoline and tollbooth passes.
Johnston felt the traditional real estate business was ridiculous. “While 10 percent of the real estate agents do 90 percent of the business, everyone else is starving,” he said.
Looking at the traditional real estate business in the information age, Johnston pronounces it "ridiculous."
Johnston starts off his new agents at $25,000 or $35,000 per year while the more experienced agents earn closer to an $80,000 salary and bonuses. Top administrators earn six figures.
The Tampa Bay Business Journal chose the company as a finalist for 2005's Best Places to Work in Tampa Bay.
"If your home has increased in value" by 30 or 50 percent, "why should you share that with an agent?" he asks. "When we came into this market, the commission norm was about 7 percent, now it's 4 to 5 percent.” He feels that is absurd, and claims to have saved his clients $20 million in commissions.
The industry has noticed.
In 2005 Johnston was named among the "100 most influential Real Estate People," in the country by Inman News, a well-respected real estate journal. Gov. Jeb Bush awarded Johnston the 2005 Governor's Entrepreneurship Award, and Johnston was selected as a finalist for the 2005 Ernst & Young Entrepreneur of the Year Award.
Home Discovery's 250 employees are headquartered in Tampa, and have an estimated 10 million Web visits each month. The company also has Florida offices in Orange County, Lee County and Broward County.
Home Discovery says it offers technology “unmatched in the industry,” and is probably the largest company in the nation utilizing Johnston's model.
Each Home Discovery listing includes its very own Web page and virtual tour.
Agents are equipped with vehicles, laptops with wireless Internet and e-mail, cellular phones, digital cameras, global positioning systems, e-signature technology and a proprietary client relationship management system called "Discoverit 2.0."
Instead of having one broker manage the complicated process of a sale, Home Discovery uses a team approach.
Although Home Discovery is not the first low-commission real estate service, it is among the most successful in the nation.
It has been operating for three years and it's just getting into its stride with a $10 million Florida marketing program.
Agents are not able to claim Home Discovery as a low-cost, low-service company. The company basically offers one stop shopping for the home buyer and seller. Everything from Home Owners Insurance to Closing is handled through his company and subsidiary companies.
For agents who want to remain with some traditional commission structure, Johnston says he is developing another program, which could accommodate that goal to some degree, while utilizing the technological backbone of his company.
Johnston wants to have Home Discovery visible in about 80 percent of Florida's markets.
Johnston says. "I put everything on the line for this." He added “The sky’s the limit.”