In 40 years as a licensed real estate broker, Philip Nothnagle has sold nine homes.
“My wife kids me about it,” the president and CEO of Nothnagle Realtors confesses. “She tells me I’d better get out there and sell something.”
Christine Nothnagle, his daughter and a vice president who runs the mortgage banking and insurance businesses associated with Nothnagle Realtors, is more understanding.
Her father is a CEO, not a salesman, she explains. And as a CEO, his record speaks for itself.
The perennial leader of the Rochester Business Journal’s residential realty list, Philip Nothnagle’s brokerage has long dominated this market. Nothnagle Realtors fields 10 times as many agents as Mitchell Pierson Jr. Inc. Realtors, the second-ranked firm on the list.
A competing broker, Is Levy, president of Is Levy Realtor & Associates, estimates Nothnagle Realtors agents close half the residential sales in this area.
“When you’ve got half the agents in the area, you’re going to get half the business,” he reasons.
Indeed, Nothnagle Realtors agents accounted for $486 million of the $1 billion in the residential sales tallied by the Greater Rochester Association of Realtors Inc. in 1997.
But size alone does not keep the brokerage on top, Levy adds, praising Nothnagle’s abilities.
The brokerage was founded a half-century ago by Nothnagle’s father, John, who in 1948 used $400 saved from an Eastman Kodak Co. job to start it. John Nothnagle was convinced he could use photographs shown to buyers in a homey office-setting to sell homes.
The concept was a stroke of marketing inspiration that in time was picked up by virtually every real estate firm in the country. John Nothnagle also started the Gallery of Homes Inc., a residential-brokers network that was the precursor of franchise operations such as Century 21 Real Estate Corp.
The Gallery went public as a separate firm. It was sold to Empire of America Federal Savings Bank in 1986. When the thrift went under a few years later, it took the Gallery down with it.
Philip Nothnagle’s brother Ray followed his father into the real estate business in 1957, and Philip joined him in 1965. Ray took the helm three years later.
From the start, says Ray Nothnagle–who handed the president and CEO jobs to his brother in 1990 and gave up the chairman’s post last year–Philip was more drawn to the finance end of the business than to sales.
In fact, Ray had to persuade his brother, who had imagined himself leading a quiet scholar’s life as an economics professor, to go into real estate at all.
In the end, he adds, Philip turned out to be an innovator whose contributions have added measureless value to the firm.
Chief among them is Nothnagle Realtors’ associated mortgage-banking operation, Nothnagle Home Securities Corp.
It is not uncommon now for residential realty firms to have associated mortgage-lending or mortgage-brokerage arms. But when it was started in 1969, the Nothnagle mortgage business was the first non-bank mortgage lender of any type licensed in New York.
A moneymaker in its own right, Nothnagle Home Securities wrote $92 million in business last year.
It also has been a key selling tool for the brokerage, Ray Nothnagle says, giving its agents a deal-closing edge in times when mortgage money was tight.
Philip Nothnagle also has shown something of his father’s flair for marketing innovation. Among his introductions are the For Sale Line, a voice-mail directory of all the firm’s listings, and a television show featuring tours of homes for sale that echoes the 1948 photographic home showings.
Nothnagle himself traces his initial reluctance to enter the family firm to memories of his father’s frequent absences.
While his father was a devoted parent, Nothnagle says, the demands of building a new business meant he often was absent from the dinner table. Nothnagle associated such absences with real estate and resolved to seek a career less demanding of time.
Father James Boyle, a boyhood friend who as pastor of St. John of Rochester Catholic Church now is Nothnagle’s parish priest, recalls John Nothnagle as instilling a sense of thrift in young Philip.
Both he and his friend had paper routes, Boyle says, “but I always had more money. I think his father made Phil give two-thirds of what he made back to the family.”
Boyle also remembers Nothnagle as a studious child who enjoyed the respect of his classmates as well as their friendship.
Through high school and undergraduate studies in college, Nothnagle earned good grades, excelling in history. He graduated from Le Moyne College in Syracuse in 1962, intent on pursuing a career as an economics professor.
Nothnagle had his choice of a full scholarship for graduate studies at Syracuse University’s Maxwell School of Citizenship and Public Affairs and teaching assistantships at Pennsylvania State University in University Park and the University of Wisconsin at Racine.
He chose Wisconsin “because I wanted to see the Midwest,” Nothnagle says.
