Patti, OMG.  What a shocker.

Patti, that's gotta be tough for all these agents and brokers right before the new year.  Was it something they saw coming or did it come as a total shock?

Happy Holidays Patti Mallen!

Would you please check this service out for me. www.RealEstateEF.org/fixyourcredit.htm

I am curious to know if you think it is a good credit repair service. I read your blog and you have a lot more experience than I do in these matters.

A guy with the company told me they pay 40% for referrals and so I'm thinking of becoming an agent, but I know the credit repair industry is full of scams.

Thank you and Happy Holidays,

Greg Jones
Coldwell Banker

I think it would be tough to not see it coming.  I am surprised an office with 350 agents would shut down though.  You'd think that they could have downsized or shut down some of the offices but not all. Yikes.

Patti: this is horrible...I feel sorry for all inconvenienced by this...the timing is terrible!

OK, lets take a different spin on this scenario. First of all, it is not the Brokerage that sells real estate. It is you the agent. Many brokerages throughout the US and in california have been consolidating, tightening their belts etc. Many were over extended anyhow. Here in California we are overloaded with excess agents who are not productive and many who are not ethical. Look at this as a cleansing process to trim the fat and the excess. For those whose hearts are truly in real estate business will come and there will is a place to hang your hat.

I do not see brokerages shutting down as a bad thing. I see it as an opportunity.

I feel bad for everyone involved.  I do not know if the timing is really that bad however, since you said thay can take their listings and will still get paid on all escrows.  On a postive note, the fact that it happened now will allow the agents to go to another broker and be settled in before the spring market. Hopefully they all have their own databases and they are not through the office.  Changing offices is always an inconvenience, even it it was a decision by the agent themself. I wish everyone good luck and a Merry Christmas.

Although the timing is incredibly bad, what an excellent opportunity for someone to open a new office and pick up the displaced agents. 

What extremely poor timing. With holidays and all changing licenses would be a big drag. In Oregon as I suspect it is in Arizona, you must be licensed to do business. This would mean 350 agents not able to do anything untill the Interview and sign with a new Broker.

Really poor timing on the Brokerage's behalf. A business does not usually go out of business on a whim. They almost always know a long time in advance.

The timing is probably very logical.  If they were open for business even 1 day in 2008, they would have to file tax reports.  It also might be connected to the building lease.  This gives them a week to get everything out of the office.  I'm sure that the owner took the timing very seriously.

Patti, that is too bad. 

My prayers are with the agents and admin staff.  I still believe that Better Days begin right now.

This has been an extremely difficult year here in Phoenix with hundreds of mortgage shops closing their doors and title companies cutting back everywhere. I have realtor friends losing their houses and some have even gone to work part time at Walmart.

What I have been shocked with is the apathy, lack of creativity, and lack of innovation. What is that old saying have a plan or plan for failure.

Don't get me wrong, I think this is terrible especially this time of the year, but there have been those of us yelling at the top of our lungs that people need to be doing something different. I used to say change to grow your business, now it's just to allow your business to survive.

The sad part is now in my opinion many will use this as another excuse. There is an article today that that Dave Liniger is going to meet on Wednesday with the franchise owners and develop a new plan.

To me the plan is so simple that it staggers my imagination that people don't see what is working in these tough markets.

1. We need more buyers DUH!

So how do we get them?

In Phoenix, right now there are only 2 ways....1 is to advertise and promote to the Canadians with strong dollars to buy up second and vacation homes.

 The second which is most of the market is Sellers need to help the buyers qualify for a home loan using one of the 5 legal ways to get them the down payment. If you don't know what the 5 legal ways are, sorry you are part of the problem not the solution. Please feel free to visit http://www.thedownpaymentguy.com/ to learn about them.

Please don't take this the wrong way, it's terrible when good quality people are losing the homes, their jobs, their stability and money. But I think it's worse when people give up and join the pity party instead of developing a plan to move forward.

This remax shop could easily gather more buyers than anyone else if the leadership just developed a plan for the changing marketplace.

