How To Get Rich Selling Houses
In 1946 Ernest Ridout left his milk wagon to grab a ride on the housing boom. With a weak heart and the gift of the gab he set out ringing doorbells, put himself on top of the real-estate heap. And he’s still only 31
ERNEST RIDOUT, a 27-year-old milkman with blond hair, blue eyes and a grin like Mickey Rooney, finished his round in Toronto’s east end one day in 1946, came to the conclusion that he was in the wrong business and said farewell to his horse. Although he had been making a comfortable $80 a week on commission delivering bottles, Ridout had a hunch that the postwar real-estate business was going to boom.
His door-to-door job brought him in contact with potential house buyers: newlyweds on the point of divorce through living with “in-laws” and mothers of six throwing nervous breakdowns through sharing kitchens with other housewives.
So he sat for an examination set by the Ontario Securities Commission and became a licensed realestate broker.
He was not the only man who opened the door when opportunity knocked. Since 1945 the housing boom has swelled the number of Toronto realestate brokers from around 100 to nearly 400. But of them all, newcomers and long established, Ridout, according to the Toronto Real Estate Board, has been the most sensational success.
In less than five years he has come to be regarded as Canada’s biggest realtor.
Now the ex-milkman lives with his wife and three children in a $20,000 home, has two cars, a speed boat and a country cottage and employs two servants.
In 1949 Ridout sold $15 millions worth of houses at an average of $10,000 apiece. This year, at writing, he has already sold $20 millions worth of property ranging from a lot for $600 to an apartment block for $200,000. In August he was offering his biggest listing ever — a downtown Ottawa estate for one million dollars. But the backbone of his business has always been the $10,000 house for what he calls “the ordinary Joe.”
He employs 75 salesmen, some of whom earn $15,000 a year, and 35 stenographers, switchboard girls and clerks.
The head office of Ernest Ridout Ltd., a glass, chrome and rubber floor affair, is on Bay Street in mid-town Toronto. He has three other branches in east, north and west Toronto. They are all neon lit and open from 8.30 a.m. to 10.30 p.m. six days a week. Ridout also has subagents throughout Ontario and working agreements with realtors in many U. S. cities.
He is a partner in Ridout, Harvie, Golightly Ltd., an insurance agency which underwrites some of the property he sells, and a director of the Geer Land Corporation, which provides mortgages for some of his clients. Although he used to say, “Fools build houses and wise men buy them,” he now has interests in the construction business.
Ridout admits the housing crisis gave him his rocket rise. His staff reached four in 1946, 12 in 1947, 30 in 1948, 80 in 1949 and today is 100 plus. “It hasn’t been that easy though,” he says. “Scores of realtors folded while I was opening up.”
His competitors say he is aggressive, shrewd and ruthless. Ridout insists that his success stems from cultivating the small buyer, hearing his housing and financial problems, and getting him the best home possible for his money. He says half of his new business comes from the recommendations of well-suited buyers and sellers.
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Ridout has been helped full time from the beginning by his wife Wilma who manages the East End branch. Wilma, he says, can estimate to within $500 the value of any house in Toronto from a telephoned description. She knows the form so well—and the prices of houses on each street—that a few questions (What kind of floors? What kind of plumbing?) give her the answer.
Before his first year was out he was joined by his two brothers.
Younger brother George, a music and book lover, is a cripple from polio and a former accountant with a motor firm. Today he’s the administrative brains of the business. He is also in charge of a rigorous training course which Ridout salesmen must pass before they are employed.
Older Howard, a chess and tennis enthusiast who once worked for an advertising agency, now controls Ridout advertising. He spends $10,000 a month on newspaper and radio space. From a table of averages compiled during the last five years Howard says he can estimate to within a cent what the commission returns will be on every dollar invested in any given ad. From his tables he can estimate almost the exact number of phone calls a classified ad of a certain size will bring.
A family friend says, “Ernest is the motor, George the brakes and Howard the chromium fittings.”
Ridout’s three married sisters work for him periodically whenever a sales spurt overtaxes the office staff.
His mother, who brought up the family on a World War One widow’s pension of $125 monthly, works for Gertrude Tate, a realtor specializing in homes above $20,000, and is often in competition with her own son. Ernest once snatched a house listing from under his mother’s nose.
