Latest / The Connect Practice Track & Grow Podcast / Episode021: PART 5 - Understanding The Recent Civil Decision In Missouri Against NAR / Guessing And Betting On The Next 25 Years

Transcript

Episode021: PART 5 - Understanding The Recent Civil Decision In Missouri Against NAR / Guessing And Betting On The Next 25 Years · The Connect Practice Track & Grow Podcast

• 0:00
  SPEAKER_00: Welcome to the Connect Practice Track and Grow Podcast.
• 0:04
  SPEAKER_00: Habits, routines, motivations, and mindset from some of the most successful real estate professionals on the life.
• 0:10
  SPEAKER_00: Check out the show notes at Connect PracticeTrackGrow.com.
• 0:15
  SPEAKER_00: This show is brought to you by the Strategic Resource for Real Estate Professionals, creating and coaching business opportunities and strategies that support and add value to the lives of real estate professionals at thestrategicresource.com.
• 0:29
  SPEAKER_00: And by Roost Real Estate Company.
• 0:32
  SPEAKER_00: Today's real estate agent doesn't follow old rules.
• 0:35
  SPEAKER_00: She makes new ones.
• 0:36
  SPEAKER_00: Learn more at CareerWithRoost.com.
• 0:42
  SPEAKER_02: Hi all, Chris McAllister here with the Connect Practice Track and Grow Podcast, where it's my job to make your business better and your life, hopefully, much easier.
• 0:50
  SPEAKER_02: I'm here today with my podcast partner and digital marketing specialist, Lacey LeBlanc.
• 0:55
  SPEAKER_02: And I want to welcome you to part five and the conclusion of our deep dive into the long-term ramifications of the recent civil court decision in the case of Stitzer Burnett versus the National Association of Realtors and assorted brokerages.
• 1:10
  SPEAKER_02: So just a quick recap in part one, we covered the facts of the case and got a basic understanding of what this is what this verdict did to our profession as a whole in the short term.
• 1:22
  SPEAKER_02: And then the second part, we talked about how the four mega brokerages involved, REMAX, Anywhere, Keller Williams, and Home Services of America, responded to the lawsuit and why.
• 1:35
  SPEAKER_02: And if you'll remember, Remax and Anywhose to settle, and Keller Williams and Home Services chose to fight on, along with NAR.
• 1:43
  SPEAKER_02: In part three, we talked about how we as broker owners, in my opinion, to a large degree, brought this on ourselves and what we can do in the future to restore honor to our profession.
• 1:54
  SPEAKER_02: I know that sounds a little melodramatic, but I do think it's a bit on the nose there.
• 1:58
  SPEAKER_02: And in part four that we did last week, we subcovered some of the practical changes that we're going to have to embrace regardless of how the appeal process plays out in 2024.
• 2:11
  SPEAKER_02: And today's episode is entitled Guessing Embedding on the Next 25 Years.
• 2:17
  SPEAKER_02: So, Lacey, good morning.
• 2:19
  SPEAKER_02: How are you today?
• 2:20
  SPEAKER_01: Good morning.
• 2:21
  SPEAKER_01: I'm great.
• 2:22
  SPEAKER_01: I'm I appreciate that recap because we've covered a lot.
• 2:25
  SPEAKER_01: Guessing embedding on the next 25 years, that's some title.
• 2:29
  SPEAKER_01: How'd you come up with that?
• 2:30
  SPEAKER_01: Why are we why did we title this episode with that?
• 2:33
  SPEAKER_02: I've been a strategic coach client for well since I think 2003, 2004.
• 2:39
  SPEAKER_02: And the founder of Strategic Coach, Dan Sullivan, is just a brilliant thinker and uh resource to entrepreneurs.
• 2:47
  SPEAKER_02: And Dan came up with uh this concept earlier this year that everything we do as entrepreneurs involves guessing and betting.
• 2:57
  SPEAKER_02: So we first make guesses about what we think is going to happen in the future, and then we place bets on the guesses we think have the best chance of the that we have the best chance of being right about, right?
• 3:08
  SPEAKER_02: So when you think about what we've talked about the last five sessions we've done together, you know, we're doing a heck of a lot of betting, right?
• 3:16
  SPEAKER_02: You know, we're forecasting, we're making predictions, we're prognosticating, but we're basically we're guessing.
• 3:24
  SPEAKER_02: And this episode is pretty much done guessing.
• 3:29
  SPEAKER_02: And this episode is about which guesses I think that we should be willing to place bets on, if that makes any sense.
• 3:37
  SPEAKER_01: Yeah, it does.
• 3:38
  SPEAKER_01: I have had the luxury of, well, not a client, but I've been Dan Sullivan adjacent for many years.
• 3:44
  SPEAKER_01: And you know, that's a concept that I think I use uh every day.
• 3:48
  SPEAKER_01: You know, you if I guess I guess about the day and then bet on what what I'm gonna be able to accomplish each and every day.
• 3:55
  SPEAKER_01: So it absolutely makes sense.
• 3:57
  SPEAKER_02: And the second part of the title comes from Jeff Bezos, the founder of Amazon.
• 4:00
  SPEAKER_02: Bezos famously said that his focus as CEO back when he was running the company on a day-day, day-to-day basis, was not, he wasn't focused on the things that weren't going to change in his timeframe over the next 10 years.
• 4:15
  SPEAKER_02: What he wanted to do was to anchor his thinking to what he knew he could count on no matter what.
• 4:23
  SPEAKER_02: So what Jeff Bezos did and and I assume still does is his every entire day, his strategy, his thinking was all informed about the things he was confident weren't going to change at all over the next 10 years.
• 4:39
  SPEAKER_02: And I just want to take that out a little bit longer, right?
• 4:43
  SPEAKER_02: I think there are certain things that we're guessing that I'm willing to bet will not change over the next 25 years.
• 4:51
  SPEAKER_02: So we can react, you know, to the things that you know we think are going to change and affect us in the short term, or we can create a personal business for ourselves that is built on a solid foundation, a rock solid foundation of things that just flat out are never going to change, right?
• 5:11
  SPEAKER_02: Does that make sense?
• 5:12
  SPEAKER_02: So for instance, we know that home, right?
• 5:16
  SPEAKER_02: Home will always be the most important thing to all of us.
• 5:20
  SPEAKER_02: That's never going to change, right?
• 5:22
  SPEAKER_02: And after we came out of COVID, you know, it's more important than ever.
• 5:25
  SPEAKER_02: It's where we raise our kids, it's where we enter get entertained, it's where we have our restaurants, it's where we do our work.
• 5:32
  SPEAKER_02: I mean, it's everything.
• 5:34
  SPEAKER_02: And I'm willing to bet my entire working life on that outcome that home is going to be continue to be the most important place in our lives.
• 5:44
  SPEAKER_01: So my goal today is-I'm willing to bet your entire working life on that as well.
• 5:48
  SPEAKER_01: Just want to put that out there.
• 5:50
  SPEAKER_02: And my goal today is not only to make some guesses about the future, but figure out which are the safest bets for the next 25 years.
• 5:57
  SPEAKER_02: So before we get rolling into that, I have a couple of updates about the suit itself.
• 6:03
  SPEAKER_02: So, first of all, there's a podcast out there called All In, A-L-L-I-N, the All In Podcast.
• 6:09
  SPEAKER_02: And it's four successful venture capitalists and tech entrepreneurs get together every single week and talk about what's happening in the industry.
• 6:18
  SPEAKER_02: They talk about AI, they talk about politics, they talk about so many things.
• 6:22
  SPEAKER_02: And I was surprised when I was listening this past weekend that this lawsuit came up and the four of them spent a good 15-20 minutes on the topic.
• 6:33
  SPEAKER_02: And, you know, their perspective was very transactional.
• 6:37
  SPEAKER_02: I mean, you know, these guys are the elite of the elite of the 1%.
• 6:42
  SPEAKER_02: And, you know, they were focused on the fact that, you know, why should I pay a realtor$60,000 for something that, you know, I could do myself.
• 6:48
  SPEAKER_02: So for them, it was all about commissions and all about the price fixing aspect of it, less about the service, because they they really had no need for the service.
• 7:00
  SPEAKER_02: You know, when they did transact properties, they had an attorney draw up the contract.
• 7:04
  SPEAKER_02: They did the negotiations themselves, they had an attorney draw up the contract and do the closing.
• 7:09
  SPEAKER_02: But I think it's interesting that this thing has started to enter the zeist, so to speak, that you know, I'm hearing more and more about it.
• 7:18
  SPEAKER_02: And what was super interesting yesterday, there was an article in the New York Times, 1227-23, and by Deborah Kamen.
• 7:27
  SPEAKER_02: And it's a long article.
• 7:29
  SPEAKER_02: Gosh, I've got it's 2,000 words actually, about what's happening with the National Association of Realtors.
• 7:37
  SPEAKER_02: And I had no idea.
• 7:39
  SPEAKER_02: So, aside from the suit, I guess there were all sorts of scandals among the leadership ranks in NAR this past year.
• 7:48
  SPEAKER_02: So they had a president who had resigned under the weight of sexual harassment allegations and wrote an open letter to the NAR.
• 7:59
  SPEAKER_02: I didn't see this read it, but you know, I don't pay attention to these things.
