A Publication of WTVP

The chief operating officer and president of RE/MAX Unlimited, John Ginder understands the power of the Internet in the housing market, but he also knows the importance of personal service. In this interview, Ginder forecasts the commercial real estate market in central Illinois in the next five years. The father of three was raised on a farm near Jacksonville, remaining there until he began college at Bradley University in 1963. While there, he met his wife Cyndi, now a physical therapist, and they were married in 1969. The couple has three children—Alyssa, Rex and Zachary—who are now living on their own. Alyssa is a speech pathologist, Rex is a jet pilot and Zachary is pursuing his master’s degree in social work at the University of Southern California in Los Angeles. Ginder and his wife currently live in Peoria.

Who or what influenced you to enter the real estate field?

I was in the Business Management and Administration program at Bradley University and working in the research department at Caterpillar when a friend of mine asked me to take a test he had designed for his father to fulfill a social studies class requirement. I agreed to take the test to help him out, and later his father called to interview me for a position as a real estate sales agent in his firm. I met with Harold Jenn, the owner, and he indicated that the possibilities of a great career in real estate were only limited by the agent’s ability to service his client better than the competition. I left Caterpillar to attend Bradley University full-time to complete my degree and then decided to become a realtor, working on a part-time basis only to augment the family income. I had great motivation to do well since we had our first child on the way. In the next year our daughter Alyssa was born, and I graduated from Bradley. I made the decision to continue my career in real estate full-time in 1974.

What is your role at RE/MAX Unlimited?

My role at RE/MAX Unlimited is president and chief operating officer. I am a hands-on person; I still list and sell real estate in order to keep my skills sharp.

Tell about RE/MAX, its various divisions, etc.

RE/MAX came to town in 1980 when Charles Rock purchased the first franchise in this area. I joined RE/MAX of Peoria North in 1985 when it was about 27 agents strong. In 1996 I purchased the company and renamed it RE/MAX Unlimited. Since then, we have grown to 85 agents. RE/MAX Unlimited continues to be among the highest producing offices per agent in the RE/MAX system—averaging over 37 transactions per agent in 2005. RE/MAX Unlimited is a full-service real estate company with both residential and commercial divisions. We have a title company and a mortgage company in-house to fully serve a wide variety of our clients’ real estate needs. When RE/MAX came to Peoria in 1980 it was at the beginning of one of the worst real estate markets in decades. RE/MAX was the latest franchise to enter this market and, within five years, became the market leader in transaction sides, total sales volume and transactions per agent. We have maintained that position since then in spite of the tremendous growth in the number of real estate agents that have recently entered the real estate market.

Within RE/MAX Unlimited we have agents who develop residential subdivisions, commercial developments and shopping centers; build spec houses; and, of course, help clients buy and sell all price ranges of residential real estate.

How has the Internet changed the way real estate is bought and sold?

About 10 years ago the Internet was the monster on the horizon. It was rumored that the Internet could nearly replace the conventional real estate agent. A consumer could look up houses for sale on the Internet, look at pictures all around the house and make buying decisions without consulting a realtor. Offers to purchase could be made via this new electronic medium without even leaving the consumer’s home. These possibilities were very disconcerting to the real estate industry. As the Internet progressed technologically, virtual tours could be taken throughout homes and even throughout neighborhoods. With the help of very sophisticated software, a consumer could check crime rates, household incomes, average household size and other demographic data on the Internet. Yet studies have shown that the purchase of a home is 70 percent emotional. Home buyers and sellers want and need direct advice and counsel in one of the largest purchases of their lives. These two factors did not receive enough weight during the early years of the Internet.

Indeed, there have been sales of homes almost completely over the Internet, but nothing takes the place of walking through a house to get the “feel” of the place where you may decide to raise your children. By using the Internet, home buyers are able to eliminate properties they do not want to see and actually save time touring homes. For the realtor, fewer showings may result in a sale, thus saving valuable time; however, advertising costs have risen dramatically. There are literally hundreds of channels that a realtor can use to advertise properties in the hope that the right buyer will see his or her listing. Most of these channels do not work very well, but just as during the dot-com era, there are lots of vendors vying for the realtor’s advertising dollar. One of the latest tools for marketing homes is called HomeSight. Along with virtual tours and photographs, the consumer can look at the complete floor plan of the house. This gives consumers even more information about the flow of traffic around the house and will help them decide if they want to physically tour the house. It is one of the latest and greatest tools and is available exclusively at RE/MAX Unlimited.

