An outward sign of an inward reality check showed itself this fall at Re/Max Coastal Properties as it closed several of its branch offices and consolidated its company into its Eastwood Road building.

Danny McPherson, chief financial officer for Re/Max Coastal Properties, said he knew it was time to make some radical changes when he saw the sales numbers for June.

“Anyone in business always has to forecast what the next quarter, what the next year is going to look like. And we had the ability to forecast it and we weren’t in dire straits by any means,” McPherson said. “Re/Max made the changes they did because they are going to be here through the real estate adjustment. Period. But we had to adjust to it.”

The numbers in June were bad. June has traditionally been on of the best months of the year for real estate sales, he said. But when this year’s sales numbers came back at a sharp decline, the company decided to restructure to weather the oncoming slowdown.

According to McPherson and Louise Voelker, managing broker in charge, the firm started discussions on what to do before the end of June.

“Like everyone, when business was booming, everybody started opening offices everywhere,” Voelker said.

“Carolina Beach was booming in 2005 and we all put an office there. Topsail Island, we all went to Topsail Island. We all branched out and had overhead from multiple offices and when this market [took] the turn that it took, we had to start looking at where do we want to put our resources,” said Voelker.

Early in 2008, sales numbers were climbing, McPherson said. Sales started out lower than in recent years, according to data collected from the Wilmington Regional Association of Realtors, he said. But the numbers had started lower than the past few years. Then June arrived.

Based on the numbers and its agents, Re/Max Coastal Properties determined it needed to chart a different course to weather any future declines.

According to Re/Max Coastal Properties, most of its agents average more than 10 years of experience. McPherson said the company has had agents drop out of business because they haven’t had the experience. The company determined it would focus on its experienced agents and provide them with the best resources possible. “Which lead us to decide to restructure the company,” McPherson said.

Offices often had opened near an agent’s neighborhood for the convenience of the firm’s agents, the majority of which are independent contractors. In restructuring, the company eliminated the branch offices, consolidating into its 2018 Eastwood Road location. Re/Max admits that the decisions have not been easy and along with the offices closures, Re/Max Coastal Properties pared its full-time staff by one.

“We have a tough marketing (job) on our hands,” McPherson said. “We are in uncharted water.”

McPherson likens the decisions his company made to those that homeowners need to make these days. Outstretching its resources is not an option for Re/Max, he said.

There have been many tough decisions, but the company is following a “dollars and sense” approach, Voelker said.

The company’s goal in its consolidation was to stay in one location. While local offices were convenient, McPherson and Voelker believe the majority of business in real estate occurs in living rooms and kitchens … or in an agent’s car, not in an office. The shift has changed the way its 60 independent contractors do their business.

“We’ve really tried really to be forthright and honest with what we see happening with our agents and we’re not trying to convince the entire Wilmington market that there isn’t a problem,” Voelker said. “There is a problem. It’s dramatically changed. It doesn’t mean that houses aren’t going to continue to be sold in Wilmington.”

McPherson said that he and Voelker have a duty to remain optimistic in the face of the challenges, but also to be realistic. The market may not be something we can control, McPherson said, but we can control our attitude, be fair and get the information in front of its agents, their clients and the community.

Voelker and McPherson both said that a recent pay bump for its employees, which was funded by some of the cuts in expenses, has helped in the company’s camaraderie. The pair also noted that the company stands behind the common wisdom floating around the market – that it is a buyer’s market. They showed this by purchasing the Re/Max building at 2018 Eastwood Road, they said. The company hopes this sends the message to clients that it is now a good time to buy.

McPherson was careful to point out the local real estate industry has a rippling effect on other industries –affecting a large swath of people in our local market. He refers to the importance of the real estate market in Wilmington and how hard-hit many other companies may be with the real estate downturn.

Voelker and McPherson admit that their decision to speak openly about the market downturn and the company’s restructuring is part of their plan to not scare others, but to be realistic. Voelker stressed that – particularly in this kind of a market – honest, open communication becomes a key element in internal and external communications, whether with clients or with agents.

There are few guarantees in this business. But, Voelker said, “We like the real estate business, but no one likes change.”