Latest / This Week in DFW Real Estate / The $8.5 Billion Bet: Why Berkshire Hathaway Just Bought Taylor Morrison

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The $8.5 Billion Bet: Why Berkshire Hathaway Just Bought Taylor Morrison · This Week in DFW Real Estate

0:00
Speaker 1: Warren Buffett had stepped down. He's no longer this is retired.
0:03
Speaker 1: So this is the first major purchase of the CEO
0:06
Speaker 1: that he put in place Greg Gable, And so Greg
0:09
Speaker 1: has made a bet, an eight point five billion dollar
0:14
Speaker 1: bet on housing where they are buying the builder Taylor Morse.
0:19
Speaker 2: So they were still publicly marketed, correct, they just weren't
0:22
Speaker 2: on the big dog man. What a precedent we're setting
0:27
Speaker 2: around Zilla's control over the flow of the listings, that
0:30
Speaker 2: they are now more important than reelture dot com. Do
0:32
Speaker 2: you know that a federal judge in Illinois just ruled
0:35
Speaker 2: that if you're on reeltra dot com and not Zillo,
0:37
Speaker 2: that you're not publicly marketed. If I'm sitting against you
0:39
Speaker 2: in a listing appointment, I say, hey, I've taken one
0:41
Speaker 2: hundred listings this year and the other agent has not
0:44
Speaker 2: taken any in their entire career. Do I have an
0:46
Speaker 2: unfair advantage over you and winning you as a client?
0:51
Speaker 3: I mean we all started zero from somewhere though, right, yes?
0:54
Speaker 1: So?
0:54
Speaker 2: But would you probably rather listen to me? Should be
0:57
Speaker 2: a cap on how many Google reviews? Ex I can have?
1:01
Speaker 2: The socialism ever work? Nick GF churn it up this
1:12
Speaker 2: week at DFILM, your real estate.
1:17
Speaker 3: Weekly podcast too for agent who actually.
1:19
Speaker 2: Give pay party move listening, Heat, clothing streets, Dflay.
1:29
Speaker 3: Listen. All right, welcome back to another episode.
1:34
Speaker 1: This is eleven twelve or thirteen, depending on which way
1:37
Speaker 1: you watch this, it's eleven twelve or thirteen. We've taken
1:41
Speaker 1: a couple of weeks off, so thank you for watching
1:45
Speaker 1: our previous shows, the last one, the Remax one.
1:49
Speaker 3: Definitely in the Facebook group.
1:50
Speaker 1: If you're not part of our Facebook group DFW Realtors,
1:53
Speaker 1: go join that.
1:54
Speaker 3: That has a little bit of some interesting comments.
1:58
Speaker 2: Everybody was excited to talk about the episode for better or.
2:02
Speaker 1: Worse, which I didn't understand because someone and I like
2:07
Speaker 1: this person, someone had made a comment that all we're
2:11
Speaker 1: doing is just trying to recruit, which we have never
2:13
Speaker 1: mentioned recruiting anything on this podcast.
2:17
Speaker 2: I don't think we talk about even our affiliations much
2:22
Speaker 2: on this podcast. I think we just like to talk
2:24
Speaker 2: about real estate.
2:26
Speaker 3: Like to talk about real estate. We like to help
2:27
Speaker 3: real estate agents.
2:29
Speaker 1: So if you're not part of that real estate Facebook
2:30
Speaker 1: group DFW Realtors, go there. Just don't spam it. It's
2:33
Speaker 1: been a little bit out of control lately of this.
2:35
Speaker 2: We are going to start ruthlessly banning people. So if
2:40
Speaker 2: for whatever reason you're seeing this on the Facebook group
2:44
Speaker 2: or on YouTube, please don't break the rules. We will
2:46
Speaker 2: have to get rid of you. It's not fun. It's
2:49
Speaker 2: just it's so much spam. Your listings go on the MLS.
2:57
Speaker 1: Yeah, just not in the Facebook group. But you know
2:59
Speaker 1: what can be in there and who you need to
3:01
Speaker 1: go support is Starren Smith, the best home warranty company
3:05
Speaker 1: out there. He's with Armadillo Home Warranty. Just reach out
3:08
Speaker 1: to Tharren at Armadello dot one. That's all you need
3:11
Speaker 1: to do. Armadello dot one. There's no forward slash backslash.
3:15
Speaker 1: There used to be one, but this is not about us.
3:17
Speaker 1: No Armadello dot one. Just tell them that the the
3:21
Speaker 1: crew over at the This Week in DFW real Estate
3:24
Speaker 1: not the only real estate podcast, but this Week in
3:26
Speaker 1: DFW real Estate sent you over there. He'll take great
3:29
Speaker 1: care of you. Your clients will love it. It's a
3:32
Speaker 1: lot better than the other crappy ones out there. And then, last,
3:36
Speaker 1: but not least, we've got Homeward Property Managements. Uh Dana
3:40
Speaker 1: Winn and Duncan O'Donnell. The property managers over there are
3:43
Speaker 1: doing an amazing job of fighting through this weird leasing
3:47
Speaker 1: cycle making sure that their owners are getting great quality
3:51
Speaker 1: tenants in there. All you need to do is go
3:52
Speaker 1: to Homeward at DFW dot com and Brian like, so,
3:56
Speaker 1: the last couple of weeks, we've we've you know, we
3:58
Speaker 1: went through these these real estate mergers, right, so the
4:02
Speaker 1: Real Remax merger, we saw EXP acquire and by Next
4:08
Speaker 1: Home yep. And you know, funny thing is like I
4:12
Speaker 1: was chatting with someone about this. I said, we weren't
4:14
Speaker 1: going to talk about it, but something just popped up
4:17
Speaker 1: and I was chatting with an agent about this, this
4:21
Speaker 1: whole thing, and she was asking, like, what's your thoughts
4:23
Speaker 1: and stuff like that. And first off, the Next Home
4:26
Speaker 1: exp merger or the purchase is already done. That was
4:30
Speaker 1: an all cash deal. The Real Remax is not done yet.
4:33
Speaker 1: That's maybe by the end of the year. And so
4:36
Speaker 1: that had already been announced, but someone was asking This
4:39
Speaker 1: person was asking Leo, the CEO of EXP, you know
4:44
Speaker 1: what they felt about this, and He's like, I don't
4:47
Speaker 1: have feelings about business. I have feelings about my kids,
4:50
Speaker 1: my wife, but I don't have feelings regarding this.
4:54
Speaker 3: This is business.
4:55
Speaker 2: Yeah, And I.
4:55
Speaker 1: Thought that was a great take because everyone's you know,
4:58
Speaker 1: people get their feelings really involved in this like this,
5:01
Speaker 1: this this whole brand identity thing. It's it's it's really strange,
5:07
Speaker 1: like when Keller Williams was, you know, when when exp
5:10
Speaker 1: was taking all the color whims agents. You know, you
5:12
Speaker 1: know you're either four or against either one of those companies.
5:16
Speaker 1: It's just it's just really funny how people take all
5:19
Speaker 1: those feelings and emotions even though it's not their their company.
5:22
Speaker 2: I mean, I think last episode we got some conversations
5:25
Speaker 2: in the Facebook group that I think were really kind
5:27
Speaker 2: of an interesting microcosm of the same thing. You know,
5:30
Speaker 2: we say some things on this podcast sometimes that I
5:32
Speaker 2: think can tend to have solicit interesting responses from people,
5:36
Speaker 2: but they're they're mostly emotional, and I think that we
5:40
Speaker 2: do a good job of just saying what we think
5:42
Speaker 2: on this show, but I don't really attach any emotion
5:45
Speaker 2: to it. And if we're wrong, we're wrong. It is
5:47
Speaker 2: what it is. I do think it is very interesting.
5:50
Speaker 2: You're right, especially and maybe this is true in other businesses,
5:53
Speaker 2: but especially in this business. We get emotional around brands
5:59
Speaker 2: and allegiance is and things like that, and it's a
6:03
Speaker 2: really interesting thing I think to spend emotional stamina on,
6:08
Speaker 2: especially when no matter what brokerage, what ties you have,
6:13
Speaker 2: whoever you're with, you have the ability to go out
6:16
Speaker 2: and build an amazing business there. I just want to
6:18
Speaker 2: let you guys know there are agents out there with
6:21
Speaker 2: every single brokerage on earth that are probably selling a
6:23
Speaker 2: little more than you are right now. So you can
6:25
Speaker 2: be successful anywhere unless you're the number one agent in
6:28
Speaker 2: the in the world, in the world. Yes, so there's
6:30
Speaker 2: one person this is not applied to, and I take
6:32
Speaker 2: it back for that person, but it's amazing the things
6:37
Speaker 2: that will spend emotional stamina on where I would also
6:41
Speaker 2: pose it that I think a lot of agents, if
6:44
Speaker 2: they spended more emotional stamina on growing their business, no
6:48
Speaker 2: matter where they're at, their career, would probably be better off.
