For a man who makes his living selling property, Dave Liniger is relaxed about the US housing slump. Perhaps that's because he reckons he's seen it all before.
In the 35 years that the 61-year-old has been running Re/Max, the multi-million dollar real-estate business he founded in Denver, Colarado in 1973, he's seen seven presidencies, four recessions and more housing downturns than he can recall. "The correction was inevitable. You can't have prices going up 20% a year, because you price people out indefinitely."
Liniger has been talking about property ever since, at the age of 18, he read a book on how to make a million from real estate. Some would have dismissed the idea as a get-rich-quick scheme, but Liniger was hooked. "I thought, wow, that's the way to get rich if you've got no money buy houses and fix them up."
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But even then, getting on the housing ladder wasn't easy. Just married and earning $99 a month as an entry-level airman at Davis-Monthan Air Force Base in Arizona, Liniger had to work three part-time jobs just to get the deposit for his first house. $450 down on a $10,000 property, paying $94 a month on the mortgage. "A year later I got assigned to go to Vietnam. I sold the house and made a $4,000 profit. That was more than I was making on a full-time job and three part-time jobs combined for a year. The die was cast."
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Getting himself a real-estate licence to save on commission, by the time he was 21 he owned more than 20 houses. But it wasn't until he moved to Denver in 1971 that he hit on the idea for Re/Max. At the time, estate agents gave their employer 50% of commission they made. Liniger decided on a set-up where he would own the office and "the agents would pay a fair share" of running the firm. In this set up, the average agent would get to keep 85% of commission after expenses.
He bought an office big enough for ten agents on the outskirts of Denver and ran an advertisement in the local newspaper. In the first year, he managed to get 21 agents, in the second 42. That's when he spotted an interesting trend his largest rivals, who between the two of them had 50% of the market, didn't hire women agents. "They thought it should all be male, wear a tie, drive a big fancy car, be a member of the country club and work the high end of the market."
So gradually, Liniger found that the best sales women started coming to Re/Max. "In the first five years, my sales force was about 75%-80% women." By the sixth year, Re/Max was Denver's top real-estate company and Liniger was taking in $280,000 a year. "It wasn't great, but it was decent."
By 1976, he had eight offices across Colorado and his managers began asking to set up and own their own offices. So the next year, they set up a franchise programme and sold more than 100 franchises at $5,000 each, plus continuing fees. They weren't fussy at first "anyone who called, we said yes, we'll give you a franchise". As a result, Re/Max grew rapidly.
Now with a global network of more than 7,000 franchises, it's still privately owned and Liniger remains upbeat about the future. "Each time you work your way out of it [of a housing crisis], home ownership is still highly desirable and this housing crisis will pass as others have done."