When an office is this large, you can begin to realize what a tough nut the owner had to dish out each month.

I`m guessing $20K a month which is no small feat for any owner or company.

It`s a harsh reality of how "The market of 2007" changed the lives of so many.

That being mentioned why didn`t Re/Max Intl. step in sooner to assist Re/Max 2000? After all they`re collecting the franchise fee`s from this owner.

In my opinion this effects all Re/Max offices across the country. 

It`s hard to imagine Re/Max would  tarnish their "Good name" without some intervention.

I don't like to hear this- ReMax is my favorite.

Well Patti I am a RE/MAX agent in Westchester County, New York.. I read your bio and you are an experienced broker with years in the business.  You know what to do.  Your web site looks like you have already done it.  In response to Scott's remarks we don't know if RE/MAX International stepped in or not or if there are other circumstances involved in this that we are not aware of.  A lack of sales????I am not entirely that makes sense considering how RE/MAX is structured. I feel bady for the 20 or so employees.  The agents are keeping their listings and will find options out there for them.  Is there more to this story?

Wow, what a horrible thing to have happen at such a time. My thoughts and prayers are with those agents as they face the changes before them.

Hi Patti - it sad and unfortunate about the timing of all this, and this smells like there's far more to this story than appears to meet the eye.  You don't just close up a company with that many offices on a whim - this had to have been planned, and even if it is due to sales being off, I would have thought that they'd start by perhaps closing down those offices with the least performance instead of all of them at once.

Scott - I have to think that RE/MAX International, had they been aware of this about to happen, would surely have been in touch with those owners.  And we have no way of knowing if that happened, or is happening.

I like what Terry Osburn wrote - this is an opportunity for many of those folks.  Hopefully they'll see it that way, after the shock wears off, and make the most of the opportunity that awaits them.

Ann

There must be more to this story. 350 Realtors should be generating business no matter how tough the market.  It will be intersting to hear what actually happened.  Please keep us informed if you find out more.

We had a big RE/MAX office here in Atlanta shut down not long ago.  They just locked up one day... no money.  In all honesty, I don't think it had much of an effect of the agents.  The good ones got into new brokerages pretty fast.  I feel bad for the staff.  They are the ones that need to actually look for work. 

Well...

I saw it coming. Not that I actually saw this particular office closing. However, it was just a matter of time before we started seeing these kind of cut backs in this business.

TLW...ROAR!

I'm suprised that a non-discount broker would be shutting its doors however the number of agents or business philosophy means nothing if they don't produce.  I'm shocked at this new trend of the email pink slip...so cold.   

Wow - that is pretty crazy - thanks for the heads up.

Patti,

 WOW!! That is definately shocking! I am a RE/MAX agent here in montgomery county, MD & while some agents in our office are having a down year, some are having the biggest years of their career. While I know that the arizona market has definately been difficuly and sales are down overall I have had the pleasure of speaking with a few agents personally who are having outstanding years! While I can fully imagine how difficult it can be on the owners to keep the doors open when they are not making the money they have been or in their eyes need to, I am clearly blessed to have 2 broker/owners who are committed to both us as agents and RE/MAX international to keep our firm going and growing as best they can!

Not a good story here. Like the Bulls coach that was fired Christmas eve. We can all hope for the best for all concerned, the market is what it is, but it too will turn around. It always does.

best holiday wishes 

It's tough to loose your office. They must have seen it coming. Many brokerages are going to have to become more efficient/productive to avoid closing. I hope this office had some warning.

Patti,

I am sorry for your loss.  For some of us being in a comfortable environment with people that we know and trust is an important component of our business, I wish you well in your search for new diggs.  It is surprising that Remax would release 350 agents onto the local market at the same time, it may be difficult for the surviving brokerages to take in that many agents at once, unless they are just hanging their license and working from home.  Whatever the reasons for the mass closure the responsible thing would have been to warn the agents and stagger the closures.  

