Ed Krafchow is President of the tri-state consortium of Prudential California Realty (PCR), Prudential Nevada Realty (PNR) and Prudential Texas Properties (PTP). A former lecturer at UCLA and UC Berkeley, Krafchow is known for his personal commitment to agent training, motivation, inspiration and integrating technology into daily operations. Krafchow has increased the company’s transactions and sales volume more than four-fold, with an organization that now boasts annual sales volumes of more than $10 billion, 3,300 agents, and 125 offices in three states. A frequent national speaker, Krafchow has been identified by the California Association of Realtors as one of California's top brokers and recognized as a technological leader by the Employee Relocation Council for his contributions to agent and real estate technology advances.
Email Ed
As an "industry visionary", what do you see as the major changes occurring in the real estate industry?
Consolidation and automation. Consolidation in two ways. First, in that many smaller independent brokerages are finding they can’t provide the technology infrastructure, training, or tools they need to attract and keep agents. This is forcing these smaller companies to merge with larger brand names to survive. This has been an ongoing trend that should continue.
Second, in that real estate is no longer just the business of buying and selling a house. We are now talking about the lifecycle of the average consumer that may buy/sell several homes over the course of their lifetime, not to mention an array of associated services and products they may purchase. The consolidation of many multiple companies offering home services products into one larger company that can provide a family of services approach is definitely occurring.
Regarding automation, it’s all about efficiency, access to information, and the ability to do a greater volume of work to make up for the slim profit margins most brokers deal with. The challenge is how to bring this automation seamlessly to the agent population and get them to use it.
What major "corporate players" are driving change and what may be their impact?
The Title industry as a whole, in particular, First American Title and Fidelity National Information Services. This is because they are moving towards the headwaters of the transaction and are large players with significant capital. What this could mean to our industry is yet to be determined, but they will be a driving force in the future.
Who are the "individual trendsetters" that are shaping the future real estate industry?
On the consultancy side of the business, Jim Sherry, Steve Murray and Erik Antanow; on the state association level, Joel Singer; and on the broker level, there are just too many to mention here, but I have tremendous respect for a long list of brokers. Brokers that are true entrepreneurs and at the same time have a great touch with their people and company culture.
What are the expectations of the emerging real estate consumer?
Consumer expectations are foundationally about better and faster service, and greater value. The emerging real estate consumer is more knowledgeable than ever before, primarily because they now have access to so much information thanks to the Internet. The major change is from proprietary information to ubiquitous information that agents interpret for their clients. The consumer no longer looks to the agent as the information gatherer, as much as to facilitate the transaction and to translate the abundance of information into something meaningful to the client’s particular situation. This requires a higher level of sophistication from agents and brokers.
How should the Brokerage and Realtor Association / MLS respond to these real estate consumer expectations?
An infrastructure that provides adequate technology and marketing tools is critical, including sharing MLS data in a more streamlined way. The more we can empower our agents to be an irreplaceable asset to the consumer throughout the lifecycle of buying, selling and owning their home, the more we guarantee our continued survival as an industry. If at any time the consumer no longer needs the services we provide because we are antiquated or out of touch with their needs, we become obsolete. Also, all stakeholders and associations need to cooperate together to define goals and vision and walk the path together. Otherwise, conflicting interests simply nullify progress.
What changes should a Brokerage implement to ensure profitability in the future?
Listening to agents and consumers. Watching the trends and monitoring them. Looking at leading edge business models (primarily those outside of the real estate industry) and finding ways to integrate their winning philosophies into our own businesses. Being a provider of tools that surpass what an agent or consumer can get on their own. And probably most important, accountability. At Prudential California Realty, we have an accountability matrix where we set goals for our managers that must be attained. It’s a simple business concept of return on investment, yet I am shocked at how few brokers actually use it.
What role do you see the Realtor Association / MLS playing to ensure Broker profitability?
Being in the know about what’s happening on a state and national level, and passing that information along to the broker. Playing an upfront role in lobbying for the betterment of our industry. Providing more tools that consolidate the myriad of sources of information into a streamlined source that can be quickly accessed, in particular the MLS. And finally, to stay away from enterprising and remain in the role of a supporter and informer of the enterprisers.
Based upon your vision of the future of the real estate industry, what are you doing to help influence positive change?
In 1999, we introduced the first online real estate auction, which is still to date, one of the most successful. We were charting new territory, but learned a lot about the consumer’s need for the agent to still be involved in the transaction.
Also, the development of WebTop, the Intranet tool that provides agents with a one-stop place to gather critical information, order marketing materials, promote themselves and exchange data. It’s been a labor of love that has been over five years in the works, but it’s now being adopted nationwide.
And finally, a leadership training program that teaches leaders to develop leaders so we can continue the legacy of this industry as a community and agent centered business.
What books would you recommend as a "must read" that have influenced your
vision?
- "Control Your Destiny or Someone Else Will" by Noel Tichy and Stratford Sherman
- "Jack Welch and the G.E. Way" by Robert Slater
- "The Wisdom of Teams" by Jon Katzenbach and Douglas Smith.
What advice would you give Brokerages and Realtor Associations / MLSs to assure they stay relevant and successful in the future?
Expect change. Embrace change. Look towards other leading edge business models to provide ideas and solutions that can be adopted by our industry. Continue to create and provide tools that make us a necessary component of the homebuying/selling process. We need to nurture a new level of expertise and sophistication if we are to survive, including adding positions like CIOs and marketing directors that are experts in their field of study. We also need to recognize the stakeholders and their value to the business, whether they are big or small, agent or broker.
Email Ed
