Grant Boelter is a Minneapolis-based freelance journalist who writes about real estate and urban issues. He has worked as a newspaper reporter as well as in corporate and nonprofit communications. In addition to writing, Grant enjoys getting around Minneapolis by bike and traveling with his wife and coonhound.
Merger Tips From Alaska Market Leaders
Having gone through four acquisitions themselves, real estate professionals Dar and Ed Walden share their business-building story and advice for a seamless transition.
June 28, 2017
When Dar Walden began her real estate career in Anchorage, Alaska, 17 years ago, positioning her company to be the market leader in Alaska wasn’t exactly the first thing on her mind. She and her husband Ed were simply focused on settling down in the same place.
Ed was winding down what would be his second-to-last tour in the Air Force and Dar was ready for more concentrated time with their three children after 13 years in a marketing career, where she spent much of her time in Europe and Asia. When the Waldens were in the process of downsizing their home in Anchorage as part of that transition, Dar struck up a friendship with the agent they met along the way, Carol Butler.
It so happened that Butler was searching for someone with proven marketing expertise and Dar had mentioned to her that she was interested in learning more about real estate. Dar began working under Butler, learning the finer points of real estate, and ended up buying the business from Butler.
After Ed finished his final Air Force tour in 2003, he joined Dar’s growing team. While the Waldens are both natives of northern California, they’ve settled in Alaska and honed their business to fit its unique market, which they describe as more transient than others. With a boom-or-bust oil and gas industry playing a large role in the local economy, as well as a large military community, the Waldens have become accustomed to facilitating relocations.
“I’ve sold some clients three homes,” Dar says, as in three different homes each time they moved back to town.
As the Waldens have built the Dar Walden Team in Anchorage, they’ve explored ways to expand. So, when the opportunity to acquire Madden Real Estate in Fairbanks presented itself earlier this winter, the Waldens knew they had to jump. While Fairbanks is 360 miles from Anchorage, it offered the Waldens an opportunity to enter the nearest major market. The merger gives them a total of 28 employees (19 agents), and the Waldens say it should make their team the top-producing team in Alaska.
This being their fourth acquisition during their time in real estate, the Waldens offered the following tips to ensure a smooth transition:
Build relationships that matter. The Waldens had gotten to know Wes Madden, owner of Madden Real Estate, through a marketing cooperative, and from there they made a point of getting together at professional events. When Madden decided to put his business up for sale, the Waldens had the inside track and first opportunity to negotiate. “Dar and Ed are best able to understand and provide the leadership to run the company,” says Madden, who will stay on as a member of the leadership team and minority owner. “I was not super confident that selling to a traditional broker would have been successful.”
Check your ego (don’t fix what’s not broken). While completing a major acquisition is a huge accomplishment, the Waldens caution against letting vanity get in the way of something that’s working well. “You really need to check your ego at the door when doing something like this” and keep the focus on the business reasons for an acquisition, says Dar. In the case of their most recent merger, they’ll keep the Madden Real Estate name for their office in Fairbanks, as they know it has major brand recognition in that market.
Have lawyers check your work rather than drive the agenda. When the Waldens knew that Madden was serious about selling his business, they hit the road to Fairbanks and set up shop in the Maddens’ basement for the next few nights to hammer out the details of the merger. The Waldens took lessons from past negotiations where attorneys got involved early in the negotiation before a framework was set, which resulted in higher fees than both sides had anticipated. “You want to make sure your best interests are at heart, but work the key details out with the people you’re are in negotiation with first,” says Dar.
Good accounting pays off. As part of every merger, books should be examined and re-examined. “Have sharp accountants at your site and have the structure already developed,” says Ed.
Plan your messaging carefully and work on building trust. Acquiring a top-selling firm means acquiring a top-selling team. For the Waldens, it was essential to meet with members of the Madden team as soon as the merger became official to both assure them they were a key part of their plans and that they had no intention of making major changes at an already high-performing office.
Appreciate the goodwill of your new team. Because Madden Real Estate was an independent agency and the Waldens operate a Keller Williams franchise, it meant that more than 100 signs on active listings managed by the agency needed to be changed to reflect the Keller Williams brand when the merger became official in March. The Waldens received the support from their new Madden team members in Fairbanks to get the job done—no small feat in March in Alaska. “The snow was 6 feet deep,” says Ed. “We did it all in one day. The team is so strong and so tight.”