Schwendeman settles into new venture | BrainerdDispatch.com | Brainerd, Minnesota

Schwendeman settles into new venture

Posted: January 31, 2014 - 9:46pm
Back | Next
Surrounded by sports memorabilia in his new offices in Baxter, Chad Schwendeman, broker/owner of the new Exit Realty franchise expects to grow to 30 agents.
Surrounded by sports memorabilia in his new offices in Baxter, Chad Schwendeman, broker/owner of the new Exit Realty franchise expects to grow to 30 agents.

BAXTER — Football helmets, complete with signatures of notable NFL players, stand out along a wall in Chad Schwendeman’s new office. He said the sports memorabilia — with signed jerseys in the office hallway, including one from quarterback Brett Favre — is a retirement investment.

For a driven man and self-described workaholic, retirement may seem a distant horizon.

When Schwendeman was 28, he bought Tower Real Estate. It was 1999. During the next seven years, he brought on four other partners and later they bought the Weichert franchise. He was recognized as one of the top 125 real estate agents in the nation.

“Over 14 years I learned a lot, what I wanted for support from a franchise and what I needed,” Schwendeman said. Recently, he decided it was time for a change, leaving Weichert for a new venture.

After researching options in the industry and interviewing companies, Schwendeman flew to Toronto, Canada, several times to meet with the founder and CEO of Exit Realty Corp. Exit founder and CEO Steve Morris started the corporation in 1996 in Toronto. The name, which may seem a bit unusual, was picked for its ubiquitous nature. It’s everywhere. Millions of signs in every city, town, village in buildings large and small. Even above the doors at competitors’ offices. They all say “exit.” Whether that translates to the public awareness of the corporation may take time to determine as Exit seeks to grow to include 3,600 offices and 100,000 agents by 2018.

Schwendeman, 42, said he was impressed with the company’s culture, its emphasis on marketing and training and healthy work/life balance. He’s long been a proponent of aggressive marketing. He also saw more diversity at the top.

“We are in a very male dominated industry,” he said, noting six out of the nine executives at Exit are women. After meeting with a couple of those female executives, Schwendeman described them as the most dynamic, intelligent people he’s ever met.

Schwendeman said he was looking for a company that offered leadership, retirement, technology and training on how to use it, marketing, compensation and a desired work environment.

While some have asked him why he didn’t form his own real estate agency, Schwendeman said he couldn’t have the resources now available to him as an independent. This way, he said, clients from other parts of the county who have never heard of his name may be familiar with Exit. There are 750 Exit offices in the U.S. and Canada.

Schwendeman said one of the attractions in choosing Exit came from its funding philosophy promoting sponsorship. That sponsorship, Schwendeman said, creates an environment where agents have a vested interest in each others’ success versus a focus on internal competition. After Schwendeman joined the company, broker/owners of other Exit franchises called to offer assistance, share information or training. In an industry often focused on competition, Schwendeman said the collaborative response is one of the things he thinks sets the corporation apart.

For Exit real estate agents, commissions are split 70/30 with the agent taking the larger share. If an Exit agent brings another Realtor to the company, he or she receives the equivalent of 10 percent of the new agent’s gross commission.

“This type of philosophy allows them to have a built-in mentor,” Schwendeman said.

The 10 percent bonus comes from the Exit corporation not from the new agent’s commission cut. If the new agent is making $50,000 a year, the sponsoring agent gets $5,000.

That 10 percent bonus translates to a 7 percent retirement benefit, or it can be a 5 percent beneficiary benefit. Once an agent’s commission hits $100,000, their commission cut increases to 90 percent.

Schwendeman quoted Exit’s CEO Morris’ statistics of 93 percent of the sales are done by 7 percent of the Realtors with the average real estate agent making $20,000 a year. Schwendeman currently employs four full-time employees and 12 to 15 real estate agents. A goal is to grow the office to include 30 agents who are full time. Schwendeman’s Exit offices are in the Johnson Centre in Baxter. The franchise grand opening is Feb. 28.

With positive signs with the stock market, economic and housing news and expectations for low interest rates through the first part of this year, Schwendeman is optimistic about this year in real estate. He said he personally had $42 million in sales in 2012 and $52 million in 2013 selling 260 properties. Baby boomers are starting to retire and gravitating to the Brainerd lakes area, he said.

“We have a lot of big city amenities with still a small town feel,” he said, adding the attraction of the lakes and health care is bringing a lot of people from Minneapolis to look for retirement homes in the Brainerd lakes area.

The transition from boom to bottom wasn’t easy when the housing market crashed.

“In the peak it was very easy to sell houses. You could put the sign out and gosh you’d have five offers in the same day. Now it takes a marketing strategy and a marketing budget to get them sold,” Schwendeman said. “It was tough. I knew there would be a market correction back when everything fell apart in 2007 and 2008, but we didn’t think it would be a market depression. ... It was the sky was falling.

“I think the low interest rates have helped and people out there I talk to feel good about the economy. When people feel good they maybe go and buy that second home or upgrade.”

Even during the recent tough years, Schwendeman said he didn’t want to leave the industry and still loves houses and marketing.

“Real estate has always been my passion,” he said, noting in real estate success can hinge on how an individual is able to brand and market themselves. “Really it’s the work ethic and drive.”

RENEE RICHARDSON, senior reporter, may be reached at 855-5852 or renee.richardson@brainerddispatch.com. Follow on Twitter at www.twitter.com/Dispatchbizbuzz.