After a war injury, Roger Fazendin changed the plan to follow his father into the appliance business and went into real estate instead.
Selling houses, he figured, would be a whole lot easier than hauling washing machines into cramped Minneapolis basements, said Roger’s son, Dan Fazendin, who took control of the business from his father in 1986.
As that business, Roger Fazendin Realtors, nears its 50th anniversary, it has become the largest independent, privately owned brokerage in Minnesota — and it is about to pass into the hands of a third generation.
Dan Fazendin is selling the business to his son, Andy, who joined Roger Fazendin Realtors after a stint as a software company analyst and two years as a volunteer in the jungles of Central America. “I’ve been here for 40 years and I’m ready to hang this thing up,” Dan said. “Andy is buying his place at the table.”
Andy Fazendin is taking the reins at a time of turbulence and technological change. Though the company’s presence is best known in western suburbs where it was founded, its 50 or so agents work with buyers and sellers across the metro area. And despite a wave of consolidation among brokerages, the company remains independent.
“What they’ve done is so amazing,” said Marshall Saunders, who until recently was co-owner of ReMax Results, the state’s third-largest brokerage. “They are facing a tsunami of pressure against them, and they do it seemingly with ease.”
In any other major cities across the country, Fazendin might not be all that unusual. Most markets are flush with large family-owned brokerages.
The Twin Cities, however, is dominated by two firms, Coldwell Banker Burnet and Edina Realty, that were once family-run but now are affiliates of national firms. Edina Realty, for example, was founded by Emma Rovick, a housewife from south Minneapolis who started selling real estate to help raise money to buy her daughter a piano. The company is now an affiliate of Berkshire Hathaway’s HomeServices of America.
Together, those two companies closed nearly 50,000 transaction sides (the listing and selling sides of a home sale) last year, according to Real Trends, a national real estate trends firm. The next biggest is ReMax Results, which had 16,165 transaction sides.
Fazendin doesn’t report its transaction volume. Steve Murray, editor of Real Trends, said that Fazendin is one of only a few companies that have been owned and managed by the same family for three generations. Among all U.S. small businesses, fewer than 3 percent of them make it to the third generation.
“If they can keep producing good leaders, people with a passion who care about the biz and people who are capable and want to run it and take it forward, then there are no barriers,” Murray said.
The biggest challenge these days comes from the Internet, which has transformed the real estate industry in many ways. The biggest companies are leveraging their resources to buy market share, a presence on the Web and the kinds of sophisticated marketing tools that Roger Fazendin might have considered a “Jetsons”-like dream.
All three generations of Fazendins have resisted the urge, despite many offers, to fold the firm into another company. They’ve been reluctant, Andy said, because of the threat such a move could pose to the company’s culture, which father and son say is what differentiates Fazendin from the mega-brokers.
“I’m open to opportunities as they come about, but would never do anything to jeopardize the culture here,” said Andy, lamenting the challenge that getting bigger makes when trying to stay connected on a personal and professional level with his agents. The company was named a Top Workplace among small brokerages in 2012. It sponsors a weekly office lunch, with a rotating cast of chefs from among the staff, to foster that sense of community.
“I cringe when people introduce me as their boss,” said Andy. “We work for the agents. They’re independent contractors.”
Dan said the current size of the company is manageable, especially when trying to manage the inevitable cycles of real estate prices.
He’s learned his lesson the hard way. In the mid-1970s the company had nearly 100 agents and four offices. But by 1979, the housing market came to a near standstill when mortgage interest rates rose to 18 percent. Dan was forced to close all but the original Wayzata office. “It took us a decade to come out,” he said. “And I have the confidence that Andy knows how these cycles work.”
Fazendin weathered the latest downturn much better than the one in the late 1970s because the company was a much more manageable size, and has maintained a stable of well-connected agents. Sales hit bottom in 2007 but have risen nearly 60 percent since then.
“Our advantage is that we’re like a SEAL team,” Andy said. “We can react very quickly and we can provide that critical edge.”