Pamela Dittmer McKuen is a Chicago-based freelance writer who specializes in homes, lifestyle, and travel. Read her work at AlltheWritePlaces.com
On Golden Ponds
For Doris Phillips and her husband Glenn, a consulting gig grew into a multistate, mostly online brokerage focused solely on lake properties.
May 9, 2017
People become passionate about lake homes. Whether they grew up on a lake or set a goal to retire on one, those who spend time living on a lake make memories that can last for generations. We are selling the lake experience, and the house is the gateway to that.
Building the Virtual Model
I grew up in Alabama and Georgia, with family in both states. My first job related to real estate was in 1991 as a file clerk for a title insurance company in Birmingham. After 13 years, I had worked my way up to director of marketing. Then the company merged with some others. I wanted to offer more and better support services, so in 2004 I started my own title insurance and real estate closings company. I met my husband, Glenn, a business startup consultant and software developer, that year at a Chamber of Commerce luncheon. We married in 2006.
Company: Lake Homes Realty
Licensed in 13 states
Number of sales associates: 72
2016 gross sales: transaction volume of $231 million on 1,064 sides
2017 estimated sales: transaction volume of $387 million on 1,900 sides
Note: These sales figures have been corrected from a previous version of this article.
An investment banker approached us in 2011 to assess the potential profitability for a website that promoted lake properties for sale. They were mining data feeds for properties, and they wanted agents to buy ads and pay referral fees. We created our own business model with real agents and real licensing. The investors asked us to make it happen. We agreed and also became part owners in the company.
I had been doing real estate closings for years and I’d read the contract for almost every real estate company in Alabama. But if I was running a brokerage, I wanted to be licensed, so I could understand what a real estate professional’s day—and needs—looked like. I’m now licensed in Alabama and Georgia.
Connecting Niche Buyers and Sellers
Lake Homes Realty is a mostly online real estate brokerage that specializes in property with a lake view, lake access, or lake frontage. We launched in January 2013 with three agents and a handful of small lakes. Today we are licensed in 13 states, mostly in the South, and we have 72 agents.
Because our operation is highly virtual, we do not open brick-and-mortar offices except where required by law, like in Tennessee. We belong to more than 50 multiple listing services, and every night our website updates with new listings, expireds, and solds.
Let’s say you want a lake house within two hours of where you live. Our website may show you lakes you haven’t heard of. Maybe you need a hospital nearby. Maybe you want a fast-boat lake, a party lake, or a fishing lake. Our website pops out that information. We have consumers who say, “I’m in Connecticut, and want to retire somewhere warmer but not Florida. Can you help?” On our site, they can look at lake homes in many states in one place.
Sellers come because we promote properties far and wide. Most of the time the buyers coming from outside our agents’ neighborhoods. Buyers generally come from two or three hours away because they feel this lake home will be their getaway. We bring eyes to the table that local agents and their marketing efforts couldn’t. Price points vary widely, depending on the market. Average selling prices range from $200,000 to multimillions. Over half the deals are cash, and most contracts go through.
Our agents prospect and market on their own, but they also are contacted by buyers and sellers who find them through LakeHomes.com. At that point, the process is very traditional. Our agents meet buyers and sellers. They conduct home tours (sometimes by boat) and neighborhood tours and offer market education.
One Lake, One Agent at a Time
When we started, there were no comprehensive databases of lakes, lake properties, or real estate agents who sell them. No one could tell us which multiple listing services covered what lakes. Lewis Smith Lake in Alabama is covered by four different MLSs. Some lakes cross two states, like Lake Hartwell in South Carolina and Georgia.
We first went online to research various markets and agents. Then we got in the car to meet agents face-to-face. We said, “We’re coming to your area and are looking for a few people to join us.” Sometimes agents would tell us, “A dot-com won’t work here. We’re not tech-savvy.” And we’d tell them, “Yes, but the buyer who is three hours away is.” Gradually, agents joined us, and one state led to another. The first year we put 55,000 miles on the car and spent 171 nights in hotels. Now our business development officer does much of the traveling.
We find our agents in an assortment of ways, including web and social media presence, MLS data, and publicly available professional association information. Some agents have found us. The number of agents we have in each market depends on size. Lake Martin in Alabama, for example, has 750 miles of shoreline. We have two agents there now and will probably end up with three. We’re not looking for the most agents in a market. If you get great producers, you don’t need many. Some of our agents also list in-town or non-lake properties, but we don’t promote those listings. They show up on the agents’ own websites and on the multiple listing services and syndicates. We want to be respectful of what our customers are looking for No Desks, No Desk Fees
Our revenue program is very traditional. The split varies by market and agent production, but we don’t have anyone at 50-50 or worse. Other than a small amount per transaction for errors and omissions insurance, we don’t charge fees. As director of national brokerage operations and chief operating officer, I run everything in the back office. I coordinate all the sales transactions and listing agreements and support our agents with leads, coaching, training, and research. We communicate remotely and in person. Each fall, we host our agents at an educational and networking summit in Birmingham. We also put on annual regional training events and monthly interactive webcasts and conference calls for training and coaching. We have our eyes on expanding into more states. Other niche markets, such as penthouses and mountain homes, could fit our model in the future. But first we want to be really good at this one.