The CultureMap Interview

Real estate legend John Daugherty reveals surprising lessons learned in 50-year career

Real estate legend reveals surprising lessons learned in long career

Anne Incorvia, John Daugherty, Cheri Fama at 50th anniversary celebration
Executive vice president Anne Incorvia, founder and CEO John Daugherty, and president and COO Cheri Fama celebrate the 50th anniversary of John Daugherty Realtors at River Oaks Country Club. Courtesy photo

When Lawrence Marcus returned to Dallas in 1977, a few years after opening the Neiman Marcus Galleria store, John Daugherty longed for the listing of the retailer's Houston home on Little John Lane. So Daughtery drove to Dallas and pitched family patriarch Stanley Marcus to hire him to sell the house.

"Why do you think I should list with you?" Marcus asked.

"Because I'm the best," Daugherty replied.

"No, you're not the best," Marcus said. "You're the hungriest."

"And he was right," Daugherty said. "And I got the business."

Even being in business for 50 years — he celebrated with his real estate family at a low-key celebration at River Oaks Country Club in May — Daugherty continues to stay hungry to make the next deal, which is a prime reason for his lasting success. "He loves a challenge and loves to embrace opportunity," says Cheri Fama, president and COO of John Daugherty Realtors, who joined the company seven years ago and remains a close friend and business confidant. "It keeps him going."

"And we’re a family, we’re not a company," says Daugherty, who serves as the company's founder, chairman and CEO. "We’re a family first."

Certainly few people know Houston's moneyed set better than Daugherty, who grew up in River Oaks with some of Houston's best-known old guard families — "I think I got a better people education than I did a college education," he recalls — and was a fixture on the young-and-rich '60s society circuit, where he was playfully known as the "Debutantes' Delight." His firm, which now totals 150 full-time sales agents and a large support staff, continues to sell more than 40 percent of the homes in the city's most exclusive neighborhood as well as specializing in other prime areas, including The Woodlands, where Daugherty recently opened an office.

"The thing I practice every day is 'never, never give up,' and 'no is a closer answer to a yes' —no matter if it’s personal or business life," Daugherty says.

During an interview in his paneled Post Oak office with an ornate fireplace and framed newspaper clippings, Daugherty is a natural-born storyteller and an astute historian of Houston's fabled past as well as a bridge to it future (fingers crossed that he one day writes a book). Here are some topics we covered:

How he got his start:

In 1967, Daugherty was in his early 20s when he got into the real estate business working for Jimmy Jax, an ex-Rice football player and well-known real estate agent who taught Daugherty the finer points of how to sell a house. With Daugherty's connections and Jax's tutelage, he was on his way. Nine months after he started with Jax, he left to go out on his own after his father suffered a serious stroke because he felt like it was time to really grow up. And he learned a valuable lesson when he told Jax he was leaving.

"(Jax) came around the desk and gave me a hug and said, 'I’m here to help you.' And for the next five years, he was the first person I called. He was a competitor then but he was always there for me," Daugherty says, "Eighteeen years ago, he knocked on our door and wanted to join us. He stayed with us for 14 years. We lost him seven years ago." 

What he first learned about the real estate business:

"I learned how important communication is and how if you make a mistake, raise your hand and say, 'I’ll get it corrected.' And if it costs your client money, write him a check for it," Daugherty recalls.

"The biggest check I ever wrote was for $10,000 for a house we sold out in Memorial. The owner represented to us that every door in the house — and it was full of French doors — was bugged for alarms. They had it inspected and it wasn’t. This was before all of the disclosures, so they came to me and said, 'It doesn’t have what y’all said it had.' We wrote him a check for $10,000 and I can’t tell you how many millions of dollars in business I got from them because I was honest about how it happened and I made up for it — and that’s how I’ve always done business."

The first house he sold:

"It was on Perthshire, and it was a half block west of Gessner. It was $37,000, on a regular lot. And the man who bought it was with Jefferson Chemical and our office was next to them. How Jimmy got that connection is they came from Beaumont, of all places, and we sold him that house and that was the first house I’ve ever sold. And I’ve loved the business ever since. I love architecture. And I love people. The two mix very well."

What was business like back then:

"When I started the business in 1966 with Jimmy Jax, there was a house on the northwest corner of River Oaks Boulevard and Ella Lee. And the people who lived there were Milo and Agnes Maule. They were asking $250,000 for the house and couldn’t get it — on River Oaks Boulevard, one of the best streets in our city. Roy Cullen’s house sold about two years before I got into the business and I think Oscar (Wyatt) told me he paid $250,000 for the house (next to River Oaks Country Club) and it was on six acres."

Best lesson he learned:

"It happened sometime in the '70s. John Bookout was coming to Houston to be president of Shell. They had been in London for quite a bit of time and had an incredible collection of English antiques. He said, 'I want to live two blocks east or west of River Oaks Boulevard, on Chevy Chase, Del Monte, or Inwood. And I want an English house.'

"There were no English houses for sale (in River Oaks), but there was a house on Pine Valley that was English and it was vacant and I bet we went to that house seven times and he wouldn’t make an offer on it because it wasn’t in (his preferred) location.

"So stupid me, I drive him by a house that’s on the north side of Del Monte, a little over a block west of the Boulevard. And it’s a brick house with a red tile roof. It doesn’t show that much of an English house. I said, 'You don’t want to see this house.' And he ended up going and getting another realtor who sold them that house because of that location.

"So the lesson I learned is show them every house on the market and let them make the decision. What I was then was what I call a 'real estate consultant' instead of a real estate salesperson. A real estate consultant makes decisions for their clients; a real estate saleperson educates them about the market. And I’ve been teaching that ever since. So it was a good lesson for me."

What's the market like now:

"It’s healthy, it’s realistic, there’s so much movement coming into Texas. The No. 1 population is coming from China. We'll see an incredible amount of growth in this city in the next 2-3 years. We had our second best year last year, and our third best the year before that."

When he is going to retire:

"I have no intention of retiring. I’m going to get this back fixed and I’m back rolling strong," Daugherty says (a few days after the interview he successfully underwent surgery). "I’m just 73. The 70s are the 50s. Now when you get to 100, that’s old. My mother got to be 91 and fortunately I got 95 percent of my mother genes.

"I don’t have any intention to slow down. I love what I’m doing and we work so well together,' he says, referring to Fama. "We’ve never had a major disagreement. We’ve had discussions and talked them out."

"We can say anything. It’s been very productive and constructive, let’s put it that way — for both of us," Fama says. "I have already been doing it over 35 years. But you learn something new every day."