RE/MAX’s CEO Powerhouse

Margaret Kelly

NAWRB is honored to have had the opportunity to have an insightful and candid interview with Margaret Kelly, CEO of RE/MAX. Kelly is responsible for the day-to-day operations and strategic direction at RE/MAX across North America and in more than 95 countries around the world. She is recognized by countless organizations for her exceptional leadership skills, commitment to community involvement, and for being an advocate for businesswomen around the globe. Kelly has not only had a phenomenal, 27-year career with RE/MAX, she is an incredible person with valuable insight to both personal and professional matters.

NAWRB: I’ve read a lot about you, particularly that you’ve learned some valuable life lessons and developed a solid work ethic from working in your family’s factory throughout most of your youth. Could you share some of those lessons and experiences that have helped shape and motivate you?

1. KELLY: You know, it’s funny. I’m in this position, and still to this day, I remind myself that I’m CEO of RE/MAX. It wasn’t a goal. My biggest goal growing up was to go to a community college, get a bookkeeping degree and just be a bookkeeper somewhere. My parents would say, “Don’t go to college; get married and have kids.”

I didn’t want to work in the factory that my family owned. It was noisy, dirty, and I had been working there 10 years. I thought education would get me out, so all I cared about at the time was to go to a two-year college. I didn’t think of going to a four-year college at the time because the message my parents inadvertently gave to us was, “All of those things are for other people. We don’t have a lot of money…we work, and that’s what we do.” So, I always thought that things like vacations, new cars and store-bought clothes were for other people, not for us. The first time I ever questioned it was when I decided to go to college.

Once I was in community college, I saw the other students moving on and getting four-year degrees. I realized that may be the next step, so I ended up getting a finance degree. The opportunities that came my way paved the road for me. I never had my eyes set five years down the road. I just took advantage of various opportunities that came, one at a time.

One of the first and most valuable lessons that my father gave me was when one day I wanted to take time off work in our factory, but I literally had thousands of pieces on one side of a machine that needed to be worked on. I had an empty bin on the other side to put the finished pieces in after I worked on each one, and I was extremely discouraged. I complained to my father, “I’ll never get this done,” and he said, “Margaret, don’t look at what you have to do, because if you look at what you haven’t completed, or what you haven’t got in life, you’ll never be happy. Look at the other side of the machine at what you’ve completed and celebrate the things that you’ve got.” It was such a strong lesson to me that over the years, I’ve come to rely on it. I had to always plan my free time around my workload in addition to school. Sometimes it was tough, especially when I wanted to do things like go on a date when I was covered in machine oil with cuts, burns, and scrapes on my hands. But, I learned a phenomenal work ethic that I am grateful for.

Instead of having goals that were planned far out, I had to learn “How do I survive at what I’m doing now?” which is what a lot of real estate people have to do. For example, I know a real estate agent in Arizona that, for many years, only handled high-end properties. When the market turned, she said, “Ok, what do I have to do now?” and started handling distressed properties, short sales, and anything she could to keep earning the same income. Regardless of what industry someone is in or what the market is, you’ve got to look at what’s going on and learn to be flexible.

NAWRB: I read that you are a cancer survivor and that you have been through some trying and difficult times in addition to surviving two types of cancer. Were there moments when you felt like giving up, and if so, what inspired you to conquer such adversity?

M. KELLY: Yes, you know, I had a very difficult time in my life where within 23 months, I was diagnosed with breast cancer, had a mastectomy, and not long after that, my father passed away. I ended up with cancer again and had to have a complete hysterectomy. Only eight weeks after the hysterectomy, I had to have emergency back surgery for a herniated disk that caused me to lose control of a leg. All of this in 23 months, and it was a very difficult time. And yes, I actually sat back and said, “God, what is it? Am I not supposed to be working? Should I slow down?” I even had one holistic professional state that because I work in a man’s world, my body is trying to throw off my woman parts. I obviously didn’t go back to that person, but it’s amazing the kind of things people will say and do.

I had to sit back and think through “What do I want in my life?” I have a great marriage, two sons, and I really enjoy my career. I decided that if I don’t go back, cancer wins. The reality is that I love what I do, and I really enjoy the people I work with. They are like family, so I went back.

A few things happened after I returned to work. First, the Susan G. Komen Foundation came to us and asked if we wanted to be a national sponsor of the Race For The Cure. It worked out great. For 10 years, I was a survivor, a sponsor, and a speaker about women’s health, breast cancer, and the things we need to do to take care of ourselves. What a great thing to be involved in.

Also, it wasn’t too long after I came back to work that I found an anonymous suicide note in our office mail. To make a long story short, I figured out who it was. They tried to commit suicide a couple of times. They reached out because they knew of the hardship that I had been through and thought I would understand why they were giving up. That was almost 13 years ago, and that person is still working with us, they are happy and doing phenomenally well. I look back and say, “Wow, what would have happened if I didn’t come back?” It was a tough yet easy decision to come back. Since then, I’ve been able to see the impact it’s had on other people’s lives.

