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Bed Bath & Beyond Buys Fathom Realty: The $53.4M Real Estate Shockwave · This Week in DFW Real Estate

• 0:00
  Speaker 1: Do you have any old coupons from Bed Bath and Beyond?
• 0:04
  Speaker 2: Remember those big vacine the oversize Oh that's the big
• 0:09
  Speaker 2: cardboard one. Yeah, I remember this, that's that never expired. Yeah.
• 0:15
  Speaker 1: Right, And so when you think about that, think about now,
• 0:20
  Speaker 1: how Bed Bath and Beyond just bought.
• 0:25
  Speaker 2: Fathom real Estate.
• 0:26
  Speaker 1: Yeah, for fifty three fifty three point four million. The
• 0:31
  Speaker 1: main three items was roof, the HVAC, the air conditioning system,
• 0:35
  Speaker 1: and then there was a.
• 0:37
  Speaker 2: Rat infestation, rat poop everywhere. Yeah, and they're going to
• 0:40
  Speaker 2: chew away your installation, yes, And so that's the big
• 0:43
  Speaker 2: thing with the rat guys.
• 0:44
  Speaker 3: If you guys don't like, if you ever know navigated
• 0:45
  Speaker 3: that rats chew apart your installation, they're like, what does
• 0:49
  Speaker 3: it just say?
• 0:49
  Speaker 2: They're like immune to it.
• 0:50
  Speaker 3: Fathom Real Estate had four hundred and twenty million dollars
• 0:53
  Speaker 3: in revenue, was taking it twenty million dollar loss, and
• 0:55
  Speaker 3: just got two million two million in bridge financing two
• 0:59
  Speaker 3: million dollar. When you're generating four hundred and twenty million
• 1:02
  Speaker 3: annually and you're losing twenty million, do you understand when
• 1:04
  Speaker 3: your burn rate has to be A two million dollar
• 1:07
  Speaker 3: bridge loan is like shooting a BB gun and a
• 1:10
  Speaker 3: freight train. That means that Fathom real Estate was an
• 1:12
  Speaker 3: incredibly deep trouble, like really really really deep trouble.
• 1:17
  Speaker 2: GF churn it up. This week in df Your real
• 1:25
  Speaker 2: Estate Now Weekly podcast, Hooper.
• 1:29
  Speaker 4: Agents who actually can't pay Party moved, listing heat could
• 1:33
  Speaker 4: the freaks day?
• 1:41
  Speaker 1: Let's sen All right, Welcome back to another episode of
• 1:45
  Speaker 1: this Week in DFW real Estate. Hopefully you caught last
• 1:49
  Speaker 1: week's episode, and if you didn't, you need to go
• 1:51
  Speaker 1: back and watch that one. Subscribe to our YouTube channel,
• 1:53
  Speaker 1: leave a comment because last week, Brian, if you recall
• 1:56
  Speaker 1: we talked about because you were here, I was, yeah,
• 1:59
  Speaker 1: you were awareing you Mexico Jersey.
• 2:00
  Speaker 2: I was one. Yes, they play at a PM tonight.
• 2:05
  Speaker 2: Do they do?
• 2:06
  Speaker 1: They play South? That's right, My hair lady told me
• 2:08
  Speaker 1: that because no really yeah, okay, I.
• 2:12
  Speaker 2: Think they win.
• 2:12
  Speaker 3: They'll probably win group if they win this one because
• 2:15
  Speaker 3: they got two goals last time, so they're doing good
• 2:17
  Speaker 3: on goal differential.
• 2:19
  Speaker 2: Okay, so you want to go back to listen.
• 2:20
  Speaker 1: Last week's show, we talked about the Great agent displacement,
• 2:23
  Speaker 1: two hundred thousand agents that have left the National Association
• 2:26
  Speaker 1: of Realtors membership, whether they just left all together or
• 2:30
  Speaker 1: just drop that title. It's left to be unknown right
• 2:34
  Speaker 1: now because I think, you know, again some of them
• 2:36
  Speaker 1: are just joining the MLS.
• 2:39
  Speaker 3: Yeah, that's been We haven't talked a lot about that,
• 2:41
  Speaker 3: but that I do. I don't know how we could
• 2:43
  Speaker 3: find that data might be local somewhere, like how many
• 2:46
  Speaker 3: agents just left, nor versus how many left the business.
• 2:50
  Speaker 3: And that's also you know, that doesn't take an account
• 2:52
  Speaker 3: agents that are still in the business technically, but they
• 2:55
  Speaker 3: just haven't done a deal. And that's that's a lot
• 2:57
  Speaker 3: of agents this year as well. So the third is hitting,
• 2:59
  Speaker 3: the her is thinning, sorry regardless.
• 3:01
  Speaker 1: Yeah, and then you know again on last week's show,
• 3:05
  Speaker 1: just a quick recap, you know how you had built
• 3:09
  Speaker 1: using Claude And we did an AI AI summit yesterday.
• 3:13
  Speaker 1: We had a little over I think it was a
• 3:15
  Speaker 1: little over one hundred agents were there was growth was
• 3:17
  Speaker 1: packed and we had some great speakers. I'll tell you
• 3:20
  Speaker 1: like from that AI sum and Brian was one of
• 3:22
  Speaker 1: our guest speakers and he shared how he has been
• 3:25
  Speaker 1: utilizing Claude and AI agents, how he rebuilt the Homeward
• 3:29
  Speaker 1: website Homeward Property Management. So if you're looking for a
• 3:32
  Speaker 1: new property management company, or maybe you've got a client
• 3:34
  Speaker 1: that needs to rent out their house and have professionally managed.
• 3:38
  Speaker 1: Then you need to go to a Homeward DFW dot
• 3:40
  Speaker 1: com and talk with Dana Wyn and Duncan O'Donnell over there.
• 3:43
  Speaker 2: But Brian, you relaunched and.
• 3:45
  Speaker 1: Rebuilt our Homeward website, and normally that would have probably
• 3:51
  Speaker 1: cost what seven ten thousand dollars ten thousand dollars, so
• 3:55
  Speaker 1: we would have spent ten thousand plus dollars on redoing
• 3:57
  Speaker 1: that entire side, redoing the pages, making it more seo
• 4:00
  Speaker 1: geo and AEO friendly so it can be found online
• 4:03
  Speaker 1: a lot better. Yep, the first day you launched it,
• 4:07
  Speaker 1: how many organic leaves did we get?
• 4:08
  Speaker 2: Those? Four or five? It was pretty cool? Yeah, yeah,
• 4:10
  Speaker 2: it was really cool.
