Today we’d like to introduce you to Thomas Porrecca.
Hi Thomas, we’re thrilled to have a chance to learn your story today. So, before we get into specifics, maybe you can briefly walk us through how you got to where you are today?
I started my real estate career in 1971 purely by accident. I was seeking to raise private funds to invest in barren land in the United States that was strategically located for future appreciation and development. A local real estate broker called me to sit down and talk and I eventually secured a license with his firm.
After three years of residential real estate, I found that I enjoyed commercial leasing of office buildings more interesting and profitable, so I moved to a commercial firm in downtown Philadelphia whose speciality was leasing office space in high rise Buildings.
Three years of working as a commercial broker I came upon a corporate position with Exxon Office Systems which was really an investment by Exxon for a foray into office products in an attempt to supplant all the computer and information companies then in existence. Exxon thought that with their money they could buy the best talent and nudge out all competitors. After a few years and having spent billions of dollars Exxon folded its tent and gave up their idea of creating the worlds’ biggest entity outside of oil.
As Exxon’s attempt collapsed, I found it necessary to move on to the Datapoint Corporation which at the time in the mid-80’s was the largest computer company in the country. I travelled the Northeastern part of the country negotiating leases in office buildings for the company’s sales and service personnel. After the company President made bad decisions, the company was destined to go out of business.
My next move in the corporate world was to become the national real estate manager for Dictaphone Corporation. In this position I was responsible for a portfolio of about one hundred and seventy office leases throughout the country which meant that I travelled to one city or another once every month to search the market for the best deal for the company to house their sales and service personnel.
One again I found myself with a company whose days were numbered. I left Dictaphone in the 1990’s and it was not long after that the company disappeared since dictation was on its way out with the advent of the personal computer.
At the age of fifty-seven I found that going forward there were not going to be many opportunities in the corporate real estate world. I would not be interviewing with people a lot younger than myself and although I had a wealth of knowledge my chances of future corporate positions were negligible.
Although being fifty-seven years of age is normally not an ideal time to start a business, I knew that was the only viable and sensible course for me to pursue. With some very old furniture and a thousand Xeroxed flyers I walked the streets stuffing mailboxes and car windshields for hours at time every day.
It seems that for once I had luck on my side along with hard work because 2001 was the start of an escalating market. I realized that I was competing with some very large firms and they would get larger with each passing year. How was I ever going to compete with an office of two hundred and fifty square feet and furniture that resembled furniture from the 1950’s.
I took a lesson from the world’s premier stock brokerage firm, Merrill Lynch. Back in the latter part of the 1990’s Merrill charged probably three hundred dollars for a small trade of one hundred dollars. Charles Swab had recently come along with trades as low as $29.95. Merrill at the time came out and stated that being the world’s premier brokerage house they would never discount commissions. Well, after Swab started to take billions of dollars from Merrill each month Merrill quietly came out with online trades of you guessed it $29.95. What I realized was that if Merrill Lynch was brought to its knees from a discount firm it was reasonable to assume that would be the future path of stock brokerage commissions. If it happened to stock brokerage, when would it happen to real estate brokerage.
Realizing that I needed an edge to compete in the real estate market I knew that sooner or later the same discounts would have to come to the real estate industry, so I started my business based on a commission of three percent listings. Every other firm was at six percent and no one, but no one ever let people know that commissions are negotiable and have always been negotiable. They all toed the line that the commission was six percent; period! Was it always price fixing? Of course it was, although the brokerage industry denied it over the last fifty years.
With sellers realizing for the first time that they could pay half the commission my business soared. Through the first ten years or so I worked at least twelve hours a day seven days a week. When it is your business, you never mind how many hours you are putting into your business; it is your baby and you take care of your baby.
The downside to my success was that the entire industry ganged up on me with threats of violence, running me out of the business and constantly trashing me to anyone who would listen. One of the firms actually offered to buy my firm just to get me out so they could preserve their sacred six percent commissions.
Bringing this up to date after twenty-six years from the inception of my discount brokerage business the threats are obviously gone and most of the animosity. Today everyone negotiates commissions, but I still make it my business to undercut any competitor.
To their peril my competitors never realized twenty-six years ago that discounting was coming to the real estate business.
I’m sure it wasn’t obstacle-free, but would you say the journey has been fairly smooth so far?
Never get discouraged keep the faith in what you are doing
Is there any advice you’d like to share with our readers who might just be starting out?
Never quit on your dreams
Contact Info:
- Website: https://porreccarealestate.com