A Ground Floor Man
She still insists on living in the Dewhurst Boulevard home where Ernest was born in 1919. His father died in 1928 of war gas injuries. Mrs. Ridout, struggling to polish her children with English ideas of gentility, managed with all but Ernest. The others took music lessons and spoke grammatically. Ernest became an urchin with the gift of the gab. He once threw a pie at his older sister Eve and then sold his mother the idea that she must pay for the damage to the wall because she ducked.
At 10 Ernest started working for a grocer, two hours before school, an hour at midday, two hours in the evening. On Saturdays he worked from 8 a.m. until 10 p.m. His wage was $2 weekly. He was ambitious. He used to say to his mother, “Mom, I seen a car I’m gonna buy you.” His mother chided: “I have seen I have
Ernest bought a water pistol and gave his mother instructions to squirt him in the ear at 5.30 a.m. daily so he wouldn’t l>e late for work.
By the time he was 12 he was making dates with girls. At 16 he bought an old Essex car and hawked fruit. At 19 he married Wilma Taylor, a neighbor’s daughter, and for six months they rented a hroken-down farm 20 miles north of Toronto for $8 a month. Ernest made the owner paint the exterior before he’d take it.
Then he became a street photographer. He specialized on snapping children. He tried aerial photography and went broke
A heart condition kept him out of the services and he got a milk route. He concentrated on ground floor customers. Every time he got a new ground floor customer he would drop one on the second floor. It was tough tactics but it paid off in time and strength and income.
In the afternoons he sold real estate for an East End broker. “I used to get all the houses under $2,000,” he says. “But I was making more than the other guys.” Although he had to be up at 3 a.m. for his milk job he sometimes didn’t get home from real estate until 1 a.m. and would snatch 40 winks on the bed in his clothes.
After the war he went into real estate full time. Like all new realtors, Ridout found his first problem was finding a house to sell. This is called “getting a listing.” Competition is fierce. The day an owner advertises his house independently a dozen realtors are on his doorstep offering their services.
They tell the owner they will bring only likely buyers thereby saving him from the nuisance of showing it to many poor prospects. They point out that they are qualified by examinations to estimate the market value of a house accurately thus protecting the seller from accepting too little or from loss of time through hanging on for too much. They are ready to guide him through the tricky legal formula of the “offer to purchase,” which is a binding document committing the potential buyer to forfeit of his deposit should he change his mind.
The realtor also pays for all advertising and transports all viewers to the house.
The seller usually sees some advantage in using an agent. The fee is fixed by agreement through the realtor’s own organization—in Ridout’s case the Toronto Real Estate Board. This is 314% on the sale price of the house.
Most realtors seek what is known as “an exclusive listing,” an agreement by the seller not to employ any competing realtor. But in cases where difficulty in sale is anticipated—a house may be too large or unorthodox—the realtor often advises the seller to give it a co-operative listing.
This means that the house is put in the hands of all the agents who are members of the local board. A fee of 5% is then charged and divided between the realtor who actually obtains the listing and any other who makes the
When he started out Ridout read the newspaper ad columns diligently and was on the doorstep of many homes that were offered for sale privately. He concentrated on the East End and says he quickly got the bulk of the listings because, as a milkman, he had become known to many people
It Was All-Night Work
Today one of his salesmen makes a specialty of cultivating milkmen, breadmen, icemen, and other deliverymen who generally know where houses are for sale.
Ridout used other methods too. He contacted lawyers and asked them for the names of clients who might be putting houses on the market. In registry offices he compiled lists of houseowners who were renting to tenants, then visited each in turn and asked if they wished to sell. He got leads from obituaries and wills published in the press. He solicited builders for the rights to handle new projects. He advertised that he wanted houses for sale. He even knocked at doors “blind” and asked people if they cared to sell. "You have to be aggressive,” says Ridout, “and have the ability to make people like you.”
Now that he’s well known, listings are no longer a problem. Buyers are easy to find but not always easy to please.
Ridout sold only one house in his first month; 12 in the second. The front parlor was full of buyers until midnight. Wilma, his wife, kept them there with chatter and innumerable cups of tea while Ridout took out the viewers in turns. When all the viewings were over Ridout and Wilma would sit up until 4 a.m. bringing their books up to date. Brothers George and Howard came in to help after their own day’s work was done. One heady night Ernest sold eight houses and made himself more than $1,000. George and Howard quit their other jobs.
The Ridouts plowed profits back into the business, opening up offices, employing salesmen, buying good cars to run their buyers around, and splashing on advertisements.
