Latest / NOISE vs SIGNAL by Inman / Brown Harris Stevens CEO Bess Freedman on Why Bigger Isn’t Always Better in Real Estate

Transcript

Brown Harris Stevens CEO Bess Freedman on Why Bigger Isn’t Always Better in Real Estate · NOISE vs SIGNAL by Inman

0:00
Today, I talked to Bess Freedman with Brown Harris
0:02
Stevens, who said she would rather close the
0:05
doors than sell out to a large corporate consolidator.
0:09
Plus, she gives us new interesting insights on
0:12
the private listings battle. I really enjoyed
0:15
this conversation. I hope you do, too. Hey, everyone.
0:18
This episode is brought to you by Lofty, the
0:20
agentic AI operating system for real estate.
0:23
Lofty's AI doesn't wait to be prompted. It works
0:26
proactively on behalf of your agents to uncover
0:29
new listing opportunities, engage leads, schedule
0:33
meetings, and drive more transactions. Lofty
0:36
turns every agent into a top producer. Visit
0:39
lofty .com to see how agentic AI can put your
0:43
business growth on autopilot. Everybody in the
0:46
business of home has a pitch. Almost nobody gets
0:49
asked a hard question. This show fixes that.
0:52
Welcome to Noise vs. Signal. I'm your host, Inman
0:56
CEO Tom Bohn. Each week we sit down with the
0:58
top producing agents, industry CEOs, prop tech
1:02
founders, and the people shaping the future of
1:05
the business of home. Then we break down the
1:08
week's biggest headlines and decide what's noise
1:11
and what's signal. Let's get into it. Hey, everyone.
1:17
My guest today runs one of the last large independent
1:20
standing agencies in New York City. Bess Friedman
1:23
is CEO of Brown Harris Stevens. 2 ,300 agents,
1:27
39 offices, 153 years in business, no debt, and
1:32
the highest average sales price per agent in
1:36
the country. She's also a former prosecutor,
1:39
which I'm obsessed with, which explains a lot
1:42
once we get her going on some of the things we're
1:44
going to talk about today. Bess, welcome to Noise
1:46
vs. Signal. Thank you so much, Tom. It's a pleasure
1:49
to finally get to talk to you face -to -face.
1:52
Absolutely. I've been waiting for this. We were
1:54
talking in the green room prior, and I absolutely
1:58
love your op -eds and your editorials. And I'm
2:01
not putting a thumb on the scale in terms of
2:04
whether I agree with them, fabulous and it hit
2:09
me today when i was prepping for this conversation
2:11
i'm like why do i love her writing and when i
2:14
heard you're a former prosecutor it all came
2:16
together to me i was like ah okay she's presenting
2:20
a case so i would love before we get into all
2:22
the noise and craziness of the real estate industry
2:24
today talk to me quickly about that background
2:27
kind of how that informed what you're doing today
2:30
and how do you utilize it thank you so much and
2:33
i appreciate that i love to write it feels like
2:36
it's therapeutic for me but you know i always
2:38
wanted to be a lawyer as a kid and that was sparked
2:41
by a woman you may or may not know you you're
2:43
from new york so you may have heard of bella
2:45
abzik absolutely One of the first women in the
2:48
House of Representatives. And my mom took me
2:50
to hear her speak when I was nine. And I just
2:52
said, Mom, I want to be a lawyer. So it was something
2:55
I wanted to do. And I went to law school. I did
2:58
a lot of public service stuff. And then I became
3:01
a prosecutor. I was also a legal aid lawyer.
3:03
But as a prosecutor in particular, I had the
3:05
best boss in the world who I'm still friends
3:07
with. His name is Danny Barnett. And it teaches
3:11
you how to speak, how to organize your thoughts,
3:14
how to argue something, how to back it up with.
3:16
substance so i even say today to young people
3:20
if you're thinking about a career law school
3:23
is such a big plus for you because it teaches
3:25
you a lot of things whether you decide to practice
3:27
or not so i did practice law for about five years
3:31
i loved it it was great and i started to have
3:34
a family which was a challenge in the sense that
3:38
i needed more flexibility in my time and that's
3:40
how i sort of got myself into real estate Does
3:43
that I mean, think about when you were a prosecutor.
3:46
I mean, that's obviously especially in New York
3:48
City. That's got to be an incredibly. I was,
3:50
by the way, I was not in New York City when I
3:52
was a prosecutor. I was in Montgomery County,
3:54
Maryland. I lived in Washington, D .C. OK, still
3:57
just as crazy. Yeah, still. Yeah, still very
3:59
crazy. You're right. It is still just as crazy.
4:02
But yes, I just wanted to factually correct that.
4:05
But how does that like I mean, do you use a lot
4:07
of those elements of those training that on the
4:09
moment, you know. pitching and processing or
4:12
building cases or do you build cases for your
4:14
clients for your team members what does that
4:16
what does that look like i don't think that you
4:19
build a case in that way the way you describe
4:22
but i do think you analyze things and you look
4:25
at things legally sometimes and also i like to
4:28
have substance to back up whatever i'm saying
4:30
to support because you could just say anything
4:32
but if you have something to really back it up
4:35
it makes your case stronger and so you want to
4:37
sort of lay it out easily for people and then
4:40
you want to also argue it and then come to a
4:43
conclusion for people i think that helps with
4:45
everything and if you're selling a home it's
4:47
the same thing you want to price it right you
4:50
want to explain why you're pricing it right based
4:52
on comparables. And you want to explain the best
4:55
process and how to get there and the marketing
4:57
and all those things to hopefully get to a conclusion
4:59
of getting them the price that they want and
5:01
a closing. And so it's similar in that way. But
5:04
I have to tell you, when I was a prosecutor,
5:07
it was the best job in the world because it taught
5:09
me so many things. You'd have 100 cases. You
5:12
had to speak in front of a judge. I would sit
5:14
down with defendants sometimes who weren't represented
5:16
and try to talk to them. I learned. EQ, negotiating.