• 4:11
  Speaker 3: What's also cool is that, you know, this is just
• 4:13
  Speaker 3: what's we talked about about this yesterday, Like your ability
• 4:17
  Speaker 3: to build things using AI is really limited only by
• 4:21
  Speaker 3: your own curiosity and your willingness to just be resilient
• 4:24
  Speaker 3: and figure it out, you know, like one thing at
• 4:26
  Speaker 3: a time, non only, and this is going to be
• 4:29
  Speaker 3: relevant to agents as well. Not only did we rebuild
• 4:31
  Speaker 3: the site and it's much more effective, much more streamlined,
• 4:34
  Speaker 3: much faster and ranks better. But we've built systems that
• 4:38
  Speaker 3: continually do the site maintenance and keep it updated and
• 4:41
  Speaker 3: keep it fresh and keep new content coming on. It's
• 4:45
  Speaker 3: really cool. Was working on that late last night. How
• 4:50
  Speaker 3: it keeps the site updated and post new content and
• 4:54
  Speaker 3: things like that on a regular basis. I am now
• 4:56
  Speaker 3: working on a way to do that where it doesn't
• 4:58
  Speaker 3: suck up a lot of tokens. One thing, this is deviating,
• 5:02
  Speaker 3: but just remember this as you're working more with AI.
• 5:06
  Speaker 3: In the future, token efficiency is going to be incredibly important.
• 5:10
  Speaker 3: So be thinking about how you can do things with AI.
• 5:14
  Speaker 3: And then as you build like agents that do repeatable
• 5:17
  Speaker 3: things when you need to make adjustments or change things,
• 5:21
  Speaker 3: don't start over the entire process. Learn how to just
• 5:24
  Speaker 3: fill in the gaps of what you're doing, because man,
• 5:26
  Speaker 3: as that things suck tokens up when you ask it
• 5:28
  Speaker 3: to repeat itself and kind of run the process again.
• 5:31
  Speaker 1: I think that's the whole kind of scam that AI
• 5:33
  Speaker 1: is doing, the beautiful scam. The businesses are right, so well, yeah,
• 5:36
  Speaker 1: we'll be in that subscription model the rest of our life.
• 5:39
  Speaker 1: But today's show first, off. While we're going through, we
• 5:43
  Speaker 1: had there was a another merger that went down. If
• 5:47
  Speaker 1: you saw the the meme post that I posted on
• 5:50
  Speaker 1: it and the and the real estate group DFW real
• 5:53
  Speaker 1: it Urs, just go join that group, be a part
• 5:56
  Speaker 1: of it. And we've got over thirty five thousand members
• 6:00
  Speaker 1: in there and growing, you know, anywhere from loan officers,
• 6:04
  Speaker 1: new real estate agents, betteran real estate agents, you name it,
• 6:06
  Speaker 1: we've got them in there. So come join, collaborate and
• 6:08
  Speaker 1: share a network. But you know, the FED had made
• 6:13
  Speaker 1: their announcement yesterday, so we're going to break into that.
• 6:16
  Speaker 1: But you need to support the sponsors of this show.
• 6:18
  Speaker 1: Please please please, because Brian and I don't get paid
• 6:20
  Speaker 1: to do this.
• 6:21
  Speaker 2: We just do this for fun.
• 6:23
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  Speaker 1: was out to dinner with some friends. I think I
• 6:50
  Speaker 1: told the story last week, and they had Armadillo and
• 6:54
  Speaker 1: their AC went out and they were thankful to get
• 6:57
  Speaker 1: a cover. There was one little hiccup they needed. I mean,
• 7:00
  Speaker 1: it wasn't Armadillo's fault, but I got on with the
• 7:03
  Speaker 1: call with Aaron and got it taking care right away.
• 7:05
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• 7:08
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• 7:22
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• 7:26
  Speaker 3: What do you think Jeron Powell was doing yesterday? He's
• 7:30
  Speaker 3: probably drinking, me drinking. He's probably reading. He seems like
• 7:35
  Speaker 3: a guy who'd be reading a book. Or he seems
• 7:37
  Speaker 3: like one of those guys that plays remote chess against people,
• 7:40
  Speaker 3: you know, like where you do.
• 7:41
  Speaker 2: One move and then email them what you did and
• 7:44
  Speaker 2: then they do a move. And I bet he had
• 7:46
  Speaker 2: like thirty of those games. He does seem like that,
• 7:48
  Speaker 2: but I would say, we can't judge a book. Parks Covery.
• 7:51
  Speaker 2: He's probably had rap music.
• 7:52
  Speaker 1: On, yeah, and he had his glass of whatever choice
• 7:57
  Speaker 1: of liquor, yes, and just listening to the new Fetchair
• 8:01
  Speaker 1: and go over. Really the same thing that I'm sure
• 8:03
  Speaker 1: Drume would have been doing pretty much. Yeah, drum was
• 8:06
  Speaker 1: fired basically, you know, pushed out because the new fetchairman
• 8:11
  Speaker 1: comes in with the hopes everyone's hopes of them lowering rates.
• 8:15
  Speaker 3: Right and immediately does not and was a little bit
• 8:18
  Speaker 3: I wouldn't say hawkish, but just another kind of hurry
• 8:22
  Speaker 3: up and wait cadence. Mister Kevin Walsh comes in and
• 8:25
  Speaker 3: they immediately do nothing. Polymarket has got it at seventy
• 8:31
  Speaker 3: seven percent right now.
• 8:32
  Speaker 2: That will pause next month as well.
• 8:36
  Speaker 3: Some are even predicting that maybe we'll see a twenty
• 8:39
  Speaker 3: five basis point increase.
• 8:41
  Speaker 2: Twenty two percent increase. There's twenty two percent of people.
• 8:44
  Speaker 1: Betting on the poly markets right now are saying that
• 8:46
  Speaker 1: they would you know, most likely see an increase, And
• 8:49
  Speaker 1: then you got the the small single percentage of people
• 8:52
  Speaker 1: saying that we'll see a decrease with yeah, we're not. Look,
• 8:56
  Speaker 1: I'm going to go with the seventy seven percent that
• 8:59
  Speaker 1: we will see nothing in July.
• 9:01
  Speaker 3: I don't I mean, I can't rationalize why we would
• 9:06
  Speaker 3: see a rate decrease absence some you know, big event
• 9:16
  Speaker 3: or something for the foreseen future. We keep hoping that
• 9:19
  Speaker 3: rates will come down. And I think that we sort
• 9:21
  Speaker 3: of keep hoping that rates will come down in this
• 9:24
  Speaker 3: like this very American way that we're addicted to cheap money,
• 9:28
  Speaker 3: you know. I think that we just have this a
• 9:30
  Speaker 3: zeitgeist that lower rates is always better. It just it
• 9:35
  Speaker 3: is leads to an inflationary environment over time. We've seen
• 9:38
  Speaker 3: that time and time again. The whole reason we're in
• 9:40
  Speaker 3: this mess in the first place is by printing too
• 9:42
  Speaker 3: much cheap money and then giving it away for free.
• 9:45
  Speaker 3: So I don't know why we have such shortsightedness that
• 9:49
  Speaker 3: we never seem to get over that lower rates is
• 9:51
  Speaker 3: always better. But it seems like we've been hoping for
• 9:54
  Speaker 3: lower rates for a long time. I think we're going
• 9:56
  Speaker 3: to continue to be hoping for lower rates for a
• 9:59
  Speaker 3: long time. Nick made a comment years ago, like twenty
• 10:03
  Speaker 3: twenty two, as rates were really increasing, that he was
• 10:07
  Speaker 3: afraid of a kind of a stagflationary environment. And I
• 10:11
  Speaker 3: don't know that we would say this is a stagflationary
• 10:13
  Speaker 3: environment because we don't have high unemployment. We actually have
• 10:15
  Speaker 3: really good employment numbers, but we do have the hallmarks
• 10:20
  Speaker 3: some of the hallmarks at a stagflationary environment, in the
• 10:23
  Speaker 3: sense that wages and asset prices remain out of whack.
