INEZ STEELE
‘The best approach’

In the more than 25 years that Janet Pratt has operated her Canton real estate firm, she’s received only about four offers from larger firms to acquire her business.

But within the last three years, Pratt, 73, has noticed that the offers have become more common, as larger real estate companies seek to capture a larger share of the market.

Most meetings Pratt has had with representatives from larger companies seeking to acquire her office have been cordial, but some encounters have been rather unfriendly. Pratt recalls that after she recently rebuffed one company’s second acquisition offer, a representative told her the firm was going to open an office down the street from hers.

“I said, ‘Be my guest. Competition is always good,'” said Pratt, owner of Pratt Realtors. “I’m too old to be threatened.”

Nationwide, the real estate industry has experienced a significant amount of consolidation and franchising. Many independently owned and operated companies are choosing to sell their businesses to make a large profit, while others are franchising as a way to increase name recognition and revenue flow and reduce capital expenses.

But despite the trend of consolidation and intense competition from larger entities – which have large advertising and marketing budgets and, in some cases, national brand name recognition – there are plenty of thriving small independent companies in the Bay State.

Nearly 80 percent of the real estate firms in Massachusetts are independently owned and not associated with a franchise, according to a member survey done by the Massachusetts Association of Realtors.

In recent years, there have been some high-profile acquisitions of independent firms in Massachusetts. Most notably, The DeWolfe Cos., after going on an aggressive buying spree and acquiring dozens of New England companies, went public and sold out to real estate powerhouse NRT in 2002. NRT then merged Coldwell Banker Hunneman with the DeWolfe offices to form Coldwell Banker Residential Brokerage.

Today, some of the largest independently owned companies in the Bay State include Norwell-based Jack Conway & Co. and William Raveis Real Estate & Home Services, a Connecticut-based firm that began expanding into Greater Boston three years ago.

Some companies choose to sell because it makes financial sense, explained Robert N. Authier, chief executive officer of MAR.

“There is money to be made in being acquired,” said Authier. Others choose to associate with a franchise because of the brand-name recognition, advertising reach, and belief that they can acquire a greater number of property listings through a franchise affiliation, he added.

Still, many owners of smaller one- or two-office firms have rejected tempting offers from large corporations and franchises. Authier said some company owners have resisted acquisition because “they like being independent and like to have some control.”

Large companies tend to be centrally run from corporate headquarters, giving local office managers and brokers less input. That type of setup is unappealing to many who chose real estate as a career, including Pratt.

“I like being independent. I like to make my own decisions and I don’t like to answer to a corporate office,” said Pratt, who started her business in the kitchen of her home in 1979.

‘A Personalized Manner’
Inez Steele, executive director of The Realty Guild, a network of independently owned offices in Massachusetts, said guild members are continuously contacted by franchise operations urging them to sell their firms.

“Why do they remain independent? Because they feel they can service the public better by owning their own firms. They can look at each transaction individually and take the best approach in a customized and personalized manner,” said Steele. “No matter what they say, offices using the names of franchises and chains ultimately have to toe the corporate line in many ways.”

Pratt and other owners of firms say that a key to their success has been the personalized service they are able to offer. Whether a buyer or seller is calling 7 a.m. or 7 p.m., “the phones are always answered by someone,” Pratt said.

“If someone needs to get a hold of one of my brokers, I know where they are or how to reach them,” she said.

Jim Polino, who started Highland Real Estate in Winthrop with his wife Elizabeth nearly 30 years ago, said he seriously considered joining the Coldwell Banker network last year. But after traveling to Cendant headquarters in New Jersey and listening to all benefits the company was touting, Polino said he realized that “they were offering me less than what I have,” he said.

“After being an independent for so long, it’s hard to give it up,” said Polino.

Polino said his company, which competes with four other offices in Winthrop, has been able to thrive because of his ability to provide hands-on management and because of the thorough training the 16 agents in his office receive.