5:21
It was fun. I had peers. I mean, there was so
5:24
much involved and I had to pass the bar exam.
5:26
I mean, there's so much involved and it was incredible
5:29
and the gift of my life. And I'm always thankful
5:32
for it. As I mentioned, really friendly and close
5:35
to Danny who taught me so much and has been a
5:38
mentor in my life throughout. I love that. There's
5:40
so many different, diverse. people in real estate
5:44
come from all walks of life. I was just speaking
5:46
to an agent in Miami and he said, the number
5:49
of people who were, what we talked about, actors,
5:52
attorneys, engineers, all this type, and they're
5:55
all gravitate towards this idea of, I want to
5:58
be my own independent business person. And that
6:02
kind of gets us back to what we're seeing in
6:04
the market now, which is what does the model
6:06
look like going forward? I make the case, I have
6:10
made the case on stage that I think, based on
6:13
the barriers to entry, which are low. I think
6:16
based on the entrepreneurial spirit that you
6:18
see from agents, that the future is really about
6:22
independent boutique types of groups. Am I wrong?
6:25
I mean, you've held out a long time, right? You
6:28
partnered with First Team instead of trying to
6:30
merge with them. Is collaboration over consolidation
6:33
a real model? And what does it look like for
6:35
the boutique or independents? I think it's been
6:38
a benefit for us. And, you know, we've hired
6:40
a lot of agents based on the fact that we are
6:42
independent with no debt and we offer something
6:45
different. But I think there's various ways to
6:47
do this job and you can be a big brokerage and
6:50
do it well. You know, I think Compass has built
6:52
something huge and that might not be or appeal
6:56
to every type of agent, which it doesn't. But
6:59
I will say this. I read a stat yesterday that
7:01
spooked me. that 17 % of consumers, only 17 %
7:05
trust real estate agents. Wow. And I spoke about
7:09
this last year. We are in a real trust crisis
7:12
and it's going down, down, down. And so if we
7:15
don't lean in or double click on transparency
7:18
more, it's frightening what the future of real
7:21
estate might be. And so we have to remember we
7:23
are trusted advisors to people. We have to put
7:26
their interests first. And so I think some people
7:29
have lost that. the concept of what they're doing
7:32
it and why they're doing it. Our mission has
7:33
always been clear. We're here to serve people.
7:35
We're here to put your interests first, our agents
7:37
and our clients alike. At the end of the day,
7:40
hopefully the byproduct is you make money. I
7:42
mean, that's always, you want to be able to do
7:44
that, but that shouldn't be the goal. That shouldn't
7:46
be the reason why you do what you do. I don't
7:49
think. Yeah, no, I think that's a good point,
7:52
but we have to at least acknowledge that there
7:54
is a, certainly maybe a cost benefit to being
7:57
part of a larger rolled up platform. huge. I
8:00
mean, you have capital markets, you have tons
8:04
of money and you can do all sorts of things.
8:06
You can acquire, get bigger, you know, but it's
8:09
true that bigger is not always better in what
8:11
we do because, you know, selling homes, it's
8:14
an emotional commodity. It's so personal. The
8:16
discussions we have with people. when they lose
8:19
loved ones, when they're going through a divorce,
8:21
when they just get married, when they have a
8:22
baby, they want a person who's there. You know,
8:25
you're opening their drawers, their closets,
8:28
you meet the dog, the kids, you know what? I
8:30
mean, what we do is so different than everything
8:32
else. There's no other advisor that's actually
8:34
in. your grill you know in your face in your
8:37
home you know what i mean so it's very special
8:40
what we do and i always emphasize that because
8:43
it's not a transaction it's a relational business
8:46
built on trust and if those big companies lose
8:50
all of that i don't know what will be i haven't
8:52
that story's not over yet here's where the challenge
8:56
for me is on the bigger brands as someone who
8:58
has been now in this industry for six months
9:01
but have sold bought 10 homes in my life, right?
9:05
Probably more than the average bear, okay? But
9:07
here's what I will tell you that I will, and
9:10
I have tested this theory and we're actually
9:12
doing research on it now as part of InMintor
9:14
Report. Every consumer that I've approached and
9:18
talked to them about their real estate transactions,
9:20
their real estate connections, none of them so
9:23
far have been able to tell me who their person
9:27
works for. All they can tell me is... Oh, I've
9:31
got Sally and I love Sally. Well, who's Sally
9:33
with? Oh, I think she's with so forth and so
9:38
on. So I'm really fascinated by like, how does
9:40
this, to me, it's still about the individual
9:44
personality and brand. And I just don't see how
9:48
that benefits on a roll -up basis in terms of
9:52
that, at least from a branding perspective. On
9:54
a monetization, on a cost basis, I understand
9:57
all that. But from a brand perspective, Is anyone
10:00
out there going, I'm going to go hire Brown Harris
10:03
or I'm going to go hire a compass because they're
10:05
the great. It's not like you're buying Apple.
