- Monthly Q&A with Lane Hornung.
- This month marks 4th anniversary of 8z.
- 8z agents averaged $8.1 million in sales in 2013.
This month marks the fourth year anniversary of 8z Real Estate, a sponsor of InsideRealEstateNews.com.
While Lane Hornung, CEO and cofounder of 8z, and I usually talk about a real estate issue in our monthly question and answer session, I thought this month we should focus on the company itself.
John: Lane, 2013 was a record year for real estate. In the Denver area, more than 54,000 homes traded hands for a total dollar volume of almost $15 billion, not only soundly beating 2012, but even the go-go years of 2005 and 2006. How did 8z perform in this heady market?
Lane: 8z had a great year from a market standpoint, a transactional standpoint and a growth standpoint.
John: Let’s break it down. How many brokers at 8z?
Lane: We started the year with 69 8zers and ended the year with 89, but we are not a body shop who brings in any agent. More important to us than adding people is to add really great Realtors and helping our existing Realtors to be more productive. Our total dollar volume grew by about 39 percent, year over year, even though most of our new Realtors were not with us for the full year.
John: How productive were your Realtors?
Lane: Glad you asked. I am very proud of them. Our Realtors closed an average of 25.2 homes each in 2013. That is very high by industry standards. That is around three or four times the average for a full-time agent and about 10 times the average when you include everyone who holds a real estate license, including part-timers.
John: How do you measure closes?
Lane: We are very strict about how we measure closes per agent, whether our client was the buyer or the seller. Each transaction is per license holder. At some firms, they might have a team leader with four people on the team and all the team members contribute their side to the team leader. Not at 8z.
The other important thing to mention is that we only had one Realtor in Colorado who did fewer than 10 transactions last year, and he did eight. At some companies you might have 100 agents and five of them are mega-brokers who do a disproportionate number of the deals and many more agents in the firm who only do four or five transactions.
John: It’s obvious why doing a lot of transactions is important for the Realtor, but why should a consumer care?
Lane: 8z is a purpose driven company. We think that real estate is broken and we are fixing it. One of the things broken is that many people think all agents are created equal. They are not. How do you get better? You help lots of clients buy and sell homes. You do a lot of transactions.
Ask yourself, would you rather have an accountant who is a part-timer and does one or two tax returns each season, or someone who has done many, many returns. The more you do something, the better you become and the better you know the market, and the client directly benefits from that knowledge and expertise.
John: Does it work the other way, too? By that I mean, can an agent who is busy afford to pass on a deal that is not in the best interest of a client?
Lane: Absolutely. An 8z agent who does 30 transactions a year has the luxury to pass up a deal. An 8zer can give you an honest appraisal and say, “Look, now is not the best time to sell your home. Wait a year or two. You’ll still be here and I’ll still be here.”
If an agent only does three deals a year, they are so hungry for a commission, they can’t afford to pass up a deal. That is something else that is broken with real estate. A lot of consumers think agents only care about the commission. Sometimes these consumers are right.
John: What was the average dollar volume per Realtor at 8z?
Lane: It was $8.1 million in 2013.
John: That is high by industry standards, isn’t it?
Lane: Yes, it is. And we are a company that is not just in the luxury market. We sell homes across the entire Front Range, including Greeley and Colorado Springs, where the prices are not nearly as high as the prices in Boulder and parts of Denver.
John: Lane, tell us how you came up with the name 8z?
Lane: We were looking for a short domain name. 8z was available and it sounded very progressive.
Then, I went out for a run and it occurred to me that all of Colorado’s Zip Codes start with the number eight. That kind of clinched it.
John: Of course, last year you also opened an office in Burlingame, Cali. (where there are four 8z brokers), but you kept the 8z name.
Lane: In many cultures around the world, eight is the number of prosperity. So we think of 8z as the zip code of prosperity.
John: Thanks, Lane.
8z Real Estate is a sponsor of InsideRealEstateNews.com along with Universal Lending and Land Title Guarantee Co. A monthly Q&A with Lane Hornung is a feature of IREN. Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.