A 38-year real estate veteran, Steve Brown has seen every angle of this business, from the sales associate’s perspective to the broker/owner’s. Now, he’s ready for his biggest role yet. The co-owner of Dayton, Ohio’s Irongate Inc., REALTORS®, a full service real estate firm with six offices and 300 agents, Brown gears up for the year ahead as the 2014 National Association of REALTORS®’ President. “I’m ready to do what it takes,” says Brown. “I’m ready to go.” In this exclusive interview, find out what his long-term goals for the industry are and what’s tops on his agenda.
Maria Patterson: Let’s start at the beginning. When and why did you first choose to become involved in the real estate industry at the association level?
Steve Brown: I became involved initially with the Dayton Area Board of REALTORS® and it didn’t take long for me to see that the decisions made by the Board affected how I did business. Their policies and decisions directly affected my own pocketbook. So I wanted to be a part of that decision-making process.
MP: Why is it important for REALTORS® and brokers to play a role in their local, state and/or national associations?
SB: If you’re taking your business seriously, you have to realize that being a part of a REALTOR® association is part of investing in your business. I don’t just mean financially. I’m talking about investing time and talent into an organization that does what you can’t do on your own—like reaching out to Congress on legislative and regulatory issues that protect the accessibility, viability, sustainability and affordability of property ownership. And if you don’t think dealing with those issues is an investment in your own business, well, you won’t be in business for long.
MP: How does association involvement ultimately benefit real estate consumers and homeowners?
SB: The REALTOR® Association is really the only organization that stands up and advocates on behalf of property owners in the country. Who else is stepping forward and dealing with the concerns and rights of property owners on various issues, such as eminent domain and mortgage forgiveness? If we do our role well, it’s not just about advocating on behalf of our industry, but on behalf of homeowners—and not just residential property owners, but commercial property owners, land owners and property managers, too.
MP: So then, what are your overall feelings toward assuming the President’s role for NAR in 2014?
SB: I’m very excited about the opportunity. At the same time, I am keenly aware that there are a lot of challenges ahead. I believe in this work and I believe that what we do has a bearing, not just upon our industry and the economy, but upon our society and our nation. Property ownership is part of the American Dream. In doing this work, I feel that we are all serving our country in a profound way. I’m passionate about the work we are doing, and I want to make this year a great experience for our members.
MP: How has the real estate market changed permanently post boom and bust?
SB: One of the changes that has come out of the “Great Recession” is a tempered and more realistic view of property value. And there’s more cautiousness among younger buyers who have seen their folks lose homes because they overinvested, or the market turned on them. A home cannot just be seen as a piggy bank or as an equity line. A home is a long-term investment. I believe consumers now understand that. So the biggest change is a better consumer awareness of value and their sense of being more deliberate when purchasing a property. The real estate downturn and the recession taught us to be better stewards of our money and more discerning of value.
MP: In your opinion, what were the most significant changes to the business last year?
SB: The biggest change that took place in the past year was our improving economy. Things are getting better, albeit slowly. Unemployment is slowly dropping, home values are more than stabilizing, and in many cases, rising. We’re seeing a generally improving market, which gives us the opportunity to reinvest in our businesses, improve our facilities and expand our technology. We can now make improvements that we have had to put on hold for several years.
MP: In your opinion, what is the current status of the real estate recovery and what can we expect in 2014?
SB: I think we’re going to see a continuing improvement. Consumers are demonstrating a growing confidence in their investments, whether residential, commercial or land. We’ll see stability in home values. We’ll also be dealing with slightly higher interest rates, but it’s still going to be a historically low rate. (One of my agents recently showed me a company newsletter from November, 1983, which told of how “people were lining up for the new 14 percent mortgage rates.” The good old days weren’t always so good, were they?). We’ve been able to accommodate fluctuations in interest rates in the past, and I’m certain we will be able to accommodate them in the future as well. However, it will take the consumer a while to switch gears in terms of expectations regarding interest rates, which will most likely be in the 4.5 – 5 percent range. Maybe these are “the good old days...”?
MP: So, are rising interest rates the biggest concern for our industry next year?
SB: No. What will overshadow interest rates are tax reform issues and the continuing fight over the mortgage interest deduction. Unfortunately, many of these historical supports are touted as “loopholes.” It’s unfair to characterize these incentives as such. They were put in place to help people buy property because when they do, they’re investing in communities. Everybody wins. We have to be vigorous in our defense of these incentives to make sure we remain a country of property owners and not a country of renters. There’s a profound difference between the two, economically, socially and culturally. So that’s what we will be dealing with next year, as well as regulations surrounding HUD that will have an impact on how we do business.
MP: Do you believe any of these issues will come to resolution during your term?
SB: Tax reform has been on the table for many years. I don’t see it being fully resolved in the near future, so we need to continue to be watchdogs over any tax reforms that could adversely affect the ownership, accessibility and sustainability of real estate.
That being said, we would like to see resolution of the Freddie and Fannie restructuring. The protection, viability, solvency and mission of FHA are also of critical concern. That’s a big part of what we’ll be dealing with next year. If we didn’t have these institutions in place during the recent Great Recession when the private market so dramatically retracted, we wouldn’t have been able to sell properties, period. These are ongoing, long-term issues, and we have to continually work to protect the real estate industry and the consumer in our advocacy work.
MP: What will be your approach to serving the NAR membership next year?
SB: I think it’s important that we continue to improve our communications with our more than a million members. We have maybe 20 percent who are actively engaged in our work. I understand the 80/20 rule, but my hope is to strategically target and better communicate with the various segments of our REALTOR® members. One email blanketing a million members is not effective. From residential to land to commercial sales, we need to better target our members so as to better serve their interests and needs, as well as the industry as a whole. To give you a specific example, we have to identify our “pure” commercial real estate members, as well as serve our members who do both residential and commercial business. (We refer to them as “resi-mercials”). Each has specific needs that we must serve if we are to serve all aspects of real estate.
MP: How does NAR plan on continuing to advance homeownership in 2014?
SB: Property ownership, not just homeownership. We have to continue to advocate in Washington on behalf of the property owner. Every elected official has REALTORS® in their community and those REALTORS® have more knowledge of their community than most any other professionals in that community. That is one of our most important assets in terms of who we are and what we do. So we have to continue to advocate the benefits of property ownership through our associations and through the REALTOR® Party.
MP: What are a REALTOR®’s top challenges in today’s market and how can they best rise to meet them?
SB: Legislative and regulatory challenges are in the forefront. Another continuing challenge is technology. New technologies come along every day of the week! The challenge is to study and understand the advantages and disadvantages of technology in our everyday business—and then buy what makes sense for us. We need the actually usable, not just the latest. To thoroughly understand technology, I think you have to ask the question: “How will this better service my clients and increase production?”
MP: What can we, as an industry, do better in terms of truly connecting with today’s consumers?
SB: Consumers can have all the information at their fingertips, which many do, but when they actually make that home purchase or property investment, they need someone to guide them. They need someone to advise them, to interpret all the information, and someone to truly care about the decisions they are making. Most importantly, they want to be treated kindly. At the end of the day, the real estate transaction is a profoundly human experience. If one can remember this, amid the marketing, disclosures, inspections, financing, and all the rest, we will have no problem keeping connected.