I wish you a Merry Christmas Patti and leave you with this thought:  sometime stuff has to happen in order for other stuff to happen.  Looking forward to hearing about where you land and wishing you the best of luck.  

The administrative staff are entitled to unemployment.  Not so the Independent Contractors. 

This is really tough news.  However, it could have been worse.  Prudential Americana in Phoenix, with 1200 agents, filed for Chapter 11 and continued operations.  Foxtons filed bankrputcy and kept the listings and sold them to another company.

At least the agents get to keep the listings in this case.

Very disturbing.  Very disturbing, indeed. 

I don't like seeing ANYONE lose their jobs, but that office was home to Bruce "Da Moose" Fraser, one of the BLINDEST bloggers to ever post on the Internet.

My favorite head-in-the-sand quote from Da Moose: "Bruce Fraser, an agent with RE/MAX 2000 in Gilbert, said Sunday the company held its Christmas party about two weeks ago, and there were no signs the broker was in trouble. ‘I did not see this coming,’ he said.”

Survival is to the fittest, not the blindest or most optimistic.

Good luck to the displaced workers. 

Patti...My heart goes out to all of those affected by the shut down, especially the broker/owner...can't imagine having the kind of emotions a decision like this evokes and at this time of year as well...

My heart goes out to the REALTORS, employees and families that this affects.  Don't give up... 

I just read another post that made me think about what I wrote above. 

What I wanted to suggest is that agents who hold brokerage licenses could open NEW offices to "pick up" or help the others who were affected by the closing.  I believe that most people with brokerage licenses have plans of opening offices anyway.  They could get a new office off the ground easier with the availability of agents when they start up.  Thus helping them open the office and helping the others by providing a new office. 

When one door closes, another one opens mentality.

Out of 350 agents I estimate that about 35 or more of them have brokerage licenses.  Most of them have working relationships with the other 300+ agents and could continue working together if some of these brokers opened.

My husband gave me this news earlier today.  To say I am shocked, is an understantement.  I sincerely hope that all of the agents get placed with a stable office.

That must be terrible for everyone involved. The realtors will find other places although at considerable cost in marketing materials but the support staff will find it the hardest. My prayers are with those affected even the uncertainty of some homeowners with thier properties listed will feel the effects.

That must be terrible for everyone involved. The realtors will find other places although at considerable cost in marketing materials but the support staff will find it the hardest. My prayers are with those affected even the uncertainty of some homeowners with thier properties listed will feel the effects.

Patti - I'm so sorry to hear the news, and hope that perhaps RE/MAX International will "buy" or reooen the offices as company owned.  Here in St Petersburg, a big Keller Williams recently let agents and staff go.

WOW. I am so sorry to hear. But when one door shuts, another opens!  Good luck and keep the faith.

I assure you ReMax Intl. knows everything about their Franchisee`s. After all they have to compensate Remax monthly. Notice had to be given in advance. A company with 6 offices as Remax 2000 has isn`t too small. They`re in contact with these Brokers weekly through sales reports and regional Remax managers.  This is part of the scenery as many offices who have felt the pain of 2007.  

Nice timing.  I wonder what another week or so would have mattered. 

This is the first "large" real estate company that I've seen bite the dust as a result of the current market....no big builders yet....but how long do you think it will be before more crash and burn?  Sorry to hear it, but it's coming!

Bob Mitchell

ValueList Real Estate Services, Inc. 

What ever happened to "personal responsibility".  Why not give these agents and staff acceptable notice so that people can get their affairs in order?  It's a cowardly way to conduct business, to just shut the doors and inform workers and agents via email.  I would have the lowest amount of respect for my brokers and owners if they did that to the people that I work with. 

An EXIT Realty office recently closed here in Florida...it was due to the unfortunate ill health of the broker...you never know the circumstances...

I'm sure there are plenty of current Broker's who would open their arms to the plethora of available agents...it is shocking that an office with that many agents would shut down...unless there are other circumstances...

I feel for them though as well.

