The Success Story of RE/MAX
Dave and Gail Liniger, founders of RE/MAX
- Dave Liniger
RE/MAX was founded in 1973 by Dave and Gail Liniger, then two 20-something real estate agents from Denver, Colorado. They decided to set up their own real estate company, and set new rules of the game. They created RE/MAX, which stands for "Real Estate MAXimum", a model that encourages experienced real estate salespeople to develop their business potential. This company principle distinguishes them from the many inexperienced and part-time agents, for whom real estate sales were just something they did “on the side.”
Dave Liniger's entrepreneurial career, however, began as a near failure! Liniger grew up in Marion, Indiana, and was a student at the University of Indiana, but dropped out. He joined the Air Force, and was sent to Phoenix, Arizona. At the age of 19 he bought a house, renovated it, and sold it for a profit of $4000. Quickly realizing the potential of the business, he used his military salary to make down payments for the purchase of other properties, which he remodeled. By the time he was 24, Liniger owned 20 single-family homes.
He worked in a number of a brokerage firms and quickly became one of the top agents, selling multi-million dollar homes. However, the last company he worked at was a traditional brokerage firm, where he had to split the commission on the sale 50-50. It was then, that David decided to set up his own real estate company, based on the 100% rule, where the agents get a 100% of the commission on each sale and pay a fixed overhead fee.
The road to success was not easy. Although, he knew the concept of the 100% commission promised success to top-caliber agents, David found it hard to implement it in practice. He knew he needed lots of money, and thanks to his sales skills, he convinced five business sponsors to invest $300,000 in the company. As soon as they promised the money, he began hiring. He interviewed more than 25 candidates and rejected all of them! Not surprisingly, outstanding agents were hard to find!
The 28th candidate, David’s future wife, Gail Liniger was hired, not as an agent, but as a secretary! Admittedly, David knew that he did not have the marketing skills to make his company a nationwide success, and Gail had a marketing degree from Southern Illinois University. Having been hired as a secretary, however, Gail quickly proved her talents and was promoted to Vice President that same year. Five years later, she was made Executive Vice President, and a year later, she was elected President!
Eventually the couple succeeded in hiring a few highly skilled sales representatives, which gave the company a sense of stability. Not long after the company stabilized and its competitors realized it was not going away, they were attacked by damaging rumors. The company was accused of illegally dealing in government-backed securities and stocks, and both the Federal Bureau of Investigation and the Securities and Exchange Commission launched parallel investigations. Each investigation failed to find anything wrong, but the public image of the company suffered.
Financial and other practical constraints forced David to change strategies and he decided to use a franchising model to achieve the desired national expansion. First, he approached independent, well-established brokers, and tried to convince them to brand their offices as RE/MAX offices. Most of them, however, did not agree because they found RE/MAX’s overhead fees too high. Then, in 1977, he changed gears again and approached more entrepreneurial spirited brokers, who were just starting up. The struggle was not over, but the new strategy started to show its results. And, as David says, “The rest is history”
“I’ve been miserable when poor, and I’ve been miserable when rich. Let me tell ya, it’s a hell of a lot better being miserable when rich.”
RE/MAX is recognized for the most productive sale force in the real estate industry, with a global reach of more than 85 countries.
Today, the company has own regional franchises as well as overseeing and licensing individual franchises for real estate sales offices, each individually operated and owned. Outside of US, the company agents are provided with corporate services, such as agent training and advertising, in return for a fee. Franchise agreements do not enforce rules on brokers's business locally and concentrates almost entirely on support. RE/MAX franchise is constantly rated as one the best real estate franchises in the world by different media.
