Long & Foster’s Bain on the Brand, Legal Issues and Market Trends
By • March 13, 2024 0 1628
Fourteen years ago, Patrick Bain, now president and CEO of the Long & Foster Companies, began working for the man he would end up succeeding: Jeff Detwiler. Bain ran Long & Foster’s insurance, home warranty, property management and rental service businesses — also launching Insight Home Inspections in 2021 — until Detwiler resigned in March of last year. It was the start of new era with Bain at the helm, along with Jackie Thiel, who became president of Long & Foster Real Estate.
Berkshire Hathaway affiliate HomeServices of America acquired Long & Foster in 2017. “Like most acquisitions, it was sort of business as usual at Long & Foster for about five or six years,” Bain explained. “Berkshire Hathaway said, ‘You’re a great company, continue to run the company the way you run it.’”
When HomeServices of America decided to make some changes, responding to shifts in the market, Bain was in the succession plan and got tapped as president and CEO. Dealing with legal issues was among his initial challenges.
“Everybody in the industry is navigating a whole bunch of change and litigation, and we are too,” Bain said. “We have a very strong brand, which makes us a target, sometimes inappropriately so.”
One of the class-action lawsuits the industry is facing alleges the existence of an anticompetitive agreement that had home sellers paying inflated commissions to brokers or real estate agents in violation of antitrust law.
“They’re attacking the industry and, really, what I would say are tried and true practices of trading, listing and selling real estate,” Bain said. “What is alleged is just plainly not true.”
The lawsuits started with a handful of larger real estate companies like HomeServices of America and Long & Foster, along with the National Association of Realtors. “Like most litigation, there are two sides of the story, and we are aggressively defending our position,” Bain said. “It’s business as usual until there is some rule change or regulatory change or the Department of Justice weighs into this thing.”
“We come to it with a high degree of integrity,” Bain said. “I don’t believe the argument that there’s collusion and conspiracy and all these crazy allegations. I live it every day and I see that we are a big part of the American dream of home ownership.”
Leveraging the Long & Foster Brand
Patrick Bain assembling Adirondack chairs to support Habitat for Humanity on Long & Foster’s 2023 Community Service Day.
Long & Foster spent the last year doing what Bain called a “deep dive” into the company culture, examining who they are, what they believe in and how best to leverage the nearly 60-year legacy of co-founder Wes Foster.
“It’s caused us to examine where we want to play in the marketplace and what kind of company we want to be,” Bain said. “We have a great brand … I think we have a responsibility to do something with that that’s substantial and meaningful.”
Bain spent his first 120 days as president and CEO getting grounded and delving into the culture at L&F. He visited all nine of the states where the company operates, doing what he called a “listening tour” and hosting sessions called “Let’s Get Real.”
“I said, ‘Tell me what you want Long & Foster to be, and what you’re looking for, and what you want to be a part of and how we can best deliver that,’ because I don’t think anyone has ever asked them that question before,” Bain said. “We learned a ton and came out of it with a sort of redefined vision and mission and set of core values that govern how we do business, who we are, how we behave and how we treat each other every day.”
Bain added that the company made a deliberate decision to go to market as one Long & Foster, not dividing things up into nine separate state units. “That is proving to be transformational for us,” he said.
The Current Market
According to Bain, current inventory is slim, and it’s going to be that way for a while. As he explains: housing prices continue to rise, fueling inflation because housing is a big part of gross domestic product. Rising prices drive higher interest rates, impacting demand. Not many are in the market to buy due to the current high rates versus a few years ago. The real estate market is stuck in a bit of a supply-and-demand problem, all of which fuels inflation.
“This cycle is hard to break when the Fed has this stranglehold on lowering inflation and they won’t lower interest rates until that happens,” Bain said. “As a result, there aren’t a lot of choices, and when one does come up on the market, you’re competing and driving prices higher.”
Despite all this, Bain advised buyers not to give up, because everybody should still be striving for home ownership. “It’s a good thing for our country, families and our culture,” he added.
With buzzwords like escalation clauses, prices over asking, appraisals and pre-approvals, Long & Foster aims to simplify the process. The company wants its customers to remain with L&F for life. “No one else in our market in the nine states that we’re in can bring that level of capability and expertise to our buyers and sellers every day,” he said.
The Future of Real Estate
In the wake of AI, the real estate business has started to navigate the new technology. Bain admitted that yes, technology can move things faster and make things more efficient, but the reality is the consumer has an expectation of service and relationship, and that can’t be replaced with a machine.
“People buy, sell and live in houses, not computers,” he said. “You can’t take the human element of our business out.”
It’s a genuine challenge at times. Bain referred to a dehumanization of commerce, especially since Covid. “You don’t actually have to go anywhere or talk to anyone. It can be brought to you,” he said.
However, there is a high percentage of Americans who still believe in strong relationships and great service. “When you can deliver that, you can use it as a competitive advantage.”
Time to Decompress
Pittsburgh-native Bain, who owns a condo in Reston, travels back to Lower Burrell, Pennsylvania, every weekend to spend time with his wife, Suzanne, and their three children: Caroline, 24; Jonathan, 21; and Avery, 18. He and Suzanne will celebrate 35 years of marriage this September.
He calls the four-hour commute on Fridays and Sundays the best times in his week to decompress — then to start planning for the week ahead.
As for putting down roots in the nation’s capital, while he’s a Pittsburgh Steelers and Penguins fan at heart, he has grown to love local teams like the Washington Capitals and Commanders, and the Baltimore Ravens, too.