6:53
Speaker 2: Every year, we spend a lot of time arguing about
6:56
Speaker 2: brands and mergers and takeovers and things like that, and
6:59
Speaker 2: I'm mean we talk about on the podcast, but for
7:02
Speaker 2: the most part, we get up every day and talk
7:04
Speaker 2: about what do we need to do every single day
7:05
Speaker 2: to move our businesses forward? And I think we do
7:07
Speaker 2: a pretty good job of remaining unemotional about these things,
7:10
Speaker 2: and I think that's why we've been relatively blessed to
7:14
Speaker 2: build some pretty cool organizations.
7:15
Speaker 1: Well, I mean, the business we're in is, you know,
7:18
Speaker 1: one of the lead generation business but helping you know,
7:20
Speaker 1: find motivated buyers and sellers. So if you and I
7:24
Speaker 1: were with you know, you know John Doe real estate
7:28
Speaker 1: brokerage that's never been heard of, we're still going to do.
7:30
Speaker 1: We're still going to go look for motivated buyers and
7:33
Speaker 1: sellers every day. More than likely we're still going to
7:35
Speaker 1: sell the same amount, if not more houses than we
7:39
Speaker 1: did the year before.
7:39
Speaker 2: Yep.
7:40
Speaker 3: So you know, I just I just when when when
7:43
Speaker 3: she was telling me that's what.
7:44
Speaker 1: Leo, the the CEO of exp It said, I was like,
7:47
Speaker 1: oh that I love that because yeah, there's no there's
7:51
Speaker 1: no feelings in business.
7:53
Speaker 2: It's an incredibly healthy mindset. And so on that topic
7:56
Speaker 2: of no feelings in business, another acquisition has been announced.
8:02
Speaker 1: Yeah, so this is so Warren Buffett's company, Berkshire Hathaway
8:07
Speaker 1: just just made a huge bet on on housing. So
8:13
Speaker 1: so they they you know, Warren Buffett had stepped down
8:17
Speaker 1: he's no longer this is retired. So this is the
8:20
Speaker 1: first major purchase of the CEO that he put in
8:23
Speaker 1: place Greg Gable, and so Greg had has made a bet,
8:28
Speaker 1: an eight point five billion dollar bet on housing where
8:33
Speaker 1: they are buying the builder Taylor Morrison. Yes, and so
8:39
Speaker 1: you know that doesn't really necessarily impact real estate agents
8:43
Speaker 1: per se.
8:43
Speaker 2: It's an interesting acquisition, though. I do have this funny
8:46
Speaker 2: image in my head because Warren Buffett was so notoriously
8:49
Speaker 2: conservative that he's like sitting in his dining or his
8:53
Speaker 2: living room in Omahon, gets a phone call. He's like, Greg,
8:55
Speaker 2: did what I just put this guy in chars? He
8:58
Speaker 2: spent eight point five billion dollars.
9:00
Speaker 3: But he's sitting height point five billion.
9:01
Speaker 1: They're sitting on on more cash than they have ever done.
9:05
Speaker 2: They unwound a lot of positions.
9:07
Speaker 1: Yeah, we were retired, so they were they were sitting
9:09
Speaker 1: on almost four hundred billion dollars in cash. So this
9:11
Speaker 1: is realistically this is a very small a small bet
9:16
Speaker 1: of the cash position that they're in.
9:18
Speaker 2: Two. I might be totally wrong on this though, and
9:20
Speaker 2: I don't even know how you would google it. Jesse.
9:23
Speaker 2: To my knowledge, is this kind of the first like
9:29
Speaker 2: legitimate builder acquisition by a national real estate firm and
9:36
Speaker 2: kind of like what we would consider the modern era.
9:39
Speaker 2: This is I don't, I can't. Nothing else comes to mind. Yeah,
9:44
Speaker 2: I mean, I guess that's true because they are not
9:47
Speaker 2: they are not pen fed, right yep, So yeah, then
9:50
Speaker 2: I guess so I guess it's that's not really it's
9:53
Speaker 2: the Umbrella company, so that doesn't really make sense.
9:55
Speaker 3: Okay, yeah, this is this is just their holding company.
9:58
Speaker 2: And well, let me ask you this, does do any
10:01
Speaker 2: other holding companies that own major real estate brokerages also
10:05
Speaker 2: own builders, like anywhere or I think that would be
10:10
Speaker 2: an interesting an interesting thing to know if there are
10:15
Speaker 2: other players that are in both spaces new construction and
10:19
Speaker 2: resale brokerages. Not that it makes a difference, but it
10:25
Speaker 2: is an interesting I just want to know if this
10:27
Speaker 2: is kind of like a new I guess what I'm
10:29
Speaker 2: trying to ask, is is this something that we think
10:32
Speaker 2: is an unbroken ground that's now been broken that might
10:35
Speaker 2: be some of the next frontier for acquisition targets are
10:39
Speaker 2: going to see more builders and brokerages get into business together,
10:45
Speaker 2: which is something we've not talked about. By the way
10:47
Speaker 2: we've talked about lenders, We've talked about title, we've talked
10:49
Speaker 2: about insurance, new construction and residential real estate brokerages doing
10:56
Speaker 2: jvs or actually being owned by the same company. That's
10:59
Speaker 2: not really something that I know that I've talked to.
11:02
Speaker 3: But here's the other thing.
11:03
Speaker 1: So Taylor Morrison, what so they own Clayton Properties Group,
11:06
Speaker 1: which if I remember when I was reading about this
11:10
Speaker 1: and just kind of doing some homework on it, Clayton
11:12
Speaker 1: Properties Group is does I believe they do the modular homes?
11:15
Speaker 1: So you know, so now getting into Taylor Morrison, the
11:19
Speaker 1: Taylor Morrison brand is new construction, but they're also build
11:23
Speaker 1: to rent community, so they're still betting on the rental
11:26
Speaker 1: side of where housing and where the industry is going.
11:30
Speaker 1: So they'll still own the aspects. You have the renters,
11:33
Speaker 1: they own pen fed, they have the real estate arm,
11:36
Speaker 1: they have the insurance arm. So does this continue to
11:39
Speaker 1: complete that cycle? Well, so think about that.
11:41
Speaker 2: This is where this is an interesting conversation. So like
11:44
Speaker 2: Berkshire's stack right now, home services, So they have the
11:47
Speaker 2: brokerage side, they have Clayton Homes, which is the manufacturer
11:49
Speaker 2: the modular Taylor Morrison, they've got in house mortgage, in
11:52
Speaker 2: house title, they've got insurance, so they've got pretty much
11:55
Speaker 2: that entire stack. We've been talking for a long time
11:58
Speaker 2: now around mergers and act positions in the real estate space.
12:02
Speaker 2: Think about this from the mortgage space. You have, for example,
12:07
Speaker 2: like Prime they have their entire just their normal mortgage branches.
12:13
Speaker 2: They also have jvs like Highland Home Loans right, which
12:17
Speaker 2: is Island Holmes's in house lender. Imagine what does a
12:21
Speaker 2: future look like where a real estate brokerage owns the
12:25
Speaker 2: new construction piece and you have agents that specifically either
12:28
Speaker 2: do both or work just on the new construction side
12:30
Speaker 2: for that brokerage for their in house new construction. Is
12:34
Speaker 2: that a future because Berkshire Hathaway just made a move
12:36
Speaker 2: in that direction.
12:37
Speaker 1: No, it could be, and we've again we've talked about
12:40
Speaker 1: this on this show and the only real estate podcast
12:42
Speaker 1: worth listening to show where the the industry has been
12:47
Speaker 1: trying to find their solution and their way into owning
12:51
Speaker 1: the entire transaction circle.
12:54
Speaker 3: Right.
12:55
Speaker 1: So you know, from the longest time the traditional brokerages
12:59
Speaker 1: just know, they dabbled in it, but now it's almost
13:02
Speaker 1: a must to have the ancillaries and in order to
13:06
Speaker 1: be you know, almost to insulate yourself and to protect yourself,
13:10
Speaker 1: You've got to get your agents. You know, if you're
13:12
Speaker 1: a brokerage, you have to get your agents on board
13:14
Speaker 1: with using the ancillaries because the brokerages aren't as profitable
13:17
Speaker 1: as they once were.
13:18
Speaker 3: You know, we're you know, kind of the rates.
13:21
Speaker 1: To the bottom of you know, lower fees, no fees,
13:24
Speaker 1: you know, some feest here, some fees not. And and
13:27
Speaker 1: if you can have, if you can have the the
13:30
Speaker 1: grouping of agents that are producing, and you can also
13:34
Speaker 1: get them to start utilizing the ancillaries, and the ancillaries
13:37
Speaker 1: are helping them either grow their business or you know,
13:41
Speaker 1: make them look like a rock star, get more reviews,
13:44
Speaker 1: whatever that may be. Now that helps obviously the parent
13:48
Speaker 1: company or the brokerage or whomever that may be agreed.
