Innovation and Inspiration

Charles Molineaux

June 11, 2008

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This is the third article in a series on how local small businesses are surviving in the slowing economic conditions.

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A n openly religious approach to business may seem incongruous in the world of real estate, but as the industry struggles through – to borrow from Thomas Paine – times that try Realtors’ souls, an appeal to something higher could seem to be in order.

And somebody up there may indeed like Solid Source Realty. Since it started operations in 2003, covering both commercial and residential real estate, the company has seen impressive growth. Even as the U.S. and Georgia real estate worlds have veered toward smoldering nether regions, Solid Source has continued a course towards the heavens, attracting a startling number of new agents.

Michelle Shoda, founder and principal broker of Roswell’s Solid Source Realty, points out that Solid’s roster has grown 116 percent in just the past 16 months in spite of – or maybe because of – the turmoil in the field. “We hate to see an agent struggle,” she says, “but for Solid Source it’s been a chance to offer a platform where agents can stay in the business.”

Shoda will be the first to tell you she wears her faith on her sleeve, but it’s not the only reason Solid Source is going strong. Her unique agent perks and innovation have helped guide her company through a tough economy – and an ongoing chance we haven’t even seen the bottom yet.

Innovating During Tough Times

“Struggle” has indeed been what the industry has done lately. Tighter standards from mortgage lenders, a drooping economy and slipping home values have cast a pall over the whole field, and over residential real estate in particular. Scattered pockets of Atlanta regional real estate still experience stability or even continued growth in prices, but most metro zip codes have suffered declines. The Annual Home Sales Report from the Atlanta Journal Constitution darkly informs that sales fell in all metro counties in 2007.

Shoda sees plenty of writing on the wall. “Some of the greatest analysts believe it will be [the years] 2013 or 2014 before we see 2005 levels of real estate come back,” she says. “The whole market across the nation has gone down 15 percent. Agents who were closing 5 to 10 transactions a month are now closing 1 or 2 at the most. That’s put a lot of people in a bind.”

This, she figures, is where Solid Source Realty can present a strong case to agents who find themselves making fewer sales and pinching pennies at every opportunity. Instead of splitting the proceeds of sales with brokerages, the firm’s flat-rate fee structure does enable its agents to keep more of their commissions from their sales.

“Instead of in corporate America, where they were only getting $10,000 of a $20,000 commission, they’re saying, ‘Hey, I can go with Solid Source and get my $20,000 check. And even if I have only one closing in the last two months, I get all of my commission, minus $300 [for Solid Source’s agent closing fee], so I can weather the storm.’”

It’s a pitch that has paid off, she theorizes, as the outlook has worsened. “We’ve gone from 1,200 agents in January of 2007…  We were up to 2,200 agents in January of this year. Now we’r e up to 2,600.” 

With her company only five years young, Solid’s arrival on the scene just before the biz hit its rough patch seems an unlucky twist of serendipity. “When we started the firm, this kind of commission plan wasn’t necessarily essential because real estate was just booming,” she says. “Now it’s really needed for agents to be able to continue in the business.”

Investing In Efficiency

It’s in the margins that Shoda hopes to tweak operations and service offerings to help agents keep their businesses going through admittedly lean times. “Even with so many agents inactivating their licenses and going back to corporate, the people who have stayed in the game really need a place of value that appreciates them and helps them grow their business. There are a lot of ways to increase the services you offer your clients without incurring a tremendous cost. "

The firm has also exploited developments in technology and law to streamline operations for its agents. Now that the Georgia Real Estate Commission accepts digital versions of most important real estate documents, Solid Source has invested more than $250,000 in becoming an all-electronic operation, with thousands more dollars going toward upgrades to its computer systems.

A proprietary software package lets agents file their material online instead of endlessly driving paperwork back and forth. It’s a valuable plus for agents, saving them time and trouble, not to mention increasingly expensive gasoline, a consideration that has suddenly grown to monumental proportions in a pursuit in which professionals routinely spend a lot of time on the road already.

“We are the first paperless real estate office in the country,” Shoda says. “Instead of having to come to the office, the agents can fax in their paperwork, then just log in and view all their files for the past three years, at no extra cost.”

Also among the perks is a continuing education program for the real estate professionals, a little personal reinvention for its employees. The firm offers assistance to agents in processes like setting themselves up as LLC corporations, allowing for tax savings. Its agents can also tap into 30 classes a month. For those who find themselves painfully less busy than they’d like to be, Shoda proposes seeing the situation as an opportunity. “What we’ve tried to do is focus inward. If they’re going to be slower now, this is a great time to re-sharpen skill sets. We opened a real estate school last year to offer agents more classes during the down market. They can get better and better. So as the market starts to come back, they’re at the top of their game.”

Shoda says riding out the storm, and finding ways for agents to do it have become an important objective, and one for which options do exist for a nimble entity ready to adjust. “There are little things that can make such a big difference. Instead of just saying, ‘Boohoo, the market is down. What are we going to do?’ and sit around in fear and anxiety … that’s how we’ve responded.

“We started with one agent. That was me. We now have about 2,600. Everything that’s happened has been a kind of blessing.”

Cover Image: © Pryzmat | Dreamstime.com

Inside Image: © Carole Nickerson | Dreamstime.com

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Charles Molineaux has written about local and national news for more than two decades. He has worked as a correspondent and anchor for CNN, CNN Headline News and CNN’s financial network. Charles currently reports for WAGA-TV Fox 5 News in Atlanta, and is a regular contributor for Catalyst Magazine , Atlanta Woman and Business to Business magazine .

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