Steve Baird: Brokerage owners ‘need to focus on what we can control’
The Baird & Warner CEO shares how his family business has thrived in a cyclical, sometimes “regressive” industry, and discusses the future of buyer agency.
- Baird says sticking to business principles through good times and bad is what has allowed his family firm to remain successful since the 1850s.
- He also discussed his company’s recent expansion into the Florida market and potential outlook for further growth.
- Baird said he supports buyer agents discussing compensation and exclusivity in the lead-up to a decision to the NAR lawsuits.
Baird & Warner is one of the most prominent names in real estate in the Chicagoland area. And it's a family name that goes far back — far enough back that the business pre-dates the American Civil War.
Steve Baird, owner and CEO of the storied brokerage, took over the family business three decades ago and has seen multiple booms and busts. He views success through a broader lens than sales volume, though Baird & Warner currently ranks 36th in the nation among brokerages by sales volume with more than $6 billion in sales last year.
In an exclusive interview with Real Estate News, Baird shared his perspective on supporting agents with meaningful training, expansion to new markets, and the opportunity to think differently about commissions. (This interview has been edited for length and clarity.)
You've seen a lot of peaks and valleys over the years. In a challenging market like this one, what are you doing to support your 2,300-plus agents?
I talk to people in the business about how we need to focus on what we can control. You can't control what the market does for the most part. In these times, it's getting back to really basic stuff, like talking to your buyers and talking to your sellers, because there are enormous misconceptions about what's actually going on in the marketplace.
For example, I don't think it's generally known that the real problem with the market is the lack of inventory. The common thought process is, well, interest rates are high, which is true, and that does have an impact, but we have almost unlimited buyer demand right now and we don't have enough inventory. If we had 25-30% more inventory, we'd do 25-30% more business.
Brokerage models are changing. What do you think brokerages should be focused on?
In our model, we're training and showing agents how to run their business. We're committed to that and we believe that's our niche, our segment, and what we're really good at. And we've done it for a long time.
eXp, on the other hand, is a perfect example of a company that provides very little to their agents other than licensing. And there have always been companies that fill that niche and they've come and gone. RE/MAX is in that category. Charles Rutenberg is in that category.
A lot of companies will say, "Oh, go to our website, and you can get some training there." Which is technically true. But you know, agents need more than that.
What are other companies doing well, and are there any strategies you'd like to emulate?
We're always looking at what other brokerages do, but we're also looking at other companies outside of the industry. Because the real estate industry, quite frankly, is very regressive in terms of its ability to evolve and change and create. We're one of the very few industries that doesn't offer an integrated service package to our customers.
We have really focused on how to integrate all the services that somebody needs to buy or sell a house. We're trying to make it work systematically so the agent can focus on just dealing with buyers and sellers. The client doesn't care about the mortgage or title or attorneys or inspections — they just want to know, "What do I need to do to buy a house?"
Agents were the catalyst for Baird & Warner's recent expansion to Florida. How is that going?
With technology, people can really do business anywhere. A bunch of our agents were following their clients to Florida — the client would rather have the agent they knew and trusted from Chicago come with them to Florida where they don't really know the market. It comes back to personal relationships.
Agents are very entrepreneurial. They came to me and said they wanted to be in Florida but stay with Baird & Warner, so we opened an office in Naples to facilitate that. It was about meeting the needs of those agents, but it also occurred to me that if we're able to do it in Florida — and we can figure out a model to do it — then we can go to a lot of places. It's a new world.
Do you think the class action commission lawsuits could impact what buyer agents earn?
I don't think it's going to cost buyers any more money and I don't think buyer agents are going to make any more or less, but it may change where the money comes from. A good agent should be sitting down with their buyer and explaining to them how the process works and how they get paid. It's going to be disruptive in the short term, I think.
I hope it opens the door so people start to ask, "Why is it always split 50:50?" There are markets where the split is 60:40 or 55:45. If you provide a higher level of service or you're a better agent, then why don't you charge more? There's now an opportunity for creative people to do things differently.
How has Baird & Warner remained successful over so many years?
It sounds really simple, but we have always felt you need to run a business by solid business principles. You need to know about making money and, in this case, supporting your agents and your clients.
So many companies and so much of the press are focused on market share or volume. If you run your company with those goals in mind — which a lot of companies do — it's easier to get market share but you'll be compromising on a lot of things.
But if you don't run a successful business, you're not going to be around. That means there are times — and right now is one of those times — where you've got to make a lot of tough decisions.