13:51
Speaker 2: And then this is this is such an interesting conversation
13:54
Speaker 2: because this is where as I think through this and
13:59
Speaker 2: if I'm totally wrong, we can go back and watch
14:02
Speaker 2: this episode and say, Brian, you're a fool. We're thinking
14:05
Speaker 2: through this on the fly. And that's what I love
14:07
Speaker 2: about this podcast. This is where the brokerage piece, well,
14:11
Speaker 2: this is where the the the entire umbrella, meaning the
14:15
Speaker 2: corporation that owns the brokerage, the new construction, right, mortgage,
14:19
Speaker 2: insurance title, the entire stack. There are some pieces that
14:22
Speaker 2: might be at odds with other pieces. So if we
14:25
Speaker 2: think about this, scroll back up. For me, Jesse, I
14:28
Speaker 2: just wanted to see one stat on this right, there's
14:31
Speaker 2: good right. So this if you take Berkshire, for example,
14:35
Speaker 2: getting all the ant now they own pretty much all
14:37
Speaker 2: the ancillaries or most of the ancillaries. Right. As an agent,
14:43
Speaker 2: I'm a resale agent, I've got to be thinking about
14:46
Speaker 2: how do I get a piece of those ancillaries as well,
14:48
Speaker 2: how do I stay at the center of the transaction,
14:50
Speaker 2: how do I stay at the center of the home
14:51
Speaker 2: ownership experience, and how do I maximize my lifetime value
14:54
Speaker 2: as a client? Because that's what Berkshire is doing. And
14:57
Speaker 2: the reality is so in the future when a Berkshire
15:02
Speaker 2: owned builder, maybe a tailor Morris soon as they just
15:05
Speaker 2: bought right, they use the entire stack, They're going to
15:08
Speaker 2: use a Berkshire lender, They're going to use Berkshire title,
15:11
Speaker 2: They're going to use Berkshire you know, insurance. And I
15:13
Speaker 2: don't know if I said that already right, Well, the
15:18
Speaker 2: buyer's agent for that buyer that's purchasing from that stack,
15:24
Speaker 2: they're actually the most important part or the most expensive
15:27
Speaker 2: part of that transaction. Now that buyer agency commission becomes
15:32
Speaker 2: the most expensive part of that transaction unless it gets
15:34
Speaker 2: whittled way down, right. And so there's a piece of
15:38
Speaker 2: this where Berkshire owning that much of the stack actually
15:44
Speaker 2: gives them so much control over the transaction that it
15:48
Speaker 2: may begin to whittle down the value of the buyer
15:51
Speaker 2: at this the buyer's agent at the middle of that transaction.
15:55
Speaker 1: So here's here's what Berkshire Hathway's plan is, though this
15:58
Speaker 1: is greg able to CEO Berkshireaway literally said, the goal
16:02
Speaker 1: is to unify all home building operations into one combined platform.
16:07
Speaker 1: And what you'll start hear and again start listening to
16:10
Speaker 1: the platform, like, you know, there's I'm with the company.
16:13
Speaker 1: You know, you know, my team, the Good Home team
16:16
Speaker 1: is at exp reality from the broker's side, but we
16:19
Speaker 1: are partners with a platform called Place and you know,
16:23
Speaker 1: you know the entire the entire agenda and the goal
16:27
Speaker 1: is to to have have your hand and be able
16:30
Speaker 1: to have a piece of every portion of that transaction.
16:34
Speaker 1: Not only does it create a better overall consumer experience,
16:38
Speaker 1: which you know, let's let's be real, the way that
16:40
Speaker 1: the real estate industry has been fragmented for as long
16:43
Speaker 1: as it has, it can be a very frustrating consumer
16:46
Speaker 1: experience where you know, they're talking to this person, they're
16:49
Speaker 1: talking to that person, they're talking to this person, and
16:51
Speaker 1: they don't all communicate together, right because they're not they're
16:54
Speaker 1: not part of the same team or the same company, right,
16:56
Speaker 1: And then fingers start getting pointed at if something goes wrong.
16:59
Speaker 1: And so this is where those consumers get frustrated. And
17:03
Speaker 1: just like when you know Travelocity, and just like when
17:05
Speaker 1: Zillow has been made, if you start looking at a
17:08
Speaker 1: better consumer experience on something, even if it's low cost,
17:12
Speaker 1: no costs, whatever you can make, you can create a
17:16
Speaker 1: legitimate billion dollar maybe trillion dollar a year of business
17:21
Speaker 1: because you're now solving the the frustrations of the consumers.
17:25
Speaker 2: Well, and you can do it for you can do
17:27
Speaker 2: it for lower cost to the consumer. This is this
17:29
Speaker 2: what happens in every industry right when you think about it,
17:32
Speaker 2: when when the industry, any any experience that involves multiple
17:35
Speaker 2: industries is fragmented, then it's always going to cost more
17:38
Speaker 2: because the customer, the cost of customer acquisition for each
17:41
Speaker 2: one of those pieces is still you know, one hundred percent,
17:44
Speaker 2: let's just call it. Right. So, in a housing transaction,
17:48
Speaker 2: there's a real estate agent, there's insurance piece, there's mortgage,
17:53
Speaker 2: there's title, there's there's all of these different things, right,
17:56
Speaker 2: and if they are all separate, separately owned entity, separately
18:00
Speaker 2: owned industries, essentially adjacent industries, then they each are acquiring
18:05
Speaker 2: the customer. Yes, right, when I can go to one
18:08
Speaker 2: place and all of those pieces are coming from the
18:11
Speaker 2: same the same ownership group, we only have to acquire
18:15
Speaker 2: that customer once and that will drive prices down or
18:18
Speaker 2: costs down for the consumer over time.
18:20
Speaker 3: Well, and once you have a.
18:22
Speaker 1: More combined unified marketing message, email marketing campaign, proactive reach
18:28
Speaker 1: out campaigns, it's going to even be a more sticky
18:31
Speaker 1: ecosystem because here's still what's not happening again? You know,
18:35
Speaker 1: I'll finish reading what Greg greg Gable was say, and
18:37
Speaker 1: he's like, so their their goal is to unify all
18:40
Speaker 1: home building operations into one platform. Clayton Holmes plus Taylor
18:44
Speaker 1: Morrison connects the dots right, so connects that dotts and
18:48
Speaker 1: then the rest of the dots is the brokerage plus builder,
18:51
Speaker 1: plus lender, plus title plus insurance, all under one roof,
18:55
Speaker 1: all owned by Berkshire. This is the vertical integration at
18:59
Speaker 1: a scale this industry has never seen. And so you
19:01
Speaker 1: can say, hey, when a Berkshire owned builder, you know,
19:05
Speaker 1: brings a buyers towards a Berkshire Berkshire affiliated lender, title
19:10
Speaker 1: company or the buyer's agent becomes you know where the
19:13
Speaker 1: buyers just becomes the most expensive and most replaceable item.
19:16
Speaker 3: In the transaction.
19:17
Speaker 1: Now it is Hey, if you're the most expensive part,
19:20
Speaker 1: why don't you come to a Berkshire owned brokerage affiliated brokerage.
19:24
Speaker 1: Look at all this lead flow that we have, look
19:26
Speaker 1: at xyz we have And so this this shouldn't cost paranoia.
19:31
Speaker 1: But what it should do is are you aligning as
19:33
Speaker 1: an agent? Maybe the questions you start looking at and
19:36
Speaker 1: start asking is are you in alignment with a brokerage
19:41
Speaker 1: or a team or a business that is front is
19:45
Speaker 1: forward thinking enough to start protecting your business?
19:48
Speaker 2: Yeah, I think that's a really good question because you know,
19:51
Speaker 2: it's it's a question of where do you think the
19:54
Speaker 2: industry is headed right, because I think that you just
19:56
Speaker 2: made a really good point. The the this merge, this
20:00
Speaker 2: acquisition could be viewed from a couple of different lenses.
20:04
Speaker 2: It could be because I just said this is a
20:06
Speaker 2: second going now I'm rethinking it. It could be construed
20:09
Speaker 2: as Berkshire is doing something that could eventually alienate agents,
20:12
Speaker 2: meaning they're now the most expensive part of a consolidated transaction.
20:18
Speaker 2: And there there there commissions are going to need to
20:22
Speaker 2: get whittled down to stay part of that transaction. Otherwise
20:24
Speaker 2: they they they become the most expensive part. Right, if
20:26
Speaker 2: you're buying a if you're using a Berkshire agent to
20:29
Speaker 2: buy a Berkshire home, use Berkshire Mortgage, Title and insurance. Right,
20:33
Speaker 2: that's a really smooth piece. That's a really smooth transaction process.
20:37
Speaker 2: The agent becomes less necessary. Right.
20:40
Speaker 1: Let me give you a Let me give you an
20:41
Speaker 1: example of how this how we can kind of start
20:44
Speaker 1: to see this working. There's a there's a mortgage company.
20:47
Speaker 2: You know.
20:47
Speaker 3: I won't name the name just you know, because again
20:50
Speaker 3: I don't want to. I don't want.