10:07
No, I agree with you. I think brand matters in
10:10
the sense that. a brand is a promise right it's
10:13
you go to the four seasons you know you're getting
10:16
x y and z you know it's certain go to starbucks
10:19
like there's certain things that you know you're
10:20
going to get from a brand it's a promise so people
10:23
know when they hire brown hair stevens that there's
10:26
an expectation of a certain level of legacy and
10:29
quality and culture but yes people hire the agent
10:33
it's who they trust and so it could be whatever
10:36
firm unless the firm has a reputation that's
10:40
come into question Then it's a different story
10:44
because then the consumer says, you know, you
10:46
were tangled up in this or you did that, or I
10:48
don't like that you're doing this. I don't want
10:50
to be attached to that. That could change that.
10:52
But yes, people hire the person. And so that's
10:55
why we are constantly, our agents are intergenerational.
10:59
We focus on the right things. We try to build
11:01
ethics. We're not perfect, but we have that here.
11:05
And I think that's why we've been able to last
11:06
for so many years. And we've been able to evolve
11:09
because we care about all those things. You are
11:12
still independent, but at some point, someone's
11:15
going to come to you with an offer. right and
11:19
i have already tom no i i know i know and i've
11:22
read i think you said your exact quote was you'd
11:24
rather shut the doors but look everybody has
11:27
a number Don't they? Maybe they would. It would
11:30
not be for me. And, you know, when I sit around
11:33
like yesterday with a bunch of the execs, we
11:35
were coming up with some new policies and I sat
11:37
around, we were having lunch and I said, this
11:39
is incredible that I get to wake up and do this
11:42
every day with people that I respect and love
11:44
and learn from and we compliment each other.
11:46
And so maybe somebody for somebody else is just
11:49
for me, it's something more than just. How much
11:53
money? Because I have enough of everything. I
11:55
have a house. I have my kids. I have a great
11:57
life. I have family. I have all the things I
11:59
need. I don't need so much more. What's the difference?
12:02
If I had $100 million today, nothing would change
12:05
in my life. And I mean that because I have everything
12:08
that I need. I take the subway. I love the hustle
12:11
of New York City. I have my health. That's the
12:14
most valuable currency that there is. And I have
12:16
time. That is true. What am I going to buy? A
12:19
fancy car? but a hundred million best come on
12:22
a hundred million if i had a hundred if i had
12:24
a hundred million i would take a bunch i would
12:26
take my daughter and a bunch of friends and go
12:28
see bad bunny that's what i would love to do
12:30
i'd fly everybody and go see a bad bunny concert
12:32
because my daughter loves him and she's seen
12:35
him but i would love to see him up close because
12:37
i He's my vibe. I love him so much. So maybe
12:39
something like that. But other than that, money
12:42
is the cheapest form of currency. It's your health.
12:45
It's your relationships. You know, I have two
12:47
brothers that I love that I talk to my mom, who's
12:50
my queen. Life is precious. I'm a gifted girl.
12:53
I know it. That's awesome. That's a great, great
12:55
perspective on life. All right, let's talk about.
12:57
what you've become. You're known for a lot of
12:59
things. You're an incredibly successful businesswoman,
13:01
but you've been out there very, very vocal about
13:04
the whole private listings conversation and where
13:07
that's headed. First question is, one of the
13:10
things that troubles me really is there doesn't
13:12
seem to be any leadership around this issue.
13:15
There's corporations battling, obviously. There's
13:18
opinions out there. But there's a void, it seems,
13:20
of leadership. Who's going to take the man? Or
13:23
is it going to be state by state like Connecticut
13:25
that's deciding these things one off? And we're
13:29
going to keep living in this kind of sim of this
13:31
issue for the next five years? I mean, it's hard
13:34
to say. I know that the House subcommittee is
13:37
investigating and they're in the process of that.
13:40
And this is an issue that's nonpartisan. everybody
13:43
elizabeth warren and you know people are concerned
13:46
about this there are real estate professionals
13:48
that are concerned i think you know anthony lamacchia
13:51
who is One of my brothers in arms who I absolutely
13:55
adore and love. And he's been very vocal. James
13:58
Dwiggins, Leo Pareja. You know, there's a lot
14:01
of really respected people that have been vocal,
14:03
but they're a huge market share. And so when
14:06
you have power, you have voice. And so, you know,
14:09
there's the David and Goliath story. So I think
14:11
we just have to keep articulating. And look,
14:14
did you read the piece by Derek Johnson from
14:17
the president of the NAACP? Very much, yeah.
14:21
And I thought that was incredible because it's
14:23
not about intentional behavior that hurts minorities.
14:27
It's the impact that it might have. And people
14:30
have to remember that's what fair housing is
14:31
about. You don't have to act with malice. It
14:34
could be that you have a policy that's neutral
14:36
that impacts minorities in a bad way and you
14:38
failed. so that's the concern if he's saying
14:41
that elizabeth warren the house subcommittee
14:44
the ag you know a lot of people are talking so
14:47
i i don't know i think opinions are out there
14:49
it's just that they have a huge market share
14:51
and so they have overwhelmed the space with their
14:54
massive narrative But is there a coalition, though,
14:59
that could possibly come together on the other
15:01
side? Like, where does that sit? It doesn't seem
15:03
to be NAR, right? They don't seem to have an
15:05
interest. And look, I think Nakia is doing a
15:07
brilliant job. She is. I respect her incredibly.
