ERA Rutherford Realtors abruptly closes its doors

Agents break away from franchise, form three independent agencies

by Paul Schreiber

SBJ Reporter

pschreiberber@sbj.net

The last week of January, clients calling the ERA Rutherford Realtors offices at 1555 S. Glenstone heard the following message: "Thank you for calling ERA Rutherford Realtors. Our office is currently being closed. We no longer have any active real estate agents. If you need to reach your agent, you'll need to try another means."

So ends one of Springfield's largest real estate agencies. Ranked third in the Springfield Business Journal's 2003 Book of Lists with 210 licensed agents, the agency owned by Jerry Rutherford is no more.

However, while the three offices affected are no longer ERA Rutherford, they continue as functioning independent real estate agencies under new names.

"I'm moving out of (real estate) and I'm going to go back into retirement again," Rutherford said. Rutherford built ERA Rutherford by acquiring several area agencies in 2001 and 2002: Rand Holland Realtors, Jones and Company Realtors and Century 21 Hometown Realty.

At the time of closing Rutherford was operating a single office in Springfield, with offices in Ozark and Republic and had about 180 agents, he said, but he has been scaling back agency locations for some time. Springfield offices in Sheid's Plaza and in the Parkcrest Shopping Center were closed within the last two years. Rutherford continues to operate his other business, All American Pool and Spa.

Rationale

While real estate sales traditionally climb in the spring, Rutherford said the timing is related to his personal plans to travel.

Brokers who worked in ERA Rutherford's three offices are opening up their own offices as independents, Rutherford said. "They're not going to be area franchises," he said. "They'll be under their own banner."

Three-way split

Agents at the Glenstone office heard Rutherford's news on Jan. 27, said broker Sharon Ash.

In Springfield about 57 agents, mostly from ERA's offices at 1555 S. Glenstone, will be acclimating to new offices at 2522 S. Campbell in the Old Town Shopping Center under the identity of Complete Realty Services, Ash said. She will be broker-manager for the new firm.

Partners with Ash in the limited liability corporation are Bobe Green and Steve Rudell. The new agency will occupy about 6,400 square feet and be a full-service agency, offering both residential and commercial agents, an agent-auctioneer service, an insurance agency Jones & Co. Insurance and a title company Guaranty Title.

We're still getting "bare leases signed with us and all of that. It's very preliminary," Ash said. "We're trying to get together in a week or two what most people get together in three to four months." Ash would not comment on anything specific regarding Rutherford.

All agent licenses have to be transferred through the Missouri Real Estate Commission, every transfer has to made at the Greater Springfield Board of Realtors, all of the listings have to be funneled into the new company, Ash said. "There is an enormous amount of paperwork."

When asked about franchise alignment, Ash said she didn't know how to put her answer politely, other than to say, "No."

Ozark

The 3,000-square-foot ERA Rutherford office in Ozark, at 1603 W. State Highway J, is now Home Team Property, said Shirley Parham, whose husband, Stan, is broker-manager over about 20 agents there. The company will not align with a franchise, she said.

Home Team agent Rick Wells said the Ozark office first heard about Rutherford's decision Jan. 27. "He shut it all down, just closed the doors, left everybody kind of standing," he said.

Wells has moved listings to Home Team and handled the registration of agents with both the MREC and the Springfield Board of Realtors, said Parham. "It's been a headache. It's been a night-and-day process of restructuring."

Parham is excited about the transition and thinks losing the ERA franchise will be a bonus, however. "I think we have more to offer other agents as far as the bottom line," she said. "Commission is what it boils down to."

"They won't be paying the franchise and, as far as I'm concerned, that's never really helped us to begin with," Parham said. Franchise fees run at 8 percent of sales commission, she added.

Republic

ERA Rutherford Realtors agents at 938 U.S. Highway 60 East in Republic received Rutherford's notice on Jan. 26, said Verle Ormsby, broker. As of Jan. 30, the agency became registered as Southwest Realty with the MREC, he added.

Managing the agency with Ormsby is partner Leslie Horner. The 4,000-square-foot office operated as ERA Rutherford since 1997, Ormsby said. The new agency, Southwest Realty, has agents from Aurora, Marionville, Halltown, Republic, Willard and Springfield, he added.

It took a full week to get the licenses transferred, Ormsby said. The agency handled the $50-per-agent fee to get them registered with the state, plus the $80 office fee. Agents took care of the $50 Springfield Board of Realtors charges, he added.

There was a scramble to transfer listings for the 21-person agency, too.

The buzz

The commission splits that agents with ERA Rutherford received may have been an issue in Rutherford's decision to close the company, said Carol Jones, owner of Carol Jones Realtors.

If percentage splits with agents are set too high, it's a challenge for the broker to manage expenses. This factor, in combination with franchise fees, increases expenses.

"It's very hard for a broker to make money because the agent split is so high. That split doesn't exist in our company. All of our agents receive the same commission split (based on sales). There's no special deals here," Jones said, adding, however, that commission splits for new agents begin at 60-40 and can go up to 85 percent for top producers.

While the dissolution of the ERA Rutherford team has freed its agents and agencies to consider other options, Ash stressed the camaraderie that is shared among the three agencies.

"We consider ourselves a family. We're going to be under different names, but we're going to be the same family as before," Jones said.