20:51
Speaker 1: The the the person on Facebook that commented on ours
20:55
Speaker 1: that we're turning this into a recruitment show, because that's
20:58
Speaker 1: not the case at all. So if you're even thinking
21:00
Speaker 1: about joining Brian or myself, don't this is not This
21:04
Speaker 1: is not a recruitment show. But this this lend, this
21:08
Speaker 1: lender institution is owned by a platform. And you know,
21:13
Speaker 1: in order the the the platform mortgage company doesn't doesn't
21:19
Speaker 1: pay as well as maybe some of the mortgage brokers
21:22
Speaker 1: or some of the independents out there. But what they
21:24
Speaker 1: have access to is they have access to real estate
21:27
Speaker 1: teams that are top the top one percent of the
21:29
Speaker 1: United States, that that are generating the lead flow, that
21:32
Speaker 1: are out there hustling, that are still building even in
21:36
Speaker 1: a tough business, they're still selling lots and lots of houses.
21:39
Speaker 1: And so I was talking to one of these platform
21:42
Speaker 1: loan officers who runs a great who runs a good team,
21:46
Speaker 1: and they're they're going through some growing pains. The growing
21:50
Speaker 1: pains is that right now they've got about forty thirty
21:54
Speaker 1: eight or forty contracts in their system. You know that
21:58
Speaker 1: they're processing through and so you know, some of their
22:01
Speaker 1: communicator they're fixing their communication gaps on the new stuff
22:05
Speaker 1: coming in because they're getting lead flow all the time.
22:07
Speaker 1: But they're not making the full percentage points that maybe
22:13
Speaker 1: again like a mortgage broker company would be, but this,
22:16
Speaker 1: this loan officer, this loan officer, with this platform that's
22:19
Speaker 1: got thirty eight or forty deals going through, is making
22:22
Speaker 1: killer money. So it's gonna be potentially even from a
22:26
Speaker 1: real estate side perspective, is we start seeing these big producers,
22:30
Speaker 1: even big producers on teams where they now get access
22:33
Speaker 1: to earning revenue off the ancillary side, but they're going
22:36
Speaker 1: to sell more houses. Maybe they're making less on the
22:38
Speaker 1: real estate transaction, but they're making a piece of this
22:41
Speaker 1: and now actually instead instead of what they would think
22:44
Speaker 1: is less money, they're actually now making making more money.
22:46
Speaker 2: And that that was the point I was going to make,
22:48
Speaker 2: is this could also be viewed from the lens of
22:51
Speaker 2: if you believe that commissions are going to get compressed
22:53
Speaker 2: over the next however long many years. Anyway, Berkshire just
22:56
Speaker 2: made a move that says, hey, we've locked in tens
22:59
Speaker 2: of thousands of transitions per year for our agents to
23:01
Speaker 2: represent on they're going to need to do it for
23:04
Speaker 2: less per transaction. But now that business is pretty much
23:07
Speaker 2: guaranteed because it's going to come from our new construction side.
23:09
Speaker 2: It's the same thing on the mortgage side. Yep, you're
23:11
Speaker 2: your new construction mortgage lender does not make the same
23:14
Speaker 2: BIPs as as a resale lender, but they're just cranking
23:17
Speaker 2: them out.
23:17
Speaker 1: So for this show being this week in DFW real Estate,
23:20
Speaker 1: can we do something a little bit different That's not
23:22
Speaker 1: what we.
23:22
Speaker 3: Have up here on the screen.
23:25
Speaker 2: This is usually me doing this, by the way, I
23:26
Speaker 2: want yeah, just known.
23:27
Speaker 3: Yeah, but this is not a rabbit hole.
23:29
Speaker 1: This is a This is not us going down and saying,
23:32
Speaker 1: you know, the AI robots are going to kill us,
23:36
Speaker 1: though I am really digesting a lot of us. I'm
23:40
Speaker 1: really I'm staying up all night, like I'm pulling all
23:42
Speaker 1: nighters building some cool AI stuff. But let's let's kind
23:46
Speaker 1: of let's kind of think this out what we just
23:48
Speaker 1: talked about. And and you're you're, uh a big producer, right,
23:55
Speaker 1: You're selling let's say you're selling anywhere from eight to
23:58
Speaker 1: ten houses, you know month, And you know, as we're
24:02
Speaker 1: starting to see the shift going on, what end up happening?
24:06
Speaker 1: Do you see it where we're there's less actually agents
24:10
Speaker 1: where you're going to now see maybe this eight to
24:12
Speaker 1: ten unit producers selling fifteen to twenty houses a year.
24:16
Speaker 1: But now what they're using is is these production partners,
24:20
Speaker 1: production assistants. They're making a very very small percentage of
24:24
Speaker 1: the fifteen to twenty and you're seeing almost like these
24:27
Speaker 1: many teams within a team, because the large groups are
24:30
Speaker 1: the ones that are able to provide the scalable resources
24:33
Speaker 1: at a lower cost to that big producing agent. And
24:38
Speaker 1: now you've got the real estate teams, the large real
24:42
Speaker 1: estate teams that are selling two hundred, three hundred four
24:44
Speaker 1: and one thousand homes a year that are providing an
24:47
Speaker 1: ecosystem for these big producing agents to come in and
24:51
Speaker 1: get access to cheaper technology that they don't have to
24:54
Speaker 1: go worry about. It's implementable. They've got cheap access to
24:57
Speaker 1: AI that's implementable. They've got access to mortgage play platforms,
25:00
Speaker 1: to all the platforms set up so that that those
25:03
Speaker 1: that are willing to go put the work in and
25:07
Speaker 1: then go and build out their their team ecosystem underneath.
25:11
Speaker 1: They're now looking at they're making a half a million,
25:13
Speaker 1: maybe a million dollars a year. And the production agents,
25:17
Speaker 1: which are you know, in today's kind of terms, just
25:19
Speaker 1: the regularly the average real estate agents are now making
25:23
Speaker 1: maybe fifty to one hundred thousand dollars a year helping
25:26
Speaker 1: out on assisting on fifteen to twenty sales a month.
25:29
Speaker 2: I would would bet the farm that that's exactly what's
25:32
Speaker 2: going to happen. I think at the same bet said
25:34
Speaker 2: that probably for three years on these shows.
25:36
Speaker 1: It's the same bet that you said that Remax would
25:38
Speaker 1: not exist in five years.
25:40
Speaker 2: This is a more sure thing, but I'm still pretty
25:43
Speaker 2: sure about that. Regardless I said the brand name, by
25:48
Speaker 2: the way, I didn't that was a little people will
25:51
Speaker 2: still exist. So they just vanished like in market. I'm
25:53
Speaker 2: not saying anybody's You guys are putting words in my mouth.
25:56
Speaker 2: That's not the way that I portrayed that. Yes, this
26:00
Speaker 2: is what Nick just said. If you think it sounds
26:03
Speaker 2: apocalyptic or somehow far fits, just understand it's it's exactly
26:06
Speaker 2: what's happened in every industry on Earth over time.
26:10
Speaker 3: Look travel agents.
26:11
Speaker 1: There are travel agents that are still making a crapload
26:14
Speaker 1: of money, sure, right, and then there's there's but the
26:19
Speaker 1: travel agent, you know, kind of workfarm or whatever you
26:22
Speaker 1: would call it. Just the industry as a whole has
26:26
Speaker 1: probably shrunk by.
26:28
Speaker 3: Right, fifty percent.
26:30
Speaker 2: Also, people travel more often than they used to because
26:33
Speaker 2: costs have come down. I bought a sixty five inch
26:35
Speaker 2: TV for three hundred and sixty eight dollars the other day.
26:37
Speaker 2: Do you think that they make as much margin as
26:39
Speaker 2: they did on the Plasmas in two thousand and one
26:41
Speaker 2: when they cost five grand apiece? No, but they sell
26:43
Speaker 2: more TVs. This happens in every industry across the board.
26:49
Speaker 2: It costs way less to trade stocks than it used
26:51
Speaker 2: to it and now everybody's got basically a Bloomberg machine
26:55
Speaker 2: on their phone.
26:55
Speaker 1: So if we think about this and again this is
26:58
Speaker 1: not to scare, this is to to expand them. Mind
27:00
Speaker 1: that we all have opportunities. Right, This is just like
27:03
Speaker 1: just like you know are our belief in saying is
27:06
Speaker 1: AI is not going to replace you. AI will enhance
27:09
Speaker 1: you if you learn how to use AI to enhance.
27:12
Speaker 2: Right, and you may make This is just to repeat
27:15
Speaker 2: what Nick just said. This is not to be doom
27:17
Speaker 2: and gloom. You will probably make less commission per home
27:21
Speaker 2: in the future. You may also make money from the
27:24
Speaker 2: ancillaries and you'll probably sell a lot more homes. So
27:26
Speaker 2: that's just every industry.
27:28
Speaker 1: Yes, but it's not Unfortunately, this is not every person
27:31
Speaker 1: that gets the seat at the table. This is those
27:33
Speaker 1: who who build and those who participate in those who
27:37
Speaker 1: actually understand the opportunity that's in front of them to
27:40
Speaker 1: take it. Because this isn't Hey, I'm going to send
27:43
Speaker 1: it to this lender, this lender, this lender, this title company,
27:45
Speaker 1: this title company, because I want to get invited to
27:46
Speaker 1: the parties. This is hey, who is who is forward thinking?
