Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, is a firm believer in looking after his agents as much as his clients. That awareness is a key requirement in this business
Did you know that the first real estate franchise in South Africa was inspired by a Kentucky Fried Chicken (KFC) outlet? And that Lew Geffen and his mother Aida launched the idea in the seventies?
That was when Geffen was working with his mother at Aida Estate Agency. It was also well after he had sold his first house at the age of 16 (with a bit of help from mom, of course, on the legal side).
While Geffen loved earning money from the commission, he didn’t much like selling houses. His next venture – at the age of 24 – was hawking Iranian copperware on the pavements of Killarney. Says Geffen: “I did well, when I wasn’t running from the police when they tried to clear us off the street. The wealthy Johannesburg women loved the copperware.”
Next up was a stint in the building business. But when the recession hit, he went back to selling property at Aida. With three kids now in the picture, Geffen decided that he’d better start learning to like, and even love, real estate.
That’s when a branch of KFC moved into their office building in Parktown North. “It was the first time we had actually heard of franchising and we thought ‘we can do that’,” says Geffen.
“Instead of using a canned programme from the US, we put down everything we knew about selling property. That converted into the training programme and the franchise business began.”
It became clear to Geffen that he was in them real estate business for the long haul. Today, Geffen has sold between R250bn to R300bn worth of properties over 34 years.
ON LAUNCHING A BUSINESS
When did you break away to start your own company?
I started Lew Geffen Estates in 1982. By 2000 we were strong in Johannesburg with about 200 agents on the team. We were part of a pack of leaders in the real estate business but we weren’t at the top: we needed something extra.
And that was Sotheby’s International Realty?
A colleague suggested we contact Sotheby’s. I pushed back at first – in my mind Sotheby’s was an auction house and nothing to do with us. But delving deeper, I found they sold properties too. It began as an affiliation agreement and developed from there.
How did South African buyers and sellers respond to the affiliation?
The public responded so positively. To me, Sotheby’s has always been an inspirational brand; they were like royalty in the real estate business. Our client profile changed overnight, and I could see I was onto something good.
What started as an affiliation turned into a 10-year franchise agreement. And when we decided to franchise nationally, it became a 30-year agreement.
How important is marketing in this business?
It doesn’t stop at the property: it’s a combination of marketing to your clients as well as to the agents in South Africa. It’s your messages to both of them. It’s about perception and that’s a vital part of the real estate business.
How can you make the move from agent to business owner?
To make the leap, you need four things:
1. Desire – to want to do it.
2. Bravery – it’s risky.
3. A skill set – the top guys have the necessary industry knowledge.
4. Resilience – it’s not always going to go your way. It’s how you come out of the downs that make or break you in this business.
How did you handle the downs?
I can recall three mistakes that taught me valuable lessons. The first: someone persuaded me early in my career to charge my agents for the paper they were using in the office. Before I knew it, six of them had walked out the door. It was a real blow. My young daughter said, “Dad, I’m tired of hearing what they did to you. It was what you did to them.” That hit me: agents are like our clients and you have to treat them as such.
My second mistake went like this: I was commissioned to sell the first house for former president Nelson Mandela – which I did. When it came to round two, an important person called me saying he had a client from London who “only wants to deal with you, to see homes in the Houghton area”. I missed the cue and passed him onto an agent of mine. Guess who that person was? Mandela.
The third mistake was entering the auction business – bad move. All I will say is: stick to your knitting.
How to promote property as an investment during rough patches
“You have to remain positive. I remember Sharpeville – that was a tough time. Since then there have been six major recessions. But we’ve come out smiling – the professionals always do.
“Because of the sliding rand, people respect that property will hold its value more than anything right now.
“The Cape Town market seems resistant to tougher times – it’s harder elsewhere in the country. It’s more sentiment-driven right now, largely due to political uncertainty.”
Digital disruption
“I’m not worried about digital disruption at all: since Phoenician times people have been trying to get rid of estate agents. But there is a definite skill set to selling a property. It might look easy but it requires a certain knowledge and level of experience. Negotiation abilities can’t be underestimated – without them, emotions get in the way and the sale goes pear-shaped.”
Watch Lew Geffen on video talk about his personal business success and the wider property industry.
Words Catherine Davis
