A couple weeks ago, Equitable Sotheby’s International of Phoenix merged with Russ Lyon Realty Company to form the largest Sotheby’s franchise in the world. The deal took months to work through the legal channels.
I received an invitation to attend the kick-off event. The Sotheby’s International Realty brass was there. Hundreds upon hundreds of agents.
I had to be there. It’s one thing to bang out ideas on how real estate should be. But I’m not cast in the cement shoes of tradition and struggling to trudge through the silt of day-to-day brokerage convention.
So when I hear of a company, a broker, who embodies my vicarious dream of change, who is doing what an owner should do, could do — must do — to prosper, I bear witness. And watch how it’s done.
This does not feel like any real estate event I have ever been too. No donuts. No title reps. No merch vendors. This was suit and tie. Class.
John Vatistas, one of the main men behind the merger, takes the stage. For the next few hours he introduces the folks who begin to layout the future. His people. Sotheby’s International Realty people. His vendors. It’s far more intense than anything I could ever dream up.
This is a huge story. It’s the emergence of a real brand. Something to feed a marketplace starving for difference.
I talked with John afterward. I was eager to understand why, during a bad market, would he pour time, energy and money into a company rather than cowering, resting on past success or getting out.
These are excerpts of the conversation:
Me: You brought the Equitable brand from diapers to a leadership position in luxury real estate in a matter of two and a half years. How does that happen?
Vatistas: The marketplace was hungry for something different. You write about it all the time. I live it. I don’t settle for less than the best. In this case it was investing in the best technology at the time. Hiring the best ad agency and creating top tier marketing materials. Recruiting top shelf agents. The best managers and a killer staff that understood premier service.
Me: And the marketplace noticed.
Vatistas: Word spread. Lots of great agents wanted in with a progressive company. They wanted to stand out vs. the competition. We delivered on that promise and it wasn’t difficult to do in my mind – standing out from the competition, that is. When driving your car, you don’t look in the rear view mirror the whole time you are driving, do you? Most companies spend their days protecting the past, rather than blazing the future.
Me: Looking over the horizon, focusing on being great, best of breed – critical components in the matrix of a great company.
Vatistas: And the matrix of a great brand. Unlike a lot of companies who are trying to be the biggest, we went for the best We never set out to be a landlord and collect rent from as many agents who are willing to pay as my business model. We are true partners with our agents. There’s a big difference in my mind.
Me: The landlord model seems to have been the prevailing mode for the last 30 years.
Vatistas: It may work for some, not me. I live in this community. I have a responsibility here. If real estate is, as we say, the most important and expensive decision you make in your life, it’s incumbent on me to make sure the people driving that deal are qualified. The idea of building a firm around excellent agents well versed in their craft was my only option. Hiring a world-class management team leading the charge was the foundation. The strong agents followed. The result is a dynamic synergism between everyone. This firm gives off an amazing vibe.
Me: Is it now possible to extend that vibe across 1,000 agents?
Vatistas: Watch us! I’ve had more than a few tell me it will be impossible with a company of 1,000 agents. I love being told I can’t do something. Simply love it!
Me: Tell me about Sotheby’s International Realty. Why?
Vatistas: First, it goes to my penchant for being the best. But also, Equitable had limitations. In the age of the Internet, being a well-known local brand wasn’t enough. We didn’t have a national or an international reach that I felt was critical in marketing properties. European investors weren’t looking to sell their $10,000,000 homes on Camelback with us, even though we certainly got our fair share. Being approved by Sotheby’s was the single best thing that’s happened to us. It gives our agents tools and reach unlike any other company on the planet.
Me: And global cred.
Vatistas: Big time. Sotheby’s International Realty has a coveted international clientele. Coupled with their powerful network of brokerages across the globe, it’s an amazing company to have on our side. I recognized the advantages that would bring my agents as well as their customers.
Me: You obviously believe in the power of the brand.
Vatistas: Yes. When it stands for something. The brand “Sotheby’s” is very meaningful to consumers and clients around the world. Equitable didn’t have that massive reach and instant recognition and it would have taken me years to create that. The consumer understands and appreciates what Sotheby’s does in the residential real estate space. The Sotheby’s client is extremely loyal to the brand and they seek us out. It’s unlike anything I’ve seen before.
As icing on the cake, an amazing group of individuals run Sotheby’s International Realty. I don’t feel like a franchisee. Or a tenant. I feel like we are true partners. They work daily to make us better and are always looking to raise the bar. I’m loving that.
Me: What about the agents? Typically, as independent folks, they don’t, as a whole, like having their bar tested or manipulated by anyone. How are you managing this issue?
