In building his residential real estate firm, Ralph Burnet has not only taken advantage of changes in the residential real estate industry—you could also argue that, in many respects, he has driven them. In any case, his success is undoubtedly due to his core business belief: “the power of self-actualization is incredibly strong.” Even at age 55, overseeing a company with 3,100 sales associates in Minnesota and $360 million in sales, it’s something he still emphasizes.
The Minneapolis native’s career began with a ski shop he co-owned called Equinox, located near 50th and France. As a new husband and father, he soon realized that he needed more income than a seasonal business (as most ski shops were in the 1960s) could provide. In 1968, he took a job at Bermel Smaby, a real-estate firm co-owned by his former Little League coach.
The self-described “Type triple-A” Burnet thrived as a real estate salesperson. Selling his share in Equinox, he soon became one of five Bermel Smaby’s top salespeople. But after five years, believing the company wasn’t moving fast enough, he struck out on his own, starting with $18,000 in seed money and a few of his colleagues.
It wasn’t an auspicious time to start a business, certainly not in residential real estate. The U.S. was mired in stagflation and recession in 1973. And in Minnesota, the real estate industry was hamstrung by a state usury law, which prohibited charging more than 8 percent interest for a home mortgage—while national rates were more than 9 percent. That meant banks weren’t lending much, and sellers had to pay a lot of points. (The law was repealed in the mid-’70s.)
“It was a dismal period,” Burnet recalls. “I can remember many negative closings, where the seller had to bring a checkbook to the closing. Not nice.”
Still, Burnet and his team—joined in 1975 by investor and partner Darwin Reedy—decided early on that their company was going to be the top home seller in the metro in 10 years. Bragging with nothing to back it up? Not really. “It wasn’t like spiking the ball in the end zone,” he says. “It was just the way we carried ourselves, looking forward and staying focused.”
In Burnet’s mind, recession offered a golden opportunity: Market share hung like ripe apples for those willing to exercise some creativity in financing home sales and to take risks. So while other firms were pulling back their ad spending, Burnet Real Estate was beefing up, putting up several huge billboards along metro freeways. Thanks to efforts like this, Burnet Realty beat its goal of being the top seller in the Twin Cities by two years.
Then, in 1982, Merrill Lynch, pursuing expansion plans of its own, enticed Burnet (along with top realty firms in other metro areas) to sell. Burnet became a Merrill Lynch employee and moved to Stamford, Connecticut, where he ran most of the company’s massive national real estate business. But by 1990, Merrill Lynch had shifted strategies, and Burnet was able to buy back his business.
Coming home to the Twin Cities, Burnet directed his company through a decade of rapid change, once again taking advantage of a changing market. Burnet Realty expanded into title insurance and mortgage financing. Driving this was a goal of becoming a one-stop shop for residential real estate transactions, with all their hoops to jump through and papers to sign. As Burnet notes, “Disposable time has almost become more valuable than disposable income.”
But regardless of how big the Burnet name has become in residential real estate, for a lot of local sports fans it has been associated with the Burnet Classic, a Senior PGA Tour event, which the company first seeded in 1993. For Ralph Burnet, it was a way of giving back to the community: Over the past eight years, the event has raised about $5 million for cancer and heart-disease care. (This year, the classic changed hands, with 3M now shouldering the sponsorship chores.) Burnet also has served on various boards; most recently, he has chaired the committee overseeing the building of the Walker Art Center’s new quarters.
In 1998, Burnet was given another attractive offer, this time from Cendant Corporation’s NRT unit, which owns numerous big-name real estate and hotel companies throughout the country. The deal, Burnet says, gives the company—now Coldwell Banker Burnet—both autonomy and added resources to increase its efficiencies.
But for all the changes in the industry and his own business, Burnet still emphasizes the same values he did when he sought to start an “entrepreneurial” real-estate company: self-fulfillment for the sales associates he hires.
“Yes, it’s been financially rewarding,” he says. “But to watch people move themselves in a positive way, and to provide the springboard for that, that’s been my greatest thrill.”
1945 – Born in Minneapolis.
1968 – Begins real estate career at Bermel Smaby Realty.
1973 – Starts Burnet Realty.
1980 – Burnet Realty becomes the top residential real-estate broker in Minnesota.
1982 – Burnet Realty sold to Merrill Lynch Realty Associates; Ralph Burnet heads its Eastern Region.
1990 – Buys back Burnet Realty from Merrill Lynch.
1991 – Burnet Realty recognized as the third largest independent real estate broker in the U.S. by Real Trends newsletter.
1993 – Burnet Realty becomes the sponsor of the Burnet Senior Classic, a Senior PGA Tour event.
1994 – Burnet Financial Group created as an umbrella organization for the many companies and services bearing the Burnet name.
1994 – Named Upper Midwest Entrepreneur of the Year.
1998 – Sells Burnet Realty to NRT, Inc.; serves as chairman of Coldwell Banker Burnet.