27:51
Speaker 1: Where are the companies being owned together right and as
27:55
Speaker 1: a as a as a one whole ownership group, as
27:58
Speaker 1: a conglomerate, whatever, how the communication piece going? And am
28:03
Speaker 1: I am I at a point where I'm I am
28:07
Speaker 1: actually going to be able to sell even in this market?
28:10
Speaker 1: Can I sell five to ten houses a month? If
28:12
Speaker 1: you can sell five to ten houses a month in
28:14
Speaker 1: this market, then then this is this is your opportunity
28:18
Speaker 1: to go say, hey, how could I go partner with
28:20
Speaker 1: a team? How could I go partner with with a
28:23
Speaker 1: brokerage that I actually see that's forward thinking to see
28:25
Speaker 1: I can get a piece of the pie and start
28:27
Speaker 1: demanding that seat at the table so that I can
28:30
Speaker 1: now get into the ancillary pieces. Because one, until we
28:34
Speaker 1: see that drop the ancillary piece is going to pay.
28:36
Speaker 3: A lot more anyway.
28:38
Speaker 1: Two, once we start to see that compression happening, now
28:42
Speaker 1: you're not as worried as much. Because once once commission
28:46
Speaker 1: compression truly start starts to happen, do you know what happens?
28:48
Speaker 1: Everyone freaks out and then they either leave the industry,
28:51
Speaker 1: they start dropping. You know, they do it for next
28:53
Speaker 1: to nothing because they need to just to get a
28:55
Speaker 1: deal in to try to get some money coming in,
28:57
Speaker 1: and then they're out of business in the next five.
28:59
Speaker 3: To twe months.
29:01
Speaker 1: And so, but the forward thinkers who are coming in
29:05
Speaker 1: were past the early adopter. So the next stage in
29:07
Speaker 1: that early adoption phase is, you know, how can I
29:11
Speaker 1: how can I make sure that I'm utilizing the right
29:13
Speaker 1: I'm in the right spot with the right organization, with
29:18
Speaker 1: the right opportunities in front of me, and those opportunities
29:24
Speaker 1: are something that that I'm going to work towards and
29:26
Speaker 1: and truly get it at bad on.
29:28
Speaker 2: So, if I'm an agent right now and I'm I'm
29:31
Speaker 2: selling whatever it is, I'm I'm making a good living
29:34
Speaker 2: selling real estate, and I'm but that's all where all
29:36
Speaker 2: my money comes from. What action steps should I be taking?
29:39
Speaker 2: Right now to make sure that I'm setting my business
29:43
Speaker 2: up for the future, whatever that looks like.
29:46
Speaker 1: First steps is I would analyze where who am I
29:49
Speaker 1: aligned with at the moment right and and that that's
29:53
Speaker 1: gonna that's gonna be tough. That's where we're going to
29:55
Speaker 1: have to say, we're gonna we got to leave the
29:57
Speaker 1: feelings out of this. This is business, and we got
30:01
Speaker 1: to look at are their teams also out there that
30:04
Speaker 1: I should look at joining, because unfortunately, there there's been
30:09
Speaker 1: a lot of bad teams out there, the parasite teams
30:11
Speaker 1: that just you know, bring agents on just trying to
30:14
Speaker 1: get deals out of them and then they don't pay
30:16
Speaker 1: them that much. But understanding that if you join, if
30:21
Speaker 1: you were open and say, all right, a team does
30:24
Speaker 1: absorb a portion of my commission, but what are they offering?
30:28
Speaker 1: And if I hit a certain X y Z mark,
30:31
Speaker 1: where is my opportunity to start pulling this other income
30:35
Speaker 1: from or earning this other income that is that is
30:39
Speaker 1: that opens up that lever that now starts to not
30:43
Speaker 1: only make up for my what I originally was making.
30:46
Speaker 1: That makes up for that that that team cut, but
30:50
Speaker 1: it's also going to eventually start leading to more because
30:53
Speaker 1: now I'm going to be a cheerleader to say, hey
30:55
Speaker 1: you should use x y Z affiliate.
30:58
Speaker 3: That's going to.
30:58
Speaker 1: Start growing even when you're not selling ten twenty thirty
31:02
Speaker 1: houses right now, you're now you're getting the power.
31:05
Speaker 3: Of the scale.
31:06
Speaker 1: So you The first thing I would do is saying, hey,
31:09
Speaker 1: how do I Am I in the right Am I
31:12
Speaker 1: on the right seat? Am I with the right organization?
31:14
Speaker 1: Am I at the right spot? Then I would go
31:17
Speaker 1: and look at do I truly have my database organized
31:20
Speaker 1: correctly and with with AI? Now you can go to claud,
31:23
Speaker 1: you can go to chat, you can go just take
31:25
Speaker 1: whatever CRM system you're using, just export that or connect
31:30
Speaker 1: chatter Claud to the API of that CRM and start
31:34
Speaker 1: to have it organized and say, who who is a
31:36
Speaker 1: past client that I haven't reached out to? Yep, Like
31:39
Speaker 1: we had a we have a really disturbing number that
31:42
Speaker 1: that our past clients, we had our newly our newly
31:46
Speaker 1: sold clients. There's some that we hadn't reached out to
31:49
Speaker 1: within the last thirty days. Just doing a check in call,
31:52
Speaker 1: like those are people that we just helped that should
31:54
Speaker 1: hopefully should still be happy.
31:55
Speaker 3: Started saying, hey, leave.
31:56
Speaker 1: Us a review, send us a referral, you know, be
31:59
Speaker 1: on the lookout for events that are coming up. And
32:02
Speaker 1: so there is those there are still balls that are
32:05
Speaker 1: getting dropped, even in good sized organizations. And so I'd say,
32:08
Speaker 1: all right, I'd be using my AI enhanced technology to say,
32:12
Speaker 1: what what past client do I need to reach out to?
32:16
Speaker 3: Can I send a text? Can it be an email?
32:18
Speaker 3: Can I do it email?
32:19
Speaker 2: Text?
32:19
Speaker 1: And then remind me to do a phone call? Is
32:22
Speaker 1: there help me plan out events? Right? So I'd start
32:24
Speaker 1: building that out and making sure that that I have
32:28
Speaker 1: my my security fence around my database so that they're
32:32
Speaker 1: not going that they're not slipping through and going to
32:34
Speaker 1: a Rocket mortgage and now a Redfin agent, that they're
32:39
Speaker 1: not going to go to a Berkshire like a Taylor
32:41
Speaker 1: Morrison or a Berkshire Hathaway you know owned company, right yep.
32:46
Speaker 2: I mean it's essentially this is what the the this
32:49
Speaker 2: is what we're doing at the broker's level is we
32:51
Speaker 2: are owning more of the stack as an agent. Right now,
32:55
Speaker 2: I think the guidance you're giving is I need to
32:58
Speaker 2: be working towards it's partnering with the right people to
33:02
Speaker 2: own more of the stack. To have a bigger stack.
33:04
Speaker 3: So let me tell you.
33:05
Speaker 1: Let me say this, like if some of this exhaust
33:08
Speaker 1: you mentally, because this is as you hear this, it
33:10
Speaker 1: does sound doo mgloom, but it's not. It's it's I
33:14
Speaker 1: We've been doing that. I've been doing this for over
33:16
Speaker 1: twenty years, almost twenty two years. And and you know,
33:19
Speaker 1: I saw a lot of agents in two thousand and
33:21
Speaker 1: eight that were fifteen twenty year veterans and they were
33:24
Speaker 1: so burnt out because they thought that, you know, when
33:27
Speaker 1: that recession hit and it wasn't as easy as it
33:30
Speaker 1: used to be, they thought that they could almost coast.
33:34
Speaker 1: And there's a lot of us that are that are
33:35
Speaker 1: looking at this and like, I'm not going to work
33:37
Speaker 1: for this if it's less when I'm not working for it.
33:40
Speaker 1: And the way that I see it is like, hey,
33:42
Speaker 1: even if you don't want to be a massive producer,
33:44
Speaker 1: how can you create your own mini ecosystem? Which is
33:47
Speaker 1: something that this is a pitch, So you know, let's
33:50
Speaker 1: follow this for a second. This is a pitch for
33:52
Speaker 1: something Brian and I have seen an opportunity on which
33:55
Speaker 1: is we built what's called the Residual Agent Network. Ran
33:58
Speaker 1: R A n and part of the Residual Agent Network
34:01
Speaker 1: is the first hub and the hub of of our
34:06
Speaker 1: of our RAND program is creating a utility your own
34:10
Speaker 1: utility concierge program. And that utility concierge program is something
34:15
Speaker 1: that you can incorporate day one. It's free to join.
34:18
Speaker 1: All you got to do is go to Residual Agent
34:21
Speaker 1: network dot com, gets gets Agent dot com, get resili
34:26
Speaker 1: agent dot com. Just go to go there, sign up
34:29
Speaker 1: and what you can do is incorporate in your in
34:33
Speaker 1: your current database and in your current buyer closings. You
34:36
Speaker 1: can have it to where you you sign your your
34:39
Speaker 1: your buyers up right but you know two to three
34:42
Speaker 1: weeks prior to closing and let them know that your
34:45
Speaker 1: move in Concierge UH team member is going to give
34:48
Speaker 1: them a call and that that concierge team member is
34:51
Speaker 1: going to work on setting them up on your behalf
34:54
Speaker 1: on electric Internet alarm systems. There's others. They've got moving companies,
34:59
Speaker 1: pest control services. They do have some home warranty options.
