Editor’s Note: This is the second in a new monthly series on affiliated companies. Our goal is to feature companies which have had history and experience with affiliated business to learn about their success and share the RESPA compliance lessons they have gained in these affiliations over time.
Berkshire Hathaway HomeServices Fox & Roach Realtors has been the No. 1 company in the Berkshire Hathaway network four years in a row out of more than 1,000 real estate companies across the country.
The Devon, Penn.-based brokerage’s market dominance is three times the market share of its nearest competitor.
Formerly Prudential Fox & Roach before being sold to Berkshire Hathaway in 2013, Fox & Roach Realtors has been in the region since 1886 in various capacities, the product of about 40 mergers and acquisitions.
BHHS Fox & Roach Realtors CEO Larry Flick V attributes the company’s continued growth in large part to its affiliated businesses. Through the Trident Group, the company provides one-stop shopping and facilitated services to its clients, including mortgage financing, title insurance, and property and casualty insurance.
“Trident Mortgage Co., our in-house mortgage company, is the No. 1 lender in the Philadelphia marketplace,” Flick told RESPA News. “And last year, we sold over 31,000 homes, over 12,000 title policies, over 7,000 mortgages and over 10,000 insurance policies.”
Fox & Roach started with affiliates in 1983 with its title insurance group, followed by mortgage in 1985.
“We’re the market share leader in our marketplace, and we have been for a very long time,” Flick said. “One strength is our diversified profit centers, which goes to the in-house financial services. As the market changes from year to year, it’s important to have multiple areas of revenue and profit.
“When the market adjusts and we have recessions, it certainly helps having financial services. When the real estate market slows and interest rates go down, it provides opportunity to do refinance business, and help our past customers lower their interest rates. Then we have the ability to reinvest those profits back in the real estate operation, which benefits the entire company.”
One challenge with mortgage, title and insurance is keeping up with RESPA and other regulations that have changed multiple times over the years.
“It’s about altering your systems and processes to make sure you’re compliant,” Flick said, “and educating our sales associates on the changes so they can educate their buyers and sellers so we can continue to deliver an exceptional level of service.
“We have an entire compliance department, which is something no company had 15 years ago. Between the four companies – brokerage, mortgage, title and insurance – we have 10 people dedicated to compliance. We have in-house attorneys. We don’t issue any marketing pieces, we don’t do anything on social media – we don’t do anything – without the approval of our compliance department. We also get a lot of support from HomeServices of America. It’s about following the letter of the law and making sure you’re always compliant with all of the regulations.”
Berkshire Hathaway also offers its franchises ongoing educational conferences and meetings to keep up to date with compliance.
“With RESPA and overall regulation, the challenges often are keeping up with the changes,” Flick said. “A lot of times when changes are made, you don’t get a lot of guidance, so you have to work very hard to make sure your systems, processes and documents are compliant and that you educate your sales associates on all the changes – when they’re coming, how it’s going to impact their business and how it’s going to impact their customers.”
Flick said brokerages thinking of starting an affiliated business arrangement for the first time need to understand that your sales associates are your customers. He also advises making sure your service levels are better than the competitions’ service.
“If you’re going to ask for business from your sales associates, in return you have to deliver impeccable service that exceeds your competition,” Flick said. “We think that in our business, it’s all about relationships. It’s about our relationship with our sales associates, and our sales associates’ relationship with their buyers and their sellers.”
Flick said other keys to Fox & Roach’s success includes making sure all 750 employees know they’re valued, providing the best technology to their 5,500 sales associates and sharing the wealth.
The company-sponsored charitable foundation, Fox & Roach/Trident Charities, has given more than $7 million and 241,000 volunteer hours to more than 250 organizations across its marketplace.
“Giving back to the community is an important part of our company’s culture,” Flick said.