Whatever you might think of Grant Cardone, he hit it out of the park recently with his interview with RE/MAX founder Dave Liniger on his podcast, the Cardone Zone, specifically for his Power Players series. 

Liniger founded RE/MAX 45 years ago and is living proof that some of the industry’s best leaders aren’t so much self-made as “hater-made,” to borrow one of Cardone’s words. 

I fought hard for 20 or 30 years. But if they hadn’t badmouthed me so bad, I think I possibly could have filed bankruptcy and just given up after two or three years. 

Dave Liniger

RE/MAX founder

If we’re being real, here, the word “self-made” feels like a flex for someone who’s forgotten the people who inspired, pushed, or provoked them into doing what they had to do to get to where they are. 

No one attains meaningful success all on their own, as this interview reveals beautifully. Liniger is a leader who chose his team members carefully. And the results speak for themselves.  

Read on for some of the highlights of the interview. 

Before RE/MAX

The first question Cardone asked was about Liniger’s life pre-RE/MAX—what he was doing before he founded the company. 

I was in the United States military. And when I came back from Vietnam, they assigned me to Arizona State University, ROTC detachment. And… I started flipping houses. Back then, the prices were way different, of course, in the sixties, but I would buy a house for $10,000 [with] a little bit down, do most of the fix-up myself and get it resold. And it was very profitable. Along the line, I decided I’d get a real estate commission—not a license, not to make a living, but to save commissions on my investment properties. As I came to the end of my service in the Air Force, I thought, well, I had to try selling real estate. I struggled with it for several months, but eventually figured it out, got the right mentors, got the right training, and so I sold real estate for the last six months of 71. Hated the desert at the time, and so moved to Denver, Halloween of ‘71. Interviewed with several real estate companies and had my choice of where I wanted to go, so I worked with the best one in town for a year as I got my residency and got my broker’s license. And then I decided to go out on my own.

Dave Liniger

RE/MAX founder

House flipping in the 60s

That led to a closer look at house flipping in the 1960s—specifically whether that was even a thing back then and whether flipping homes was Liniger’s original aim. 

No, I tried to hold them for investments, but on the low income of a military guy…once I got them fixed up, I had to turn them over so I could get the next bigger project.

Dave Liniger

RE/MAX founder

Cardone then asked what drove Liniger to start flipping homes rather than doing something else to pay the bills. 

When I was a teenager, I read a very famous book, Think and Grow Rich. It’s been the foundation of a lot of people’s success… And at that time I read another book, How I Turned a Thousand dollars into a Million in My Part-Time by William Nickerson… And his simple concept was buy a house that’s in a good neighborhood that needs fixing up and can cosmetically be improved with things like better landscaping, fresh paint, maybe new carpets and tiles and new appliances and so on, and rent them and then go buy a couple more and a couple more. At his height, he had literally a thousand-some units underneath him. And it was quite an inspiration.

Dave Liniger

RE/MAX founder

So, he put those two concepts together and thought, “Maybe that will be my future.” 

The value of having an enemy in the real estate industry

Cardone then steered the conversation to the value of having an enemy and asked Liniger to talk about the role his haters played in his eventual success with RE/MAX. 

In 1971, the average full-time realtor in the United States grossed $5,000 in building RE/MAX. We tried to come up with several different ideas, and what we really came up with was we should be a co-op. We should be like a group of doctors, lawyers, architects that work in the same facility, share the general overhead expenses, pay our own expenses, and keep the rest for ourself. And as it happened, at that time, that [meant] about 85% was going to the agent, and then they still had personal expenses like automobile and social security and such, but it was a much better deal. 

The problem we ran into was number one, the industry hated me for it because if it worked, that meant that they were going to have to pay all their agents, especially the good producers, a much higher commission split. They also were looking at it as “Well, this is just rent a desk. You don’t care about your agents like we do, and that we train and we have management meetings and we have all kinds of programs for our agents, and all you want to do is rent a desk and not work.”

Dave Liniger

RE/MAX founder

From there, Liniger talked about the changing faces of his enemies over the years, from the biggest brokers in the cities he was working in to national companies in the ‘70s and beyond. 