• 10:28
  Speaker 3: And I think that that's still going to be the
• 10:30
  Speaker 3: case for a while. Because people still have a lot
• 10:34
  Speaker 3: of equity tied up in their primary residence. They're hesitant
• 10:37
  Speaker 3: to sell for a lower price. Prices have trickled down,
• 10:41
  Speaker 3: have flattened again. Inventory you're seeing is continuing to climb
• 10:46
  Speaker 3: and absent rates coming down. I think it's a buyer's market.
• 10:50
  Speaker 3: We're shifting to a buyer's market. Buyers are going to
• 10:52
  Speaker 3: be patient, and I think the only thing that you're
• 10:54
  Speaker 3: going to see when it's as it pertains the housing
• 10:57
  Speaker 3: market is a period of wages eventually catching up with
• 11:01
  Speaker 3: asset prices, and that means asset prices will continue to
• 11:04
  Speaker 3: remain flat or even trickle down more and then it's
• 11:07
  Speaker 3: just a waiting game. And that's sort of a stagflationary
• 11:09
  Speaker 3: environment when it comes to the housing market.
• 11:10
  Speaker 1: Well, I mean one big, one big thing to take
• 11:12
  Speaker 1: into account is I mean, I was talking to a
• 11:15
  Speaker 1: buyer today. We're needing to get her price range up,
• 11:19
  Speaker 1: and we need to get her price range up. But
• 11:23
  Speaker 1: you know, she mentioned the potential moves the FEDS was
• 11:27
  Speaker 1: going to make and lowering because we've been banking on
• 11:32
  Speaker 1: Kevin to come in and lower because that's all we've
• 11:34
  Speaker 1: been hearing, right new fetch hair. You know, we're going
• 11:37
  Speaker 1: to the pressure is going to be on, and he's
• 11:39
  Speaker 1: going to want to come out of the gate. You know,
• 11:40
  Speaker 1: maybe looking good for the administration. But here's here's kind
• 11:44
  Speaker 1: of a big takeaway is that nine out of eighteen
• 11:47
  Speaker 1: officials said we need to hike the rate. Right, So
• 11:51
  Speaker 1: the dot plot that shifted from projecting cuts to projecting
• 11:56
  Speaker 1: a hike.
• 11:56
  Speaker 2: So this is a reversal from three months ago.
• 12:00
  Speaker 1: Back in March, right, the median dot showed rates at
• 12:03
  Speaker 1: three point four percent by by year end, which would
• 12:06
  Speaker 1: which would be a cut. Yesterday it moved up to
• 12:09
  Speaker 1: three point eight percent, which is a hike. Right, So
• 12:12
  Speaker 1: in ninety days and ninety days are the committee is
• 12:15
  Speaker 1: now flipped from from hey's saying all right, we're going
• 12:18
  Speaker 1: to start cutting rates to now saying we need to
• 12:22
  Speaker 1: actually increase it.
• 12:23
  Speaker 3: I don't blame them for saying that. By the way,
• 12:25
  Speaker 3: It's this, we live in a very fast moving and
• 12:29
  Speaker 3: involatile global geopolitical and global economic environment.
• 12:35
  Speaker 2: Right now.
• 12:36
  Speaker 3: We got a hot inflation report and the hottest levers
• 12:39
  Speaker 3: on the inflation report where energy and everything effect It
• 12:43
  Speaker 3: was going to be everything related to the conflict in
• 12:48
  Speaker 3: the Middle East, which we.
• 12:52
  Speaker 2: Don't know when the next.
• 12:53
  Speaker 3: Event that will infect affect inflation will be after this, right,
• 12:57
  Speaker 3: And so when you have a singular event like the
• 13:00
  Speaker 3: Iran War that gives us a inflation reading that is,
• 13:07
  Speaker 3: was it like fifty percent higher than estimates and it
• 13:11
  Speaker 3: was up from what three point six to four point
• 13:14
  Speaker 3: seven and one reading or something? Oh no, it's four
• 13:16
  Speaker 3: point two. Okay, So you're trending, you know, almost a
• 13:20
  Speaker 3: half bip in the wrong direction. I just I don't
• 13:24
  Speaker 3: see why you would cut right. I just don't even know.
• 13:26
  Speaker 2: I don't know why.
• 13:28
  Speaker 3: Anyone would be thinking about cutting rates right now as
• 13:31
  Speaker 3: inflation is increasing, even though we will get a better
• 13:34
  Speaker 3: inflation reading next month, because the conflict has come to
• 13:38
  Speaker 3: some sort of a whatever we want to call it, agreement.
• 13:40
  Speaker 3: I don't want to say an end, but an agreement.
• 13:43
  Speaker 3: But it just shows the fragility of the global economy,
• 13:46
  Speaker 3: and in that fragile state, I just I don't know
• 13:49
  Speaker 3: why you would pump more cheap.
• 13:50
  Speaker 2: Money back into the system. Doesn't make any sense.
• 13:52
  Speaker 1: Well, the other interesting thing that the fetch hair did
• 13:55
  Speaker 1: they do these dot PLoP you know, kind of the
• 13:58
  Speaker 1: survey right, and Kevin didn't do his Kevin didn't do
• 14:02
  Speaker 1: his no because his statement on this was he refuses
• 14:07
  Speaker 1: to do the plot forecast because he publicly acknowledged that
• 14:11
  Speaker 1: he was the one missing the projection and said that
• 14:13
  Speaker 1: he does not find this exercise helpful for policymaking.
• 14:16
  Speaker 2: Bro I am a mad Kevin Warsh fan right now.
• 14:19
  Speaker 3: I love that if you ever, if you get a chance,
• 14:22
  Speaker 3: read The Signal and the Noise by Nate Silver. It's
• 14:24
  Speaker 3: all about predictions probability, and it focuses a lot on
• 14:29
  Speaker 3: the political the politicization of forecasting and why it's it's
• 14:36
  Speaker 3: wrong almost all the time, and all the different reasoning.
• 14:39
  Speaker 2: Behind why our models are so off.
• 14:42
  Speaker 3: Some of it has to do with just ignorance, some
• 14:44
  Speaker 3: of it has to do with marketing, some of them
• 14:46
  Speaker 3: has to do with bureaucracy. It's all very interesting, though.
• 14:48
  Speaker 3: I highly respect a guy that comes in and says,
• 14:50
  Speaker 3: this is a dumb exercise because we don't know what's
• 14:52
  Speaker 3: going to happen tomorrow.
• 14:53
  Speaker 2: I really like that.
• 14:54
  Speaker 3: I think that's awesome. Jesse pulled this over the background.