• 8:02
  SPEAKER_02: And anyway, the convention was coming up, and there was a fear amongst the NAR staffers that this guy was going to crash the convention.
• 8:09
  SPEAKER_02: So it's a little salacious, a little drama there, but there's some uh weird things that are also going on with the leadership, I guess.
• 8:17
  SPEAKER_02: And so, you know, this reporter is saying that the year delivered a one-two punch of dual scandals.
• 8:23
  SPEAKER_02: You know, one was, of course, the lawsuit, and the other was the fact that they actually had three people who resigned in the top leadership uh positions, and one of them was involved in a sexual harassment scandal.
• 8:34
  SPEAKER_02: So a one-two two punch, and many within the organization actually admit, and this I think is interesting because I have not seen these words anywhere.
• 8:43
  SPEAKER_02: But NAR is now in real danger of going under.
• 8:48
  SPEAKER_02: And when you think about it, you know, if they lose this appeal, you know, we're talking billions of dollars, and if they lose this appeal, the likelihood of losing the other lawsuits that we talked about last week is, you know, fairly great as well.
• 9:02
  SPEAKER_02: And, you know, bankruptcy is a real possibility for NAR, I guess.
• 9:07
  SPEAKER_02: And then the other thing that was interesting about this article is that several high-profile real estate agents across the country are talking about starting their own realtor groups or their own groups.
• 9:18
  SPEAKER_02: Realtors own the term realtor.
• 9:20
  SPEAKER_02: So if NAR goes under, there'll be a mass fight to own that trademark, I guess.
• 9:26
  SPEAKER_02: But there's already talk in the industry that I hadn't paid any attention to or even been aware of that, you know, some people want to create an alternative to or multiple alternatives to NAR.
• 9:38
  SPEAKER_02: They also talk about in this article the additional lawsuits, again, the spectrum of the bankruptcy word, more about the antitrust things, and the fact that again, REMAX and Coldwell Bankers stopped requiring their agents to join NAR.
• 9:54
  SPEAKER_02: And Redfin, actually, which is a national company, will require agents in certain markets to stop paying NAR altogether.
• 10:04
  SPEAKER_02: So now we're getting to the point where it's not optional to join NAR.
• 10:07
  SPEAKER_02: You've got some companies saying that they don't want to be associated with NAR at all because they never want to be dragged into these lawsuits.
• 10:14
  SPEAKER_02: So, you know, we've heard the words going under, we've heard bankruptcy.
• 10:19
  SPEAKER_02: Here's my favorite: this is an extinction level event.
• 10:22
  SPEAKER_02: A real estate agent with Compass, who has been one of the most outspoken critics of NAR since the sexual harassment allegations broke.
• 10:29
  SPEAKER_02: So they had three people leave, starting with the president, Kenny Parcel, the president.
• 10:34
  SPEAKER_02: He quit in August.
• 10:36
  SPEAKER_02: And then Bob Goldberg, the organization's longtime chief executive, the guy who actually runs the day-to-day, he bailed out a year early on his contract.
• 10:46
  SPEAKER_02: And then they had a human resources person who had been in position for 40 years, and uh she finally resigned after facing widespread calls for her removal.
• 10:56
  SPEAKER_02: And again, that probably stems from the harassment allegations.
• 11:00
  SPEAKER_02: Anyway, what else?
• 11:01
  SPEAKER_02: I'm flipping through this article again.
• 11:03
  SPEAKER_02: I read through it again this morning just to be ready.
• 11:05
  SPEAKER_01: But I think this might be a good time to mention correlation and causation, right?
• 11:10
  SPEAKER_01: Because all this stuff is happening at the same time, but and you know, they one doesn't necessarily cause the other, but the correlation is really important, I think, and the timing.
• 11:20
  SPEAKER_03: Yeah, the timing.
• 11:21
  SPEAKER_01: I don't know, like it's not this is not something we've discussed up to this point.
• 11:25
  SPEAKER_01: The outside uh possibility, right, that the NAR is gonna go away.
• 11:30
  SPEAKER_01: It's kind of all been will the NAR go away because of this, but we haven't really discussed the fact that this is not the only reason the NAR could go away, right?
• 11:39
  SPEAKER_01: And the fact that this happened before this, maybe, and and people have already been thinking about how they're gonna go.
• 11:47
  SPEAKER_02: I think you're exactly I think that is a great point.
• 11:49
  SPEAKER_02: I don't believe NAR is going to go under because of you know harassment charges.
• 11:54
  SPEAKER_02: I think if NAR were to go under, it would be because of the weight of the lawsuits and the pending fines.
• 12:00
  SPEAKER_02: I also found it interesting that that this article being published the day before, you know, we planned to do this podcast together where I am gonna make my guesses as to the future of NAR for whatever that's for.
• 12:11
  SPEAKER_02: So there was this, you talk about uh a confluence of events, coincidence, I guess, huh?
• 12:17
  SPEAKER_02: Um, so NAR itself, get this, has a billion dollars in assets.
• 12:22
  SPEAKER_02: They control a billion dollars in assets, this realtor association, right?
• 12:27
  SPEAKER_02: And they control access to the MLS.
• 12:30
  SPEAKER_02: And as we've talked about, it's not every MLS, and the Times doesn't go into this, but we know that there are certain states where they have already passed legislation that you don't have to be a realtor to get into the MLS.
• 12:41
  SPEAKER_02: But that's one of the big things that you know people are furious about with NAR is the fact that only realtors get to go in the multiple listing service, and it's very hard to sell a house without the multiple listing service.
• 12:52
  SPEAKER_02: Now, notwithstanding that you can do it for sale by owner on Zillow and a million other ways to do it.
• 12:58
  SPEAKER_02: But nevertheless, that's one of the big criticisms of the group.
• 13:01
  SPEAKER_02: They're one of the top political action committees in the country, raising more than$80 million for both Democratic and Republican uh political candidates in the 22 election cycle alone.
• 13:13
  SPEAKER_02: So they spent$80 million on different candidates in the 22 uh election cycle.
• 13:18
  SPEAKER_02: And again, this is going to go to appeal, they're not backing down.
• 13:22
  SPEAKER_02: And but again, it all comes back to, and especially in this article, and I think what's become clear is it comes down to whether or not they can keep the MLS restricted behind what they call a velvet.
• 13:33
  SPEAKER_01: So you know, we didn't talk about any of this in the, you know, none of this was the subject of the lawsuit, but the more you're talking about how they control access to the MLS, I keep thinking like this is and they're all of their assets, and I keep thinking this is starting to sound more and more antitrustee.
• 13:49
  SPEAKER_02: I know, yeah.
• 13:51
  SPEAKER_01: The more you talk, the more I'm like, well, maybe they missed something.
• 13:54
  SPEAKER_02: Yeah, well, there's another giant lawsuit coming down the pike, and it's not just the big four that are being uh included this time.
• 13:59
  SPEAKER_02: This time includes EXP, World Holdings, Compass, and Redbin.
• 14:03
  SPEAKER_02: So it's understood why Redbin in certain markets has decided to disassociate from the real tours.
• 14:08
  SPEAKER_02: Yeah, so this could be a very disruptive event, as we've talked about.
• 14:12
  SPEAKER_02: You know, we're you and I are trying to piss anticipate what could happen and get ahead of it, you know, you know, especially at Roost is what we want to get ahead of it.
• 14:21
  SPEAKER_02: But this article really does make it real.
• 14:24
  SPEAKER_02: And clearly, with all these people that they talk about in this article, it's three, four people that are trying to create alternatives to NAR.
• 14:31
  SPEAKER_02: The only thing I can say to that, Lacy, there's obviously big money in trade organizations.
• 14:35
  SPEAKER_02: So I guess if you can get dues from as many people as you could possibly get dues from and restrict the use of the word trademark, I guess you could make a ton of money.
• 14:45
  SPEAKER_02: But I do think it's interesting that people see this of the Realtor Association as a giant business model when they want to get in on that middleman stuff.
• 14:54
  SPEAKER_02: So anyway, I thought that was interesting.
• 14:56
  SPEAKER_02: It sort of is a I don't know, it's an amplifier and maybe a capper to this whole series, I think.
• 15:02
  SPEAKER_02: And like I said, it was published in the New York Times yesterday the 27th.
• 15:06
  SPEAKER_02: If you want to take a look at it, it's a little bit more salacious, but it's also clearly critical of the National Association of Realtors.
• 15:16
  SPEAKER_01: Well, I think the the fact that there are more of these articles coming out and they're going into more detail and they're incorporating, you know, parts of the story that are not directly related to the lawsuit.
• 15:27
  SPEAKER_01: What I see that as, especially from a marketing perspective, is you know, people are going to start to hear about this, they're going to start to look into this, they're going to start to, and and real estate agents specifically, and they're going to start to do their own thinking and their own guessing and their own betting.
• 15:44
  SPEAKER_01: I think the really great thing about Roost is how almost all of your strategy and your tactics are bet you're betting on the things that won't change ever.
• 15:56
  SPEAKER_01: Right.
• 15:56
  SPEAKER_01: So I think that's the you're already ahead of the game because everything that we talked about with the NAR, all of that focuses on what might change, right?
• 16:05
  SPEAKER_01: Not what's necessarily going to stay the same.
• 16:08
  SPEAKER_02: And I we have to be aware of what's going to change.