Having that many enemies saying, ‘You’re a crook,’ and you know you’re not. And not only that, every agent we got started making a lot more money. They were intensely loyal to the company. And so it’s just a slow start, but when it took off, it took off. And so all those people were in their fifties and sixties at the peak of their business experience, and here we’re in our twenties. Well, fast forward 50 years, they’re all dead. I’ve forgotten they were enemies. I don’t even think about them anymore. And over the last 20 years, I and my team have new people coming in. I think we have a different attitude towards competition in that it doesn’t bother me anymore. Of course, there’s going to be different people who want to do different things, and we became the icon. But once you’re number one, you’ll find out everybody wants to take you down.

Dave Liniger

RE/MAX founder

Work ethic in real estate agents

Haters aren’t just the people who don’t like to see you succeed by taking a path different from the one they chose. Sometimes, it’s the folks who just don’t want to put in the work to get the results you’ve worked for. 

To succeed in this industry, it’s not enough to have great ideas or a great personality. Agents without a strong work ethic do not last. 

So, it’s worth asking (as Cardone did), “What percentage of real estate agents would you say have a good work ethic?”

I honestly think you got 20% of really good producers that statistically are so different. Average time in business, 15 years, average incomes well in excess of a hundred to $200,000 a year. They’re getting 70, 80% of their business from repeats and referrals because they have given outstanding customer service. So real estate is the worst paying easy job in the world, but it’s the best paying hard job in the world if you can manage the longevity, get the experience, and build up a book of business.

Dave Liniger

RE/MAX founder

What are most agents deficient in?

As a follow-up question, Cardone asked Liniger what he thought most agents are deficient in—sales, marketing, follow-up, goal setting, refusing to quit, or something else? 

Everybody thinks that the luxury brands are paying more for their laborer, and it’s not true. They search and find people who are already friendly, warm, hardworking, committed to the company, and that selection process works… It’s the same thing with a real estate agent. Real estate agents, if you’re not outgoing and have a nice friendly personality, people aren’t going to want to work for you. We’re not bookkeepers, we’re not accountants. We’re warm, gregarious, outgoing people.

Dave Liniger

RE/MAX founder

What are the top skills agents need to work on?

So, what skills, other than being sociable and cultivating emotional intelligence, are most important for real estate agents to develop if they want to be in the top 20%? What do they need to work on? 

In today’s era, you’d better grasp digital marketing. Other places still work, but as you can see, newspapers have disappeared. And it used to be the best source of leads that an agent could get would be a repeat or referral customer. If you’re a beginner, you don’t have any of those, right?… Well, today everybody talks about lead generation from all the portals, but there are literally a hundred million leads generated a month in various portals, and yet there’s only four or five million transactions a year out of all those leads… In RE/MAX, probably 75% of our top producers won’t even look at an internet lead.

Dave Liniger

RE/MAX founder

So, Cardone asked, where do these agents get their leads? 

While Liniger didn’t dispute the value of open houses and signage, his answer made it clear which lead source he considered most vital to an agent’s business growth. 

Repeats and referrals for the top producers is the most important thing there is.

Dave Liniger

RE/MAX founder

Sales or marketing: which is more important?

Next, Cardone asked whether Liniger would pick sales or marketing skills, if he had to pick just one. 

I would say that in franchising, it’s selling the franchises. To get the scalability, you need a lot of units open.

Dave Liniger

RE/MAX founder

To be clear, the word “units,” in this case, means franchise locations. 

All great franchisors provide four or five things. It doesn’t matter whether it’s McDonald’s or if it’s RE/MAX or if it’s Marriott… Number one: they have a unique product or service. Number two, they have market share and a brand name. Number three, they have training systems and technology, and number four, they have group purchasing.

Dave Liniger

RE/MAX founder

Using McDonald’s as an example of group purchasing, he went on to explain why he owns a private golf club with no members, which he uses for charitable fundraising. 

We do have a pro shop and we sell about a million dollars worth of golf balls, shirts and caps, that sort of thing. And I said, you have any catalogs? I’m thinking, let’s try to buy a set of new clubs for me for wholesale. And he smiled at me and he says, ‘Dave, we don’t sell clubs to be honest with you. Figure out which clubs you want and then go to Goldsmith or something like that. They sell retail for far less than what we can buy something wholesale.’  That’s the scalability of it.