15:10
I think she's really done a good job. I had her
15:12
on stage and just, you know, look. Everyone who
15:15
throws shade at NAR, you can throw shade on NAR
15:18
previously, but the new administration, the new
15:22
folks on there are trying to right the ship and
15:24
we have to give them an opportunity. I agree
15:26
with that. I think people are too soon to say,
15:28
oh, they did this. And I was like, yeah, but
15:30
she's in charge now. You know, it's easy to heckle
15:33
from the cheap seats. Let the lady do her job.
15:35
She's hired a great team. She's one of the smartest
15:38
women in the industry. If you've talked to her,
15:41
you know this. Oh, she's a boss. She is a real
15:44
boss. I respect her incredibly and I have complete
15:48
faith in her ability. So I would say you got
15:51
to give people an opportunity to right the ship,
15:53
as you said. So I don't know where or how or
15:57
if there's a coalition. I feel like we have a
15:59
mini coalition here in New York City. You know,
16:01
when I go to events and I talk to agents, even
16:03
agents that are at Compass, a lot of them will
16:05
say, you know, I 100 % don't support this. I
16:09
don't like it. There are people that care. maybe
16:12
are not as vocal, but there is a sentiment that's
16:15
running through. Jonathan Miller's been very
16:17
vocal. It's been an incredible voice. So I think
16:20
we have to just, you know, let's see what happens.
16:23
You know, we'll see what happens here. Give me
16:24
the best Friedman former prosecutor pitch as
16:28
to why private listings are a disaster for the
16:32
industry and the consumer. Talk to me like I'm
16:34
a moron, which some people would agree with.
16:36
You are not a moron at all. But I would say that.
16:41
you know decades ago we had an industry where
16:44
things were hidden there wasn't transparency
16:46
and that hurt the consumer hurt price discovery
16:49
hurt so many things and today we're in a place
16:52
where we've made so much progress where the market
16:55
is out there the consumers know prices they know
16:58
days on market and everything is there to be
17:01
seen and i think when you start hiding things
17:03
and go back to the 80s and put things behind
17:06
a paywall or not let people know or manipulate
17:08
you know days on mark market and price I think
17:12
you're taking us back you're hurting the consumer
17:14
you're hurting affordability you're hurting the
17:16
marketplace overall and I don't think there's
17:19
bad intent by the way on the part of Rob you
17:22
know someone asked me if I thought he was a bad
17:24
person and I said absolutely not I know Rob he's
17:28
actually a really good guy smart family man I
17:32
respect smart businessman absolutely but You
17:35
know, smart people can have bad ideas. And I
17:38
just think this idea is not working. It's not
17:40
a good one. He hasn't thought it through in the
17:43
right way. And the thing that shocked me the
17:45
most has been, you know, people who are on the
17:48
other side of this not too long ago are now on
17:50
his side because obviously their checks are being
17:52
signed by him. But they were vocal about, you
17:55
know, how private listings should be outlawed
17:57
and how days on market should be revealed. And
17:59
now today they're singing a different tune. I
18:01
don't know. Do you have courage of your conviction
18:03
or are you just sort of a rail rider that goes
18:05
whichever way is convenient? So you mentioned
18:08
Rob, you're talking about Robert Refkin for those
18:10
obviously listening. So he had just recently
18:13
said that by spring, about 80 % of compasses
18:17
and former anywhere listings will debut on compass
18:20
.com first. If he gets there, what does that
18:25
mean? What does that do? And where does that
18:27
put the MLSs, frankly, in all this? Well, here's
18:30
the question. What does the seller think of all
18:34
this? Has anyone spoken to them? Are they being
18:36
led in the right direction? I mean, seller choice
18:39
has been the narrative. We want sellers to be
18:41
able to choose. I'm telling you, Tom, sellers
18:43
have always had the choice. We have a seller
18:46
right now who is selling quietly because they're
18:49
a big name person. That was their choice. They
18:52
wanted to do that, but that's the exception,
18:54
not the rule. And so they're just going to steer
18:57
everybody in a different direction because why?
18:59
Who is it serving is the question I would ask.
19:02
Yeah. So again, so who is that serving? If Compass
19:05
is showing them 80 % on Compass .com, what is
19:09
the end game then for groups like that? What
19:11
are they hoping for? They're hoping to, you know,
19:14
domination. They want to get rid of Zillow, which,
19:17
you know, I understand they want to own their
19:20
information and be in control of it and have
19:22
the consumer go to Compass versus Zillow. And
19:25
so, you know, I know Zillow has more than 2 billion
19:28
unique visitors a year, maybe more than that.
19:30
And consumers go to Zillow, like it or lump it.
19:33
I get it. It's frustrating. You have to pay Zillow.
19:36
They have experts. They have all these programs.