• 16:10
  SPEAKER_02: We we can't keep our heads in the sand, but I think that uh long-term business is going to be here in the next 25 years.
• 16:15
  SPEAKER_02: You you've got to focus on the things that that you know aren't going to change, the things that people have always wanted and will continue to want.
• 16:23
  SPEAKER_02: So what I wanted to jump into today was the, and I headed this section of my notes is the National Association of Realtors has become a de facto labor union for we agents.
• 16:35
  SPEAKER_02: So we've, you know, we've established NAR is a powerful force in the industry.
• 16:38
  SPEAKER_02: It's got a huge impact on the lives of its members.
• 16:41
  SPEAKER_02: You know, it is a trade association, but I'm not the first person to compare it to a union because it shares a lot of the same characteristics.
• 16:48
  SPEAKER_02: So both NAR and you know, a trade union or a labor union are membership organizations that represent the interests of their members.
• 16:56
  SPEAKER_02: And I think you could substitute workers, right?
• 16:59
  SPEAKER_02: You know, we all have to work for a living and we all pay NAR for the privilege of using the word realtor access to the MLS, the status associated with that extra level of training, et cetera.
• 17:12
  SPEAKER_02: But you know, and it's not that much different than you know, an auto worker paying the Teamsters.
• 17:18
  SPEAKER_02: Obviously, the difference is auto workers are W-2 folks, and we're not, but nevertheless, NAR gets we pay NAR to represent our interests as real estate agents and brokers.
• 17:32
  SPEAKER_02: Right now, obviously the Teamsters don't represent workers in a particular industry.
• 17:37
  SPEAKER_02: They represent workers in in all industries or many industries, but at the end of the day, we pay them to look after us, to take care of us, to have their have our best interests at heart and have the skills, resources, and access to influence government, right?
• 17:55
  SPEAKER_02: To pass laws that are in our best interest.
• 17:57
  SPEAKER_02: That's what it is.
• 17:58
  SPEAKER_02: So both NAR and trade unions would engage in this this is extreme.
• 18:03
  SPEAKER_02: You know, it's not that the NAR, although this is what the lawsuit is, Lacey, it's not that the NAR is engaging in collective bargaining on our behalf, like a union is.
• 18:13
  SPEAKER_02: And yet, you know, if it's the NAR that's negotiating contracts with MLSs, right, on behalf of their members, you know, it's a little bit of a stretch, but you could make that analogy.
• 18:27
  SPEAKER_02: You know, just like trade unions negotiate contracts with employers, NAR negotiates, and I think you have to include the state organizations and even the local, but they negotiate contracts on our behalf with the MLSs, set the rules.
• 18:39
  SPEAKER_02: There's also various benefits.
• 18:41
  SPEAKER_02: NAR, you know, gives us education and training opportunities to take advantage of, offer an additional fee, of course.
• 18:48
  SPEAKER_02: They give us legal and legislative advocacy through the Realtor Political Action Committee or RPAC.
• 18:54
  SPEAKER_02: And, you know, just like AARP, we get discounts every five minutes via text messages, you know, for discounts on insurance and all kinds of other service services.
• 19:06
  SPEAKER_02: So if trade unions are focused on collective bargaining and political activist activism, NAR is focused on providing services and also political activism or at least political influence.
• 19:21
  SPEAKER_02: So it is interesting because you know, as I think about this the last few days, we have abdicated literally our entire business model, all of us have, to NAR.
• 19:33
  SPEAKER_02: You know, it when you really go to the deep bottom of that rabbit hole, it's hard to say that you know, clearly we've been complicit, right?
• 19:43
  SPEAKER_02: I mean, we've been lying relying on NAR, paying NAR for a long time.
• 19:48
  SPEAKER_02: I think it's a safe thing to say that they got a little bit greedy.
• 19:53
  SPEAKER_02: You know, clearly it's in their best interest to have as many license licensees become realtors as possible because it's a numbers game.
• 20:00
  SPEAKER_02: And maybe this confluence of events, you know, very well could be a tipping point.
• 20:06
  SPEAKER_01: So what's I think that's interesting that so when I think about it, is it a union or I think about, you know, like my sister-in-law is a member of the union.
• 20:14
  SPEAKER_01: She works out in LA as a writer for TV and movies, and she's a member of the union.
• 20:19
  SPEAKER_01: And I think my question for you is if I'm looking for someone to help me buy or sell, right, a home, then I'm looking for a realtor.
• 20:28
  SPEAKER_01: I'm looking for a trademark, registered trademark, you know, little R with the circle realtor to help me do that because I don't know, just in my mind, that's the most trustworthy and reliable of like everybody else is like an offspring in real estate agent.
• 20:44
  SPEAKER_01: Is that the same?
• 20:45
  SPEAKER_02: But are you right?
• 20:46
  SPEAKER_01: No, not in reality, but just in my mind, right?
• 20:50
  SPEAKER_02: But that is the that's the sale, right?
• 20:52
  SPEAKER_02: That's how NAR sells is that if you don't have that realtor trademark beside your name, that people aren't going to trust you.
• 21:00
  SPEAKER_02: And the scary thing is that feels like it's starting to change.
• 21:05
  SPEAKER_02: I mean, let's face it, if you're looking for a realtor, well, first of all, you're going to go see Nana.
• 21:09
  SPEAKER_02: But you know, if you didn't have Nana in your family, you would talk to somebody who recently bought and sold a house, ask them about the experience, ask if they would refer anybody, right?
• 21:19
  SPEAKER_02: You would probably assume they have a license, you know, because most people don't practice real estate without a license.
• 21:24
  SPEAKER_02: It's a felony.
• 21:26
  SPEAKER_02: But my guess is you'd probably be looking at them, looking at the brokerage.
• 21:31
  SPEAKER_02: But I don't know that any of us would dig so deep down to see if they actually had that realtor button next to their name.
• 21:37
  SPEAKER_02: You know, it's not something that we tend to flash around.
• 21:41
  SPEAKER_01: And maybe, but like with the control, right, that the NAR has had over like the MLS or you know, where I am, then there are some very practical aspects of being a realtor versus not being absolutely are.
• 21:58
  SPEAKER_02: What I'm saying is you and I being so close.
• 22:00
  SPEAKER_02: To the business, know to ask those questions.
• 22:02
  SPEAKER_02: I'm not sure that if you had a fantastic agent who wasn't a realtor, that's going to stop that agent from getting business.
• 22:08
  SPEAKER_02: That may have been different 20 years ago, but I don't think that's the future.
• 22:12
  SPEAKER_01: Yeah, that was my question.
• 22:13
  SPEAKER_01: Is that real or is that real or not real?
• 22:16
  SPEAKER_02: I don't think it's real.
• 22:17
  SPEAKER_02: I you know, I think it used to be, but I don't think it's I'm betting.
• 22:22
  SPEAKER_02: Well, I'm guessing right now, that's not going to be the case anymore going so as NAR's ability to track attract members and support from the big guys like Remax and Anywhere and so forth, its relevant is only going to diminish over time.
• 22:36
  SPEAKER_02: You know, it's gonna become less and less of a force to be reckoned with.
• 22:39
  SPEAKER_02: And I think the best example or analogy is the National Rifle Association.
• 22:43
  SPEAKER_02: You know, remember they used to be, my God, that's all you ever heard about was NRA this and NRA that, and the giant political action folks, and they almost went bankrupt.
• 22:52
  SPEAKER_02: And I assume they're still out there, but they're not uh top of mind or big in the media anymore.
• 22:57
  SPEAKER_02: And of course, NAR has a vested interest in having as many members as possible.
• 23:02
  SPEAKER_02: It is a body shop and a numbers game for them.
• 23:06
  SPEAKER_02: And the fact is, you know, it's in this is interesting, right?
• 23:10
  SPEAKER_02: So if you're a this has always been my criticism of the giant, you know, legacy house brokerages and you know, the mega franchises, is that it's a numbers game for them, right?
• 23:20
  SPEAKER_02: They need as many people as they possibly can to be able to collect you know fees from, right?
• 23:30
  SPEAKER_02: And if you get to the point where you're not adding agents to get those base fees, then you're not growing as a company.
• 23:38
  SPEAKER_02: And if you've gotten so big that you've become a public company and you're not growing anymore, and your profits are going down, your stock price goes down, and you know, everything sort of diminishes after that.
• 23:49
  SPEAKER_02: NAR is no different.
• 23:50
  SPEAKER_02: You know, there's a reason why they want as many members as they can get.
• 23:55
  SPEAKER_02: But I think that as we go forward, and let's say there is commission compression, but the other thing that's going to happen is I don't think you're going to see, and I'm honestly I'm willing to bet this one, Lisey.
• 24:08
  SPEAKER_02: I don't think you're going to see as many part-time third, fourth career realtors, socialites, dabblers, dilettants in the world.
• 24:17
  SPEAKER_02: I think this industry is about to get far more competitive, you know, whether because you know fee structures are going to finally change or you know, agents are going to become more productive.
• 24:29
  SPEAKER_02: But if you just pull the the 30%, I it'd be interesting to know exactly what percentages of realtors didn't close a house in the last year, right?
• 24:40
  SPEAKER_02: But if you've got a million and a half realtors and you lose 30% of them, it doesn't mean the business is going to change.
