Coldwell Banker Affiliates of Romania is countering this phenomenon by launching a franchise system, which means on the one hand that it will expand countrywide, and on the other that it will act as a lifeline for small agencies that will have the advantage of operating under a known brand, in order to over-come the crisis.
“Of the 10,000 real estate agencies active before the crisis, 80 percent are small, with one or two employees. These are most exposed to the crisis, and will suspend their activities. There will be no bankruptcies, rather just a freezing of their activity while they wait for better times,” said Ion Radu Zilisteanu, Manager of the Intermedias group and spokesman of the Romanian Association of Real Estate Agencies (ARAI). According to Zilisteanu, only some 8,000 agencies are still operational, and the number continues to drop. The volume of housing units for sale in November 2008 not only interrupted the upward trend in sales of the previous month, but lead to a sharp 42 percent decline for studio apartments, a 35 percent drop for one and two-bedroom apartments, and a 21 percent fall in offers of three-bedroom apartments, according to the monthly report of the anunturiparticulari.ro portal.
Coldwell Banker will introduce a franchise program as of next week for neighborhood agencies with problems. “We are not just trying to protect our brand. We are willing to help them with money in exchange for a percentage of company shares. We will give them access to all the properties in our portfolio. This is a measure to counter the crisis, because together we will be stronger,” said Valentin Ilie, Coldwell Banker’s Chief Executive Officer.
The grim situation is further aggravated by the salaries of sales agents. Sales and Project Managers in the real estate field were among the best-paid employees on the Romanian market a few months ago, with monthly salary packages in excess of €10,000. At present, not only is recruitment frozen in this sector, but also the fixed salaries of employees now rarely exceed €3,000. In spite of the fact that bonuses for agents have doubled and even tripled lately, very few are able to meet their targets. “Restructuring, limiting expenses, smart marketing, and targeting niche segments of the market are measures to be taken in this period,” said Liviu Ureche, General Manager of the mid-sized SATO Imobiliare company, and former President of ARAI.