How does RE/MAX recruit realtors to become part of its network?

I asked a former client of mine how he got his five children to pick up all of their toys every night before bedtime. He responded that the best way to do that is to give them good direction and training. But more importantly, he made it as easy as possible for them to pick their toys up by providing large floor-level cabinets with easy access. I try to apply that philosophy to my business.

It has always been my goal to provide the best environment available in my market area for my associates, so that it would be as easy as possible for them to do their work. When an agent works in a company that is professional, positive, cheerful and energetic, and when the best support service and the best facility, equipment and technology is provided, an environment is created that is conducive to high productivity. Recruiting follows a company culture. The agents that want to grow their business with our type of “family/professional” culture are attracted to a company that provides a working environment that is conducive to high production per agent. We don’t have part-time agents that can’t take phone calls when their clients want to see a property or list their home. Service is the name of the game in the real estate business, just as it has to be in any well-run company.

With the real estate housing market slowing down, what are your predictions for the housing market in central Illinois in the next 2-5 years?

The real estate market has slowed a bit in central Illinois. The inventories of homes are higher than before as interest rates have gone up from a low of about 4 ½ percent three years ago to approximately 6 percent today for a fixed-rate loan lasting 15 years. The interest rate climb has made an impact on the market, but current rates are still very affordable. New home construction has slowed somewhat, as construction material costs have increased considerably in the last two years. Construction costs coupled with increased interest rates make a sizeable difference in the affordability of the average new home. Also, there are a large number of lots under development in the Tri-County area. Some realtors believe that there is a four-year supply of developed lots and lots being developed in our market area. If this is the case, it will be difficult for some subdivisions to sell out before the holding costs greatly reduce the developer’s bottom line, especially with current commercial interest rates much higher than two or three years ago.

Central Illinois has a very solid economic base, and this will help insulate the Peoria area from any significant swing in the national market. We have enjoyed a 3 percent to 5 percent appreciation rate each year for the past several years in our real estate market. This is far from the tremendous appreciation rates seen in southwest Florida and the southern coast of California, but our steady conservative appreciation will not be subject to the great fluctuations of those markets. Consequently, we should still enjoy a steady real estate market for the next two to five years barring any other national catastrophe.

What are your predictions for the commercial real estate market in central Illinois in the next 5-10 years?

The commercial real estate market is an enigma. There are a lot of properties on the market now for sale or lease, but it seems that the consumer wants a new, nearly-new or completely remodeled space for their business. They would rather not incur the expense and time to remodel. Now, borrowing money for remodeling is more expensive because commercial interest rates are higher. However, the owner of a commercial space cannot demand a higher lease rate just because the costs are higher, despite the increased interest rates. There seems to be a lot of interested commercial users in the market, but they are more particular about where they want to locate their business as traffic patterns and development areas change. I expect to see a sustained and steady demand in the commercial market over the next several years barring any dramatic disruption in the marketplace.

How has the industry changed since you’ve been a realtor?

Having over 33 years of experience qualifies me as an “old timer” in the real estate business, and I have seen a lot of changes during that time. Realtors used to receive information about new listings through the mail approximately three to four days after they were turned in and processed by the Peoria Board of Realtor’s MLS system. The new listings, price changes, new sales and properties that had recently gone off the market were very slow to reach the people who really needed that data to show houses. All this information was kept in a three-ring binder in the office. We had no faxes, no email, no cell phones and very poor copy machines. If a realtor sold more than 20 to 25 properties per year, they were in the top tier of the real estate community; now realtor “teams” may close well over 100 transactions in a year.

During a very bad real estate market in the Peoria area in the early eighties, the Peoria Board of Realtors voted to go electronic. All data was transferred via a phone line to a machine that printed it out on heat sensitive paper. This paper would completely bleach out words and become unreadable if left in the sunlight for very long. As we started to recover from one of the worst markets that I have ever experienced, car phones and bag phones began to be the latest tool for realtors and fax machines were able to produce legible documents. In the mid-nineties, the Internet began to be used as a marketing tool for real estate in this area which created a whole new set of opportunities and challenges for the real estate industry. Private and closely-held information about properties was now made available to the public. Intellectual and private information would have to be protected from unscrupulous interlopers into this new domain who would use this newfound information to their advantage. Web service providers sprung up by the hundreds, each trying to attract the realtor to use their new services.