• 24:47
  SPEAKER_02: It just means that the 70% who are left are going to continue to do make very good livings.
• 24:53
  SPEAKER_02: And the 30% of the people, many of whom are a danger to themselves and other others, are going to disappear.
• 25:00
  SPEAKER_02: That's great for the public, as far as I'm concerned.
• 25:03
  SPEAKER_02: As maybe as bad as that might sound to somebody, but that's great for the public, but it is terrible for NAR.
• 25:10
  SPEAKER_02: So NAR is going to be against anything that potentially reduces headcount.
• 25:15
  SPEAKER_02: Right now, the way the commission system is structured and the way clear cooperation is structured, NAR can continue to collect fees from a lot of non-producing or poor-producing realtors because in many markets you sell one or two houses a year, you know, you've made a nice pocket full of change based on that buyer broker agreement and or that clear cooperation agreement.
• 25:42
  SPEAKER_02: And it's more way more than enough to take a piece of that out and pay for the NAR.
• 25:48
  SPEAKER_02: So, you know, anything that's going to reduce headcount hurts NAR.
• 25:52
  SPEAKER_02: I still think, and where I think here's a guess.
• 25:55
  SPEAKER_02: I'm not really a bet on it, but I think what you're going to see, it's not just NAR, in my opinion, that could be in trouble.
• 26:04
  SPEAKER_02: I think the individual MLF are going to be in trouble too.
• 26:08
  SPEAKER_02: So it's like, for instance, where we are in Columbus, we have Columbus, Ohio.
• 26:13
  SPEAKER_02: You go down I-70 to the west, about 40 miles, you come to Springfield, you go another 30 miles west, and you get to Dayton, Ohio.
• 26:21
  SPEAKER_02: So you're talking maybe 70 miles, about the same uh distance uh from top to bottom that Rivard County, Florida is where we are today.
• 26:29
  SPEAKER_02: In that 70 mile stretch on I-70, there are three individual MLSs.
• 26:36
  SPEAKER_02: We do business in all three of those.
• 26:38
  SPEAKER_02: We have to pay three individual MLSs.
• 26:40
  SPEAKER_02: We have to pay Columbus, Western Regional, which includes Springfield and Urbana, and Dayton.
• 26:46
  SPEAKER_02: And then there's another one in Cincinnati.
• 26:48
  SPEAKER_02: That is ridiculous.
• 26:50
  SPEAKER_02: The only people making money on that are the people who own those MLS franchises.
• 26:54
  SPEAKER_02: Nobody else is.
• 26:55
  SPEAKER_02: And I think the thing that you're going to see is that a Zillow or even a Realtor.com, which isn't associated financially with the realtors, by the way, they just sold them that or they licensed them the name Realtor for Realtor.com.
• 27:09
  SPEAKER_02: But I think Zillow has the makings of a national MLS platform where we as Realtors or individual sellers ultimately go out there and advertise their listed properties.
• 27:22
  SPEAKER_02: You know, for Zilla to do that, though, would be a big change to their business model.
• 27:26
  SPEAKER_02: Right now, they've got a really good thing going that they don't want to see the boat rocked anytime soon either.
• 27:31
  SPEAKER_02: They're a public company, they've got shareholders to answer to.
• 27:33
  SPEAKER_02: But Zilla is a beautiful thing.
• 27:35
  SPEAKER_02: They get all of our information for free, they get our listings for free, they aggregate leads and they turn around and they sell them back to us.
• 27:42
  SPEAKER_02: It is a beautiful business model.
• 27:43
  SPEAKER_02: And for that business model to change to one that is a quote, a national per fee advertising platform, probably would not be as profitable as their current model.
• 27:54
  SPEAKER_02: So, you know, Zillow, just like the NAR, is not going to go down without a fight.
• 28:01
  SPEAKER_01: All very interesting.
• 28:02
  SPEAKER_01: I so disruption, right, is one thing.
• 28:05
  SPEAKER_01: Working with entrepreneurs that we talk a lot about is kind of purposeful disruption.
• 28:10
  SPEAKER_01: So I just want to throw out there, I read a comment about, I just Googled NAR alternatives when I found about a thousand Reddit feeds from basically most of them were new real estate agents who were like, Do I have to do this?
• 28:23
  SPEAKER_01: It seems really expensive.
• 28:25
  SPEAKER_01: And one of the comments that really stuck out to me, every almost everybody was like, Yeah, you I mean, you can not do it, but you're just hurting yourself and your clients.
• 28:33
  SPEAKER_01: That was really kind of the general gist.
• 28:35
  SPEAKER_01: But there was one comment that said something like, as much as I don't like to pay fees, I really wish they were higher because the amount of, and they said clueless agents that have joined since 2020, just by passing a test and paying a minimal fee is nauseating, is the word that they use.
• 28:52
  SPEAKER_01: So if I'm thinking about the NAR, you said they'll really fight against anything that would, you know, give them fewer members.
• 29:00
  SPEAKER_01: But I would go the opposite direction.
• 29:02
  SPEAKER_01: I would try to, without, you know, making anybody mad, I would try to become super exclusive.
• 29:07
  SPEAKER_01: I would raise my fees, I would, you know, make it the the cream of the crop.
• 29:11
  SPEAKER_01: I don't know if that's a possibility, but that's just what it was on my mind after reading that that conversation.
• 29:15
  SPEAKER_02: No, and I agree with you completely.
• 29:17
  SPEAKER_02: Where it's not in NAR's best interest to raise fees.
• 29:20
  SPEAKER_02: It's in their best interest to lower fees and attract as many new realtors as they possibly can.
• 29:25
  SPEAKER_02: I think the the place that we have to go to solve the problem that person on that Reddit feed is articulating is individual states have got to raise the bar on who can get a license and what continuing education is going to look like and what pre-licensing looks like.
• 29:43
  SPEAKER_02: If you remember, we talked about, you know, since COVID especially, this whole thing about watching videos of continuing ed on your computer, answering nine questions, and you know, being able to buzz out, you know, a three-hour course in an hour and a half, unless it's structured that you have to get a certain percentage, and then it'll slow you down, you know, and make you wait to answer the next question.
• 30:05
  SPEAKER_02: But I'm with you a thousand percent.
• 30:07
  SPEAKER_02: We raise the bar, we raise the licensing fees, we raise the licensee requirements, and you know, NAR can do what they will, but I think that comes down to individual states.
• 30:18
  SPEAKER_02: And that's going to have a lot more meaningful and immediate, you know, return on professionalism, let's say, than you know, we as individual brokers, you know, trying to push back and raise our standards, which we have to do, and which is exactly what you know I'm going to do with Roost going forward is we our standards will be much higher than what I see in competing brokerages.
• 30:41
  SPEAKER_02: And I'm not trying to save the world.
• 30:44
  SPEAKER_02: I'm not uh tilting at windmills, but I want an organization of professionals, of people who can consult with real estate investors, whether they be individuals or professionals, you know, people living in their house owner occupants or not.
• 30:59
  SPEAKER_02: And I want them to be the best trained, the most productive, the most experienced, all of those things.
• 31:06
  SPEAKER_02: And that's what I want this company to be about.
• 31:08
  SPEAKER_02: But I think it I don't think you're going to get that from NAR.
• 31:12
  SPEAKER_02: Maybe we did get that from NAR, you know, 20, 30, 40 years ago.
• 31:16
  SPEAKER_02: But I think it's a safe thing to say that we're not getting that from NAR now.
• 31:19
  SPEAKER_02: And that's part of what the issue is.
• 31:21
  SPEAKER_02: So anyway, now you got me going again, but I think it starts with the ones.
• 31:25
  SPEAKER_01: Well, I mean, so much of the disruption you see is the lowest common catering to the kind of lowest common denominator, right?
• 31:32
  SPEAKER_01: Or so much of the right, that's a lot of what you see is how do we get to the most people with them, you know, the least amount of money.
• 31:38
  SPEAKER_01: But so the volume equals, you know, quantity equals quality at that point.
• 31:42
  SPEAKER_01: But so little of it is what you guys are doing.
• 31:45
  SPEAKER_01: What I see maybe some of these replacement organizations, right, might try to do, which is really step above, right?
• 31:53
  SPEAKER_02: To maybe have the but I think the problem with NAR is with in brokers, broker owners, is we've left it to NAR to be our mission statement writers.
• 32:04
  SPEAKER_02: We've left it to them to articulate a vision.
• 32:06
  SPEAKER_02: We've left it to them to create strategy and tactics.
• 32:09
  SPEAKER_02: I'm done with that.
• 32:10
  SPEAKER_02: I I'm not gonna abdicate that responsibility to NAR anymore.
• 32:14
  SPEAKER_02: And I'm certainly not gonna abdicate it to you know any of these new middlemen startups.
• 32:19
  SPEAKER_02: I absolutely believe in licensing.
• 32:21
  SPEAKER_02: You'd be crazy not to, right?
• 32:23
  SPEAKER_02: You so you're gonna always have licensing, but I think we have to go back to you know, an entrepreneurial responsibility to ourselves, our stakeholders, our companies.
• 32:32
  SPEAKER_02: And gosh, Lacey, I'm saying it out loud.
• 32:35
  SPEAKER_02: I I think we got to cut out the middleman and the middleman, quite frankly.