35:01
Speaker 1: Armadillo will hopefully soon to be one of those, so
35:04
Speaker 1: Armadillo dot one get with Aarren Smith. But as as
35:08
Speaker 1: those services start to get turned on because you introduce
35:12
Speaker 1: them to that concierge company, you're gonna get paid and anytime,
35:16
Speaker 1: especially on electric, anytime that they renew their their electric
35:20
Speaker 1: for the next year and try to get hopefully a
35:23
Speaker 1: cheaper rate.
35:24
Speaker 3: The minute they do that, you get paid again.
35:27
Speaker 1: And so that starts to build a little bit of
35:29
Speaker 1: that many residual that residual agent income, so that you
35:33
Speaker 1: beyond the closing, you start to earn a higher lifetime
35:36
Speaker 1: value per client. But now you're truly building a value
35:39
Speaker 1: to create a sticky ecosystem because that move in concierge
35:41
Speaker 1: is gonna say Hey, Brian, thank you so much for
35:44
Speaker 1: utilizing Nick and the Good Home team. I know they're
35:47
Speaker 1: an amazing team. They you know, we're so lucky to
35:50
Speaker 1: be a partners of theirs and you made a great,
35:52
Speaker 1: amazing choice. Can you do me a favorite, Brian? When
35:54
Speaker 1: you're done with this, can you make sure to go
35:55
Speaker 1: leave them a five star review? As well? As they
35:59
Speaker 1: would love to earn more referrals and work with people
36:02
Speaker 1: just like themselves. We could we ask for a favor.
36:05
Speaker 1: Could you send them anytime you hear think about anybody
36:07
Speaker 1: thinking about buying, selling, or investing in real estate. Would
36:09
Speaker 1: you make sure to send them to Nick and the
36:10
Speaker 1: Good Home team.
36:12
Speaker 2: And here's so this is just a small little piece,
36:15
Speaker 2: is a small spoke of the entire hub. But I
36:18
Speaker 2: want to make a few things really clear here right,
36:20
Speaker 2: what Nick is talking about here is a microcosm of
36:23
Speaker 2: this broader conversation. So a move concierge partnership is a
36:28
Speaker 2: very easy partnership to put in place. You send clients,
36:31
Speaker 2: the move Concierge team handles it. You make a little
36:33
Speaker 2: bit of revenue, We work on your behalf to generate
36:36
Speaker 2: more referrals for your business. Reshop your clients every year.
36:39
Speaker 2: Always make you the rock star.
36:41
Speaker 3: Right.
36:41
Speaker 2: Also, at the end of the day, it's also basically
36:44
Speaker 2: your own utility councier's business that you're not running. It's
36:47
Speaker 2: part of your ecosystem. So now you have an offering
36:50
Speaker 2: to every person in your database, right whether or not
36:54
Speaker 2: they're moving, right now, you're providing them with several piece
36:56
Speaker 2: of value. Jesse, you you are really big into these
36:59
Speaker 2: what's the what is the average person in just the
37:02
Speaker 2: state of Texas overpaying for as soon as there are
37:05
Speaker 2: electricity contract aspires, what percentage over are they now paying it?
37:10
Speaker 2: It's like fifty percent, right, because once your initial contract expires,
37:14
Speaker 2: your rate just it explodes, right, And most people don't
37:17
Speaker 2: know that, and they're overpaying for electricity, and so is
37:19
Speaker 2: most of your database. And by the way, so are
37:21
Speaker 2: most of the people in your database that they know.
37:24
Speaker 2: Now you actually have a new business, i'd say, a
37:26
Speaker 2: new business, a new vertical to your existing business. You
37:28
Speaker 2: have a new vertical to your existing ecosystem. The majority
37:31
Speaker 2: of people in your database are probably overpaying for electricity,
37:33
Speaker 2: whether they just moved or not. Okay, and they also
37:36
Speaker 2: know hundreds of people that are probably overpaying for electricity
37:39
Speaker 2: as well. Let's just say that right now, you have
37:41
Speaker 2: a conduit in your business that you don't run every day.
37:44
Speaker 2: Right what you have is a custom website that's built
37:47
Speaker 2: out that your partner's built for you. You have a
37:49
Speaker 2: way to go to your database and say, hey, I
37:51
Speaker 2: have a new value proposition in my business. I started
37:54
Speaker 2: a move concierge team. But we also will just shop
37:57
Speaker 2: you for the best rates. Whenever did you know the
37:58
Speaker 2: average person overpays by probably about fifty percent after the
38:01
Speaker 2: initial contractor expires. By the way, all your friends, I
38:04
Speaker 2: would love to help save them a little bit money
38:06
Speaker 2: as well. Just send them my link, right, and the
38:10
Speaker 2: Move Concierge team or the Tilly Conceriel team handles them.
38:13
Speaker 2: You make revenue. Now you've got more people in your database, though,
38:16
Speaker 2: do you understand this. Now you've got more people in
38:18
Speaker 2: your database that you're providing value to. And then what
38:20
Speaker 2: does that do? Well? That goes back to your home
38:22
Speaker 2: sales side, right, and then we start to add The
38:25
Speaker 2: vision for this is to start to build the stack
38:28
Speaker 2: for the agents in the network, the same way that
38:30
Speaker 2: Berkshire Hathway just acquired a new construction company to build
38:34
Speaker 2: out part of their stack. So what else? What is
38:36
Speaker 2: the what are the other value pieces that go into
38:38
Speaker 2: the home ownership experience, insurance by the way, life insurance,
38:42
Speaker 2: and estate planning, things like that. There's like ten different
38:45
Speaker 2: spokes that you can help you in the future will
38:48
Speaker 2: be able to partner with your little ecosphere and your
38:53
Speaker 2: job is to continue to build relationships, drive leads in
38:58
Speaker 2: and you get paid every time. I'm one of the
39:00
Speaker 2: partners in your ecosystem does business that provides value for
39:03
Speaker 2: the people that you are building relationships and driving into
39:06
Speaker 2: that world, which, if.
39:07
Speaker 1: You think about it, when you think about this, you're
39:10
Speaker 1: building what like you just said, what a Berkshire Hathway
39:12
Speaker 1: is doing where where jess if you scroll up like
39:15
Speaker 1: they own Berkshire owns the again they own all of
39:19
Speaker 1: these these affiliates, so that they're now into stick built, right,
39:24
Speaker 1: so they now have not only do they have modulate,
39:26
Speaker 1: they have stick built, and then they have now the
39:28
Speaker 1: build to rent portion of that. So they're not just
39:31
Speaker 1: selling it. They have they're they're keeping their renters in place.
39:34
Speaker 1: They've got the mortgage, they've got the insurance side, they've
39:37
Speaker 1: got the life insurance side, they've got the title side
39:41
Speaker 1: of this.
39:41
Speaker 2: Yes.
39:41
Speaker 1: So so when you look at this on a small scale,
39:46
Speaker 1: if you were to say, hey, I'm I'm going to
39:48
Speaker 1: be like a Berkshire Hathaway style business, this is the
39:53
Speaker 1: start and too many and often what ends up happening
39:56
Speaker 1: is that we we kind of dismiss it.
40:00
Speaker 3: You know.
40:00
Speaker 1: There there was there was a time and on this
40:04
Speaker 1: on this other show that we had where I was
40:07
Speaker 1: dismissed by this person to my left about these about
40:12
Speaker 1: these eye buyers that we're coming in here, and I said, look,
40:18
Speaker 1: the main thing about these eye buyer companies is is
40:20
Speaker 1: that they're taking away are at bats, They're they're they're
40:24
Speaker 1: putting a limited number on it.
40:26
Speaker 3: Now, we were both right and wrong.
40:28
Speaker 1: By the way, they didn't explode because once that market
40:32
Speaker 1: shifted we saw this decrease.
40:34
Speaker 2: They would have probably though if we continue in the
40:36
Speaker 2: same direction.
40:36
Speaker 1: Correct, correct, and so, but what we need to start
40:40
Speaker 1: looking at is are at bats and opportunities as a
40:43
Speaker 1: business you as a main business owner. You're not just
40:45
Speaker 1: a real estate agent, You're a business owner. And as
40:47
Speaker 1: a business owner, we've got to look at, Hey, how
40:50
Speaker 1: do I how do I create a better experience for
40:52
Speaker 1: my clients? How do I legally and ethically be able
40:56
Speaker 1: to you know, increase my lifetime value per client and
41:00
Speaker 1: per customer? How can I continue to provide even amazing
41:05
Speaker 1: value of the services that I would bring to them,
41:08
Speaker 1: which is who doesn't want to save money on electric?