• 14:57
  Speaker 3: You know where Jerome was yesterday, he was there worth
• 15:00
  Speaker 3: Now he's still part of it, you know, you don't
• 15:01
  Speaker 3: have to come to these things. I think he's still
• 15:03
  Speaker 3: I think he's still a voting member.
• 15:04
  Speaker 2: If I remember. Yeah, he's just not the chair anymore. Yeah. Yeah.
• 15:07
  Speaker 1: So the main thing is is as we as we
• 15:09
  Speaker 1: break it down, I mean, inflation was still the driving factor.
• 15:12
  Speaker 1: I mean it was up, you know, running at four
• 15:14
  Speaker 1: point two percent. That's more than the FEDS. That's more
• 15:17
  Speaker 1: than double the FEDS two percent target. And the other
• 15:20
  Speaker 1: thing that FED has now upgraded their twenty twenty six
• 15:23
  Speaker 1: fore inflation forecasts to three point six percent, which is
• 15:27
  Speaker 1: up from two point seven percent in March. So the
• 15:31
  Speaker 1: main driver was the Iran war drove up energy prices,
• 15:35
  Speaker 1: and like you and I talked about yesterday, Brian, you
• 15:38
  Speaker 1: know that damage doesn't reverse overnight, because my comment was,
• 15:42
  Speaker 1: and I look logically, I know this, but you know
• 15:44
  Speaker 1: is like, all right, we start, we get in this
• 15:47
  Speaker 1: Iran conflict, and then all of a sudden, gas prices
• 15:50
  Speaker 1: in oil prices shoot up overnight, and that's not a
• 15:55
  Speaker 1: real reflection of the cost to get gas or the
• 15:58
  Speaker 1: cost to get that oil, and so the gas and
• 16:03
  Speaker 1: oil industries making money on that gap. Then everything gets higher,
• 16:07
  Speaker 1: they're still making money. And then even as it starts
• 16:09
  Speaker 1: to fall, gas prices are falling overnight, they're still selling
• 16:12
  Speaker 1: off on the higher price stuff.
• 16:13
  Speaker 2: One hundred percent.
• 16:15
  Speaker 3: You're not going to see it come down in a
• 16:16
  Speaker 3: straight line because you still need the capitalistic race to
• 16:19
  Speaker 3: the bottom.
• 16:19
  Speaker 2: Let's say something costs two.
• 16:21
  Speaker 3: Dollars and then it goes to four dollars overnight, and
• 16:24
  Speaker 3: then whatever it is that was causing it to go
• 16:27
  Speaker 3: well artificially to four dollars overnight, goes away. Well, let's
• 16:32
  Speaker 3: say there's ten competitors in the marketplace, all ten of
• 16:36
  Speaker 3: them are going to go Okay, let's just go back
• 16:37
  Speaker 3: to two dollars. You're going to see the first mover
• 16:39
  Speaker 3: goes to three ninety nine, second mover goes to three
• 16:41
  Speaker 3: ninety right, because we were still paying for it at
• 16:44
  Speaker 3: four dollars. So this is just the law of capitalism, right.
• 16:47
  Speaker 3: You're not going to see gas prices go right back
• 16:49
  Speaker 3: down to two. It doesn't make any sense. There's a
• 16:52
  Speaker 3: big arbitross play for the oil and gas industry right now.
• 16:56
  Speaker 3: That is the race back to zero or race back
• 16:59
  Speaker 3: to neutralities. So don't expect gas prices to go down
• 17:03
  Speaker 3: significantly for several months.
• 17:07
  Speaker 2: What do you what?
• 17:09
  Speaker 1: What do you see over the next the rest of
• 17:11
  Speaker 1: the year, like so you know, if you're betting in
• 17:14
  Speaker 1: poly markets, what is is are we going to are
• 17:16
  Speaker 1: you is your bet that we are going to see
• 17:19
  Speaker 1: just no change for the rest of the year or
• 17:22
  Speaker 1: are you leaning towards an increase.
• 17:23
  Speaker 2: I would never put money behind this.
• 17:26
  Speaker 3: I think people that do are a special type of crazy,
• 17:29
  Speaker 3: just again, because we have no idea what's going to
• 17:31
  Speaker 3: happen day to day in this world. If I were
• 17:33
  Speaker 3: to make a bet right now with free house money,
• 17:36
  Speaker 3: I would bet no change for the rest of the year,
• 17:38
  Speaker 3: absent any outside event that we can't predict. I don't
• 17:41
  Speaker 3: see why you would. You just got to have people
• 17:44
  Speaker 3: got to make enough money to buy things, and wages
• 17:48
  Speaker 3: have to catch up to asset prices and absent anything
• 17:52
  Speaker 3: else that just takes time. Adjusting rates doesn't affect those things.
• 17:55
  Speaker 3: And I just don't see why you bring them down.
• 17:57
  Speaker 1: So what what I see this as are in our
• 18:00
  Speaker 1: DFW real estate market. If we're advising sellers, I mean
• 18:04
  Speaker 1: the sellers. The selling market's tough right now. And we
• 18:07
  Speaker 1: said this yesterday on camera tamor Getty's podcast the Closing
• 18:11
  Speaker 1: Table with lawyer's title is that my belief and I
• 18:16
  Speaker 1: this is not trying to blow fluff or motivate and
• 18:19
  Speaker 1: just you know, try to get us all hyped up.
• 18:21
  Speaker 1: I truly believe that our stock value as real estate
• 18:25
  Speaker 1: agents or is that an all time high? And I've
• 18:28
  Speaker 1: said it in the past. I said it during COVID
• 18:31
  Speaker 1: where we needed to navigate all those channels. Like during
• 18:33
  Speaker 1: the COVID market, everyone's like, oh, you don't need real
• 18:35
  Speaker 1: estate agents. You know, you could fog them here and
• 18:37
  Speaker 1: get three thousand offers. But what you had to do
• 18:40
  Speaker 1: is figure you know, the agents needed to go do
• 18:42
  Speaker 1: the due diligence to find out during that time what
• 18:45
  Speaker 1: was a legitimate offer versus some of the ones that
• 18:47
  Speaker 1: we're just trying to tie it up and maybe beat
• 18:48
  Speaker 1: them up and bully them down and et cetera. And
• 18:51
  Speaker 1: then for you know, during the buyers, you know, for
• 18:53
  Speaker 1: buyers there in that time, is how do we realistically
• 18:56
  Speaker 1: find a way to get you in a home that
• 18:57
  Speaker 1: you're not going two hundred thousand over asking instead you
• 19:00
  Speaker 1: were one hundred and fifty thousand over asking. You know
• 19:03
  Speaker 1: now and you know, looking back now we're seeing some
• 19:06
  Speaker 1: of those people who you know, drastically paid hire for
• 19:10
  Speaker 1: their house and upside down and underwater. But that's that
• 19:13
  Speaker 1: was that market. That was a different time. But I
• 19:15
  Speaker 1: do believe that today with buyers and sellers, that agent's
• 19:20
  Speaker 1: stock value is at an all time high. Agreed to
• 19:23
  Speaker 1: one hundred percent, agreed one hundred percent. I had a
• 19:26
  Speaker 1: slew of coaching calls this morning, and a few of
• 19:29
  Speaker 1: them in particular. One in particular, we were we were.