Once at midnight a seller, impatient about the slow disposal of his house, threatened to withdraw the listing and take it to another agent. The Ridouts mollified him over a bottle of rye and took him home singing at 3 a.m.
One buyer was so dithery that Ernest sat with him from 10 p.m. until 6 a.m. before he wrote a shaky signature on the “offer to purchase.” Two years later Ernest sold the same house for this man at $1,500 profit.
George and Ernest once arrived with two separate couples to see a house at the same time. Both sides wanted it. The women quarreled so violently they started tearing each other’s clothing. The brothers decided that neither couple would get it.
Monthly Prize: A New Suit
Every month Ridout now tries out between six and a dozen aspiring salesmen. They go through a course based on his own methods. This lasts six weeks and consists of daily lectures on effective use of the telephone, advertisement writing, insurance, mortgages, property appraisal, legal procedure, and even public speaking.
In a written examination one of the tests is putting into simple English the windy lawyers’ documents associated with property investment.
Often prospective buyers stipulate they want a house in a specific neighborhood. No other will do. If Ridout has none listed in this area he sends out his rookies knocking at doors until they find somebody willing to sell.
Toward the end of the course recruits go off to see prospective buyers and sellers. At first they never know whether they’re going to meet a genuine client or a “plant” who is part of the curriculum. Fewer than half the trainees survive.
Ridout prefers recruits from low income jobs: they’re keener to make big money. His staff today includes a former taxidriver, a milkman, policeman and trucker. One of his star salesmen is an ex-handyman who now earns $8,000 a year. He has one former bank manager who through making the change has tripled his income. Several Ridout salesmen gave up their own real estate businesses to join him.
Ridout claims his good salesmen average $7,500 a year. If a man can’t earn $5,000 a year he fires him. A few make $15,000. One or two who got up to $25,000 a year left Ridout and started in for themselves.
Like most other real estate salesmen they work on commission only. The Ridout firm takes the 3J^% on the sale price of every house and splits it fifty-fifty with the salesman who makes the deal. Out of his half Ridout pays for all advertising and office upkeep. Salesmen buy and maintain their own cars, although Ridout gets them new ones at a discount through fleet rates.
Each month Ridout buys his most successful salesman a new suit. A few of his topnotchers have wardrobes that would delight a diplomat. He insists on well-dressed men and is finicky about them keeping their cars tidy. Some salesmen have their cars washed twice a week. Once a year Ridout throws a lavish party for the whole staff. The last one cost him v $2,000. He prefers married men and all new fathers on his staff get a gift of $100. A Ridout salesman’s first qualification must be the ability to make Ridout like him.
One of Ridout’s critics says his practice of recruiting salesmen outside the white-collar field is “lowering the tone of the profession.” Ridout says he’s more interested in results than tone. “Men who’ve not been used to earning much are all the keener once they get the chance.”
Ridout doesn’t look for a slump in house prices. “A house is 90%. labor and as long as bricklayers can enrn $2 an hour there won’t be much change,” he says
He Can Cook, Too
Although confident, Ridout is far from cocky. He has a sunny modesty which has won many a female client and seems to hold his staff spellbound. Once when he was passing through the outer office and the stenographers smiled respectfully he said, “Aw shucks,
I feel like a jerk!” He finds being H boss doesn’t come naturally. He has ordered the use of Christian names throughout the business, from office boy to topr executive, except in tile presence of customers when “Mister” is exchanged at all levels.
Self styled “lowbrow of the family," Ridout will say sardonically to his brother George, who likes classical records, “Play me the third movement from Shakespeare," or to chess-playing Howard, “Give me a set of trap drums any day.”
At home he likes jive sessions. His greatest accomplishment musically was the addition of his clarion baritone to a prize-winning Kiwanis quartet.
Once his guests saw him wave away his wife Wilma and himself cook an excellent turkey dinner for 12.
At 31 Ernest Ridout has been told by his doctors to take it easy. He says, “I had bred a monster and it was beginning to own me.” Now he does much of his business on fishing trips and golfing week ends. This summer he spent 14 days unbroken holiday for the first time in his life at a sumptuous rented cottage in Muskoka with his wife, three children, servants, and numerous guests. To one of his guests he said: “I feel more like 51 than 31 just puttering about up here.” The guest replied: “Most men who’ve done what you’ve done are 51!”
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