At the school, he shortly encountered a statistics course that changed his mind.
His idea of economics was more “old-fashioned, more on the historical side,” Nothnagle says. He had not been ready for the econometric analyses that now have come to dominate the profession, so he left.
“Statistics,” he says, “was my Waterloo.”
Still, though his brother already had been wooed into the brokerage, Philip resisted real estate.
Instead, he returned to Rochester and got a job at Marine Midland Bank, working in a management-trainee program.
During the two years Philip worked at the bank, Ray Nothnagle was working on his brother, trying to get him to come into the brokerage.
“I thought his banking experience would be helpful,” Ray Nothnagle says. “And I told him the earnings capability in real estate sales was better. I was doing quite well at the time, better than Phil.”
Though his brother did “a little selling,” Ray Nothnagle says, Philip early on gravitated toward the mortgage business.
The germ of the brokerage’s trailblazing mortgage-banking arm lay in Philip Nothnagle’s banking contacts.
To ease the process for the brokerage’s clients, Philip worked out agreements with banks to earmark some of their available mortgage money for Nothnagle customers.
Nothnagle in turn would do advance work for the banks, making sure each loan prospect the brokerage sent over met the bankers’ criteria.
By 1965, when the firm formalized the arrangement by becoming a licensed mortgage lender, Philip “had been bugging us to do it for some time,” Ray Nothnagle says.
As a lender, Nothnagle Home Securities would write loans to home buyers. Once the sale went through, the loan would be sold to a bank.
Nothnagle Home Securities and a host of other similar businesses today follow essentially the same practice. But at the time, such deals were virtually unheard of, Ray Nothnagle says.
Through the 1960s and 1970s, Philip Nothnagle concentrated on building the mortgage business, while his brother managed the sales end.
Their father’s marketing ideas had paid off from the start, bringing the firm from nothing to $1 million in business in its first year. By the time Ray Nothnagle became president, it was a $30 million firm.
In the mid-1980s’ red-hot real estate market, the brokerage closed some $400 million in sales a year, and the mortgage-lending operation was writing more than $150 million in loans.
Nothnagle says he increasingly moved into management of the real estate brokerage through the 1980s. In 1986, he brought daughter Christine into the mortgage business. When he took over as president and CEO in 1990, she took the reins of Nothnagle Home Securities as the mortgage firm’s chief operating officer.
Though Nothnagle ended up putting in long hours, as his father had done before him, her father never did do so at the expense of time spent with his children, Christine Nothnagle says.
Rather than leave his own children at home when he worked evenings or weekends, Nothnagle trundled them into work with him. Christine Nothnagle recalls playing at the mortgage brokerage as a 4-year-old, and later working there as a high-school student.
Like her father, she worked in banking before coming back to the family firm. In her case, the banking stint was much shorter–a matter of a few months.
Her father put no pressure on her to work for the brokerage, Christine Nothnagle says. She took the banking job in Boston after graduating from college because she thought it would be exciting to live there. But after a few months, she decided that working for the family firm would be far more congenial.
Her father, she explains, is one of the most innovative bosses she could hope to work for; more importantly, he also is one of the fairest.
Philip Nothnagle is not sure his competitors would see him in that light.
Among other Rochester-area brokers, he imagines, “I’m probably not very popular right now.”
Why? Because of Nothnagle Realtors’ recent efforts to recruit their top agents.
The brokerage, he says, has long invested considerable resources in training its agents, only to see them aggressively recruited by competitors. He figures turnabout is fair play.
Nothnagle Realtors for several decades has maintained an agent-training center at which all agents are required to do initial and regular brush-up stints.
The recruiting effort is one part of Nothnagle’s strategy to maintain and grow market share. He also is mounting TV and radio ad campaigns to boost the agency’s brand awareness.
Nothnagle’s concern over his colleagues’ opinion of him speaks more to his sense of fair play than to actual resentment among competitors, says Michael Haymes, president of the Pittsford-based Re/Max Realty Group Inc.
Is Levy concurs. Nothnagle is highly regarded among competing brokers here, he says, “the best competition anybody could have.”
Adds Haymes: “Phil is a man of extreme integrity. I never had any problem with him. If there were ever any issues to work out, he worked them out. He’s a straight shooter, very well respected.”
A business where he feels right at home
In 40 years as a licensed real estate broker, Philip Nothnagle has sold nine homes.