Emeritus Victor Kress: Pursue Diverse Interests
Emeritus Victor Kress: Pursue Diverse Interests
Diversify both your business interests and your avocations to help you navigate through tough times, says Victor Kress, 71, a broker-associate with Kress/GMAC Real Estate in Meadville, Penn. (pop. 24,000), where he has been a lifelong resident. Kress has worked at the brokerage started by his late father Vic for nearly 50 years. When the elder Kress died in 1977, Kress took the reigns until 1996, when younger brother Biff stepped in as broker-owner. Kress has remained an active salesperson since then.
What was the real estate business like when you became licensed in 1960?
KRESS: The economy was bad and I had recently gotten my business degree from Allegheny College. I joined my father's brokerage, Vic Kress Real Estate Specialists, when I couldn't find a job. I got no favors from him and worked strictly on commission. Interest rates were in the double digits and selling properties in the conventional ways was ridiculous. We had a lot of owner-financed deals. What helped me was the fact that I had gotten my insurance license right before I got my real estate license. So I was operating a one-man insurance business as well.
How else did you boost business in your early years?
KRESS: I saw there were good opportunities to purchase investment properties. There was a lot on the market. So I bought my first apartment building in 1961 and made it my goal to buy one building every year after that. I now have 33 properties, though I've sold a few. It's hard for me to sell them because I'm attached to them like children. But I've developed a reputation for helping others in the community buy investment property. It's been a great specialty area to have.
What have been other advantages of having real estate in your investment portfolio?
KRESS: Having real estate, in addition to stocks and bonds, has helped me with my personal finances. It gives you something else to fall back on when sales are slow. Because of all the property management that my wife and I do, it's been helpful to be a landlord in the current market. Diversifying my business with property management and insurance has helped us get through. It's important to have accessory lines. I've never lost money on an apartment building.
But you've diversified your career in other ways too, right?
KRESS: For about 15 years I wrote a sports column for the local newspaper covering high school and college football, and I also published my picks for NFL games. I still broadcast football and basketball games for our radio station. My love of sports has helped me make contacts for business. It's enabled me to do a lot of networking. My father always told me to join a country club to make connections, but I'm not that sort of person. I don't play golf. I'm much more comfortable meeting people at a sports bar or at a church social.
How would you describe your approach to working with clients, especially during a down market?
KRESS: I never use fluff when I talk to people or tell what they want to hear. I don't blow a lot of smoke when I work with people. I tell them what I really think, even if they don't like hearing it. It can be tough to tell people that a house is not worth $150,000, when it's worth only $130,000. I don't spin my wheels on advertising. If they don't listen to me, I move on. We're careful in our office to have more than one broker help price a listing. It's not a good idea to leave it to the judgment of just one salesperson. We lean on each other with the idea that two or three heads are better than one.
What has surprised you most about working in this difficult market, where unemployment in your area has reached 16 percent?
KRESS: For the first time in my career, I'm telling some owners not to sell. I never thought I'd have to do that. But people are taking such a beating that it's best to wait until the market gets better. Some homes are selling for 10 percent to 20 percent below their appraisals. But many people just don't have a choice because of lost jobs. The high number of depressed property sales can make markets look better than they are. I've worked with many sellers who then need me to help them find an apartment. I'm well known in the area (45 miles from Erie, Penn.) and people trust me. It's easy to keep in touch with people in a small town because you see them on the street or at a ballgame.
Are you encouraged by the extension of the first-time home buyer credit?
KRESS: It is a good thing for now, but I'm worried about what will happen after the subsidies are gone. The hope is that markets will be better. And I am the kind of guy who sees the bottle as half full.
What do you most enjoy about the real estate business?
KRESS: I like people and helping people find the right home for them. It's fun. The business suits my competitive nature, and every day is different.
Any thoughts of leaving the business?
KRESS: In some ways it's tempting, but I want to stay in the game. My friends who worked in factories are all retired. But it's in my nature to compete. Fortunately, I don't need the money from real estate to live. The money is a carrot and it's how you keep score. I still hate losing clients, and I hate when deals aren't able to close.
Any advice for people starting out now?
KRESS: When I took over my father's company in 1977, the economy was also down. When a local plant closed, people would come to me seeking to get into real estate. I discouraged them if they had children. There's no weekly paycheck or other guarantees. It's wrong when brokers hire anyone who happens to come in off the street. It's important for sales agents to be part of the community, to know the local streets. If you're new to the area, you may get eaten alive.
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