Share this
Mister Wong
Digg
Del.icio.us
Slashdot
Furl
Yahoo
Technorati
Newsvine
Googlize this
Blinklist
Facebook
Wikio
Hear this text
Print
E-mail
Lew Geffen is not your typical big company executiveLew Geffen is no shrinking violet. But, then again, there are probably not too many of them in the real estate business – at least not successful ones. And by any standards, Geffen has been very successful.
He is the founder and chairperson of Lew Geffen Sotheby’s, which boasts 66 offices in South Africa and an army of estate agents.
His most prestigious properties are marketed to an affluent worldwide audience via the influential tie-up with United States-based Sotheby’s International Realty; and he has recently opened an affiliated real estate auction house – Savile Row Auctions – to extend the business into new areas of opportunity.
Despite the breadth of his empire, Geffen is not your typical big company executive. For a start, getting to see him is a breeze; no phalanx of personal assistants, no need to arrange an interview months ahead; no demands for questions in advance, or that certain subjects be taboo.
His gleaming high performance Porsche sits flamboyantly in a reserved park bay outside his office and he greets you, looking tanned and fit, in an open-neck shirt showing glimpses of a gold chain.
Yep, Geffen is smooth.
Maverick man
He is also something of a maverick – and seems to delight in the role, being quick to acknowledge with a smile that he has been referred to in the media as “a maverick with a tan”.
This comes from his personal philosophy of “wake up early and always have a tan”. It is something he borrowed from the late Greek billionaire shipping and airline magnate, Aristotle Onassis, who was himself a high profile individualist and self-made man.
Not for Geffen, then, the intricate quotations from self-help and business philosophy authors – the like of which are so often espoused by top executives during media interviews. Indeed, he says he has never read a self-help book.
He is also not one for having to explain himself to others, telling the Business Report newspaper that he had never thought of taking the company public because: “I am a maverick and can’t be beholden to shareholders”.
The independent, unconventional approach was evident early on. As a young man, he found himself in a shop that sold Persian carpets and ended up buying the whole stock for what was then a great sum of money. But it paid off handsomely and, within three weeks, he had resold everything for four times what he had paid.
Emboldened by his success, he went to the Middle East and brought back 50 crates of similar items, which he then sold on the pavement.
“The police had never seen a hawker like this,” he told a property magazine years later.
The one-time volunteer in the Israeli Army also spent time as a labourer on a building site, learning the skills that would enable him to launch and run his own housing construction company for five years in the 1970s.
Into real estate
The decade’s recession eventually brought the building boom to an end and Geffen found himself resuming a previously short-lived career in the real estate business. Perhaps it was written in the stars that he would eventually end up and prosper there.
His mother, Aida, was a partner in a prominent property business in the 1950s, but left to start Aida Real Estate in 1958. Initially, she based herself in a small flat in the high-rise Johannesburg suburb of Hillbrow, with her mother as her assistant and a 10-year-old Lew looking on.
Her business thrived and Geffen joined her, first at the start of the 1970s and then again in the late 1970s after closing his construction company. He was initially on the sales side, but subsequently moved into the franchising aspect of the business. Aida then became the first South African real estate company to establish franchises.
But a few years later, Geffen clashed with his mother and decided to strike out on his own by starting Lew Geffen Estates in Johannesburg in 1982. The rest, as they say, is history.
The business progressed and grew, despite sometimes difficult trading conditions in the 1980s and early 1990s. He pioneered the concept of “parameter advertising”, which has paid handsome dividends and given the company a point of competitive difference. Using this approach, advertising for a particular property will state the seller’s asking price, but will also give the lowest price point from which buyers can begin making offers.
“The buyers see only one price while the seller sees another – and they hopefully meet at the market price,” he explains. “So, even though the asking price may be 30% too high, we’re still digging at 30% to 40% below that price to extract the right buyer.”
He admits he is perplexed as to why the concept is not regularly copied by other realtors, but speculates that it is because his company has always strongly enforced use of the system, whereas others do not.
The then Estate Agents’ Board was originally unhappy with the concept, but Geffen tweaked it and persisted until it was accepted and became a cornerstone of the company’s marketing.
As another example of marketing ‘chutzpah’, he tells the story of trying to sell an unbelievably smelly house inhabited by a transvestite prostitute. His advertisement read: “At R200 000, this is a fumigator’s paradise, at R100 000 it’s a perfume garden. All this house needs is a good wash – we will provide gas masks.” The property sold at the full asking price.
