Would you believe a realtor who can’t remember the last time he said, “Location, location, location”?
By Kevin M. Mitchell
In 2001, with Coldwell Banker, Bryan Kelsey topped an astounding $39.5 million in sales, making him one of the top-selling agents in the St. Louis area. Despite having worked at seven companies in his 17 years in the business, he’s likely to stay with his current company; after all, he founded it. He started Relocation Realty in January 2002 and now has 75 agents working for him.
Odds are, this business will do better than his previous ventures into entrepreneurship. “When I was young, I started a lawn-care business in winter, which was clearly a bad idea,” he says with a laugh. “Then I started selling vacuum cleaners door-to-door in the winter. That was a bad idea, too.” Classes at Meramec Community College led him to a job as a computer programmer, then it was on to real estate, where his career path took a dramatic turn for the better.
“Last year we produced the St. Louis Association of Realtors’ Rookie of the Year,” he says. “We have brand-new people—many of whom have never sold before—doing $7 or $8 million their first year. Teaching is my passion, and that we can take someone from a different industry and have them do that much in a short period of time is great.”
So are the first three rules of real estate really location, location, location? I can’t even think of the last time I made that statement. You can have two subdivisions right next to each other, yet one is performing at 3 percent higher than the other. I once bought investment property in University City—which is considered a very good location—at $27,000. Years later, I had to sell it for $14,000. And that was in a good community. So “location, location, location”—well, it’s easy to use that phrase, but things like the style, the age, the supply of ground available, etc., matter more.
Lots of people think they can be real estate agents. Are there too many of you in St. Louis? In 1995, there were 7,271 realtors in St. Louis. By 2003, there were 9,166. For years it was flat, and then it shot up. Every month over 10,000 realtors are added to the rolls nationally. We have an oversupply of realtors, which means you have to get better at this. Yes, all the buyer wants is the right home. But with an oversupply of real estate agents, you better bring something new to the table.
What makes a good realtor? You really have to push yourself through months of learning and failures. But most of all, you have to be a master interviewer. Too many people are master presenters. When you first talk to a realtor, you want someone who is very skilled at asking questions, not just proving they are a great self-promoter. I even teach [interviewing] to my 7-year-old son, Ben. When I have to drive him someplace, I make him ask me seven questions in a row without making a statement. [Laughs.] He’s not crazy about it.
What makes a bad agent? One agent I knew got five offers the first day the house was for sale. And the agent was happy. But that’s wrong. I don’t want multiple offers. That means the house is underpriced.
It seems having a computer science background wouldn’t be helpful in real estate. Computer programming taught me a lot. While I was in that field I developed software called “Precise Pricing,” which can measure the appreciation rate [of homes] within your block. See, your neighborhood is a mutual fund, not a subdivision. Your house is a stock within that mutual fund and only performs as well as the other stocks in your mutual fund. So we have software that helps determine that. This is more about moving money than the American dream.
It is? If you buy a house for $250,000 and the growth rate is 3 percent a year, you’re worth about $312,000 in seven years. If you bought a house for the same amount in a subdivision whose growth rate is 7 percent a year, you’ll be at $416,000 in that same amount of time. But the trick is both are in “good” neighborhoods—good school districts, etc. There’s a subdivision not far from here that everyone admires, but the houses there are growing at only 0.5 percent, and they are $800,000 houses. Why is it not going up more? An oversupply of material.
Sort of taking the romance out of it, aren’t you? It might seem like a cold statistic. And I say buy whatever you want, just buy informed. If your favorite house is in a neighborhood that’s growing at only 1 percent a year, it will still be your favorite house. But if everyone bought houses like they were an asset and with a growth rate, it would change our buying habits.
So where do you live? Ballwin.
And does your house measure up to your formula? Like many people, I bought the house my wife, Patti, wanted. Also, it was close to our church and had a three-car garage. I always wanted a three-car garage. [Laughs.] But at least I was informed.