• 19:33
  Speaker 3: Having a conversation without diving too far into into people's details,
• 19:39
  Speaker 3: a seller trying to navigate this market in a way
• 19:44
  Speaker 3: that if their agent had not given them expert guidance
• 19:48
  Speaker 3: would have cost them ate a lot of money. Essentially
• 19:53
  Speaker 3: kind of still had a COVID mindset and was under
• 19:56
  Speaker 3: contract with a buyer that had a realistic mindset about
• 19:58
  Speaker 3: this market. That seller is in a situation where this
• 20:02
  Speaker 3: is going to be their retirement. Everything that they sell for,
• 20:04
  Speaker 3: those proceeds are going to be they what they retire
• 20:07
  Speaker 3: off of, so every penny really counts for them. And
• 20:09
  Speaker 3: I understand and empathetic to those things. But they were
• 20:13
  Speaker 3: on the verge of blowing a deal over a little
• 20:15
  Speaker 3: bit of stubbornness that with their days on market, with
• 20:19
  Speaker 3: the other inventory in the neighborhood. My firm belief after
• 20:24
  Speaker 3: looking at it is that the next offer they would
• 20:27
  Speaker 3: have gotten would have been for substantially less and they
• 20:30
  Speaker 3: were really close to blowing it, and their agent did
• 20:33
  Speaker 3: an amazing job of helping navigate that and bringing everybody
• 20:38
  Speaker 3: to the closing table. That I mean, that could have
• 20:40
  Speaker 3: been a tens of thousands of dollars bad decision for
• 20:43
  Speaker 3: that seller, and I think a lesser agent would have
• 20:47
  Speaker 3: probably just been in yes man mode and really maybe
• 20:51
  Speaker 3: hurt their sellers.
• 20:52
  Speaker 1: Well, I think that again, why what you just use
• 20:56
  Speaker 1: as an example, I have a personal one where I'm representing.
• 21:01
  Speaker 1: We shared this on on Tamra's podcast yesterday, So whenever
• 21:04
  Speaker 1: that comes out, Jesse, is that out in a week
• 21:06
  Speaker 1: or so?
• 21:08
  Speaker 2: Two weeks? So two weeks the first probably the first
• 21:12
  Speaker 2: of July. We're going to be July fourth week.
• 21:13
  Speaker 1: Then, yeah, we're going to be celebrating the two hundred
• 21:18
  Speaker 1: and fifty two point fifty coming out on Tamra's podcast, I.
• 21:23
  Speaker 2: Would address different. Yeah, we should have known that. Thanks
• 21:25
  Speaker 2: a lot, Jesse.
• 21:27
  Speaker 1: So you know, you know, I shared this on her
• 21:29
  Speaker 1: show that you and I did yesterday, which was you know,
• 21:33
  Speaker 1: I'm representing an elderly disabled military vedroom and he put
• 21:38
  Speaker 1: a home under contract. First of all, the negotiation that
• 21:42
  Speaker 1: we went through took two weeks, So it took two
• 21:45
  Speaker 1: weeks to finally get under contract. This home that my
• 21:48
  Speaker 1: my buyer made an offer on was on the market
• 21:51
  Speaker 1: previously for several months. They took it off and expired,
• 21:54
  Speaker 1: and then a new agent got it and we we
• 21:57
  Speaker 1: came in with a you know, with the relatively not
• 22:00
  Speaker 1: a super not a strong strong offer that would blow
• 22:03
  Speaker 1: them away, but a good enough one to open the
• 22:05
  Speaker 1: dialogue and saying, hey, we're serious. And it took three
• 22:10
  Speaker 1: days for the agent to counter back. First off, like yeah, like,
• 22:14
  Speaker 1: I mean again, how serious is the seller? Right? They
• 22:17
  Speaker 1: countered back with with cutting you know, with raising the
• 22:21
  Speaker 1: sales price, cutting the the seller concession, and have cutting
• 22:25
  Speaker 1: the commission.
• 22:26
  Speaker 2: Down by you know, by two thirds.
• 22:28
  Speaker 1: And when I talked to this agent, I said, hey,
• 22:30
  Speaker 1: when we spoke before, just let you know this is
• 22:33
  Speaker 1: they're using their VA loan one hundred percent financing. We're
• 22:35
  Speaker 1: we're asking for closing costs because they're not they.
• 22:37
  Speaker 2: Don't have a lot liquid.
• 22:38
  Speaker 1: So you come back with this offer first where you're
• 22:40
  Speaker 1: cutting all this out right, it makes zeros like the
• 22:42
  Speaker 1: important parts right, which you know, my my buyers level
• 22:46
  Speaker 1: headed didn't get you know, didn't get superly, super emotionally
• 22:49
  Speaker 1: invested on that part. We ended up, you know, long
• 22:52
  Speaker 1: story short, over two weeks executing seven thousand above asking price.
• 22:57
  Speaker 1: We got closing costs, We got closing costs worked in there,
• 23:01
  Speaker 1: you know, the commission worked out, and then inspections happen.
• 23:05
  Speaker 1: And they do inspection of this house built in nineteen
• 23:08
  Speaker 1: seventy eight, and the house had a lot of deferred maintenance,
• 23:12
  Speaker 1: which as a listing agent you need to be ready
• 23:14
  Speaker 1: for deferred maintenance on a house, especially if your client
• 23:16
  Speaker 1: didn't take care of it to have realistic talks. So
• 23:19
  Speaker 1: the roof needed to be replaced, you know, maybe at
• 23:23
  Speaker 1: worst case scenario, just you know, a lot of repairs
• 23:25
  Speaker 1: done to make sure it's twelve years old, to make
• 23:27
  Speaker 1: sure that it's ensurable, and it had it wasn't cooling
• 23:32
  Speaker 1: within well within the differential range.
• 23:34
  Speaker 2: It was way off.
• 23:36
  Speaker 1: Had two window units upstairs, so it tells you that
• 23:38
  Speaker 1: the house was They knew they were struggling enough. And
• 23:41
  Speaker 1: then there is an electrical panel. There was a lot
• 23:43
  Speaker 1: of it, and then the.
• 23:45
  Speaker 2: It doesn't affect them. They don't get glass yards and
• 23:48
  Speaker 2: their lungs.