Dave Liniger

RE/MAX founder

Returning to the sales vs marketing question, Cardone asked Liniger which of the two agents should focus on in 2024, if they could focus on only one of them. 

Basically, to me, you have to focus on the area of your business that’s going to give you the greatest return for the time that you’re spending. And that’s the difference between the everyday real estate agent that’s out, fumbling around, and somebody that really takes their business as being extremely important to them, and they make it a passion, and they’re devoting all their energies to maximizing everything they do with the least amount of effort.

Dave Liniger

RE/MAX founder

How important is mentorship and coaching?

At this point, Cardone asked Linigar how important mentorship, examples, and coaching are to an agent’s success. 

Well, I think it’s incredibly important. Human beings mirror their surroundings. If you look at a small child that’s maybe a month old, and mommy and daddy are cooing over it, smiling and trying to laugh, but by the time they’re five or six years old, they want to grow up and be like mom and dad, and by the time they’re 10 or 12, they want to grow up to be with their peers and they have the rebellious years. And so, I think about 95% of learning is by mirroring and by storytelling. And storytelling and having examples [that] prove a point rather than preaching is very important.

Dave Liniger

RE/MAX founder

Sitzer/Burnett and copycat lawsuits

The conversation then turned to Sitzer/Burnett and its impact on the industry, specifically when it comes to buyer agent commissions and who should pay for them. 

The National Association of Realtors and various MLSs a few years ago came up and put in the code of ethics, how to split the commissions between buyers and sellers. When buyer agency first came up, nobody would pay a buyer. They’d just say, ‘I’ll go to a dual agent. I’m not going to pay a commission to buy something.’ And so the buyers and sellers agents and businesses decided the seller would pay the commission, but we would let the seller know that if you pay a five or six or seven or two percent, whatever it is, that we’re splitting the commission with the buyer agent. The whole concept, I think, was that often—especially a first-time buyer—they’re kind of hurting to even come up with a down payment and the closing costs and an additional 2% or 3% or whatever it comes out to. And so that system worked.

Dave Liniger

RE/MAX founder

From there, Liniger summarized the commission litigation, including Sitzer/Burnett, and explained why he generally prefers to resolve conflicts outside of court, even when he’s confident of his position and in his attorneys’ ability to represent it. 

He summed up the plaintiffs’ position regarding the alleged conspiracy between NAR and several of the top real estate brokerages and explained why the mediators pressed RE/MAX to settle. A verdict for the plaintiffs in any of the major commission lawsuits would ignite a firestorm of copycat litigation, which would ultimately have cost RE/MAX far more than the $55 million they settled for. 

To this day, Liniger doesn’t believe his agents did a single thing wrong. But the settlement he reached protected them from any existing and future lawsuits using the same argument. 

And, as we’ve all seen since then, settling before the trial was a smart move. The verdict for the plaintiffs in Sitzer/Burnett left the remaining defendants with a judgment of over $5.3 billion.

Nobody’s got that kind of money in the real estate industry.

Dave Liniger

RE/MAX founder

Cardone followed up with a question about the copycat commission lawsuits filed after the verdict. The plaintiffs’ attorney, Michael Ketchmark, lost no time in filing another lawsuit (Gibson) against NAR along with a list of real estate brokerages, including Redfin, Compass, and eXp. Gibson later joined with Umpa (another Missori lawsuit and the 10th reported since October 31, 2023).

Liniger pointed out that the attorneys filing these suits aren’t limiting themselves to big-name national brokerages; many are going after smaller regional entities. 

The original complaint was just against the biggest ones. But all over the country, they have a local attorney that goes after a company that has a hundred agents, and their attitude is, ‘Well, if this worked on a national basis, you have a hundred agents, they’re doing 10 transactions a year each, [that’s] a thousand transactions. You go back six or seven years, you had 7,000 transactions. And if you can get a $4,000 or $5,000 judgment for each one of those commissions, it’s time to buy a yacht.

