``Our Industry is Broken,'' President & CEO of GMAC Home Services Said in Major Speech at Annual Business Conference.

Business Editors & Real Estate Writers

LAS VEGAS--(BUSINESS WIRE)--Feb. 3, 2003

John Bearden Said Real Estate Has Strayed From its Roots of

Meaningful Relationships That Benefit Consumers; Firms Must Commit to

Fundamental Overhaul

With the busy spring home-buying and selling season just weeks away, the president and chief executive officer of one of North America's largest real estate firms today delivered a sobering dose of news to his colleagues across the nation: The real estate industry is broken and in dire need of a major overhaul.

Speaking to more than 2,200 realtors and brokers gathered for his company's annual business conference at the Paris Hotel in Las Vegas, GMAC Home Services President and CEO John Bearden said the trust and close working relationships that once defined the residential real estate industry have been replaced by fractured relations between franchisors, brokers, agents and most importantly, consumers.

"Our industry is broken and terribly misaligned," Bearden said during a major morning speech that kicked off the day's events. "Our proud industry was founded upon one-on-one, person-to-person connections that thrived because they shared a common goal: to provide the very best service possible to consumers.

"But our industry today is awash in intellectual dishonesty by some franchisors. Instead of dedicating themselves to the growth and success of their franchisees -- and ultimately, the services they provide consumers -- they seem motivated more by a desire to simply sign more franchisees and then sell them superfluous 'stuff' that boosts their profit margins but does nothing to improve customer service or spark genuine, productive relationships."

Bearden said the numbers alone speak to the industry's misalignment: Brokers across the nation today average just $137.50 in net profit for each transaction -- despite several of the best years in the history of the industry.

Rebuilding trust and providing services to consumers based on solid relationships is especially crucial now, Bearden said, because consumers are asking for -- and expecting -- more from their realtors. "Over the past year and a half, our research into the needs and desires of consumers has shown that they want more, not less, from their real estate professionals," Bearden told the crowd of GMAC Real Estate agents and brokers from across the United States.

For example, consumers want recommendations on mortgage, title and closing services, insurance and warranty -- services they consider core to the transaction. Meeting those desires will require franchisors to "once again forge relationships where service to the 'real' customer -- home buyers and sellers -- stems from the success of others, and results from the partnership of everyone involved in the transaction," said Bearden, a former real estate broker and longtime advocate of improved consumer services.

For its part, Oak Brook, Ill.-based GMAC Home Services is working to raise levels of customer service through a new program called Premier Service, Bearden said. The program was founded on three tenets: GMAC Home Services will always listen to its customers so that there is no misunderstanding what it is they want from the relationship; the company's agents will commit, in writing, exactly what they will do for them and when they will do it; and the company will measure the results of transactions to ensure that its service met or exceeded customers' expectations.

Bearden also noted that his company's aggressive pursuit of superior service now includes making available the new Blackberry wireless technology platform to sales associates. Last month, GMAC Real Estate became the first national real estate company to offer the popular handheld Blackberry device, which enables agents to stay in constant contact with customers and contact potential customers immediately as calls and leads are forwarded directly to their devices. The sophisticated Blackberry devices also enable agents to wirelessly access property information, e-mail and phone services, Bearden said.

About GMAC Home Services

Based in Oak Brook, GMAC Home Services is one of the nation's largest real estate organizations, delivering premier service to homebuyers and sellers through its three operating companies: GMAC Real Estate, GHS Mortgage and GMAC Global Relocation Services. Backed by the resources of industry giant General Motors, the GMAC Home Services network has more than 1,300 franchised and owned residential real estate offices throughout the United States.