• 32:38
  SPEAKER_01: Great news for buyers and sellers.
• 32:40
  SPEAKER_01: Great news for buyers and sellers.
• 32:42
  SPEAKER_02: So what happens if NAR folds or just becomes steadily more and more irrelevant?
• 32:48
  SPEAKER_02: What is going to be lost?
• 32:49
  SPEAKER_02: We don't have NAR.
• 32:50
  SPEAKER_02: What the hell happens?
• 32:52
  SPEAKER_02: Well, I do think that one of the issues is you know, the influence NAR has on state and even federal government legislating and rulemaking bodies.
• 33:00
  SPEAKER_02: You know, the states have followed NAR's lead for a long time.
• 33:04
  SPEAKER_02: And to have them step out is going to create a vacuum.
• 33:10
  SPEAKER_02: So either industry, individual brokers have to step up and get involved at the local and uh really the state level, or you're gonna see individual states sort of do what they do best, which is expand their bureaucracy.
• 33:24
  SPEAKER_02: And that may, that's probably not gonna be the best solution, but somebody's gonna step up and fill the void, right?
• 33:29
  SPEAKER_02: So it's either gonna be state-led government bureaucracy, or it's gonna be a handful of you know, visionary leaders like the, you know, in Columbus, the Harley Rutas, the King Thompsons, you know, the people that for in Columbus, for instance, are synonymous with ethics and high standards, you know, in real estate for you know, decades and decades who are gone now, quite frankly.
• 33:51
  SPEAKER_02: Either those people got to step up as somebody's got to step up and be that person again.
• 33:56
  SPEAKER_02: We don't have that right now.
• 33:58
  SPEAKER_02: So, you know, bureaucracy is problematic, people out for themselves are problematic.
• 34:03
  SPEAKER_02: We we need leadership, quite frankly, Lacey.
• 34:06
  SPEAKER_02: I guess that's what it comes down to.
• 34:07
  SPEAKER_02: I think brokers are we're gonna have brokers step up, we're gonna have leaders step up, they're gonna have to get involved at the state and local level.
• 34:14
  SPEAKER_02: They've got to promote fair competition, transparency, consumer protection.
• 34:18
  SPEAKER_02: We're gonna make that bet right here, right now.
• 34:20
  SPEAKER_02: We have got to step up and lead this industry.
• 34:23
  SPEAKER_02: We cannot continue to abdicate our leadership responsibilities to the NAR.
• 34:28
  SPEAKER_02: All right, as we get through this series, the other thing I just want to clarify once and for all is you know, my position on the case for buyers agents.
• 34:36
  SPEAKER_02: Nothing just irritates me more about this whole thing than how initially the media came after buyer agents.
• 34:44
  SPEAKER_02: And now we think we're starting to see a shift that people are starting to understand what NAR is doing and what has happened.
• 34:50
  SPEAKER_02: And obviously, from that New York Times article, NAR is becoming the villain.
• 34:54
  SPEAKER_02: But buyer agents are absolutely critical, they deserve every dollar they make.
• 34:59
  SPEAKER_02: Working with that buyer is you can't automate, you can't digitize that part of the equation.
• 35:05
  SPEAKER_02: You know, you gotta let's just use first-time buyers as an example, but move up buyers, I think, is an example.
• 35:11
  SPEAKER_02: But you know, if you've got a first-time buyer, you know, you can't digitize putting mom and dad at ease when it comes to the kids buying their first home, right?
• 35:21
  SPEAKER_02: That relationship, that one-on-one, face-to-face, belly-to-belly interaction, not just with the the kids buying, I use kids, I don't mean that disparagingly, but the people actually buying the house, but you're also dealing with the family.
• 35:35
  SPEAKER_02: You're dealing with mom and dad.
• 35:37
  SPEAKER_02: And you can't digitize, you know, helping Nana, you know, manage, expand, liquidate her personal real estate holdings, right?
• 35:44
  SPEAKER_02: That that that's there's nothing about that that can be digitized.
• 35:49
  SPEAKER_02: You need buyers' agents for that who have the you know the emotional intelligence to make that real.
• 35:59
  SPEAKER_02: I do think this is a guess, I've not put money on it yet, but I do think the whole distinction between what a quote listing agent does and what a uh selling agent does or a buyer agent is going to start to fade.
• 36:12
  SPEAKER_02: And here's the next bet, Lacey.
• 36:15
  SPEAKER_02: I think real estate consulting is the is the term that I think we're gonna see going forward.
• 36:21
  SPEAKER_02: I think that's gonna be the new norm.
• 36:23
  SPEAKER_01: What's the definition of real estate consulting?
• 36:25
  SPEAKER_02: Real estate consulting means that we are experts at every aspect of buying and selling real estate.
• 36:33
  SPEAKER_02: You know, it's an NAR construct that we have separated buyers and sellers and clear cooperation, and to some degree that's been aided and abetted by agency laws, but dual agency or transaction agency is legal in every single state in the union.
• 36:47
  SPEAKER_02: So to separate buying and selling, I think is just wrong.
• 36:51
  SPEAKER_02: You need those interpersonal skills, whether you're working with a seller, negotiating with a buyer, negotiating with another agent who might be involved.
• 37:00
  SPEAKER_02: You're a consultant.
• 37:01
  SPEAKER_02: What do I need to list my house at?
• 37:03
  SPEAKER_02: What should I offer for this house, right?
• 37:04
  SPEAKER_02: Those are consulting questions.
• 37:06
  SPEAKER_02: Those aren't listing questions or buyer questions.
• 37:08
  SPEAKER_02: And I think as we see processes start to become streamlined, I think as we start to see costs coming out of the whole equation in response to commission compression, I just think that distinction is going to fade.
• 37:24
  SPEAKER_02: You know, just like the buyer agency function, one-on-one consulting can't be digitized.
• 37:30
  SPEAKER_02: You know, you can do it on Zoom, right?
• 37:32
  SPEAKER_02: But it's not nearly as uh satisfying.
• 37:35
  SPEAKER_02: But I'll tell you, the sad fact is, and as we talked about how we got into this to a huge degree in the first place, is we didn't even bother to meet on Zoom during COVID, right?
• 37:44
  SPEAKER_02: We just sent docs via dot loop and hoped for the best.
• 37:47
  SPEAKER_02: So anyway, I the buyer agent function is never going to go away.
• 37:52
  SPEAKER_02: The title may go away, the whatever the compensation is called may change.
• 37:57
  SPEAKER_02: But let's face it, those buyer agents, the people that are, you know, one-on-one helping people get into their first house, or those real estate consultants, right, that are helping people sell their very first house and move on to their next move up house, that is not that is worth money.
• 38:15
  SPEAKER_02: That is valuable at every single price point.
• 38:19
  SPEAKER_02: The question is, how can we make it more predictable?
• 38:22
  SPEAKER_02: How can we streamline it and how can we add value?
• 38:25
  SPEAKER_02: And if that takes some costs out of the equation, so be it.
• 38:28
  SPEAKER_02: Rather we be in charge of how the costs are going to be removed than uh somebody else.
• 38:33
  SPEAKER_01: Yeah, I mean, theoretically, we can all DIY whatever we want, right?
• 38:36
  SPEAKER_01: Like we can change our own oil, we can, you know, build our own addition to our house.
• 38:41
  SPEAKER_01: We can, I mean, anybody can do anything by themselves.
• 38:44
  SPEAKER_01: But in most cases, in in most situations, people choose to work with a professional.
• 38:50
  SPEAKER_01: And like you said, there are varying, you know, price points where you can do that.
• 38:54
  SPEAKER_01: You can run down to the five-minute oil change place and get your oil, you know, bottom dollar, or you can take it over to here, we've got a place called Aiken and Black, which is where all the you know high-end cars end up for all of their service.
• 39:07
  SPEAKER_01: And it's just a kind of a known fact.
• 39:10
  SPEAKER_01: So, you know, we can all do it ourselves theoretically, but most people choose not to, and that's not going to change.
• 39:15
  SPEAKER_01: I think you're, I mean, obviously you're spot on with that.
• 39:18
  SPEAKER_02: So I do think that there are ways to automate, systemize, make more predictable the list side of the equation.
• 39:23
  SPEAKER_02: And we sort of dug into this last time.
• 39:25
  SPEAKER_02: But you know, one of the problems I see, having thought about this for the past few weeks of the current real estate model is that there are so many individual practitioners out there that you can't count on anything being the same from there's no standardized experience from one seller or to the next or one agent to the next.
• 39:44
  SPEAKER_02: And that's because of the nature of the independent contractor arrangement with the brokerage.
• 39:49
  SPEAKER_02: I think it's also a result of you know, pressure to have as many quote realtors in the mix as we could possibly get.
• 39:57
  SPEAKER_02: It's almost like we've let the processes expand to accommodate the number of people who hold licenses.
• 40:02
  SPEAKER_02: And I think some uh bright young man is uh or woman is going to dig into that and and figure that out sooner rather than later.
• 40:11
  SPEAKER_02: You know, how do you make that experience on the list side more predictable, more valuable, guaranteed outcomes?
• 40:18
  SPEAKER_02: I guess is really what we're looking for.
• 40:20
  SPEAKER_01: So will it be an algorithm or will it be a highly niche, you know, specialized kind of person?
• 40:27
  SPEAKER_01: Like which way will that go, right?