We are all connected, and if you only see the negative, you miss the positive. Personally, my faith has helped me get through it. I also had family, friends, and co-workers. Somehow all those things come together to help you through and eventually, pay it forward.

NAWRB: Circling back to our earlier discussion about housing industry professionals having to navigate the changing landscape of the market, what can you say about the volume of properties being sold? Wouldn’t that affect one’s ability to make a living in the housing industry?

M. KELLY: A lot of investors and analysts ask, “What do you see in terms of the market?” The low inventory…sure, it’s an issue and we need to look at it, but we’re still talking about 4.9 -5 million sales. With that many properties available for sale, agents should be asking themselves, “What’s really going on in the market?” as opposed to reading the press and saying, “Oh my God, I should just give up!” They should look at the market, analyze, and say, “How can I capture a piece of this inventory?”

NAWRB: Speaking of how to get a piece of the smaller inventory, we now see tightened loan restrictions, making it harder for first time buyers, as well as an influx of foreign investors with programs like EB5. How do those factors come into play, and what does it mean for Main St. as opposed to Wall St. in terms of being able to participate in the market?

M. KELLY: Those factors do play a big part, but look at the overall market right now. The Federal Reserve is continuing their taper, but then GDP comes out at one tenth of one percent which is literally stalled. Then days later, unemployment comes down to 6.3%, and we’ve just added 288,000 jobs. So, all of these things are contrary to each other. When you factor in the CPFB, all the federal regulations and Dodd-Frank, it’s as though we have so much stimulus going on in our industry that it’s impossible to make a prediction where we will be in the next one month or even six months. To me, that’s the tough part right now.

The Fed taper is fine, but it’s time to get all artificial stimulus out of the market and let it level out to where it ought to be. Now they’re adding the consumer protection that was based upon Dodd-Frank which changes the application for mortgages, down payments, etc. This makes it harder to predict what the effect will be going forward on the market and the availability of mortgages, specifically for first time home buyers. All these things are entering our industry from all different sides and until the market settles down, how can we ascertain what impact all those factors are going to have?

NAWRB: Agreed. It used to be the case where we could rely on the cyclical nature of the market, plus some key market indicators, but the influx of stimulus and changing regulations make it hard to determine which sectors will perform and what areas of our business we should focus on or redirect.

M. KELLY: From 2007 until recently, there was no seasonality within our industry, whereas before, we could tell where the up and down markets were. Now we are starting to get seasonality again. For example, housing sales were down in November and December, just like historical trends.

One thing that irks me is when I hear things like, “Housing was down from last month.” Yeah, so? People have forgotten that buying a home should be a place where you live firstly and an investment secondly. We got into trouble when people started buying and selling homes like stock, as opposed to actual residences. People get into homes and they stay in them for approximately seven years on average, so a change from month to month should not be a big deal when it comes to a long-term investment.

It’s no doubt that there is too much regulation overall. It seems like the government is trying to protect people from themselves. I don’t think that’s what the government should be doing, at least not to this extent. I believe in an open market and free trade. That’s what’s going to allow the real estate market to settle where it’s supposed to be. Let’s get back to common sense protection, common sense lending, and allow the market to handle itself.

NAWRB: You oversee RE/MAX franchises in more than other countries; how different are foreign markets from the US market?

M. KELLY: We have about 6,500 offices worldwide but only 21 are company-owned. The rest are franchised. All of our overseas offices are franchised. It wouldn’t be worth it for us to try to open an office in a country and market we know very little about. Licensing requirements, regulations, lack of structured MLS systems…our franchisees are already aware of these factors and know how to navigate through them to sell real estate. So, I look at what happens in each country, but the franchisees are really heading up their local operations.

There are many countries we will not go into even though we’ve had inquiries, either because the government is unstable, or they don’t have at least a fairly sophisticated housing sector for our franchisees to utilize. There are countries that do not have licensing laws, no MLS, and no websites to share listings which makes it difficult to operate in. Some countries, such as Spain, South Africa, Australia and New Zealand, are very sophisticated like the U.S., and Japan is getting there. But then, look at China, where you can buy the home but you can’t buy the land (you have to lease it from the government). We have to take all those things into consideration before partnering with a franchisee.

NAWRB: Is there anything that you would like to comment on that has been meaningful to you throughout the years?

M. KELLY: Overall, the thing that really hits home to me is that over the years, with changes in technology, changes in financing, changes in you name it, the heart of real estate remains the same, which is: the number one thing that most people want is the American Dream,  to own their own home. They want to provide for their family and they want their own piece of ‘terra’. The reality is that this is not going to go away.

Real estate agents should remember that if you take away all the marketing, technology, Facebook, Twitter and everything, the core of home ownership has not changed. As long as you focus on what your business should be, a trusted and knowledgeable professional who is there to help the buyer and seller navigate, all the other things will fall into place appropriately. Don’t forget the core of your business.

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