Q&A with Harold Crye (as printed in The Tennessean)
Tennessean, The (Nashville, TN)
Tennessean, The (Nashville, TN)
January 15, 2006
Column: EXECUTIVE Q AND A
Q & A with Harold Crye
Author: JEANNE ANNE NAUJECK
Author: FREELANCE OK
Estimated printed pages: 8
Crye’s mantra: Be ambitious, kind, and don’t sweat minutiae
You may not know Harold Crye personally, but you’ve certainly seen his name on someone’s lawn.
He’s one-half of Crye-Leike, Realtors, a company he founded with partner Dick Leike in Memphis in 1977 that has grown to become the nation’s 10th-largest real estate company.
Last week, the company reported $5.6 billion in residential and commercial sales for 2005, an increase of 16% over a year ago, representing 34,039 closings.
For the Middle Tennessee region, Crye-Leike reported residential sales of $1.5 billion, up 12.83% from a year ago.
Along with Crye-Leike’s original Memphis office, the company has hubs in Chattanooga, Little Rock, Ark., and Brentwood, where Crye is based, as well as title, insurance and property-management businesses.
Crye-Leike continues to expand in the South, entering Atlanta last month, and building offices in Jackson, Miss., and Rogers, Ark., near Wal-Mart’s Bentonville, Ark., headquarters.
Crye recently talked with freelance writer Jeanne A. Naujeck about Crye-Leike’s growth, changes in the real estate business and the future of the Nashville market.
What kind of real estate company did you set out to build in 1977?
1977 — that seems like a long time ago. Then again it seems like only yesterday, but it was a totally different world, obviously. In Memphis the companies that were the big players then are no longer even in business. The Sterling Co. was the largest in the market, and that’s the company Dick Leike and I worked for. I was their sales manager and he was their top agent, and we formed the Crye-Leike company in 1977.
We felt like we could build a company that treated our agents better. There were some mindsets they had that were pretty harsh. We felt like we could build a warmer, fuzzier, friendlier, more family-oriented type of company, but we didn’t know we could be successful, or as successful as we are. We had good reputations, and people immediately began to come work for us. Our goal was to have about 20 agents because we thought then we could pay the bills and the rent. The very first sales meeting we had, all the agents sat on the sofa. Now we have probably 1,300 (agents) in Memphis, so it’s a long way from that first sales meeting.
Most real estate companies are small and local. What took Crye-Leike beyond Memphis?
We had credibility, we had energy and we had a following. A lot of companies have that, but they get to one office and they’re just content with one office. We felt like we had additional leadership skills, additional administrative skills that allowed us to put in the second office, the third office, the fourth office. And then you’ve got to change and set up systems to be able to handle that size. We’ve put systems in place where we do things consistently and do it consistently well.
For example, a lot of real estate companies only pay their agents once or twice a month. Well, that’s a bummer if you’re an agent. We pay the real estate agents the day they have the closing. So we set up a system where you get your money immediately. Our accounting system is almost like an assembly line. One person’s doing the checks, one person’s doing the escrow accounts, one person’s paying the bills and you have a software system that allows you to do all that, and a CFO. And we have our own courier system.
It’s also being enough of an entrepreneur, enough of a risk-taker that you are willing to buy that building or buy that land and build that next building. Out of 62 branch offices that our company owns, we own probably 50-something of the buildings, and we’ve built most of them from scratch. A lot of people aren’t willing to do that. You have to build up a net worth in order to do that, and we have been conservative in our lifestyle. We haven’t gone out and blown money on a lot of trivial things. We’re more investment-oriented.
Your business is built on people and the contacts they have and the relationships they build. What makes a good real estate agent?
The honest answer is you can’t tell. There’ve been people that I’ve looked at and said “They won’t make it,” but then they’ve made it. And there are people that I’ve said, “They’re a slam-dunk, they’re going to make a lot of money and do very, very well because they seem like they know everybody.”
But what we can’t tell is, what’s the internal ticking, what’s the internal drive? Sometimes we meet a person and they’re very talkative and glib and salesman-like, then we find out that they don’t have the inner drive to show up.
It’s not just about being a good talker, it’s really about being a good listener and also about being a good “follow-upper.” The people that make the most sales, they’re good listeners. They figure out what it is that you’re wanting, and then they go do the behind-the-scenes work to go find the right thing for you, and they do all the necessary things afterward.
You don’t get good people unless you search for them, unless you treat them right and let them run their world, run their operations without having your thumb on them all the time. You give them the goal and the plan and you let them do their thing. You give them suggestions or advice, but I think you try to hold off on the criticism. Everybody makes mistakes, and you have to be somewhat forgiving and not get too bent out of shape over things.
Many homebuyers are now using the Internet to gather their own home and market information. Is it making the agent obsolete?
There’s a certain change in the way sales are being made, but it’s not the change that was thought of when the Internet first came out. It scared the daylights out of a lot of real estate agents and brokers because they said, “Customers aren’t going to need me anymore.” Well, it’s just the opposite. Customers need us more, but they don’t need us to be someone that necessarily helps them find the properties. They now need the real estate agent in more of a consultant role to take them through the process.
In the old days, we were the ones that had the information. Now, they’ve already got the information, in many cases, because they’ve seen it all online. In the old days, we were hauling people around for days and showing them 100 houses, and now it’s narrowed down to showing them a handful of houses. The real estate agent’s value now is consulting with them — negotiations, writing the contract, taking them through the process and making sure everything is being done properly.