• 40:29
  SPEAKER_01: Is that's my main question about it?
• 40:30
  SPEAKER_01: Is will it be, or I mean there'll likely be some version of both uh options, but yeah, it's gonna be way more involved than sticking a sign in the yard and waiting for somebody else to sell the house.
• 40:39
  SPEAKER_02: Let's put it that way, right?
• 40:41
  SPEAKER_01: It it's good, it's it's it means that yeah, are we gonna rely on BARD or are we gonna rely on Rena in the Space Coast, right?
• 40:49
  SPEAKER_01: Like that's and again, I think what'll be both.
• 40:51
  SPEAKER_01: Some people will prefer to rely on BARD and Google's AI, and some people will prefer to rely on Rena.
• 40:57
  SPEAKER_02: I think that's true too.
• 40:58
  SPEAKER_02: But right now we have so many people who put a sign in the yard, they're not really adding value beyond you know, signing a listing contract and putting it in the MLS, and they're asking for you know three percent or whatever it is in that market, and then another three percent to pay whoever brings the buyer.
• 41:12
  SPEAKER_02: And that person who sticks the sign in the yard more often than not has no intentions of ever bringing the buyer because you know they don't want to get involved in quote dual agency.
• 41:20
  SPEAKER_02: Why would you pay three percent for that and then put all of the onus on the buyer agent to get the deal done?
• 41:27
  SPEAKER_02: It's just it's wrong.
• 41:29
  SPEAKER_02: So I have a lot of ideas that we're gonna get into over the year.
• 41:32
  SPEAKER_02: I don't want to give them all away here today, but I think there is a concept called the I don't have a good term for this, but the certified pre-owned home.
• 41:39
  SPEAKER_02: You know, I think there is a way to, you know, why wouldn't you as a seller want to get a home inspection up front before the house goes on the market?
• 41:50
  SPEAKER_02: So you know what you're dealing with, or you know, fixing what needs to be fixed, or at least go in well informed.
• 41:56
  SPEAKER_02: You know, why wouldn't you want you know, a set of marketing pictures, uh a marketing package for your home that is yours, no matter whether the agent you hire first actually gets the job done or not, right?
• 42:11
  SPEAKER_02: Why wouldn't you want an AI-assisted appraisal for your home where condition, functional obsolescence, location is taken into account with a number that you can absolutely count on?
• 42:28
  SPEAKER_02: If you think about if you had those three things, right, if you knew what the house was going to appraise at when the for the buyers when the buyer gets a mortgage, if you knew what the issues were with the house and either A fixed them up front or were prepared to disclose and negotiate those issues up front.
• 42:45
  SPEAKER_02: And if you had a marketing package that was so detailed and so complete and so, quite frankly, crystal clear and beautiful that 90% of the questions any buyer ever had would be answered, whether they found the property on Zillow or on Coldwell Banker or wherever else.
• 43:05
  SPEAKER_02: Just in those three items alone, Lacey, think of the upstream uh bothers that literally are going to be eliminated, right?
• 43:15
  SPEAKER_02: Whether the person who sticks to sign in the yard sells the property or whether there's a co-op involved.
• 43:19
  SPEAKER_02: And we don't think about the system like that.
• 43:22
  SPEAKER_02: We don't talk about it like that, we don't approach it like that.
• 43:25
  SPEAKER_02: We rely, and I'm not saying that there are not fantastic listing agents that essentially do all those things and probably more, but they are few and far between computers.
• 43:35
  SPEAKER_01: Yeah, that's not the norm.
• 43:36
  SPEAKER_02: It's not the norm.
• 43:37
  SPEAKER_02: And that's one of the things that got us here in the first place.
• 43:40
  SPEAKER_01: So I think about when I bought my home and how you know, and I bought from family, and so a lot of the choices were ours.
• 43:47
  SPEAKER_01: We did get it, you know, obviously appraised and inspected.
• 43:50
  SPEAKER_01: And but like if I had known that I would or wouldn't for sure have to replace the HVAC unit three months after moving in, which we did.
• 43:58
  SPEAKER_01: My my I, you know.
• 44:00
  SPEAKER_01: I needed when I was thinking about how much home I wanted to buy, how much down payment I wanted to put down, every decision I made about buying my home was of the my like underlying mindset was I want to make sure that I still have enough of my savings to cover the inevitabilities, you know, of what's going to happen after I move in, which is a great thing that I did that because we did end up having about$15,000 of out-of-pocket expenses immediately almost in the first year that we didn't know were going to happen.
• 44:26
  SPEAKER_01: So what if I could what if you predict that?
• 44:28
  SPEAKER_02: Right.
• 44:29
  SPEAKER_02: But most buyers don't have those resources, Lacey.
• 44:31
  SPEAKER_02: I mean, and they don't have Nana, you know, helping them out in their corner either.
• 44:35
  SPEAKER_02: So we need to look at every aspect of the home selling slash buying experience of fresh eyes.
• 44:41
  SPEAKER_02: We've got to identify the bottlenecks, whether it's in the listing, marketing, negotiation, contingency, closing phases.
• 44:49
  SPEAKER_02: Where are all the bottlenecks?
• 44:51
  SPEAKER_02: Where's the friction, right?
• 44:53
  SPEAKER_02: How do and how do we eliminate that friction and more importantly, remove the drama, right?
• 44:59
  SPEAKER_02: Get rid of the drama, increase predictability.
• 45:02
  SPEAKER_02: And when you kind of when as I think about that, and I think about all the things that I do and have done for the past 20 years, that because that's just how it's done, I you know, I just feel like we're ripe for literally a wholesale transformation.
• 45:19
  SPEAKER_02: And quite frankly, you know, one of the things, and and I don't know if Remax is listening or anywhere is listening, I I I want to believe that you know, one of the reasons that they have decided to walk away from NAR, aside from the legal liability, is that they want a chance to step up, identify and remove those inefficiencies without having pressure from NAR to let things be the way they are.
• 45:47
  SPEAKER_01: Yeah, I just I and the underlying theme there, I think, is there's one big area of friction that is not going to be possible to address with anything other than trust.
• 45:59
  SPEAKER_01: And that's just the going into the process, especially when you're talking about first-time buyers, first-time sellers, you know, that relational part of it is gonna be.
• 46:09
  SPEAKER_02: Yeah, and that goes back to why, you know, to disparage buyers' agents is just wrong.
• 46:14
  SPEAKER_02: Yeah, it's just, it's just not right.
• 46:17
  SPEAKER_02: So market making is going to become the thing, right?
• 46:20
  SPEAKER_02: You know, sellers hire us to sell their houses.
• 46:22
  SPEAKER_02: You know, I've we've talked about this before, you know, we just talked about it again.
• 46:26
  SPEAKER_02: You know, so many listing agents stick a sign in the yard and we wait for somebody else to sign the house.
• 46:31
  SPEAKER_02: I'm telling you, if I'm signing a contract with a realtor and I'm gonna pay them, I don't care how much it is, I'm hiring them to sell that house.
• 46:39
  SPEAKER_02: I expect them to come to my come to the listing appointment with and show me a list of uh potential people in their database that would be interested in a house just like mine, right?
• 46:50
  SPEAKER_02: I'm hiring them to sell my house.
• 46:52
  SPEAKER_02: I'm not hiring them to let somebody else do it.
• 46:54
  SPEAKER_02: This isn't about agency, right?
• 46:56
  SPEAKER_02: Agency law is completely different than compensation.
• 46:59
  SPEAKER_02: This is about doing the job that I, as a seller, am hiring them to do.
• 47:05
  SPEAKER_02: So just like buyer agent functions are never gonna go away, the value of a real estate professional with hyperlocal market expertise and a database of potential buyers and relationships, that's where the money is, Lacey.
• 47:19
  SPEAKER_02: And that's going to become way more valuable than it's ever been before.
• 47:23
  SPEAKER_02: And I dare say it's almost like we're going back to the future, you know, before the internet, before realtor.com, before MLS's, back when they had the books, you know, that's what you got when you hired a realtor.
• 47:36
  SPEAKER_02: So now that we've been through 20, 25 years of real estate explosions and uh, you know, with tons and tons of agents and values going up and the internet and everything, I think it is time that there's a transformation in the industry, and we take the best of what came before, the best of what happened in the past 20, 25 years, and and there's a new thing company coming.
• 47:58
  SPEAKER_02: So my big bet is I think this is a third big bet, is that market making is going to take on far more value.
• 48:07
  SPEAKER_02: You know, AI can help with market making, right?
• 48:10
  SPEAKER_02: It can help, you know, take data and put it together, but it can't make the phone call for you.
• 48:15
  SPEAKER_02: The best way to win a listing is to honestly be able to look a seller in the eye across that kitchen table that says, I may already have a buyer for your home.
• 48:22
  SPEAKER_02: Let me show you.
• 48:23
  SPEAKER_02: I think that matters in the most way.
• 48:25
  SPEAKER_02: I think obviously when you talk about all these things, listings will continue to matter.
• 48:30
  SPEAKER_02: Listings are always going to be the biggest, the best lead driver you could have.
• 48:34
  SPEAKER_02: You put a listing, you put a sign up on a listing, you're going to have buyers calling you.
• 48:39
  SPEAKER_02: And quite frankly, you know, even in the age of Zillow, some people don't.