• 23:50
  Speaker 1: They live off of that, and yeah, it makes them
• 23:51
  Speaker 1: super human. Yeah, but not even worse about that is
• 23:55
  Speaker 1: that they pee and poop everywhere and contaminate it, which
• 23:59
  Speaker 1: is not great for the ur environments. And so we
• 24:01
  Speaker 1: asked for that to be remediated. And so they come
• 24:04
  Speaker 1: back and say, well, we'll do whatever the roofer suggest. Okay,
• 24:07
  Speaker 1: check we have an eight thousand dollars bid quote for
• 24:12
  Speaker 1: past remediation and new insulation, and we'll only give you
• 24:17
  Speaker 1: half of it. We'll only split fifty to fifty and
• 24:21
  Speaker 1: we're not doing anything with AC. So my clients we
• 24:26
  Speaker 1: go back and forth. My clients increase their offer three
• 24:30
  Speaker 1: oh seven to three fourteen. Okay, and all we're asking
• 24:32
  Speaker 1: for is repair the AC. Don't we don't need a replacement,
• 24:35
  Speaker 1: repair repair the blower. Twenty three hundred dollars quote. Yeah,
• 24:38
  Speaker 1: and they raised by seven thousand. Well buy seven thousand
• 24:41
  Speaker 1: and do the full pest.
• 24:43
  Speaker 2: Yeah. They come back and they said, we appreciate it. No,
• 24:46
  Speaker 2: thank you. Wow.
• 24:48
  Speaker 1: By the way, this buyer, this seller was going and
• 24:52
  Speaker 1: went under contract on another home contingent on the sale
• 24:55
  Speaker 1: of their house.
• 24:56
  Speaker 3: Oh, so they have their own dominoes to fall, yes,
• 24:58
  Speaker 3: and so they have they have a vested interest in
• 25:01
  Speaker 3: getting this done book, you.
• 25:03
  Speaker 2: Know, without throwing the agent under the bus.
• 25:05
  Speaker 1: In my opinion, like our job when we talked about
• 25:08
  Speaker 1: this on Tamer's podcast, our job as a fiduciary is
• 25:12
  Speaker 1: to not just be the mess We're not a messenger.
• 25:15
  Speaker 1: They hired us to get the home sold and to
• 25:17
  Speaker 1: have realistic expectation talks because in that particular part of town,
• 25:22
  Speaker 1: in that neighborhoods, it's sixty five to seventy five plus
• 25:26
  Speaker 1: days on market just to sell a house over there.
• 25:28
  Speaker 3: Yeah, and your buyer's got plenty more options. I'm sure, yes,
• 25:31
  Speaker 3: I mean we're actually looking at much better options. I'd
• 25:34
  Speaker 3: never like to throw the agent of the bus, like
• 25:36
  Speaker 3: you said, you know, sometimes you just run into a
• 25:38
  Speaker 3: difficult seller. But this is ninety nine percent of the
• 25:42
  Speaker 3: value that we bring as agents. Is the agency part
• 25:45
  Speaker 3: of it, right, helping you navigate and make the best decisions.
• 25:49
  Speaker 3: What I will tell you off the top, I would
• 25:51
  Speaker 3: as far as the agent on the other side, how
• 25:54
  Speaker 3: I would, you know, maybe coach this person moving forward.
• 25:59
  Speaker 3: This seller has no business being surprised about those types
• 26:03
  Speaker 3: of things that they're being asked for.
• 26:05
  Speaker 2: Right.
• 26:05
  Speaker 3: If you have a home that you're listing on the
• 26:07
  Speaker 3: market that is built in the seventies. As an agent, right,
• 26:12
  Speaker 3: part of your job is making sure that you're setting
• 26:14
  Speaker 3: expectations for the condition of the home, everything about it,
• 26:18
  Speaker 3: that it's represented, and that your seller understands.
• 26:21
  Speaker 2: What a buyer is most likely to ask for.
• 26:23
  Speaker 3: Right. So, going into a conversation and the seller not
• 26:28
  Speaker 3: really having a pretty sure idea that we're going to
• 26:32
  Speaker 3: ask for this entire rat infestation upstairs to be taken
• 26:35
  Speaker 3: care of, the ac that's being helped out by window
• 26:39
  Speaker 3: units right now is probably something that we're going to
• 26:41
  Speaker 3: ask for. The roof being however, many years old, twelve
• 26:44
  Speaker 3: years old. I think you said, these are all things
• 26:46
  Speaker 3: that when I accept an offer. This is a great
• 26:50
  Speaker 3: feedback for this agent. When I accept an offer of
• 26:52
  Speaker 3: any price, it doesn't matter. My seller should know before
• 26:58
  Speaker 3: we go into the repair negotiations. What are the things
• 27:00
  Speaker 3: that a buyer is most likely going to ask for
• 27:02
  Speaker 3: at any price. And if that's something that is surprising
• 27:07
  Speaker 3: to me as a seller, like oh, I accepted this
• 27:10
  Speaker 3: lower offer, I shouldn't have to worry about any of
• 27:12
  Speaker 3: these things. Then me as an agent, I didn't do
• 27:14
  Speaker 3: a good enough job of having a good enough conversation
• 27:16
  Speaker 3: up front to set the expectations. No matter what price
• 27:20
  Speaker 3: we agree to in the initial contract that is absent
• 27:24
  Speaker 3: the condition of the home, we're still going to negotiate
• 27:26
  Speaker 3: repairs and so where a lot of these things get sideways.
• 27:28
  Speaker 2: And we talked about this on Tame Rast podcast.
• 27:30
  Speaker 3: Yessually, terminations are up, contracts are falling apart, and a
• 27:34
  Speaker 3: much higher clip than they usually are. I believe most
• 27:37
  Speaker 3: of that is because agents are not setting good expectations
• 27:40
  Speaker 3: with their clients on both sides.
• 27:42
  Speaker 2: And that's most of what.
• 27:44
  Speaker 1: We do, you know what, And we're a little bit
• 27:47
  Speaker 1: off of what we were going to cover all and
• 27:49
  Speaker 1: which is fine. You know what we did back in
• 27:54
  Speaker 1: and you started in twenty eleven, right, so we were
• 27:57
  Speaker 1: on that tail end of the recession, but still within
• 28:01
  Speaker 1: the realm of a lot of the training and coaching
• 28:04
  Speaker 1: that was happening back then. Do you remember a lot
• 28:07
  Speaker 1: of agents talking about doing the pre inspections. Yeah, like
• 28:13
  Speaker 1: the certified listings and inspections. Yeah, certified listings, which would
• 28:17
  Speaker 1: you would you would advise your seller and say, hey,
• 28:21
  Speaker 1: you know, this is going to help you sell it faster,
• 28:23
  Speaker 1: This is going to this is going to give a buyer,
• 28:26
  Speaker 1: especially when we're competing against everything else. And and this
• 28:30
  Speaker 1: would be a suggestion today. This is I'm going to
• 28:32
  Speaker 1: go back to my team because this is just something
• 28:34
  Speaker 1: that you know, was was kind of thrown around in
• 28:36
  Speaker 1: my head earlier. Is that this certified listing where you
• 28:39
  Speaker 1: have your seller pay for an inspection. Most inspectors will
• 28:43
  Speaker 1: do a general inspection, not a full deep one. They
• 28:45
  Speaker 1: would do for a buyer for relatively and expensive. It's
• 28:47
  Speaker 1: i think it's half the cost at least that they
• 28:49
  Speaker 1: did back then. And then you have this report that
• 28:52
  Speaker 1: you can upload to the MLS, that you can put
• 28:54
  Speaker 1: into the private works that you can say, hey, this
• 28:57
  Speaker 1: is a certified listening.
