Continued: Real estate relatives stick together

It's not easy taking orders from your dad, especially if he's always right. But now imagine that he's your full-time boss and the two of you, plus the rest of your family, are working in a struggling industry that's trying to climb out of one of the toughest economies since the Great Depression.

Welcome to the family real estate business.

Perhaps more than most white-collar industries, real estate seems to be hereditary. There are more than 50 family realty teams that work under Coldwell Banker Burnet, which serves Minnesota and Wisconsin, and there are countless other realty families across the state -- Edina Realty can't even estimate how many family teams it has.

Despite the ailing economy, family teams have found ways to keep their businesses together.

"The worse the market gets, the more positive you have to be," said Floyd Ott, 71, who has Coldwell Banker Burnet offices with his family in Cottage Grove and Woodbury.

His team consists of his wife, son, three daughters and son-in-law. Ott makes sure his business and his family make it through the tough market by keeping things light with a never-ending streak of enthusiasm and flurry of bad jokes: "I went to Harvard," he said, "and it was the hardest day of my life."

Floyd's wife, Laurie Ott, 67, said it sometimes gets stressful constantly working with family members, because they all have different personalities and ideas. Laurie and Floyd used to share an office, but Laurie eventually moved out because, according to her, Floyd was "too loud on the phone."

And the Ott kids, like most kids, occasionally get tired of hearing their dad's jokes over and over.

"That's just the way family chemistry works," Laurie Ott said. "Sometimes we're not always going to get along."

The second generation of Ott Realtors, who are now in their 30s and 40s, all earned their real estate licenses by age 18. Tina Ott-Angell, the youngest daughter, sold her first house when she was still a senior in high school and said while she didn't always plan on being a full-time real estate agent, her other interests, such as marketing and photography, eventually drew her back to the family business.

The Otts are all responsible for roping their own listings and they earn commissions individually -- about 60 percent of the commission on a home goes to the listing brokerage and the rest is split with the agent. But Laurie Ott said if she has a backup of listings, she will pass some off to Floyd or the kids, and the rest of the family does the same to make sure nobody falls behind.

Floyd Ott got started in real estate in 1959 and eventually got too busy with an overflow of listings, so Laurie stepped in. Since then, the rest of the family started joining in and at one point there were 11 family members, including in-laws, working for the family business.

"When we needed help [with the business] having a family member step in was the easiest way," Laurie Ott said.

Surviving the recession

The Ott family has survived when others in the industry have not. Bill Walsh, a spokesman for the Minnesota Department of Commerce, estimated there are now about 25,000 active real estate agents in Minnesota, down from about 35,000 in 2006.

Floyd Ott said when the housing market was surging a decade ago a lot of people joined the real estate industry and now that the industry is struggling some of those people are starting to bow out.

"Hard times are when the professionals step up," Floyd said.

The Ott family estimates it has still been able to sell about 10 houses a month through the recession. Floyd also said they run the business conservatively during the good times so they can survive the tough times.

The Otts have been successful in part because of their ability to mix the second generation's knowledge of technology and marketing with the first generation's experience and long list of contacts.

Through the years, Floyd and Laurie Ott have developed a solid base of returning clients. And when the children of their older clients look to sell a home, they typically end up hiring one of the Ott kids. Since the beginning, Floyd Ott made sure his kids worked hard to build contacts and keep the business going.

"We've been around so long we've become part of the community," Floyd Ott said.

But not all family real estate operations have made it through the recession unscathed. Sandy Loescher, 61, runs Sandy Green Realty in Minneapolis and employs her husband and two daughters as independent contractors. They have a small business that specializes in city property and their office is located in the old Grain Belt bottling building.

Because of the tough housing market, Loescher had to let go of four of her agents. But so far, she's still been able to keep the family part of her business afloat. Loescher said she knew the housing crash was coming, and she had planned financially for the downturn, but she hadn't expected it to last so long.

Loescher, who has been in the realty business for 24 years, said she's seen the low end of the housing market cycle before and right now the key to their survival is being small and flexible. She said her daughters have had many opportunities to start their own businesses or move to a different company, but in the end, they've always chosen to stay.

"There is no board of directors here," Loescher said. "We all understand our goal and we're all on the same page."

Family ties help

Family businesses in general have better chances of making it through recessions than other businesses, according to Sharon Danes, a University of Minnesota professor who specializes in family business.

"The research shows that in tough economic times family businesses tend to survive better because everyone hunkers down and is willing to do whatever it takes," Danes said. "For a lot of people, it's not just an income source, it's a matter of pride."

But when a family's core values are not reflected in its business, there is a better chance of the business going under, especially if the business is the family's only source of income Danes said. For example, if parents stress sharing and fairness as core values, but they allow one child to prosper in the family business while the other struggles, there is bound to be trouble.

There might be some light at the end of the tunnel for Loescher and other local family real estate businesses. While home sales are still dramatically down from the boom in the early 2000s, local brokers recently saw a slight uptick in sales. The Minneapolis Area Association of Realtors reported about $800 million in sales in May, which is up almost $200 million from April. However, the recent May figures are still down $100 million from May 2008 and down about $700 million from May 2005.

But even if the housing market doesn't recover soon, Floyd Ott, the eternal optimist, doesn't sound too worried.

"Tough times are opportune times," he said. "Homes are cheaper, interest rates are low, what are you waiting for?"

Alex Robinson • 612-673-7405