Dave Liniger

RE/MAX founder

While some in the industry suggested the big players were going to appeal, the reality is that the cost of doing so is beyond the means of most real estate companies, MLSs, and trade associations, including NAR. 

Ordinarily in most antitrust activities, if you appeal, you’ve got to post a 10% bond… So you look at a company like Keller, and they don’t have the cash flow or the cash, if you look at their audited financial statements on their franchise documents, to pay $500 million just for a bond to appeal something.

Dave Liniger

RE/MAX founder

Liniger’s take on the housing market

Cardone then asked Liniger to comment on the current state of the U.S. housing market, which, as Liniger pointed out, largely depends on the economy. He talked about everything RE/MAX has been through since its founding: 

  • Nine different presidencies
  • Eight recessions (starting with the oil embargo in 1973
  • The savings and loan collapse in 1980
  • The Great Financial Crisis of 2007-2008
  • COVID, the pandemic housing boom, and what followed
  • The Fed’s efforts to fight inflation

Liniger alluded to the lock-in effect and its impact on inventory and, by extension, buyers. 

People have a low rate of interest, they don’t want to move up, they don’t want to sell it and then have to come up with more down payment and then pay six and a half percent interest on twice the house price. And so they’re reluctant to put houses on the market. And that means a tremendous amount of people are trying to buy, but they can’t afford it and there’s no inventory.

Dave Liniger

RE/MAX founder

The reality (and future) of single-family rentals

Given the ongoing supply shortage, it’s not hard to find people pointing to institutional investors as part of the problem for buying up single-family homes to rent them out. The reality is institutional investors make up a small (single-digit) percentage of active real estate investors. The majority are mom-and-pop investors who own between two and nine properties each, compared to the 1,000-plus properties owned by the institutional investors, who account for around 1% of home purchase transactions nationwide. 

Cardone asked Liniger what he thought of recent statistics saying up to 40-plus percent of single-family homes in the U.S. are occupied by renters rather than owners—and whether Liniger believes that will continue. 

I would say that’s accurate… I saw a report early this week that they think it’s the big hedge funds, Wall Street buying a thousand units here, 2000 units there. In reality, almost 90% of the rental properties of single family houses are owned by individuals… And so it’s not the big companies. However, there are some companies right now that are buying and building entire subdivisions, a thousand houses, same builder buying in mass and just buying them and making them rentals instead of buying them to sell them. So it’s an impact on the market, but it isn’t that big of an impact.

Dave Liniger

RE/MAX founder

The RE/MAX difference

Liniger then referenced the book he just wrote, The Perfect 10, which talks about the leadership lessons he learned from his own experience and from top business leaders like Amazon, Google, etc. Because in re-evaluating RE/MAX, he took a closer look into why the company had lived through eight recessions and nine political climates, to say nothing of the current legal challenges. And that analysis led him to realize RE/MAX’s real strength rested in its adaptability. 

In reality, we came up with a different idea. I’ve often heard people say that the strongest of the species survives, and that was Darwin, supposedly. If you look it up, that isn’t what he said. He said, the most adaptable of the species survives. So, the dinosaurs were here a hundred million years ago, and they’re gone. The mosquito is still here a hundred million years later. And so, who’s the most adaptable? So, for a real estate agent, real estate buyers and sellers, who’s the most adaptable to the current circumstances? And that means you have to be able to lean in on a different method of doing business. You can’t do today’s business with yesterday’s methods and expect to be in business tomorrow.

Dave Liniger

RE/MAX founder

What it really takes to succeed long term

The interview wrapped up with Cardone asking Liniger if he had any advice for real estate professionals, specifically those looking to attain a similar level of success. 

The secrets to success are not secret. You don’t become successful by accident in most cases. I was certainly fairly well uneducated, but in the last 55 years of my life, I’ve gone to hundreds of seminars. I’ve read thousands of books. I’ve been mentored by 15 or 20 really amazing people. And so being a lifelong learner, you imitate what you respect… 

So if you want to be successful, you’ve got to be in the right environment. And either you’re going to be the leader of that environment or you’re going to follow a leader who’s going to make you more successful than you can be on your own.

Dave Liniger

RE/MAX founder