19:38
But the reality is that that is where the consumer
19:41
looks. I was in the car with my brother and his
19:44
girlfriend, and they were looking at properties
19:46
on Zillow in the car. I've used Zillow and Realtor
19:49
.com every single time since they've been in
19:53
existence. so they're fracturing that by putting
19:56
some stuff on compass and you know the rest of
19:59
the world is looking on zillow and so the question
20:02
again is who are you serving if you're putting
20:04
your clients interests first i think that it's
20:07
a short game and i don't think it's a winnable
20:09
game but i've been wrong many times we'll have
20:11
to see what happens you know i i think it's tough
20:15
there's been i think research is a lofty word
20:18
to use here but there has been elements of what
20:21
has been shared as research suggesting that it
20:24
can get a better selling price what are your
20:27
thoughts so here's my question how do you know
20:29
that you can get a better selling price if you're
20:33
only in a limited market you're in a sub market
20:36
explain that to me if you're exposed to the entire
20:39
marketplace How do you know what you're gonna
20:41
get? What are you using as your sample set? For
20:44
example, if you put a listing out into the marketplace
20:46
and the whole world knows about it, some little
20:49
brokerage, which has happened to us over and
20:51
over again, could come up this person with a
20:54
buyer who's willing to pay more. but they would
20:57
never know about it because it's hidden away.
20:59
So I think that narrative to me is false. And
21:02
the discussion about days on market, that it's
21:06
negative, it hurts the sellers, duh. But that's
21:08
why you have to price it right. You don't get
21:10
to manipulate that so that buyers don't know
21:13
what's going on. I mean, it's sort of how you
21:15
get price discovery, right? It's different if
21:18
Tom says. and call you call your neighbor you
21:20
say hey joe you know i want to sell my house
21:22
i'm thinking about it you want to buy it and
21:24
he says yeah let's do a deal okay so not on the
21:27
market you're just selling it to your friend
21:29
but when you say i got to move to california
21:31
we got to sell this thing we got to put it on
21:33
the market you're putting it on the market the
21:36
market deserves to know how long the price buyers
21:38
are the other side of that equation and that's
21:41
not even being discussed Don't they get to know
21:44
what's going on? So I feel like there's a lot
21:47
of manipulation going on that's not going to
21:49
benefit them. And obviously this was pretty prominent
21:52
in New York, the whole StreetEasy situation that
21:55
came up where they pulled their agents together
21:57
and pulled inventory off of StreetEasy. Inventory
22:01
actually dropped. Thoughts on that? Did that
22:04
just poke the bear? What was the end game there?
22:08
I mean, and then StreetEasy, I don't know if
22:11
retaliate is the word, but came back and made
22:13
an announcement that now if you have more than
22:15
20 % market share, then you can't be in their
22:18
experts program. So it's been this more than
22:21
a year tit for tat back and forth of lawsuits
22:24
and fights and this and that. And I literally
22:27
am just working with everyone to try to do business,
22:30
which is what we're focused on. I don't want
22:32
to get caught up in that. I mean, we've spoken
22:35
out about how we feel about it. As you know,
22:38
I got a cease and desist letter from Compass
22:40
for one of my op -eds. I had other things that
22:43
I can't talk about because I'm under confidentiality,
22:46
so I have to keep it quiet. But they've tried
22:48
to do a lot of things to silence people that
22:50
they don't agree with. And the cease and desist
22:52
was that, how do you cease and desist an opinion?
22:55
No, I mean, as a reporting agent, you know, and
22:58
we take reporting. very very seriously we literally
23:02
just are in the process of you know reaffirming
23:06
the fundamental pillars of what good journalism
23:09
is and we take that very and journalism frankly
23:11
is under attack in this country regardless of
23:14
where you sit politically i agree and i will
23:17
say and i said this to some of the team. I said,
23:21
you know, I'm really, I've been impressed with
23:22
Inman and what you've been doing because you're
23:25
neutral and detached. You're not waving a flag
23:27
either way, but you're respecting journalistic
23:29
integrity and you're making sure that people
23:32
can express their opinions. And so we wrote back,
23:35
you know, our attorney wrote back and was like,
23:37
hello, knock, knock, you know, first amendment,
23:40
like I can voice my opinion and they went away,
23:43
but they've tried other things because they want
23:46
me to be quiet. Very much so. They've tried various
23:50
things. Where do we go from here? So again, I'm
23:53
back to Connecticut, which I love. I live there.
23:55
It's one of my favorite states ever. I'm from
23:57
Connecticut too. I was up in Litchfield County,
23:59
which I absolutely adore. Is this now going to
24:02
be a state -by -state slog and the consumer just
24:04
to watch this all bleed out over the next couple
24:08
of years? I think it could be a state -by -state
24:10
unless something bigger happens. unless something
24:13
bigger happens and there's a stop and a breakup
24:16
or i don't know it's hard to say what will be
24:20
but i'll tell you this there are enough people
24:22
looking into it and concerned that i don't know
24:25
that it just fades off and they get to do whatever
24:27
they want there's enough people in politics and,
24:31
you know, like the president of the NAACP, as
24:33
we said, you know, people who are concerned for
24:35
the future of the industry. And also, you know,
24:38
look, we're in affordability crisis in this country.
24:41
People can't afford to buy their first time home.
24:44
I know that we're in discretionary markets for
24:46
the most part, but this doesn't help when you're
24:49
hiding listings does not help people. And it
24:52
strains inventory further and prices and all
24:56
those things. So I think. Politicians are going
24:59
to pay attention to that because they care about
25:01
that. And they want to make sure that Americans
25:03
are able to buy their first time home. And this
25:07
isn't helping that project at all. It's doing
25:09
the opposite. I was really impressed with what
25:12
NAR was able to do with the legislation, you
25:15
know, around affordability and the housing and
25:18
stuff. And curious why some of this was left
25:20
out of the conversation. Do you have a take on
25:22
that? I'm not sure. I can't read between the
25:25
lines. I feel like. I think people are worried
25:29
about making someone feel left out and then being
25:31
punished or not included. And there's a neutral
25:34
stance being taken because people don't want
25:38
to weigh in. You know, a lot of people don't
25:40
like to weigh in because they don't want to be
25:41
flagged for this or for that. And having a specific
25:44
opinion about it could create a reaction that
25:47
maybe they don't want. And I understand it. I
25:49
get it. Not everybody wants to go out there.