• 48:43
  SPEAKER_02: They go to Zillow and then they farm out those leads.
• 48:46
  SPEAKER_02: But you can't argue with the fact that a well-managed listing is the best lead driver you can have.
• 48:51
  SPEAKER_02: Listings are how the best in the business get the attention of new clients.
• 48:55
  SPEAKER_02: And you know, we've talked about this before, but we do instant open houses.
• 48:59
  SPEAKER_02: We get a URL for each new address.
• 49:02
  SPEAKER_02: We set up its own individual website for each listing for our agents, and that's what we promote on social media.
• 49:08
  SPEAKER_02: So what happens is anybody who's interested in that house, you know, that lead goes to the listing agent.
• 49:15
  SPEAKER_02: You know, that's how it used to be in the old days, and that's what we're trying to promote again.
• 49:19
  SPEAKER_02: There's, you know, I'm not trying to disparage Zillow, but there's no reason for me to promote to use my platform to promote a Zillow listing and know that those leads are getting passed out for a profit amongst X number of uh competing realtors in the market, right?
• 49:36
  SPEAKER_01: You know, yeah, Zillow is like the Tinder, right?
• 49:39
  SPEAKER_01: So you can see what's up there from both sides and you can swipe, you know, one way or the other.
• 49:44
  SPEAKER_01: But like what if Tinder had a third party who was out there verifying that you weren't being catfished, you know, verifying that their picture is what they actually look like today.
• 49:53
  SPEAKER_01: I just, you know, real estate agents are going to be the third party verification for the Tinder app of real estate.
• 50:01
  SPEAKER_02: Yeah, there is something to be said that part of what we do is to uh filter and find the truth in all of the things that are on the internet, including bad information on Zillow and so forth.
• 50:12
  SPEAKER_01: Well, and as AI becomes more prevalent, you know, you can take a picture, anybody, right?
• 50:17
  SPEAKER_01: I've I edit photos and have my entire adult life, and you know, I'm pretty good at it.
• 50:22
  SPEAKER_01: So I could go in anytime and edit a photo to make it look what it like whatever I want, but now anybody can do it, right?
• 50:28
  SPEAKER_01: So if you take a photo of your house, you can add a filter and change things.
• 50:33
  SPEAKER_01: And so, like, and not that's something that's gonna be done broadly necessarily, but it could be.
• 50:39
  SPEAKER_01: So, like as AI becomes more prevalent, I feel like the human part of the transaction actually becomes more important, not less important.
• 50:47
  SPEAKER_01: I think that's something that that people maybe are worried about that AI is gonna take over everything, but it really makes the human element more important, not less important.
• 50:56
  SPEAKER_01: As a writer, we've talked about this.
• 50:57
  SPEAKER_01: As a writer myself, everybody's worried, well, you can write anything with AI.
• 51:01
  SPEAKER_01: Well, sure, but somebody still has to go in and make sure that the, you know, the information that's pulled is accurate, that it's relevant to your audience or your clientele.
• 51:10
  SPEAKER_01: You know, there's still that human element is just as important as it's ever been.
• 51:14
  SPEAKER_02: So buyers' agents matter, listings matter, consultancy is the future.
• 51:19
  SPEAKER_02: Here's a here's kind of a summary, Lacey.
• 51:21
  SPEAKER_02: I think of the things we've talked about in the past, well, today in the previous four episodes.
• 51:27
  SPEAKER_02: So as we sort of round out this series, here's a few more guesses that I'm making about the next 25 years.
• 51:33
  SPEAKER_02: So I'm guessing, and this, and I'm willing to bet, that there's going to be a shift in our dynamics.
• 51:39
  SPEAKER_02: I think NAR is going to be weakened regardless of how the appeals process goes.
• 51:43
  SPEAKER_02: I think that's going to lead to a change in regulations, some more flexibility, streamlined processes, and greater focus on transparency and consumer protections.
• 51:54
  SPEAKER_02: I think barriers to entry for new real estate brokerages and online real estate platforms are likely to be lowered, but only in that, as we're already seeing, that you won't have to be a realtor to list on an MLS anymore.
• 52:11
  SPEAKER_02: As we talked about, has already happened in certain states.
• 52:14
  SPEAKER_02: The reality is, though, that where that's happened, it really hasn't changed the economics of the industry or how much agents make.
• 52:23
  SPEAKER_02: But if you don't have to be a realtor to get into the MLS, that's a big change.
• 52:29
  SPEAKER_02: What's going to happen is the default barrier, as we sort of just discussed, is that state licensing law is the barrier, right?
• 52:37
  SPEAKER_02: If we don't have NAR as an extra line of ethical defense, so to speak, state laws are the critical barrier.
• 52:45
  SPEAKER_02: But the plus side, and this is a guess, but I think that great ideas, new ideas for businesses and so forth will get to the market far faster and they will cost less than in years past.
• 52:59
  SPEAKER_02: So that's the second bet.
• 53:01
  SPEAKER_02: We're going to see new business models, and those business models are going to cost the consumer less than the legacy business model do models do.
• 53:08
  SPEAKER_02: I think you're going to see more transparency, more consumer protection.
• 53:12
  SPEAKER_02: You're going to see buyer agent agreements like we talked about before.
• 53:15
  SPEAKER_02: I think consumers are going to have a better access and forced understanding of commission rates, agent qualifications, and property details.
• 53:22
  SPEAKER_02: You know, there's a lot of crap on, you know, on Zillow and Realtor.com that's not policed.
• 53:27
  SPEAKER_02: I've seen, I've seen listings where the pictures weren't current.
• 53:32
  SPEAKER_02: Like for instance, I've seen pictures of potential rental properties of people who are selling a rental property and they want to sell to another investor where the pictures on Zillow are pictures from what was last rehabbed.
• 53:41
  SPEAKER_02: And then you go in and show the house, and that's not the same house, right?
• 53:46
  SPEAKER_02: It's certainly not the house that's represented in the pictures.
• 53:48
  SPEAKER_02: You know, there's just so many places that you've got to have, and NAR doesn't police that, right?
• 53:55
  SPEAKER_02: And I'm not sure the states can police that.
• 53:57
  SPEAKER_02: So to some degree, that's Zillow, but again, it comes down to the brokers and what their standards are for the agents who work for them.
• 54:03
  SPEAKER_02: There's going to be an evolution of agent roles and responsibility.
• 54:06
  SPEAKER_02: I think you're going to see less of a distinction between, as we just talked about, between listing and buyer functions.
• 54:11
  SPEAKER_02: I think consultancy is the name of the game.
• 54:14
  SPEAKER_02: And real estate experts are going to be just as well versed in working the entire transaction, not just one side or the other.
• 54:22
  SPEAKER_02: I think the excuse of agency to not be a market maker with using the excuses agency is done, gone.
• 54:32
  SPEAKER_02: Anybody who continues to do that, they're going to be displaced.
• 54:36
  SPEAKER_02: Niches are going to matter.
• 54:37
  SPEAKER_02: There's, as they say, there's riches in the niches, as Dean Jackson says, you know, one target market at a time.
• 54:43
  SPEAKER_02: I think that people are going to become more and more valuable by going deep into a certain market, right?
• 54:50
  SPEAKER_02: Whether it's us talking about arms in Champaign County, Ohio, or Space Coast condos, or you know, working with investors who want to buy four to 19 unit apartment complexes, going deep is a guess that I'm honestly willing to bet on.
• 55:06
  SPEAKER_02: I think we're going to continue to see uh more deterioration in continuing education and professional development.
• 55:15
  SPEAKER_02: But I think as we start to shift, I think that the continuing ed that is out there and worth having will carry the day.
• 55:25
  SPEAKER_02: And the continuing ed that does nothing but allow people who don't deserve to have a license keep a license.
• 55:31
  SPEAKER_02: You know, that's going to fade away.
• 55:33
  SPEAKER_02: MLSs are going to continue to evolve.
• 55:35
  SPEAKER_02: I don't think it makes any sense at all for us to have to pay for three different MLS systems within a 70-mile distance, you know, in Ohio.
• 55:42
  SPEAKER_02: That's crazy, but you've got three people, three organizations, and I don't know what the ownership structure of those is, but somebody's making a killing, and it's not us.
• 55:51
  SPEAKER_02: I think you're going to see commission compression, alternative pricing models.
• 55:54
  SPEAKER_02: I don't know what those are going to look like, but I have some ideas for what I want to experiment with going forward.
• 55:59
  SPEAKER_02: And the other thing is, and I'm willing to bet on this, real estate, well, all real estate agents, the best among us will be the trusted advisors that people want and need to navigate the complexities of a transaction.
• 56:09
  SPEAKER_02: And that's not going to change.
• 56:11
  SPEAKER_02: So here are five things, right?
• 56:14
  SPEAKER_02: So Glacey will put this in the in the liner notes, but this is what you can count on the need for local expertise.
• 56:21
  SPEAKER_02: You know, people say over and over, real estate's about location and location.
• 56:25
  SPEAKER_02: That is absolutely true.
• 56:27
  SPEAKER_02: And it's going to be about hyper-local expertise.
• 56:29
  SPEAKER_02: Buyers and sellers will continue to seek the guidance of agents who have a deep understanding of their local markets.
