In the real estate world, Kevin Sharkey has always taken the path less traveled. In the 1980s, he was among the first agents at one of the first virtual brokerages in the state: Independent Brokers Realty (IBR), and helped build that business into a network of more than 300 agents. And when Better Homes and Gardens Real Estate, a franchised division of the same company that owns Twin Cities-based Coldwell Banker Burnet, said it wanted to expand in this market, he didn’t hesitate. Sharkey joined forces with Andy and Jim Asbury, who had already launched the first Better Homes and Gardens Real Estate franchise in Minnesota. Earlier this year, he acquired the Asburys’ 20-agent office, making it the only Better Homes and Gardens Real Estate brokerage in Minnesota.
Q: Real estate wasn’t your dream career, how did you get into the business?
A: Dave and Cathy Gallus had just started IBR in 1988 as a two-person company when we joined. Both [my wife and business partner] Linda and I had gotten laid off from Honeywell and were going to have Dave and Cathy sell our house as we had two small children and no income. Dave offered to take us on as agents if we got licensed and would provide guidance and some leads. With their help, we were able to sell 18 houses our first year in real estate.
Q: How did you then start your own brokerage?
A: We bought the company from Dave and Cathy within a couple of years as they hated Minnesota winters and wanted to move to Florida. At that time, there was a small handful of agents in the company, but we were able to grow it to over 300 agents in a relatively short period.
Q: How did the IBR model work?
A: Financially, the IBR model was extremely successful. As a virtual brokerage, we had very little overhead and a large number of agents. We charged a monthly fee so there was a constant revenue stream, even in slow market times. We offered a high commission split to our agents, but the company dollar was sufficient enough to always keep us profitable.
Q: Why didn’t IBR survive?
A: What we didn’t have was sufficient training opportunities and [we] were not able to provide enough tools to help agents grow. We essentially processed paperwork and cut checks. As a broker, I knew I owed my agents more than what I was providing. Real estate is a very competitive profession and a broker’s responsibility is to give his agents more and better ways to be successful and find balance in their lives. The Better Homes and Gardens brand provided me with the opportunity to do so, and more.
Q: Now that your signs are affiliated with a big national brand, have you noticed a difference in your business?
A: It’s been like night and day. My agent production has dramatically increased.
Q: How did you connect with Better Homes and Garden Real Estate?
A: We’d been approached by every single brand asking us to join them, but in my mind they were a lot of the same old tired brands that didn’t resonate with consumers. When Better Homes and Garden showed up in the area, I raised my hands and said, “Pick me.”
Q: As a brokerage, what does Better Homes and Gardens Real Estate offer you that others don’t?
A: We were very clear. We said, “We like what you have to offer, but we’re independent, so please don’t get into my business and tell me how to run it.” We’ve kept our independence. We can maintain control of our business without having big brother hanging over us.
Q: The Twin Cities is a particularly crowded market that’s dominated by three mega-brokerages. Who’s your primary competition?
A: Anyone that’s a consumer-facing residential real estate brokerage. We’re more like Sotheby’s than Century 21. We’re more upscale.
Q: What does Better Homes and Garden Real Estate bring to your customers?
A: We are a lifestyle brand. We’re trying to take that to a whole new level, and are looking at doing a new construction division that’s branded with Better Homes and Garden fixtures and furniture. It’s a fresh, different look that resonates better with consumers.
Q: Technology has radically changed the real estate business, making it easier for agents to be mobile. You embraced the virtual operation years ago. Have you now abandoned it?
A: We are one company, but we have six offices, but we don’t have dedicated work spaces. We’re still trying to relate to the mobile agent culture. We are completely paperless. This is a continuation of where we were as the first virtual brokerage in Minnesota.
Q: The combined offices now have 140 agents. So what’s next?
A: We are seriously considering a [downtown Minneapolis] storefront.
Q: Has this been a good move?
A: We’re not yet 50 days into the merger, and we’re going to tear it up. I’m happier than a pig in the mud with this decision.