25:51
They want to do other things. So I get it. Let's
25:55
talk about something more positive. The good
25:57
news is, is that commissions have held. Everyone
26:00
expected them to go down. And I think that is
26:02
a good thing. I think that realtors work their
26:05
asses off to sell homes and then the commissions
26:07
are due and are worthy of the professionalism.
26:12
A reminder is that, you know, remember agents
26:15
only get paid for results. They're investing
26:19
their time with no commitment of any, you know,
26:23
certitude of money at the end. They invest in
26:25
people, their time, they give their experience,
26:28
they share everything and they have no health
26:30
care. So they're hustling nonstop. And so it's
26:34
a hard gig, despite what you see on TV. Look,
26:38
Beth, I came to this industry, you know, and
26:41
I've shared this story before. I said, how hard
26:43
can this be? And then I actually went around
26:47
with a number of different agents and dug into
26:49
the industry and learned. And I was like, wow,
26:52
there's a lot of levers. There's a lot happening.
26:56
And I don't think people fully appreciate the
26:58
amount of work that goes into properly selling
27:02
or helping to buy a home. I agree with that.
27:05
I think, you know, unfortunately, the perception
27:08
is different than reality. People think, you
27:11
know, these good looking people with. Rolls Royces
27:14
pull up, make a million dollars, fly off in a
27:17
private jet, and wow, that's great. But it's
27:20
not like that at all. In fact, you can work with
27:22
people for years and nothing happens, but you
27:25
wait patiently and you build trust with them
27:27
and you work with them. And what agents do, they're
27:30
so hardworking. And the fact that consumers really
27:32
lack confidence in agents today because of that
27:36
perception is troubling to me, which is why I
27:38
keep pushing in on transparency and not hiding.
27:42
things like days on market, et cetera. But yes,
27:44
it's a tough job. One of the things that's unique
27:47
about the American housing market is this whole
27:50
concept of a celebrity realtor. Is it very like
27:53
people overseas and in other countries, like
27:56
how? How does that exist? Has that hurt? the
28:00
industry? Has that helped the industry? Has that
28:02
kind of put some of this thought out there? Like,
28:05
you know, it's all glitz and glamour. You know,
28:07
look, reality TV is like, you know, you get a
28:09
sliver of truth and reality and the rest of it
28:13
is all, you know, for theater, right? Are you
28:16
leaning into some of that? Because, I mean, you
28:17
turn on any channel and there's something on
28:20
there like, you know. It's like crack cocaine.
28:22
It's just like, it's so like my daughter and
28:25
I, when that selling sunset thing came on, whenever,
28:28
whenever that came out, like we could watch it.
28:30
And we were like on the floor, like laughing.
28:33
I was like, these girls were like, the boobs
28:35
were out and the skirts are short and they're
28:37
walking in. I'm like, you could never be taken
28:39
seriously as a professional. It's like if a guy
28:42
came in with a shirt button down to his belly
28:43
button and was like, you know, with gold chains
28:46
and like, Hey, you know, like. If you're a professional,
28:49
you have to act as such. So do I think it's hurt
28:52
us? I think it's hurt the trust factor and the
28:55
perception because I think people think real
28:58
estate agents make so much money and they have
29:00
it easy and they don't do anything. All they
29:03
do is unlock the door. And you and I both know
29:05
that's not true. So I think it's hurt in that
29:08
way, but it certainly helps some agents. because
29:11
they've been able to build like these media empires
29:14
like ryan who's done an incredible job building
29:16
something really he's a brilliant brilliant marketer
29:20
he's a brilliant marketer he's engaging he's
29:24
articulate he's handsome he has all of those
29:26
things and he works really hard so he deserves
29:29
all of his success you know but does it help
29:32
our industry those shows no of course not but
29:36
good for him you know keep it going do what you
29:39
want but As long as the public understands that
29:42
that is just, that's not, it's like the housewives.
29:44
You think that's what it's like when you're raising
29:46
kids? Like you get your hair and makeup done
29:48
and the dog isn't barking and you know, life
29:50
is messy. And so is real estate. It's nothing
29:53
like they portray on TV. Zero. So if I bring
29:56
you a deal about best freedman, Upper East Side
29:59
realtor for Netflix, are you in or are you out?
30:02
I'm out. We've had agents who've wanted to join
30:05
us, but are part of those shows. And we've said
30:07
no every time because it's just antithetical
30:10
to what we're trying to do. And listen, people
30:13
can do what they want. Those shows to me are
30:15
not anything we're interested in. And when I'm
30:18
off, I want to be off. I want to play tennis,
30:22
see my friends, play Mahjong, hang out. I'm not
30:25
interested in, no thanks, no thanks. Mahjong
30:27
has become the new pickleball, it seems, of weekend
30:31
and nightly activities. I know, but I just want
30:34
to say I have been playing for more than 15 years.