• 28:57
  Speaker 2: Want to know what that is?
• 28:58
  Speaker 1: Find out more we are have we already have a
• 29:01
  Speaker 1: an inspection done on this house, so you can at
• 29:04
  Speaker 1: least have a general idea of what you're walking into.
• 29:07
  Speaker 1: Because my clients did say is like, this is kind
• 29:09
  Speaker 1: of this is kind of backwards. He's like, like, why
• 29:12
  Speaker 1: would I knowing what what what these problems were, I
• 29:16
  Speaker 1: probably wouldn't have made an offer or knowing that that
• 29:19
  Speaker 1: if I would have seen this report and they weren't
• 29:20
  Speaker 1: willing to cover this or work on it, I wouldn't
• 29:22
  Speaker 1: have come.
• 29:24
  Speaker 2: Yeah.
• 29:24
  Speaker 1: Right, So so now they've wasted money on an inspection,
• 29:28
  Speaker 1: They've they've exhausted mental energy connecting with his house, hoping
• 29:33
  Speaker 1: that this was the one, maybe telling their friends and
• 29:35
  Speaker 1: family they're under contract, right, and then they have that
• 29:38
  Speaker 1: that let down and of having to terminate and.
• 29:41
  Speaker 2: Move on, and now we've got this kind of built
• 29:44
  Speaker 2: up skepticism.
• 29:44
  Speaker 3: Yeah, and they've lost a few weeks, Yes, and now
• 29:46
  Speaker 3: they're going to start the process over again on a
• 29:48
  Speaker 3: different house. You make a really good point. People haven't
• 29:51
  Speaker 3: done that in a long time, doing the pre inspection
• 29:54
  Speaker 3: and then Hasspratt used to this a lot. Do the
• 29:57
  Speaker 3: pre inspection and then if you want to go above
• 30:00
  Speaker 3: me on make it a certified listing, do the pre inspection,
• 30:02
  Speaker 3: make the repairs, then do the post inspection. So now
• 30:06
  Speaker 3: you have a basically a clean slate, and now you
• 30:08
  Speaker 3: give yourself the opportunity. Anything that you didn't repair, you
• 30:10
  Speaker 3: can negotiate upfront.
• 30:11
  Speaker 2: We are aware of it.
• 30:12
  Speaker 3: We have disclosed it in your offer. You now know
• 30:14
  Speaker 3: about it. I've provided you the pre and post inspection
• 30:17
  Speaker 3: up front. So make your offer contingent on the fact
• 30:20
  Speaker 3: that this is the condition you know you're getting the
• 30:22
  Speaker 3: house in.
• 30:23
  Speaker 2: Yeah, that goes a long way.
• 30:24
  Speaker 3: That would I mean, if listing agents were doing that
• 30:26
  Speaker 3: more often right now, a lot more deals would stay together.
• 30:28
  Speaker 1: Well, not even that, but how we're needing again in
• 30:32
  Speaker 1: a higher inventory market that we're starting to see where
• 30:36
  Speaker 1: we want to attract the buyers. If you're looking for
• 30:40
  Speaker 1: a magnet, that's your magnet, right and and honestly, it
• 30:45
  Speaker 1: should get to the point where maybe that should become
• 30:48
  Speaker 1: the norm, right right now, that's the exception. You do
• 30:51
  Speaker 1: it enough times and then that becomes the norm. Like
• 30:53
  Speaker 1: how often you know when you look at when you
• 30:55
  Speaker 1: go and buy a new car, hble. I mean, look,
• 30:59
  Speaker 1: they done a great job brain in it, and you
• 31:01
  Speaker 1: ask for the car facts. Yeah right, you try to
• 31:03
  Speaker 1: look for the history. This is what this is what
• 31:05
  Speaker 1: crypto and blockchain's trying to do for not just the
• 31:08
  Speaker 1: car industry, but the real estate industry, where you can
• 31:11
  Speaker 1: see the entire history of who's owned it, you know,
• 31:14
  Speaker 1: you know the reports that have been associated within within
• 31:16
  Speaker 1: that blockchain technology.
• 31:18
  Speaker 3: That's a good point. I really agree. I mean the
• 31:19
  Speaker 3: same thing. You know, you could bring an inspector to
• 31:21
  Speaker 3: Carmacks and still buy your car. You can still have
• 31:24
  Speaker 3: an inspected if you want, but usually you don't.
• 31:26
  Speaker 2: I agree. If I if I was making an off,
• 31:29
  Speaker 2: if I was looking at a home.
• 31:30
  Speaker 3: That been on the market for thirty days, let's just say,
• 31:32
  Speaker 3: and you have an inspector report that's forty five days old,
• 31:35
  Speaker 3: and you have invoices or receipts in evidence from all
• 31:39
  Speaker 3: the repairs you made based on that inspect report, I,
• 31:42
  Speaker 3: as a buyer, I probably wouldn't even do my own
• 31:44
  Speaker 3: inspection as long as I knew as a reputable inspection company.
• 31:46
  Speaker 3: I've been in the business for a long time, you know,
• 31:48
  Speaker 3: I know whether it's BS or not. I'd probably feel
• 31:51
  Speaker 3: comfortable in negotiating that deal just based on the inspection
• 31:53
  Speaker 3: you did and all the evidence that you provided. I
• 31:55
  Speaker 3: don't think I would have a problem with that. I
• 31:56
  Speaker 3: think that probably is the way we should do it.
• 31:58
  Speaker 3: It makes way more sense.
• 32:00
  Speaker 1: But then again, the agents that jump on this now,
• 32:03
  Speaker 1: you know, will have a competitive leg up advantage. Why
• 32:06
  Speaker 1: should I hire you? This is what I do differently.
• 32:09
  Speaker 3: Yeah, ninety five point three percent list to sale ratio
• 32:13
  Speaker 3: and DFW. Right now, one of the really good hooks
• 32:16
  Speaker 3: that you could have in your listing presentation is I
• 32:18
  Speaker 3: certified all my listings, and this is the process we
• 32:21
  Speaker 3: go through.
• 32:21
  Speaker 2: Right.
• 32:22
  Speaker 3: We inspect our homes up front because we want to
• 32:24
  Speaker 3: leave less to chance on the backside. Right. Normally, in
• 32:28
  Speaker 3: a deal, there's going to be two negotiations. You're going
• 32:29
  Speaker 3: to negotiate the contract and then you're going to go
• 32:31
  Speaker 3: negotiate the condition.
• 32:32
  Speaker 2: During the repairs.
• 32:33
  Speaker 3: Right, I want to minimize the effects of that second
• 32:36
  Speaker 3: negotiation of bus as possible. So I offer a pathway
• 32:39
  Speaker 3: to what I call a certified listing. Right we inspect
• 32:41
  Speaker 3: the house ahead of time, we have a conversation about
• 32:44
  Speaker 3: repairs that we want to make ahead of time to
• 32:46
  Speaker 3: make sure the home isn't as good a condition as possible.
