The Final Frontier

In the deadly race to circle the globe in a balloon, team Re/Max plans to rise above the crowd. But can a bold ego go where no man has gone before?

"Most people don't realize it, but I'm very, very shy," he says. "I get on an airplane next to somebody and I never talk to them. I fly 270 days a year, and I can't tell you the last person I met on an airplane."

The story of Sanctuary is emblematic of Liniger's way of doing things: Get an idea, pursue it relentlessly, assemble the best talent you can find, and never, never give up. It's also the way his company came to transform the real-estate industry.

Liniger came to entrepreneurship almost by default. He grew up in Indiana, dropped out of the state university after a year and a half, served in the Air Force in Vietnam, and came back to the States with a vague ambition to become a real-estate investor. In the early 1970s he moved to Phoenix and started buying up $10,000 houses for $500 down. Then he figured he could save on the commissions if he got a real-estate license. Then he thought he might as well join a local agency and try to hustle some commissions of his own.

"I looked at some of the people in the office where I hung the license, and I thought, 'These are losers,'" he recalls. "The quality [of agent] was very low compared to today. I struggled for six months and couldn't make it work."

A short, skinny part-timer who took prospects around the desert in a Volkswagen that lacked air conditioning, Liniger didn't seem to have a prayer in the real-estate business. He was ready to pack it in but decided he might as well go to a final industry event he'd already paid for, a lecture by motivational speaker Dave Stone. Stone's smooth, confident presentation unlocked something in Liniger.

"I bought all his books and tapes," he says. "That same night I bumped into a customer and made a sale. I went out and bought a new car, which made me look more successful. In the next two days I made four more sales. I had all the confidence in the world. I never looked back."

Liniger came to believe that the reason his office was full of losers had to do with the compensation structure. In the traditional real-estate office, agents split their commission, usually on a 50-50 basis, with the broker in exchange for office space and services. The more sales you made, the more you forked over to the boss--in effect, subsidizing the rest of the crew. A company that allowed agents to keep all of their commissions and charged only a flat monthly fee for management services and office expenses would attract top producers, he reasoned; those marginal agents who couldn't make the monthly fee would be weeded out, and the company would come to dominate the market.

It was not an entirely new idea, but no one had tried it on the nationwide scale that Liniger envisioned. Long on chutzpah but short on cash, he moved to Denver and launched his own shop, calling it Re/Max, shorthand for "real-estate maximums," the kind of commission he planned to offer.

"I was very naive," he says now. "I thought this was the greatest idea in the world, that we'd have thousands of agents coming to us within a year. But we made a lot of mistakes."

Liniger's first hire was a marketing executive named Gail Main, who would later become his wife and CEO (Liniger has four grown children from a previous marriage). Over the next month he interviewed more than two hundred potential sales associates; only four agreed to stake their paychecks on Liniger's innovative plan. After two years, Re/Max had only 42 agents, and creditors and the IRS were breathing down Liniger's neck.

"There were a lot of opportunities to give up," recalls Daryl Jesperson, part of the original core of employees. "But we just didn't quit. If you stick with it, you figure out ways to get around obstacles. You burrow under them, jump over them, whatever. It's the 25-year 'overnight success' thing."

Gradually the word got out that Re/Max agents could make considerably more money than agents in a traditional brokerage. The Linigers began to franchise the concept, selling a package of products and services--training programs, a referral system, advertising support, corporate relocation services--to independently owned offices around the country. As the network grew, so did the franchise fees and the monthly management fees the agents paid to brokers, regional offices and company headquarters.

The parent company, Re/Max International, is still privately held by the Linigers and doesn't disclose its income. But in 1985, Forbes magazine estimated the surging franchiser's annual revenues at close to $8 million; the network has since quadrupled in size and now has nearly 3,000 offices in 24 countries. Although its boast of being the top real-estate network in the world has been disputed by Century 21--it has more agents, while Re/Max claims to handle more transactions--there's no question that Liniger's gamble has paid off spectacularly. The key, he says, was not tossing in the towel during the rocky start-up years virtually every entrepreneur must endure.

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