Unfortunately, these are the harsh realities of our business. It's happened before and it will happen again. Bigger is not always better. We all must learn to adjust and perservere in such downturns.

Are all Re/Max offices set up the same nationwide?  Because here the Re/Max agents pay a huge monthly fee whether or not they have any closings?  That is one of the many reasons I did not consider hanging my hat with Re/Max.  I had a horrible interview with our local office.  The person that interviewed me was not the one that should have done the interview.  She was just filling in as I found out later.  When I interviewed, I was told what my monthly fee would be but if I did not close anything that month they would hold my fee over each and every month for $100 more and I could settle up my bill when I did have a closing. Then at the end of the year, I would have to settle up my account with them no matter what.  I saw that to mean that if the market turned and I went without a closing for months then I would be in the hole. (She actually forgot to tell me that I got to keep all my commission at closing and I had already shut her out so I didn't ask.)  So if all those 350 agents are paying monthly a set fee then what did the owners do with the money?  If their operating costs increased, then why didn't they increase the agent's monthly fees and let them decide if they could pay the increase or move on?  It doesn't make sense that they would close if the agents are paying them in advance.  Maybe they were ready to retire or unload the responsibility of ownership and just used the "bad market" as an excuse, however, selling their franchise would have made more sense.  I have a family member that is in land development for a company headquartered in Scottsdale, Az.  I will have to ask him how the market is and why he thinks ReMax shut down their offices.  Donna

Hi Patti:  Whenever something like this happens it is tragic.  According to the newspaper article, ReMax 2000 had 13 offices, with a total of 350 agents.  The agents will transfer to other offices.  Good agents always will.  And, at ReMax, their listings go with them.  I feel badly for the owners.  That is an awful lot of overhead to have to pay for when, due to the market, the agents are producing less. 

At a ReMax office, whether the agents are closing deals or not, unless ReMax has made other arrangements, the local office itself still has to send ReMax Corporate a monthly fee for each and every one of those 350 agents... whether they are producing or not.  Not for office upkeep, not for rent, not for utilities, not for anything that keeps the office doors physically open.  But, from an owner's stand point... closing before the end of they year just makes much more sents than having it fall into 2008.  That's a whole additional year of forms and reports.

There is more to this story than we all know--- the news has painted a terrible picture. Don't get me wrong, I feel for the admin and those being misplaced, many friends that I know work at these offices. I am sure there has been great thought put into closing the doors, but all the logical choices were made for one reason or another...

These offices had a great reputation here in Gilbert, I live in Gilbert...so with that said I am confident something is not being handled correctly would be my guess. I am sure the high overhead doesn't help...

I wish all of RE/MAX2000 agents/brokers much luck in their pursuit in finding new offices to work from and much success in the new year! God Bless.

what a horrible thing to have happen at this time. That is definately shocking for me as Re/Max agent!

The timing seems really rotten.  Two days before Christmas.  I am sure there are many families not enjoying their holiday.

'Glad you shared this news - it's a wake up call for many of us.  No RE/MAX franchise can survive if ALL the agents don't pay our monthly bills.  

A little follow up from the local papers:

         There May Be Hope

The broker owners most likely are as sad as the agents about closing down the office and did financially what they had to do. As to timing, it is not a surprise to see it come at the end of the year. That is a time when the business owners have to negotiate and sign new leases, contracts for the next years, with both vendors and agents.

My hope is that everyone who learns of this will not adopt the "chicken little - the sky is falling" attitude.

Things happen, businesses come and go...there may have been underlying issues that NO ONE knows about and they are blaming sales.  No one ever thinks it could have been bad management or spending or one of the hundreds of other things that close businesses every year.  The sales excuse seems to always bea catch-all for failed businesses.

If we make this closing an issue then believe me the press will grab it and run with it thus building more doom and gloom for our industry.

I do wish all those displaced the best of luck and a speedy business recovery.

Happy Holidays Patti!

Thanks for bringing this to our attention.