41:10
Speaker 1: By the way, did you know that most people don't
41:12
Speaker 1: shop their internet and that you could actually go get
41:16
Speaker 1: better prices on internet if they shopped it around.
41:17
Speaker 3: Yeah, and so you now become.
41:20
Speaker 1: This this connection piece that is a way for them
41:25
Speaker 1: to remember you, to stay in front of them and
41:27
Speaker 1: to say thank you, and then you get edified by
41:30
Speaker 1: those companies that do.
41:31
Speaker 3: It, you also get a little piece of that pie.
41:33
Speaker 1: Then you get into Hey, if you're one of the
41:36
Speaker 1: bigger producers, what does it look like of getting into
41:38
Speaker 1: the mortgage side of things? You know, what does it
41:41
Speaker 1: look like to get into a little bit of the
41:43
Speaker 1: insurance side of this? What does this look like to
41:46
Speaker 1: you know, maybe be part of a revenue sharing brokerage
41:50
Speaker 1: because you can attract and now you start looking at
41:52
Speaker 1: all your income pieces because if you know, there's some
41:56
Speaker 1: mentors of ours that you know, they used to talk
41:59
Speaker 1: about having forty seven and streams of income and and
42:02
Speaker 1: this person now has a lot more than that, and
42:04
Speaker 1: they're worth several hundred million dollars and so, but it's
42:08
Speaker 1: all done through partnerships. Yes, you can't go and just
42:11
Speaker 1: create like you couldn't You couldn't run at scale and
42:15
Speaker 1: capacity just trying to create this on your own.
42:17
Speaker 2: No, you're not going to become an insurance agent, get
42:20
Speaker 2: your series six, go start a utility concierge, like all
42:23
Speaker 2: the different things you could. It's it's about And by
42:25
Speaker 2: the way, neither is Berkshire Hathway. They didn't start a
42:29
Speaker 2: new construction company, right, This is they chose the acquisition route,
42:33
Speaker 2: there's the JV route and the partnership route as well.
42:35
Speaker 1: Guess what they have the talent base to go start
42:38
Speaker 1: one up if they wanted to.
42:40
Speaker 3: It just makes no sense, exactly.
42:42
Speaker 1: You go into something that's already established, that already has
42:46
Speaker 1: all the all the systems, all the processes in place,
42:48
Speaker 1: and just go and send yep exactly like that's it's
42:52
Speaker 1: that simple. And so again, while this is that that
42:56
Speaker 1: was a pitch, just go to get residual agent dot com,
42:59
Speaker 1: sign up for it. The main portion of it, and
43:01
Speaker 1: what I really want that stickiness to be is are
43:04
Speaker 1: you operating your real estate practice as as if you
43:09
Speaker 1: were an owner of Berkshire Hathaway and now you are
43:12
Speaker 1: looking at what pieces could you pull into your ecosystem
43:16
Speaker 1: so that you now have every you can control every
43:20
Speaker 1: portion of the transaction from new construction to renting, to
43:24
Speaker 1: insurance to home you know, to home ownership, et cetera,
43:28
Speaker 1: and the sales portion of it. And once you if
43:30
Speaker 1: you start thinking of that way, it's a no brainer.
43:32
Speaker 2: Agreed, one hundred percent. This is literally just success leaves
43:36
Speaker 2: clues and a lot of the big players in the
43:37
Speaker 2: industry are starting to build these stacks. And by the way,
43:41
Speaker 2: this may be something that you're broke or your current
43:43
Speaker 2: brokerage is starting to build for you and you may
43:45
Speaker 2: get some of this built in. And I think that's
43:47
Speaker 2: an important thing to know going forward as well. Is
43:49
Speaker 2: the alignment that you have with your your brokerage is
43:52
Speaker 2: going to be important too, because they're probably thinking a
43:54
Speaker 2: lot of these same things. And so I just this
43:58
Speaker 2: is this is the time now more than ever to
44:00
Speaker 2: be thinking like a holistic business owner, not just a
44:03
Speaker 2: real estate agent flipping.
44:06
Speaker 1: Just even go down a little bit, Brian, with with
44:10
Speaker 1: your at the brokerage that that you're you know, building
44:13
Speaker 1: and helping coach and get you know, more productivity per agent.
44:18
Speaker 1: Did you guys have any impact with the Zillo Chicago
44:23
Speaker 1: kind of deal where where the MLSS have removed Zilo's
44:28
Speaker 1: listings and there was there was a little kind of
44:31
Speaker 1: uproar over that in the past the past couple of weeks.
44:34
Speaker 2: Yeah, I hadn't, I mean not not at not at
44:37
Speaker 2: United know as far I mean as far as like
44:39
Speaker 2: my knowledge, as far as how it's impacted anything, I
44:41
Speaker 2: don't think. So this is a really interesting story though,
44:44
Speaker 2: just for I think the president that it sets, So
44:48
Speaker 2: I think we should recap this because this is Matt.
44:50
Speaker 2: Every every week, it seems like in real estate there's
44:52
Speaker 2: a big merger and a big lawsuit and that's just
44:55
Speaker 2: the name of the game these days.
44:56
Speaker 1: So there was another lawsuit that I didn't want to
44:58
Speaker 1: bring up, was another nar NAR settlement, like fifty something
45:04
Speaker 1: million dollars over it was over commissions. Yeah, but uh
45:09
Speaker 1: yeah yeah. I was like that, we've we've done enough
45:12
Speaker 1: with that. I'm tired of talking about. That was the
45:14
Speaker 1: Florida one. As an influent I believe, So I was like,
45:17
Speaker 1: fifty two and a half million dollars.
45:18
Speaker 2: Yeah, it's crazy. That'll be a whole different podcast for
45:21
Speaker 2: a different day based on the president that that one sets.
45:25
Speaker 2: So let's recap this one.
45:26
Speaker 1: So basically forty three recapping, but forty three listings forty
45:30
Speaker 1: three thousand listings gone overnight in the Chicago must because
45:34
Speaker 1: they cut Zillo's feet.
45:36
Speaker 2: So gone out of the Chicago MLS. Correct, That's just wild.
45:41
Speaker 2: So how did the lawsuit play out? I'm trying to
45:44
Speaker 2: remember just all the details here. So Zillo rolls out
45:49
Speaker 2: listing access standards early last year, Compass files and in
45:54
Speaker 2: I trust suit against Zillo. In June of last year,
45:57
Speaker 2: Zillo goes on the offense and files in it I
46:00
Speaker 2: trust suit against Compass and the Chicago MLS. And then MRAD,
46:05
Speaker 2: which is the Chicago MLS, shuts off Zillo's listing feed
46:08
Speaker 2: and forty three thousand active listings are gone overnight. Now
46:12
Speaker 2: that's off Zilo, right, yeah, off right, I don't know
46:15
Speaker 2: why we said it the other way to mean, So
46:17
Speaker 2: Chicago MLS took off forty three thousand listings from Zillo.
46:22
Speaker 1: Yeah, their MLS is the Midwest Real Estate Data so
46:25
Speaker 1: m RED.
46:26
Speaker 2: But the federal judge ordered the MLS to put them
46:28
Speaker 2: back on Zillo. That's the interesting I think precedent that
46:32
Speaker 2: this that this case speaks to. And I wonder why
46:39
Speaker 2: does it say anything about what the judge's argument was
46:42
Speaker 2: as to why they needed to put the listings back
46:44
Speaker 2: on Zillo.
46:46
Speaker 1: So so Zillo has this position right now that Zillo
46:50
Speaker 1: announced a policy that if a property is publicly marketed,
46:53
Speaker 1: it must be entered into the MLS and probably broadly
46:56
Speaker 1: available within a short short period of time generally twenty
46:59
Speaker 1: four or Zilo may refuse to display it. So right,
47:04
Speaker 1: Zillo's kind of thought process and argument over this is
47:07
Speaker 1: consumers deserve to see all available homes and properties for sale,
47:11
Speaker 1: and that you know, private networks, these private listing networks,
47:17
Speaker 1: that these brokerages are building. Compass is kind of at
47:20
Speaker 1: the front of this, but they've all been trying to
47:23
Speaker 1: build it like. This isn't a you know, shame on
47:26
Speaker 1: Compass or good job Compass. It is you know. Zillo's
47:29
Speaker 1: thought and position on this is that private networks reduce
47:33
Speaker 1: transparency and that sellers may get fewer offers when exposure
47:39
Speaker 1: is limited.
47:42
Speaker 2: I think this is an important question. Do you know
47:45
Speaker 2: if those forty three thousand listings were still on realestre,
47:47
Speaker 2: dot com and redfin.
47:50
Speaker 3: Yes?
47:51
Speaker 2: Yeah, this is a Zillo interesting caveat to this entire
47:55
Speaker 2: argument about public listings. Is it only considered a public
47:58
Speaker 2: listing if it's on Zillo. That's some arrogance sons of
48:02
Speaker 2: those part I would really love to know if they
48:07
Speaker 2: came off of those other two sites, because I think
48:08
Speaker 2: that would be an important Yeah. I know, yeah, you're right,
48:12
Speaker 2: one hundred percent. I just I just think that that's
48:17
Speaker 2: I don't I don't we don't have enough information on
48:19
Speaker 2: here and I would need to go read about it all.