We’re advertising our Web address on just about everything we do, trying to drive as much traffic to it as we can. We think that’s positioning the company very well. If the market slows, then the seller wants a company that has all the tools. In a fast market like we’ve been in, just about anybody could sell a house. You hardly had to put up a sign. But as time goes on, the customer’s going to need someone with the services and tools that we have.
What about the FSBO (for sale by owner) movement? Is that a threat to your business?
For-sale-by-owners have proliferated in the hot market. They’ll have a difficult time, they’ll slow down. There are a lot of companies — assist-to-sell, or help-you-sell type companies — that are somewhat of a stopgap between a full-service company like us and being a for-sale-by-owner. They tend to have a tougher time in a slower market. I think we’re going to a slower market overall.
There has been talk of a real estate slowdown in other parts of the country. Where do you see Nashville on that curve?
I don’t know whether Nashville will experience as much of a slowdown as what is predicted for the rest of the country. Nashville’s on a roll right now. It’s on a good roll with a lot of people coming in from California or wherever. Nissan moving here. We’re on a good enough roll that I suspect that, if there is a landing, ours would be a soft landing.
You talk to all the people that are making the decision to leave California, and it’s all the same thing: quality of life. They feel like they’re in a rat race out there. They have to commute long distances, work long hours just to be able to afford a house that’s half the house they would get here.
Nashville’s centrally located, and that bodes very, very well for us. If you look at consolidation in the rest of the United States in different industries, they’re saying, “We need a centrally located place to manufacture whatever we make so we can ship it out all over the country.” Nashville has a central location, moderate climate, no state (income) taxes, low taxes, not heavy unions, an education system that seems to be working reasonably.
There’ll be some peaks and valleys on the overall growth, but I see Nashville as so well positioned, and it’s no longer a well-kept secret. That word gets out, and there will be other announcements made, maybe not the size of Nissan, maybe smaller, but still nice-size headquarters coming into the market.
What Nashville has to do is stay ahead of the curve — the road system, the sewer system, the water treatment plants. If they can’t put the infrastructure in place, then that tends to slow down growth. We keep getting compared to Atlanta, but most of us don’t want to be in Atlanta because of their uncontrolled growth and lack of roads and lack of quality of life. And so the job here is for the politicians and government to stay ahead of the curve.
Which parts of Middle Tennessee stand to gain the most?
Nashville is a 360-degree city. Some cities go up against an ocean on one side, they can only grow three ways. We can grow four. Williamson County is going to benefit, but so is every county out there. Not everyone can afford to live in Williamson County. Some of our best offices are Hendersonville and Mt. Juliet, Hermitage.
We sell a lot of houses, have great agents, and they do a tremendous job at selling more modest-priced houses. But they’ve got high-priced houses, too, in Mt. Juliet. They have $1 million houses. They just don’t have as many.
That’s one of those self-fulfilling deals. Once an area gets a reputation, and Williamson County and Brentwood did, more people come to it and build $1 million houses. If you’re going to build a $1 million house you want to be around other $1 million houses to protect your value.
But you can live in Hendersonville and it’s like resort living. Johnny Cash’s house on the lake is a prime example. His brother, Tommy Cash, who’s one of our agents, sold it. A rising tide lifts all boats, and the tide’s been rising for Nashville for the past 10 years at least. Crye-Leike came here in late 1992, and every year’s been a better year.
Where do you live?
I live about three minutes from here in the Belle Rive subdivision in a regular house that was built about 25 years ago. I can go home for lunch. We moved here two years ago this month from Memphis, and we couldn’t find exactly what we wanted. My wife is a contractor. She couldn’t find what she wanted and is pretty particular. Having built houses, she kind of knows what she wants. So finally we said, “Why don’t we just find something we can live with now and be able to resell easily?”
So we found a nice house, remodeled it with hardwood and granite countertops and brought it up to current standards, and we’ll probably live there for a few years while we find the right site — a couple acres, three or four.
Many successful Realtors work round the clock, seven days a week, to make sure their sales go through. Are you a workaholic?
I don’t think so. Over the years I’ve mellowed out a whole lot. I used to be more uptight about things, but you probably couldn’t get this size if a lot of little things bothered you. You have to let some things roll off your back and be a little more laid-back than that.
During probably the first 10 years we were in business, I can’t remember taking much of a vacation. They were few and far between. You were totally consumed and focused, and you also were struggling to make sure you paid the bills
You get to the level we are now, and you’re not worried about your next meal but you have to worry about the planning process and making sure you’re meeting deadlines.
I’ve got a wife and a 6-year-old at home. My Christmas present was a bicycle to be able to ride to the park with my 6-year-old. Life’s too short. I realize that a little bit more now than I did when I was younger.
I heard this saying: No one on their deathbed says, “I wish I spent more time at the office.” I have to remind myself of that from time to time. o
Executive Q&A is a regular feature in the Sunday Business Section.
GRAPHIC; PHOTOS, CREDIT: ERIC PARSONS / STAFF: CAPTION: Crye-Leike President Harold Crye founded the nation’s 10th-largest real estate company with Dick Leike in 1977. — CAPTION: Harold Crye, president of the nation’s 10th-largest real estate company, Crye-Leike, says that a good real estate agent is a good talker, a good listener, and a good “follow-upper.”
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Record Number: nsh2006011813585775