I agree that it is shocking, disturbing and scarey for the agents involved...

While reading your post, I couldn't help but think of one of my favorite stories by Spencer Johnson, "Who moved my cheese?"

The cheese has been moved in Phoenix for these ReMax Agents...and will probably be "moved" for others before things settle back down.

"Move with the cheese!" 

This is very sad. But I am very curious if anyone knows what the Quantity of Agents in the area is this month compared to say 5 years ago? Did they have a run up of agents (like a lot of areas)....

This is a response to the article about this in th local paper.  It apparently is from one of the agents...there is more to this story, it just has not revealed itself yet....good to see that a agnet affiliated with this brokerage is supporting the to staff even after the failure. 

sundevl021 Report abuse 7 10 rate comment: Posted Dec-24
11:50 PM

ruzz, I believe it is "generic" who is confused.

I am an agent affected with this closure, and we are being promised some answers and some sort of transition plans from Mr. Liniger and co. on Wednesday. Should be interesting.

On a personal note, Mr Kline should not be described as anything but an optimist who misjudged the intensity of our current market digression. He did not cheat anyone, nor encourage dirty sales techniques by his agents. He merely made poor business decisions. Its saddens me to read other's irrational mudslinging and hate-filled name calling. It only illustrates one's lack of education or rationality. I have read several of your comments, ruzz, and admire your respect and common sense.

Thank You!

-a ReMax 2000 Licensee

lack of sales translates to lack of paid desk fees in RE/MAX, and its a shame that this company had to fold. I wish those agents the best, but I also agree with what was said here that with every closed office or agent that leaves the business, there is another opportunity for the great agents to better serve more consumers

That's very hard to handle but not hard to believe in this economy. I've heard of other closings.

I really feel that the timing could have been a little better! However, this is a trend that will continue and even accelerate throughout most of 2008. If the Real Estate licensing law is similar there to the one in Georgia, all of the future revenue belongs to the Broker and the firm that owes more than a few creditors. All outstanding debts must be cleared before disbursing any money to the Associates since the failure and closing of the firm cancels all contractor agreements. Associates may find that they are only one of the creditors that the firm owes and a court will disburse the remaining funds among the creditors, meaning the Associates may not get paid for quite some time (if at all)!

As far the earlier comment that "the overhead must have been asound $20K' has obviously never operated anything of any size. The firm was probably spending $30-40K per office times 13 offices! Imagine having to make the numbers work with that scenario!

A particular problem that the rent-a-desk companies have is that the first "expense" that Sales Associates fail to pay is the desk fees. The Broker is then faced with a choice of letting the Associate go or keep them hoping they will make a sale or two and the Broker can recover what is owed. That combined with a horrific market downturn leaves many with no choice but to "pull the plug". 

Traditional Brokers such as Prudential and Coldwell Banker will also follow suit, but they will do so through "consolidation" of offices in a given geographic area when possible. The Associates in those firms may encounter a lot of turmoil, but will probably be able to remain with that specific Company.  

We are in for a rough ride and expect the unexpected as this ball of twine unravels. Many more shoes will drop before stability returns to this market and industry. Those that manage to survive will be much stronger when the end of the tunnel appears!

Wow, what a shocker...Let us know how it plays out, as I am sure the rest of the story will follow. Hope you had a Merry Christmas anyway.

As for the industry this is not good. Here in New Orleans, I have many call in the last several weeks. These agents are with that company and looking for new homes. I don't believe it is just out west. Here in my market I have heard of the office fee's increase twice in the last six months.

After reading the follow up article that indicated there was a chance to save the business, it will be interesting to see how this ends. The size ofRE/MAX 2000 makes this an interesting reflection on the market. I hope there are some success stories to come from those that survive this unfortunate event.

wow, all 13 offices closing.  that's a shock. I hope everyone effected finds a new home to hang their license in.

This sounds like a real estate ENRON.

