The mortgage industry meltdown and subsequent credit crunch in the banking industries have forced many real estate companies to sell out or go under.

But while taking a hit in home sales itself, Tomie Raines, Inc. has continued to be one of the most resilient companies in the industry.

Although the true matriarch of the company was Betty L. Raines, nicknamed Tomie by her father when she was just a child, the greatest growth in the real estate business has come under her protégé and now company owner, Debbie Barnett.  The wife and mother of two was “discovered” in her early twenties while working her way through school waiting tables at a local restaurant. “The owner told me I was in the wrong business,” she recalls. “He owned a real estate company as well and said I should give it a try.”  Barnett cleared out her savings account, quit her job and never looked back. “I had about three months of savings and was attending Michigan State University studying engineering, but the move to real estate was the right decision and I’ve never regretted it.”

Betty Raines never regretted taking Barnett, then known as Debbie D’Valentine, under her wing as well. When she joined Tomie Raines, Inc. in 1995, the company was doing $80 million in home sales volume. By 2002, sales peaked to an all-time high of $360 million. It was then Burnett opted to buy controlling interest in the company. “I’d been making decisions there for a while so taking on an official leadership role wasn’t that big of a stretch,” she says.

After the death of Raines last year, Barnett negotiated the purchase of the remaining 49 percent of the company. “Most people would think you have to be crazy to buy a real estate company in an economy like this,” she jokes. “But I couldn’t imagine anyone else in charge. No one could care as much about this company as I do.”

She became official owner of 100 percent of the company stock on May 1st of this year and gained the distinction of being the only female owner of a larger independent real estate company in mid-Michigan.

She acknowledges, though, it was a risky decision. “Sales have dropped to about half of what they were in ’02.” But she says she’s confident some smart decisions will return the company to the record sales of the past.

Some tough decisions already made have included cutbacks. In 2005, the company had nearly 140 agents. Today, that number is closer to 80. Some were lost through attrition but others were terminated. Barnett says despite having to tighten the belt, the quality of customer care has remained a top priority. Surprisingly, not all of the experienced agents made the cut.  Barnett opted to keep a mix of old and new. “Experience is beneficial, but younger agents bring with them energy and new ideas.”

Other efforts to save money included reducing the newspaper advertising budget, outsourcing information technology (IT) work, and consolidating offices in Okemos and Delta Township into the headquarters building in East Lansing. Barnett says that not only cut the bottom line, but also improved the company’s efficiency. “I’m now in the same building as the agents and our title company [TRI Title Agency] so it’s really a one-stop shop.”  

Barnett, with the advice of her husband, Lane, the former president and CEO of GMAC Real Estate, opted to end after just one year a mortgage company franchise deal underwritten by GMAC. “It was starting to have its own problems so we thought it would be better to leave the financing aspects of the sale to the banks.”  

But with the cutbacks, came additions as well—all designed to provide quality customer care. Surveys of the industry found the number one complaint of homeowners was not hearing from the agent after the sale was completed. Barnett felt there needed to be some guideline for basic service but wasn’t sure how to achieve that. “If no one keeps score, how do you measure accountability?” she wondered. Her answer came by breaking, yet again, new ground.  

In 2002, Tomie Raines became Quality Service Certified (QSC)—the only real estate firm in mid-Michigan to do so. Agents now provide written guarantees of service and clients are surveyed by an independent research company after each transaction. The results, ranking the agent’s work on a 1-5 scale, are posted not only on the Tomie Raines website   (www.tomieraines.com), but also on the QSC national website for all to see. In addition to a follow-up telephone call or visit to make sure the transition went smoothly, agents are asked to check back a year after the sale to make sure all documentation has been received.

With a customer satisfaction rating of 96.2 percent, the company is ranked one of the top ten in the nation in outstanding customer service.  

In 2008, Barnett introduced the Tomie Raines Home Warranty program and already this year, the company was selected to become affiliated with Leading Real Estate Companies of the World. “It’s an association of some 700 of the best independent real estate companies in 38 countries around the world. Not everyone is invited in,” Barnett says. The company has also introduced a new and improved website.  

While Tomie Raines, Inc. has been posting pictures of homes on the Internet for some 15 years—one of the first companies to do so—details of all homes can now be found online. But Barnett warns, while virtual tours can attract customers, what is selected to be highlighted can also turn others away. “Some homes just don’t photograph well,” she says. “A real estate firm can give advice on staging to provide the most public appeal.”

With declining home values and prices, more homeowners are looking to cut down on the cost of selling by eliminating agents. Barnett says that idea can be costly too. “Buyers are looking for a good deal as well. They figure if you don’t have to pay a commission they can subtract that amount from their offer.” A recent survey by the National Realtors Association found those selling themselves made less of a profit overall than those who hired an agent.  

Barnett says the decline in the housing market began in Michigan in 2005 with a drop in home values of some 20 percent overall. While some areas of mid-Michigan have taken an even bigger hit, others are showing growth. In Okemos, home prices have increased 6.6 percent from 2008 to 2009.

Investment properties, like student housing in East Lansing, have also maintained their value. Barnett says she has never seen a buyers’ market like this before and isn’t likely to see one again anytime soon. Short-sales, where a bank agrees to accept a purchase offer on a property less than the amount owed on the mortgage, have also increased in demand. Even with approval, the details can take up to six months to work out.

For some, that leaves no option but foreclosure. Prices on foreclosures can start as low as a few thousand dollars, and like the frenzy of the housing market eight years ago, the properties can often force bidding wars.

Unlike years ago, when buyers often acted on emotion in purchasing a home, Barnett says these days they’re looking for something more. “They want value for the money. They may like the house, but if they don’t think it’s a good deal, they’re not going to buy.”  

For sellers looking to make a deal, Barnett says walk through the home and determine what you no longer need. “Less is more in today’s market. Get rid of the clutter, paint the walls, replace the carpets, plant flowers and trim bushes.” Above all, she recommends pricing the home competitively—or better yet—below the competition.  

Barnett says company ownership is both a blessing and a challenge. “The decisions I make affect everyone. The pressure is on me 24/7.” Despite Barnett becoming the owner, the company’s East Lansing headquarters still bears the name of Tomie Raines.  Barnett says she thinks it’ll stay that way. “Tomie gave us a great brand and I want to continue that.”  As for her sons taking over the business someday, Barnett says probably not. “They’re both in college now and neither has shown an interest in real estate.” But she admits, “Neither did I at first, so never say never.”