30:38
You're a pioneer. I'm a pioneer. My mom plays
30:42
and my grandmother played and going away on a
30:45
trip with my friends at the end of the month
30:47
to play Mahjong. We've been doing that for a
30:49
long time. And I've been in tournaments. It's
30:51
really a wonderful game. I'll just say you should
30:53
try it. I'll put that on my list of things to
30:56
do. All right, let's talk about something less
30:58
controversial. Let's talk about politics. Nothing
31:01
could go wrong here, right? Not zero. Pied -a
31:04
-terres in New York. You've been critical of
31:07
the mayor's effort there. I will say it was a
31:10
marketing genius, frankly, on the outside. And
31:13
I can understand some of the, because others
31:16
have said in similar cities, it actually is,
31:19
including private equity people, a great way
31:20
to raise. revenue dollars you know that support
31:23
the infrastructure uh in a way that doesn't affect
31:27
the people who live it day in and day out talk
31:30
to me about your concern there because it hasn't
31:32
hurt the market at all in fact i would say new
31:35
york is back and bigger than ever it's back It's
31:38
never gone anywhere, but I think it's too soon
31:41
to say the impact. As you said, it was genius
31:44
because it's a political tax. The money that
31:47
it's actually going to bring in, I bet it's going
31:49
to be a wash. I don't think it's going to bring
31:51
in anything near what they suggested. The governor
31:54
and the mayor. estimated $500 million, $800 million.
31:57
Who knows? If people stop buying even a little
32:00
bit in those transaction taxes, which are more
32:03
than $2 billion a year to the city, goes down,
32:06
it could be a wash. So it's a political tax.
32:09
I get it. I understand it. Tax the rich, punish
32:13
them. They're already paying property taxes.
32:16
And so I think this is just, it was rolled out
32:18
very poorly, wasn't explained. You know, residents
32:21
who've lived here a long time got the notices
32:23
and now the burden is on them. It was done really
32:26
poorly. I'm happy to help raise money, but I
32:29
think there were better ways to do it. And certainly
32:32
it's not going to I don't think it will do anything
32:34
like destroy New York City. Could it impact the
32:36
market in a negative way? It might a little bit.
32:39
I don't think it'll be like substantial, but
32:42
it's too soon to say that it hasn't hurt New
32:44
York City. i'm not seeing anything yet because
32:47
the numbers have been very good but as you know
32:49
it takes time to see an impact when you have
32:52
a new policy you have to give it six months or
32:54
so yeah i grew up in new york city in the 80s
32:57
lived there through the 90s and every time someone
33:00
told me that new york is down and it's out you
33:03
know it's like san francisco you know all of
33:05
a sudden san francisco is hot again and everyone
33:07
wants to live there know five years ago was the
33:10
worst place you could actually move so i i laugh
33:12
at kind of these narratives we get across social
33:15
media did you read uh during the pandemic jerry
33:18
seinfeld wrote a great piece i think it was in
33:20
the new york times an op -ed piece about new
33:22
york city because people were saying new york
33:24
was over and he's like no way he's like new york
33:27
is the most interesting place in the world it's
33:30
never going anywhere and you know really doubled
33:33
down on it and everybody was like exactly it
33:36
doesn't mean we don't have you know bad markets
33:38
tough times crime goes up crime goes down you
33:41
know we're always looking to get better there's
33:43
nothing that's perfect but it's really the talent
33:46
capital of the world i mean everybody wants to
33:49
come here and see what it's like you may not
33:51
want to live here but wow it's got this invisible
33:54
vibe of everything from talent to fun to cult
33:58
you know you know i don't know food you get all
34:01
of it yeah even the subways even just spending
34:04
a week riding the subways you can learn more
34:07
about life than you could in a any college program,
34:10
I think, because you literally see every element
34:12
of humanity. That's the beauty of New York City
34:15
is that, you know, I was just in Spain and it's
34:18
a monoculture, you know, everybody's kind of
34:20
pretty much the same, same religion, same everything.
34:23
I was in an elevator with my son and there was
34:25
like five different languages being spoken. We
34:28
were downtown and it's a melting pot of people
34:31
from all over the world. And we live together,
34:33
we work together, and we don't care what flag
34:37
you wave, you know, it doesn't matter. So I think
34:40
that's the beauty of the city. Bess Friedman
34:42
is an incredibly talented, successful CEO, lives
34:46
in the Upper East Side, have an awesome brand,
34:49
obviously smart, a former prosecutor. Why aren't
34:53
people like you running for mayor? Oh my God,
34:55
this, you know, a friend of mine. My buddy reached
34:58
out to me last week or the week before, and people
35:01
have asked me that many times. And he's like,
35:02
look, I think you should run for mayor. You got
35:05
it. You have everything we need. You could do
35:06
it. If I thought I could make a real difference,
35:09
you know, it's just, it's a, I don't know. It's
35:12
a thankless kind of a job. I feel like I make
35:14
a difference. I really feel like I do that every
35:18
single day when I'm out in the world and how
35:20
I show up with people and strangers and in life.
35:22
But I'm always willing to help in any way. But
35:25
I think that would be a tough gig. and yeah i
35:28
don't know i don't think so i'll let you know
35:31
i would love it because i'll be the first check
35:33
written to your campaign so let's focus on the
35:36
the agent on the street the people who are doing
35:38
the hustle every single day what are the three
35:40
or four things they should be focusing on on
35:43
right now with all this crazy surrounding us
35:45
i think they have to be fluent with what's going
35:48
on like you mentioned the pied -a -terre tax
35:50
very important to understand how that's going
35:52
to work because it's going to be in two phases
35:54
now they don't have to have the legal acumen
35:56
i mean they should you know, have an attorney
35:58
explain things if they're going to buy something,
36:00
but they should understand it enough so they
36:02
can explain it. You have to understand it to
36:04
be understood, I always say. And so be comfortable
36:08
with that, know the inventory, understand what's
36:11
going on with rates. I think people are interested
36:13
in that market, you know, that sort of stuff.