I know of a broker in Maryland who closed his ERA office and some of the agents are trying tomake a go of it.  Who knows if it will fly. I believe 6 agents are creating a LLC. I don't think partnerhsips are the way to go? But give them credit for trying in this market!   

This has been a recent yet disturbing trend that has been happening in my area here in Maryland as well!  My office just laid off all of our nice little old lady receptionists in preparation for next years budget and the current numbers that have been coming in.  We are still the top producing office in our area out of ALL the others, but I just looked up at the sale board for today 12/26/07 and we only had 6 sales this month (the worst I have seen in the last 3 years since I started in this business)!

Sorry I forgot to login before I posted the comment above, please feel free to delete the one above this one!

This has been a recent yet disturbing trend that has been happening in my area here in Maryland as well!  My office just laid off all of our nice little old lady receptionists in preparation for next years budget and the current numbers that have been coming in.  We are still the top producing office in our area out of ALL the others, but I just looked up at the sale board for today 12/26/07 and we only had 6 sales this month (the worst I have seen in the last 3 years since I started in this business)!

Wow...talk about bad timing! Unfortunately, this is a harsh reality! We had to switch brokers recently and it is a drag...so my prayers go out to all the agents and their families.

Best wished to all these agents!  

My home office closed last year (Keller Williams - Marin, CA).   It turns out - best thing to ever happen to me!   As others have mentioned on this thread, it you, the agent, that your clients work with, not some franchise.

Go make your own destiny!

Good luck!!

Mitch

  My late father  used to say that you have to "look at every knock as a boost." May the displaced agents find a boost to other brokerages and be happier and more successful than ever !

Good luck and god bless to all affected.

I remember when the first remax offices opened in my area...I wasnt an agent then, but I remember they were only for the best,  most productive agents in town. No one else would commit to paying the desk fees and franchise fees that  were due with or without a sale.And Remax wouldnt accept anyone but the best.

  I think over the years too many marginal agents chose remax, and the local offices accepted them when they shouldnt have.  It worked when the market was booming, but when the maket turned south this was the result.

I see more and more agents associated with the so called 100% offices moving to firms like mine where they may only get 50%,  but leads and other services are provided, and nothing is due the broker unless you have a sale.

I'm watching one of the business channels and they just mentioned that "REMAX, one of the biggest Realty offices in Pheonix, just shut down all of their offices completely."  It makes it sound like REMAX is going down, not REMAX2000.

REMAX Int'l needs to get invovled and issue a broader statement for the airwaves--the public is about to be under the impression that REMAX as a whole is closing.

Remax 2000 designated broker should be held accountable by the Department of Real Estate. The agents got a raw deal. Remax Corporate needs to reduce the fees they charge all the office brokers so they in turn can reduce the high fees that most of the Remax Agents have to pay just to hang their license. The fees are way to HIGH. Times are tough for all REALTORS and these franchise companies need to cut brokers a break so they in turn can cut the agents a break on the high fees they already pay.

Wishing You HAPPY HOLIDAYS and Best Wishes for A GREAT YEAR 2008.

Tommy   New York Certified Home Inspector Long Island NY Nassau/Suffolk/Queens Home Inspections

Yikes!  A couple of small offices in my area have shut down, buy a ReMax office with 350 agents--wow.

what about over 200 k in bounced checks.  Na bob was just an optimist

I have inside information and remax internation should shut down because they have not paid their realtors for these bouced checks and are helping bob to stay open with a few offices

Dave Liniger is a good business man and a good person, along with his wife, Gail.  Top producers are what RE/MAX is all about.  Yes, the last 7 years may have let more in, than in a normal market, but, be assured, Dave Liniger created this company and he will not let it fail. 

Each RE/MAX office is independently owned and operated.  I don't know the details, but, it cannot be all about desk fees. I was an agent with RE/MAX for 13 years and believe me, there system works and the compensation to its agents is actually, more.  More in the agent's care and pocket.  Other issues can and have closed businesses before.  I wish the agents well and continued success in selling, the owners, my regrets for their failed business and hope that 2008 treats them kindly.