And unlike large real estate companies, which recruit new inexperienced agents and where sales associates come and go, Highland Real Estate’s agents have been with the company an average of 15 years, said Polino.

“We’re not a revolving door of sales agents,” he said.

While small companies face competitive pressures, many broker-owners say they’ve been able to survive by adapting their business models, hiring top-notch experienced agents and focusing on providing high-quality service.

“By nature, an independent office is smaller and more tightly run. They are likely to have a higher number of big producers and fewer new and part-time agents,” said Steele.

And even though smaller independent firms may not have the same advertising capacity that a large company does, the Internet has helped many smaller firms gain wider exposure – particularly as more and more homebuyers are beginning their home searches online and relying on Web sites for information about the real estate market.

“The Internet, in many ways, has empowered firms of any size to be able to provide pretty substantial services,” said MAR’s Authier.

The Internet has enabled both large and small companies to reach consumers, said David S. Drinkwater, who opened Grand Gables Realty Group in Scituate in 2002.

But Drinkwater said that one of the key ways smaller independently owned and operated firms have been able to “compete effectively with large companies” is by providing a “high standard of service.”

Unlike large corporate-owned offices, owners of smaller firms are just a phone call away – and consumers often appreciate having the ability to contact brokers directly with concerns, according to local real estate brokers.

“Small independents have been able to niche themselves in the marketplace today in ways they may not have been able to before,” Drinkwater said.

Drinkwater, who says he’s received offers “from time to time” – some by mail – said his company wouldn’t be able to offer the same quality and consistent service if it was part of a larger network.

“When you have a staff of 30 people in the office, making sure that the message coming from 30 is consistent and clear Â… is difficult,” said Drinkwater. “When you have a smaller group that’s focused on the message, it becomes clearer and it’s easier to articulate.”

In the late 1990s, when the large South Shore independent real estate firm for which Drinkwater was working decided to join a franchise, Drinkwater and six partners decided to establish their own company in Cohasset.

After several years of running the business with his partners, Drinkwater ventured out on his own.

“It was definitely the right move for me to make. My market share and productivity jumped dramatically by opening this firm,” said Drinkwater, who has been the top-producing broker in Scituate for the last five consecutive years.

Drinkwater said having control over how the company is run, instead of focusing on a larger firm’s rules and regulations, has enabled him to succeed.

“I have to have the business model to allow me to produce the best product I can,” said Drinkwater.

‘A Friendly Encounter’
Larger companies, like Coldwell Banker Residential Brokerage and Carlson GMAC, often tout the in-house educational and training programs that they can offer agents.

But smaller companies like Pratt Realtors and Highland Real Estate have been able to take advantage of the educational programs provided by trade associations, including The Realty Guild.

Joining The Realty Guild, said real estate broker Connie Sweeney, was one of the best decisions her company made.

The Realty Guild provides lower group advertising rates for its members and enables company owners to share information and “exchange ideas freely,” noted Sweeney, who started Medfield Properties with two partners in 1991.

Medfield Properties directly competes with six other companies with offices in Medfield, including Coldwell Banker, Century 21, Prudential and RE/MAX. Despite the fierce competition, Medfield Properties managed to grab 20 percent of the market share in the town last year, according to Sweeney.

Sweeney said her company gets buyout offers about three or four times a year.

“It’s always a friendly encounter. It’s done in a friendly spirit,” she said.

But each time, she and her partners, Joan Snow and Gloria Yankee, essentially have said they’re not interested.

“Being independent is a very positive experience,” said Sweeney. “We’re proud of what we’ve developed and we feel that being an independent real estate office has many benefits to both the sales associates and our clients and customers.”

Sweeney said independently owned offices have to “reinforce what they are and who they are” in order to succeed.

“I feel our challenge is being creative in our approach to real estate, but we have the luxury of being able to do that,” said Sweeney.

She added, “We really survived with hard work and hiring the best-quality individuals and agents to be part of our team Â… our reputation and our service are the most valuable assets we have.”