Vatistas: Manipulated is a very strong word. That’s not an option for us. We simply state the facts and the agents are free to do what’s in their best interests. Sometimes it means leaving the company. We can’t be all things to all agents. It’s simply not possible. Lying to an agent or trying to manipulate them would be suicide. I look at our agents as valued business partners. We are all looking to do a better job for our clients, make more money, have less brain damage and spend more time with loved ones. It’s a fairly simple recipe.
Over the last few years I’ve asked several really smart and savvy agents to coach me and be my mentor. They have been simply amazing to me. It was the best thing I could have done to help propel our company. I try to look at the business from their perspective and act out what I would want if I were a agent. Or an agent poised to achieve greatness. I also needed to make certain it makes the most business sense. Sometimes those ideas collide, but only rarely does that happen.
Me: There’s a method to the madness.
Vatistas: Yes. Seems like when there’s a method, madness can be leveraged into something quite positive and powerful.
Me: Then explain the method and madness around the merger with Russ Lyon. So why not go on a recruiting blitz for their agents.
Vatistas: Because it was smarter for our two companies to marry. The Russ Lyon brand, although very powerful in its day, was essentially dormant in my mind. But it had great potential. Under the dust was this incredible legacy that would take far more energy to build than to merge with. They have some of the best agents locally. All they needed was an infusion of energy, creativity and entrepreneurial spirit. The newly combined management team is passionate about making this happen
Me: So how do two fiercely competing firms merge. Take me through it.
Vatistas: I knew Jim Lyon, who is the son of the owner. We already had a friendship and a past history of working together. We also had mutual respect. So I called him. We talked. I got face to face with Jim and his partners and made a deal in about 4 minutes, including a bathroom break. It was simply a no-brainer. The deal made sense on so many different levels. Circumstance dictated it.
Marc: A dead market can certainly have that effect.
Vatistas: A couple of thoughts on this: The market had no bearing on the deal for me. If it was an amazing market or a terrible market, the deal makes perfect sense on so many levels. However, it’s basic real estate sense. When the market is down, buy. Increase market share. Combine personnel and reduce costs. Upgrade everything and everyone you can. Be poised to be the leader. Our competition is looking at us. Meanwhile we are looking directly ahead with blinders on.
Me: It’s about striking when the iron is cold.
Vatistas: Yes. And being more ready than everyone else when it heats back up. We are already knee deep in the process as I say this. The synergies are simply staggering. We have many offices close to each other that are being merged. The cost structure drops dramatically as a result of combining back offices. The agent pool is head and shoulders above the competition. We combined our management teams and really use their specific talents.
Me: I’m a fly on the Russ Lyon wall when they first hear about the merger. What are the agents saying about John Vatistas?
Vatistas: At first, I can only imagine. Many folks have been with that company for 20, 25 and 30 years. Change was the last thing on their minds. I’m trying to show our folks my position here is to be a humble steward of the legacy the founders Russ and Dennis Lyon built over the last 60 years. With (son and grandson) Jim Lyon now my partner, together we will not only carry forward the tradition, but also inject some serious anabolic steroids in the company.
Keep in mind it can be mentally tough to move a big ship that’s been in business for 60 years on a dime. Yet, since we have taken over the helm, that’s exactly what the new ownership group and management team has done in less than three weeks. It’s quite exciting. By the end of the summer, we’ll have this puppy humming.
Marc: Take me there. End of summer. After 90 days of 115 degree heat.
Vatistas: Ha. We’ll be at full boil with serious reduction! Lean and mean. That’s the goal. We’re closing 4 monster offices. Decking out the ones that remain. We’re going all-in on the web creating what we hope to be the best website in real estate. We are moving all our agents in the 21st century. Mobile. Video conferencing. Fully appointed in every way. We’re supercharging our marketing and advertising in ways our competition simply can’t or won’t do. We built and own a local newspaper in some of the markets we serve in Phoenix and Scottsdale. We will be expanding its reach and target audience. We’ll also be adding a major relocation company.
Me: When do you stop? When is enough, enough?
Vatistas: If we stop, the dust will collect. New ideas and innovation happen daily. It’s what gets me up every day. All around me are local residents hungry for extended services. It’s what they expect. Not words. Not promises. Results.
My phone alarm buzzed. I needed to get back to Sky Harbor and head to Chicago. I had a date with a wallet thief.
Vatistas powered on his Blackberry. I watched as e-mail messages poured in. Our time was over.
As the car took me through Scottsdale, I took notice of all the Sotheby’s International Realty yard signs as I weaved in and out of the neighborhoods off Camelback. They stood out against the ubiquity.
It’s one thing to write about brands, it’s another to witness one.
[Disclosure – Equitable has been a client of 1000Watt Consulting]