48:21
Speaker 3: That's the judges. Yep, I just looked.
48:23
Speaker 1: So the interesting part, so you're right, So it says
48:26
Speaker 1: is that Chicago sellers were never completely off the internet,
48:30
Speaker 1: right right. They were primarily missing from Zillo and Trulia
48:34
Speaker 1: during the dispute, but the listings remained visible in the
48:37
Speaker 1: MLST agents. They were on reeler dot com, homes dot com,
48:41
Speaker 1: you know, all the other all the other home site portals.
48:44
Speaker 2: How about that? And so so they were still publicly marketed, correct,
48:49
Speaker 2: They just weren't on the big dog man. What a
48:53
Speaker 2: precedent we're setting around Zilla's control over the flow of
48:57
Speaker 2: the listings that they are now more important than real
49:00
Speaker 2: Do you know that a federal judge in Illinois just
49:02
Speaker 2: ruled that if you're on realtor dot com and not Zilo,
49:05
Speaker 2: that you're not publicly marketed. Interesting where this goes.
49:09
Speaker 1: You know, the winners during that temporary times, the winners
49:12
Speaker 1: were homes dot com and reeler dot com.
49:14
Speaker 3: They saw that surge.
49:16
Speaker 2: And yeah, they probably got a bunch more eyeballs.
49:18
Speaker 1: You know, the brokerages websites had a little bit more
49:22
Speaker 1: traffic as well. But you know, consumers aren't just going
49:25
Speaker 1: to individually search the brokerages, you know.
49:28
Speaker 2: You know, I guess thinking about that though, this could
49:31
Speaker 2: go a different way though. I mean, let's just say
49:33
Speaker 2: they didn't pull them off Zilo, but they did pull
49:35
Speaker 2: them off realture dot com. Those forty two thousand listings.
49:38
Speaker 2: Would the judge have made the same argument because they're
49:40
Speaker 2: not equally marketed across all portals and platforms. If that
49:44
Speaker 2: were the case, then I guess it's like where does
49:46
Speaker 2: the buck stop? Do you have to market everywhere? Then
49:48
Speaker 2: that's to be on Craigslist too.
49:50
Speaker 3: I will. My personal stance about this is I.
49:52
Speaker 2: Feel there's a lot of logic behind these, like deep
49:54
Speaker 2: thought behind these arguments.
49:56
Speaker 1: I'm honestly just tired of the whole like fair not
50:01
Speaker 1: fair portion of this, Like you know, it's just like
50:04
Speaker 1: to me, you know, when you sign up, you know
50:06
Speaker 1: you're part of the realtor association.
50:08
Speaker 3: You have to the coming soons.
50:10
Speaker 1: They have to follow certain procedures, you know, or and
50:13
Speaker 1: you can't show it if if you list it as
50:15
Speaker 1: a coming soon in the MLS, you can't public you
50:17
Speaker 1: can't show it unless it's only to your your office,
50:21
Speaker 1: right and to me like, I'm going to do what
50:25
Speaker 1: I would and advise my My belief is that whatever
50:28
Speaker 1: my client feels it's best for them. If they didn't
50:31
Speaker 1: want to put it on the MLS, or if they
50:32
Speaker 1: want to put it on MLS but not on other sites,
50:35
Speaker 1: like if that, you know, wasn't breaking any laws, right
50:39
Speaker 1: then why am I to tell them no even though
50:42
Speaker 1: it could hurt them. Or if they want to do
50:46
Speaker 1: just the the brokerage private listing network, and I say, hey,
50:50
Speaker 1: I still I'm a believer. More exposure is better. Sure,
50:54
Speaker 1: you know, and you know I do believe that. You know,
50:57
Speaker 1: the more that we get it out there, the more
50:58
Speaker 1: eyeballs we get it, the more buyers it opens up
51:01
Speaker 1: and unlocks, the more buyer pool. Maybe they're just looking
51:03
Speaker 1: at one portal in general, sure that. But if you said,
51:07
Speaker 1: if you're like Nick, I only want this one, I'm like, Okay,
51:10
Speaker 1: I don't advise it, but I'm going to do everything
51:12
Speaker 1: I can just to hit that one avenue just still
51:15
Speaker 1: be able to get it sold for hopefully the best
51:16
Speaker 1: price possible. And if that's what my client wants, then
51:20
Speaker 1: it's then it should be my decision whether I want
51:22
Speaker 1: to take that client.
51:23
Speaker 2: On or not. I mean, I've always tried to keep
51:25
Speaker 2: my thought process simple around these things. I'd like to
51:28
Speaker 2: believe that in some ways we live in a free
51:30
Speaker 2: country and you should be able to operate as such.
51:33
Speaker 2: I think that whenever high velocity of technological advancement gets
51:39
Speaker 2: into any industry, then regulatory capture is just a really
51:44
Speaker 2: easy way for a lot of establishments to make money.
51:47
Speaker 2: And man, are these lawyers getting paid from all these
51:50
Speaker 2: lawsuits At the end of the day. I just don't
51:52
Speaker 2: think anybody is confused as to how to find houses.
51:56
Speaker 2: Now to sound go hire a real estate and if
51:58
Speaker 2: you're confused, yeah, now to sound hit critical.
52:00
Speaker 1: The only thing would be if you're at a private
52:03
Speaker 1: listing network, who's going to benefit as the ones that
52:05
Speaker 1: have the highest age account?
52:08
Speaker 3: Right?
52:08
Speaker 1: So then then you're creating you know, then are you
52:11
Speaker 1: creating some unfair advantages and not creating true fair competition
52:16
Speaker 1: you know, or more easily you know, to have more
52:19
Speaker 1: competition and opportunities as a client to go to other brokerages.
52:24
Speaker 1: Because let's say that this brokerage over here has three
52:26
Speaker 1: hundred thousand agents and they have the you know, a
52:28
Speaker 1: private listing network, then you know that obviously that private
52:32
Speaker 1: listing network, that brokerage can control a lot more things
52:36
Speaker 1: of it. So does that hurt the real estate industry?
52:41
Speaker 1: And as a consumer, do you have less options to
52:44
Speaker 1: choose from?
52:45
Speaker 2: Well? I guess the same argument could be made. Or
52:47
Speaker 2: should there be a cap on how many listings an
52:50
Speaker 2: agent can carry?
52:50
Speaker 1: It?
52:51
Speaker 2: One time?
52:51
Speaker 3: Has that ever been brought up?
52:53
Speaker 2: Well, I'd say if I'm if I'm sitting against you
52:55
Speaker 2: in a listing appointment, I say, hey, I've taken one
52:57
Speaker 2: hundred listings this year and the other agent has not
52:59
Speaker 2: taken any in their entire career. Do I have an
53:02
Speaker 2: unfair advantage over you and winning you as a client?
53:07
Speaker 3: I mean we all started zero from somewhere though, right? Yes?
53:09
Speaker 1: So?
53:10
Speaker 2: But but would you probably rather listen to me? Should
53:13
Speaker 2: be a cap on how many Google reviews? I can have?
53:17
Speaker 2: The socialism ever work? Nick? No, so then let the people?
53:22
Speaker 3: Or has it?
53:24
Speaker 2: I don't know?
53:25
Speaker 3: It hasn't worked.
53:26
Speaker 2: Here, It surely hasn't worked here. Wow, these are all
53:30
Speaker 2: deep conversations. I think responsible regulation is a good thing.
53:34
Speaker 2: I think defining the word responsible is a very fluid
53:37
Speaker 2: notion in many industries. So another day, another lawsuit, another
53:41
Speaker 2: rich lawyer.
53:42
Speaker 1: Look, make sure make sure to go to DFW Reelers
53:45
Speaker 1: Realtors our Facebook group. Make sure leaves some great comments.
53:47
Speaker 1: Even if you don't agree with this, you know we
53:50
Speaker 1: don't we don't attack and that a group and go
53:54
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54:17
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54:19
Speaker 2: And then.
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54:33
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54:35
Speaker 1: get their properties or multi family properties managed and then
54:40
Speaker 1: get residual agents. Just like on todays show, give resilis Agent.
54:42
Speaker 1: Start being the Berkshire Hathway of your business. Give resili
54:45
Speaker 1: agent dot com sign up. Someone will reach out to
54:48
Speaker 1: explain the process so that you can start building out
54:51
Speaker 1: your first hub, which is your utility concierge side. It's
54:55
Speaker 1: so super easy to implement and you could start earning
54:57
Speaker 1: some money right away.
54:59
Speaker 2: Do it. Episode twelve in the books, So juicy. Every
55:03
Speaker 2: time we get up here. I'm sure there'll be more
55:05
Speaker 2: fun stuff to talk about next week, So we appreciate
55:07
Speaker 2: you guys watching, and we'll talk to you then churn
55:12
Speaker 2: it up this week and your Real Estate.
55:21
Speaker 3: A weekly podcast. Super agents who actually give pay party moves,
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Speaker 3: listing heat colding
55:27
Speaker 2: Streets, DM Agent, let's see