As the public got a taste of viewing a lot of information on homes over the Internet, they wanted more. Still photographs and virtual tours became a very popular way to display properties on the net and this allowed the consumer access to view the home at any time of the day or night. Electronic communication allowed quick and complete exchange of data and information at the discretion of the user. These devices have allowed more work to be crammed into a given time frame because there is little down time when you cannot be in communication with your clients. The downside is that it is sometimes difficult to get work done during your time off. Electronic communication seems to crowd deadlines to the last minute. We know that we can communicate quickly and it seems that relying on convenience leads to procrastination.

What changes in the industry do you foresee in the future— how real estate transactions are handled, marketing/advertising, consumer mindsets, etc?

The real estate industry has changed so much over the last 10 years; I hope there aren’t too many huge changes in the near future. We have not seen the full effect of Internet marketing yet, but there is only so much money available to purchase new technology and to buy new types of advertising. Transaction management systems may become common in the industry soon. Transaction management is the processing of any transaction from cradle to grave, so to speak. In other words, before a property is listed for sale there will be an electronic file created on all aspects of that property. As the property goes through the process of being listed for sale, getting an offer to purchase, financing, appraisal, inspections and so on to closing, it will be handled in an efficient manner by someone who will coordinate and direct the transaction communication electronically until the closing date. This transaction coordinator will give all parties involved in the transaction Internet access to all aspects of the process until the sale closing. That way, everyone involved in the transaction can check on a particular part of the process at anytime without having to make a call or wait for information to flow back to that party in the conventional way. Consumers want more access to information and more control during the purchasing or selling of properties, and more control will become available as time progresses.

What was the best advice you’ve been given in regards to selling real estate?

I believe that the best advice I have ever been given regarding selling real estate is to be “others-directed.” That is to consider the wants and needs of your client above yours.

What misperceptions, if any, are there in regards to home or commercial real estate?

I believe the greatest misperceptions in residential real estate sales are that your time is always under your control and that the job must be really easy because so many people are realtors. Someone once said that selling real estate is the lowest-paying easy job and the highest-paying hard job. The truth of the matter is that if you want to do the best job for your clients who are involved in a very emotional event in their lives, you must be able to help them solve their problems any time you are called on to do so. There are so many realtors who consider real estate sales part-time work and too many real estate companies who will hire them and not require them to perform to any significant level of production. I would say that a successful realtor works about 50 to 60 hours a week. Realtors are not provided with health insurance or a pension plan by their company. Their car is not provided, and expenses continue to escalate to be competitive with other realtors in the marketplace.

Commercial real estate practitioners are thought to collect very large commissions and to be wealthy. In practice, a commercial realtor may not get a check for several months at a time and they generally work more than the average 40-hour week. Successful commercial realtors generally have several years experience in the field and have paid their dues, so to speak.

RE/MAX is an active participant in charitable organizations— the Children’s Hospital in particular. What is your personal philosophy, as well as that of the company, on philanthropy?

My personal philosophy on philanthropy is that we should make the time to participate in volunteer organizations. At some time in our lives we have been touched by someone or some organization that has made a difference in our view of how things should work. I believe that we have an obligation to give back to the community so that the good works of so many people here in the Peoria area continue. RE/MAX Unlimited associates support over 50 organizations by giving their time and resources. The Children’s Hospital of Illinois receives a greater part of the financial contributions from the company because we believe that children are the future of our society. Support the caregivers of our children and you will support a better future.

What would you like our readers to know about the real estate market in central Illinois that has not been asked?

About 25 years ago residents of the Peoria area were very concerned about the value of their real estate. It was a very bleak time and the stability of our economy was questioned. I believe that type of economic disaster will not happen again here because the local economy is more diversified and the availability of mortgage money is not limited to the local demographic area. Real estate in the Peoria area is one of the best investments anyone can make, and I believe it will continue for years to come. IBI