Enter Sotheby’s
But, while Lew Geffen Estates was a prominent player, it lagged well behind the likes of the industry leader, Pam Golding Properties. That changed in mid-2003 with an affiliation to the Sotheby’s International Realty network.
Sotheby’s began in the 1700s as an exclusive London auction house specialising in fine art and later branched out into real estate, before being taken over by a US-based company. It now boasts a worldwide network of affiliates and offices and has built a reputation for selling some of the most exclusive properties on earth.
For newly formed Lew Geffen Sotheby’s, the effect was immediate. The client profile changed and more people started being attracted to the brand. “We started stealing market share; we just grew,” Geffen recalls. “We also drew some fantastic franchisees. It played a huge part in changing perceptions.”
Today, wealthy South African buyers with an eye for a piece of international real estate can tap into the Sotheby’s worldwide network.
Similarly, overseas clients looking for property here are exposed to what is available locally.
Recession and recovery
The business is now solidly positioned as an A-list player in the South African real estate market. Geffen believes this has been integral to weathering what has been a devastating recession for the property sector.
Since the halcyon days of 2007, sales volumes have dropped by 50%, numerous small agencies have bitten the dust, and it is estimated that
40 000 individual agents have left the industry.
Having a higher profile, he says, means you can attract more buyers and sellers than your opposition. Similarly, you can draw the top performing agents – both of which are important advantages in a tight market.
“The big names do better in a recession because sellers gravitate towards the major brands from a trust point of view. They know the big guys have the right marketing, advertising and infrastructure… these things count.”
Comforting, maybe. But that does not mean things have been anything close to rosy. Geffen estimates that even those real estate companies successfully weathering the downturn can expect to go two to three years without showing a profit.
He is particularly scathing of the role of the banks in contributing to the woes of the real estate sector. “It was totally irresponsible to give housing bonds without equity and then add the (transfer) costs on top of it all. They actually fuelled the market to heights to which it should never have gone. They created the bloat and now they’ve pulled the rug from under everybody. It’s just irresponsible behaviour as far as I’m concerned. Greed – absolute greed.”
Wherever the fault lies, estate agents have had to adapt their selling tactics to the changed market. “By appointment” viewings (in which individual couples view homes at appointed times, usually in the week) at Geffen’s company have been cancelled in favour of a show day-only policy.
“It [by appointment] is a complete waste of time and money and done only by lazy agents who don’t want to work on Sundays,” he explains forthrightly. “For ‘by appointment’, you might get two or three phone calls – on a show day, you’ll get 20 couples for the right property. But the cost to the company is the same.”
He says the company will also no longer arrange show houses without a seller’s commitment via mandate, and he is consistently promoting an ‘honesty’s the best policy’ approach among his agents. “If you ‘BS’ the seller about the price that he can expect, then the property’s going to stick (won’t sell) and you’re wasting everyone’s time. It can take up to six months to find a buyer – and there’s a lot of expense to that,” Geffen says.
For buyers with ready resources, of course, the recession has provided opportunities for bargain buys and Geffen observes that this is when the ‘shrewdies’ come out of the woodwork and the money seems to come out from under the mattresses.
He predicts the window of opportunity for bargain hunters will close in early 2010 as the market begins to turn and prices start
rising again.
Where would he buy right now? “I’d buy an established property in Cape Town. I think it’s the right time and the prices are right – not bloated like before,” Geffen says.
The future
Although he is at an age when many are looking forward to retirement, Geffen is on record as saying it is not on his agenda. “Not to work is death,” he told an interviewer. “I would never retire. I enjoy the smell of sawdust.”
As you would expect from a maverick personality, Geffen does not do things by half when he is away from the office. He is physically active six days a week and enjoys running, swimming, boxing, weights, golf, hiking and snowskiing.
Golf is a passion – although he says he plays it badly – and he has hiked Kilimanjaro.
Another of Geffen’s philosophies is: “The first appointment of the day is always with yourself”.
Meaning, it is important for him to ensure work-life balance and make time for the activities he enjoys and which help him keep fit.
He believes it also has very real benefits in his business life. “People like to deal with others who look healthy and robust,” he observes.
Perhaps, even secretly, people also like to deal with those who cock a snook at convention and successfully forge their own path through life. ?
Mike Simpson
Simpson is a freelance journalist writing mainly on marketing, business, motoring
and travel topics.
Additional sources:
www.busrep.co.za
www.thepropertymag.co.za
www.sothebysrealty.co.za