36:16
I think coming into the office is so underrated.
36:19
Come in, talk to your colleagues, see what's
36:21
going on, go to open houses, know the pipeline.
36:25
Talk to your executives, dress the part, you
36:28
know, show up the right way. And I think if you
36:30
do that and remember, it's not about the paycheck
36:33
at the end. You know, it's about building trust
36:35
with people, letting them rely on you and wanting
36:38
to work with you because then, you know, they
36:40
refer you to 10 other people and you build a
36:42
real business. I mean, you have to treat it like
36:44
you're the CEO of your business and show up and
36:47
work hard and care about it. You can't do this
36:50
job part time. tom and do it well you have to
36:53
give your whole heart to it and treat it like
36:55
a real job and be a professional and then people
36:59
will take you seriously and lastly i will say
37:02
you know the world will see you as you see yourself
37:05
so if you see yourself in and you're confident
37:08
and you have knowledge and people trust you you
37:11
are going to be successful and i think that's
37:13
the most important thing Okay. Here's our segment.
37:16
We do every single podcast. It's called noise
37:19
versus signal. I'm going to read a couple of
37:21
short statements. You're going to tell me whether
37:23
they're noise background BS stuff that we shouldn't
37:26
worry about or whether they signal something
37:28
important for the future of the industry. Okay,
37:31
here we go. Noise or signal days on market is
37:36
a vanity metric. I think that days on market.
37:41
I think that's noise noise. Okay. You think that's
37:45
an important, you think that should be front
37:47
and center and we should be thinking about that
37:49
or it doesn't matter in terms of the transaction?
37:51
I think it does matter. You threw a tough one
37:55
at me. So because nothing is in a vacuum, right?
37:58
So days on market is something that if you're
38:03
putting a home on the market should be revealed
38:05
and should be known to the consumer. But obviously
38:08
there's different ways depending. If someone
38:11
is like we just said, if someone is quietly maybe
38:15
want to sell their home and they don't want to
38:17
put on the open market or they don't want it
38:18
out on the market that could be something different
38:21
but i think for the general seller days on market
38:24
should be revealed and yes it matters to value
38:28
because you should price it right do the right
38:30
marketing and show it and you shouldn't be able
38:32
to manipulate that in my opinion okay all right
38:36
noise or signal mls's as we know them today do
38:39
not survive in the next five years noise Noise.
38:44
Tell me more. Why? Because I think that the MLSs,
38:50
you know, serve a purpose. I think they help
38:53
people collaborate. They share information and
38:56
they're vital to what we do in our industry as
38:59
real estate professionals. i have a hot take
39:01
on this not not that this is tell me you're not
39:04
interviewing me but i have a hot take on this
39:05
yeah i think mls's are one of the most under
39:09
tapped underutilized resources that with proper
39:12
leadership and investment become can become powerhouses
39:17
in their communities that they serve that is
39:19
my personal take I agree with you about that.
39:22
You know what? I want to go back for a second
39:24
because maybe part of this is noise versus signals,
39:27
like right or wrong, or maybe it's just that
39:29
I'm misinterpreting because I do think that the
39:32
MLSs are very important and will be here and
39:34
survive and are crucial to our future as what
39:37
we do as real estate professionals. So noise
39:40
and signal. Explain that to me again so I'm clear.
39:44
I'm sorry. Noise is it's BS bullshit. It won't
39:46
happen. Signal is, yeah, that's a trend. It's
39:50
going to wind up happening. Yeah, like that's
39:52
the future. Noise or signal? AI replaces the
39:55
buyer's agent within the next five years. Noise.
39:59
Noise. Is AI going to help? Are we going to maybe
40:03
eliminate some real estate professionals? Sure.
40:06
Yeah. Could we get leaner? Yes. But explain to
40:09
me how that would work exactly. Well, that's
40:11
a good question. Smarter minds than I are working
40:14
on that. I don't see that happening, but I do
40:16
think AI is going to make everybody more efficient.
40:19
But I don't think buyer's agents get replaced,
40:23
no. All right, last one, noise or signal. Within
40:26
the next five years, there'll only be four mega
40:29
brokerages. Noise. Noise. In my opinion, you
40:35
never know. I mean, this is just a prediction.
40:38
Who knows? But I hope so. I mean, I like the
40:40
fact that there's variety. I like the fact that
40:43
I can talk about Anthony LaMacchia or my friend
40:45
Adam Modlin, who has a small brokerage here or
40:47
whoever it is. I feel like that's variety. Nobody
40:51
wants to have just one big box thing. We like
40:54
spice and variety and culture and all those things.
40:58
So I hope there's lots of different types of
41:01
brokerages. best freeman ceo of brown harris
41:05
stevens i love talking to you i think you're
41:07
an absolute boss as well i really appreciate
41:10
you taking the time thank you so much tom love
41:12
chatting with you today thanks for listening
41:15
to noise versus signal follow us on instagram
41:18
at inmanews for more conversations and industry
41:21
insights and be sure to subscribe wherever you
41:24
get your podcast so you never miss an episode
41:27
i'll see you next time