• 56:34
  SPEAKER_02: Relationships, number two, the importance of relationships.
• 56:37
  SPEAKER_02: Real estate transactions are complex, they're emotionally charged.
• 56:40
  SPEAKER_02: There is a lot of drama.
• 56:41
  SPEAKER_02: Some of it we create, but you know, there's always going to be drama that we have to manage, and that requires a huge degree of emotional intelligence.
• 56:49
  SPEAKER_02: But building strong relationships with clients that will remain essential for success, as we've talked about for years now.
• 56:56
  SPEAKER_02: Number three, you can bet that the focus on customer service, the actual experience, is going to become more and more important, especially in the age of online reviews and so forth.
• 57:07
  SPEAKER_02: Real estate agents are service providers.
• 57:09
  SPEAKER_02: Their ability to provide exceptional customer service, creating a predictable experience will continue to be a competitive advantage and a differentiator.
• 57:17
  SPEAKER_02: And that's why, you know, a huge focus that you and I are working on, you know, starting next month, January 1st, is have I earned a five-star review today?
• 57:26
  SPEAKER_02: And we've been talking about, you know, aggressively pursuing reviews, not just so that we can show a bunch of five stars, you know, but so that we can actually learn something as well.
• 57:38
  SPEAKER_02: But I want a cultural orientation amongst our property managers and amongst our realtors to the clients that they work with that have I earned a five-star review today.
• 57:49
  SPEAKER_02: I think that is going to be a competitive differentiator for us.
• 57:52
  SPEAKER_02: Customer service is everything, and I'm betting a lot on that, on that new focus next year.
• 57:58
  SPEAKER_02: Technology, it's going to continue to evolve, it's continually going to make things easier, it's continually going to make certain things cheaper.
• 58:05
  SPEAKER_02: But technology is a tool, it is an amplifier, it's not a replacement for human expertise, judgment, or experience.
• 58:13
  SPEAKER_02: And the five, the fifth thing that we're going to bet on is that the regulatory environment is going to change.
• 58:19
  SPEAKER_02: If NAR is out of the picture, it's going to leave a void at the state level.
• 58:23
  SPEAKER_02: And we're already heavily regulated, but if NAR goes away, it's we're you can bet that regulation is going to increase.
• 58:32
  SPEAKER_02: So staying up to date is the number one responsibility of all of us, brokers, owners, all licensees.
• 58:38
  SPEAKER_02: But again, it's especially critical for we as broker owners because we share a far more disproportionate burden of liability and the actual investment it takes to get a brokerage up and running.
• 58:51
  SPEAKER_02: So those are the five things that I think are huge.
• 58:55
  SPEAKER_02: You know, I think all those things, those guesses we can count on over the next 25 years.
• 59:00
  SPEAKER_02: But if I was going to summarize the five things that I'm betting the company on starting today, if not January 1st, a couple days from now.
• 59:11
  SPEAKER_02: So for us, the focus at Roost is number one, have I earned a five-star review today?
• 59:16
  SPEAKER_02: Number two, we want to sell your home for top dollar fast.
• 59:20
  SPEAKER_02: That means we're going to all be market makers.
• 59:22
  SPEAKER_02: For our owner clients and property management clients, how to automate your rent collection and get on with your life.
• 59:30
  SPEAKER_02: Those are the three business initiatives that we are digging in specifically into the new year.
• 59:36
  SPEAKER_02: The fourth thing we're going to bet on is residential real estate will continue for the next 25, 50 years to be a corners cornerstone of a diversified investment portfolio.
• 59:47
  SPEAKER_02: Just like home is everything for everybody, residential real estate as an investment will continue to become more and more important.
• 59:55
  SPEAKER_02: And we are going to double down on investments.
• 1:00:01
  SPEAKER_02: And finally, the last big bet I have of the big five is Lacey, this is the age of the new real estate professional.
• 1:00:09
  SPEAKER_02: There's nothing that we've talked about during these five episodes that diminishes my enthusiasm or optimism about the future of real estate for those of us that are willing to be part of the transformation and lead the change.
• 1:00:27
  SPEAKER_02: So this is the age of the new real estate professional.
• 1:00:31
  SPEAKER_02: I'm betting everything I have on that.
• 1:00:33
  SPEAKER_01: No arguments here.
• 1:00:34
  SPEAKER_02: That's a lot.
• 1:00:35
  SPEAKER_01: So yeah, we went over a lot today.
• 1:00:37
  SPEAKER_01: I will say one of the things that really sticks out to me, again, from a market, I think of everything from a marketing perspective, but isn't that niche part of it?
• 1:00:45
  SPEAKER_01: I saw an article the other day that talked about what kids are doing these days to get into Ivy League, you know, universities.
• 1:00:51
  SPEAKER_01: And instead of being the most well-rounded, right, on paper, instead of taking all the AP classes and playing all the sports and doing all the extracurriculars and being involved in all these social organizations, kids are focusing on one thing.
• 1:01:07
  SPEAKER_01: They're doing one project of significance that's actually making an impact.
• 1:01:11
  SPEAKER_01: And that shows these Ivy League universities that they are the ones to bet on.
• 1:01:17
  SPEAKER_01: They're the ones who are actually going to make a difference in the world, right?
• 1:01:21
  SPEAKER_01: That's and that's who these Ivy League universities want to admit.
• 1:01:25
  SPEAKER_01: So one of the stats that I read said it took your chances of getting admitted to an Ivy League university from 2% as a well-rounded student with all the classes and all the extracurriculars to 75%, excuse me.
• 1:01:39
  SPEAKER_01: And that I think that's exactly what we're going to see here.
• 1:01:42
  SPEAKER_01: The value of an Ivy League university is not diminished because more people want in it, right?
• 1:01:47
  SPEAKER_01: Nobody's stopping trying to get into these Ivy League universities, but the strategy is changing from being a well-rounded student to being an expert in one area.
• 1:01:58
  SPEAKER_01: And I think that's very telling and very similar to what's going to be happening here.
• 1:02:02
  SPEAKER_01: And in the end, I think the result is you get you're well-rounded anyway, right?
• 1:02:08
  SPEAKER_01: Because all the skills and all the experience that you have to really focus in that one area is the same.
• 1:02:14
  SPEAKER_01: It's just smarter, right?
• 1:02:15
  SPEAKER_01: You're working smarter, not harder.
• 1:02:17
  SPEAKER_01: So I can't wait to see how that plays out here.
• 1:02:19
  SPEAKER_02: You learn something from every transaction you complete.
• 1:02:22
  SPEAKER_02: The problem is if you don't complete a lot of transactions, you don't learn a whole lot.
• 1:02:26
  SPEAKER_01: Right.
• 1:02:26
  SPEAKER_01: Well, and like if you're an expert in one area, one location, one type of, you know, that does in no way does that preclude you from going and doing the exact same thing in a in the next niche, in the next niche, and the next niche.
• 1:02:38
  SPEAKER_01: Right.
• 1:02:38
  SPEAKER_02: Yeah.
• 1:02:39
  SPEAKER_02: Right.
• 1:02:39
  SPEAKER_01: So it's not an all or nothing, it's not a one or the other.
• 1:02:42
  SPEAKER_02: Um you have to be a well-rounded practitioner, but you have to be an absolutely specialized marketer, right?
• 1:02:49
  SPEAKER_02: So there's two parts to this equation, right?
• 1:02:51
  SPEAKER_02: You've got to find somebody to work with, and then you have to be able to add value to working with them.
• 1:02:56
  SPEAKER_02: And one doesn't you can't have one without the other.
• 1:03:00
  SPEAKER_02: Right.
• 1:03:00
  SPEAKER_01: They're not mutually exclusive for sure.
• 1:03:02
  SPEAKER_02: Because you're going to have far more likely to have multiple people to work from if you focus on one target market at a time and become a specialist where you can actually make a difference and have an impact than you are if you're just tossing your, you know, a billboard out there that says, you know, list with me or whatever.
• 1:03:22
  SPEAKER_02: But anyway, right.
• 1:03:23
  SPEAKER_01: Well, being a brokerage that embraces that and frankly always has, I think puts Roost ahead of the curve.
• 1:03:28
  SPEAKER_01: So it'll be an exciting place to be as all this plays out.
• 1:03:32
  SPEAKER_02: I hope so.
• 1:03:33
  SPEAKER_02: So if anybody out there would like to learn more about our company, Roost Real Estate Company, you can uh check us out at www.realestateco.com.
• 1:03:42
  SPEAKER_02: So thank you very much, Lacey, and happy new year.
• 1:03:45
  SPEAKER_01: Thank you, Christy.
• 1:03:46
  SPEAKER_01: Next time.
• 1:03:48
  SPEAKER_02: And there we have it.
• 1:03:50
  SPEAKER_02: Thanks for listening in.
• 1:03:51
  SPEAKER_02: If you want to continue the conversation, go to www.connectpracticetrackgrow.com.
• 1:03:59
  SPEAKER_02: That's connectpracticetrackgrow.com, where we have additional information about the podcast, our connect episodes, and an option you can select to be a guest on the show.
• 1:04:10
  SPEAKER_02: We'd love to hear from you.
• 1:04:11
  SPEAKER_02: So that's it.
• 1:04:12
  SPEAKER_02: We'll be back next time with another episode of the Connect to Practice Track and Grow Podcast.