• 32:49
  Speaker 3: That's going to increase the offers that you get. It's
• 32:51
  Speaker 3: also going to minimize the amount of repairs that buyers
• 32:54
  Speaker 3: ask for in the back end. You know that that's
• 32:56
  Speaker 3: a differentiating factor. That's something I don't think a lot
• 32:58
  Speaker 3: of agents are doing listing appointments right now, but I
• 33:01
  Speaker 3: guarantee you it'll reduce your days on market and it'll
• 33:05
  Speaker 3: make for much happier sellers in the end because you're
• 33:07
  Speaker 3: not coming to them with a bunch of bad news.
• 33:10
  Speaker 2: An all stock transaction. Yep, you know.
• 33:13
  Speaker 1: The good news is Fathom stock surge eighty two percent,
• 33:15
  Speaker 1: which I didn't have any unfortunately. Yeah, and it was
• 33:21
  Speaker 1: a company that did four hundred and twenty million in
• 33:23
  Speaker 1: revenue in twenty twenty five, which was which means they
• 33:27
  Speaker 1: were required for zero point one three x times their revenue,
• 33:32
  Speaker 1: roughly what a south Lake listing closes.
• 33:35
  Speaker 2: For, you know, So that's pretty funny. Oh yeah, jokes.
• 33:40
  Speaker 1: Yeah, So when you think about that, Fathom has fourteen thousand,
• 33:44
  Speaker 1: roughly about fourteen and thirty five agents. They've got their
• 33:47
  Speaker 1: own kind of proprietary, you know, technology platform called Intellagent.
• 33:52
  Speaker 1: They do have mortgage, the Encompass lending and versus title
• 33:57
  Speaker 1: as well. They have an insurance arm. And they're all
• 34:00
  Speaker 1: so running a twenty million dollar annual net loss and
• 34:02
  Speaker 1: had already taken a two million dollar bridge loan from
• 34:06
  Speaker 1: BB and B back in March, so realistically this needed
• 34:10
  Speaker 1: to happen. And so you know, what you're what you're
• 34:13
  Speaker 1: kind of seeing here is that that bed Bath and
• 34:18
  Speaker 1: Beyond had already had already lent money to this, So
• 34:22
  Speaker 1: basically they're like the hard money lender coming in and
• 34:25
  Speaker 1: taking it over.
• 34:27
  Speaker 3: Okay, I uh, were like, I didn't read this part
• 34:30
  Speaker 3: on the fly. So a couple of things. One, I
• 34:35
  Speaker 3: made a comment yesterday it is probably like I was.
• 34:37
  Speaker 3: I thought this was satire at first. I don't mean
• 34:38
  Speaker 3: that in a mean way, just didn't see it coming.
• 34:40
  Speaker 3: You know, this has been so many acquisitions lately, it
• 34:42
  Speaker 3: sounded almost like a joke. This is not the original
• 34:45
  Speaker 3: bed Bath and Beyond. No, so when Overstock bought the brand.
• 34:48
  Speaker 3: They basically rebranded them as bed Bath and Beyond, Inc.
• 34:50
  Speaker 3: They shut down all the stores, so technically it's not
• 34:53
  Speaker 3: the company that it was before that.
• 34:55
  Speaker 2: I think that's important.
• 34:55
  Speaker 1: But do you know you know who actually runs Bad
• 34:57
  Speaker 1: Bath and Beyond now? Marcus and Marcus lear.
• 35:00
  Speaker 3: So I just that was the part that I was
• 35:02
  Speaker 3: just writing, I I is, is Marcus so the same
• 35:06
  Speaker 3: Marcus Limonis? Yes, he's the CEO of of of Overstock
• 35:11
  Speaker 3: or Bedmouth and Beyond.
• 35:11
  Speaker 1: Bed Bathroom Bond and Camper was it Camper World? Or
• 35:15
  Speaker 1: he owns so he owns He's pull him up. I
• 35:17
  Speaker 1: want to see everything he owns now?
• 35:18
  Speaker 2: Yeah? So, and he had a television show at one time?
• 35:22
  Speaker 2: Is this an epic?
• 35:22
  Speaker 3: Did he buy bed Bathroom Beyond in an episode of
• 35:25
  Speaker 3: The Prophet? I had no idea that Marcus Lemonis was
• 35:29
  Speaker 3: the CEO.
• 35:31
  Speaker 2: I love this guy.
• 35:32
  Speaker 3: Yeah, he's awesome and August okay, so we were you know,
• 35:36
  Speaker 3: this just happened. It's not like he's been CEO for
• 35:39
  Speaker 3: a decade.
• 35:40
  Speaker 2: Okay.
• 35:40
  Speaker 3: In August twenty twenty five, in his new capacity as
• 35:44
  Speaker 3: executive chairman of bet bath On Yeah okay, so so Okay,
• 35:46
  Speaker 3: so it he hasn't been there since.
• 35:49
  Speaker 2: We talk about this bed Bathroom. So January fifth he
• 35:53
  Speaker 2: became the CEO.
• 35:53
  Speaker 1: Yeah, so bed Back and Beyond when when they filed
• 35:56
  Speaker 1: for bankruptcy and went bankrupt all the they didn't when
• 36:00
  Speaker 1: when Overstock bottom they didn't buy the stores, They didn't
• 36:03
  Speaker 1: get the stores in the nursery. They just got the
• 36:04
  Speaker 1: intellectual brand, right, so they got the but they basically
• 36:09
  Speaker 1: paid twenty something million for the bed Bathroom Beyond name
• 36:14
  Speaker 1: and brand, and then Overstock became that and then Marcus
• 36:19
  Speaker 1: Lamonis like uh, then became CEO back in January of
• 36:22
  Speaker 1: twenty twenty five. Yeah, and so their whole look the
• 36:26
  Speaker 1: whole thought process, because look, the running joke was I
• 36:30
  Speaker 1: posted the you know, Frank the Tank from from Old
• 36:34
  Speaker 1: School feeling there, like his quote where he's like, you know,
• 36:37
  Speaker 1: what are you going to do this weekend? And you know,
• 36:39
  Speaker 1: maybe Bed Bath and Beyond if we have time.
• 36:42
  Speaker 2: Try to watch Old School the other day with ladies.
• 36:43
  Speaker 2: She's never seen it. They wanted They wanted me to
• 36:45
  Speaker 2: pay seven ninety nine on Amazon Prime. No, I never
• 36:47
  Speaker 2: do that. I can't do it.
• 36:49
  Speaker 1: No, but when we think about it, liked bath like
• 36:52
  Speaker 1: the whole thought process because Marcus has Camper World.
• 36:56
  Speaker 2: Or Camper RV World or something like that, and they
• 36:59
  Speaker 2: own own Kirklands. I Kirklands. They have Kirklands.
• 37:04
  Speaker 1: They did a deal, I don't know if it's ownership,
• 37:06
  Speaker 1: but they have a partnership deal with container Store. So
• 37:09
  Speaker 1: their thought process is building the everything everything home strategy.
• 37:13
  Speaker 2: The three pillars.
• 37:14
  Speaker 1: You have home ownership, transaction, the omni channel retail, and
• 37:17
  Speaker 1: now you've got the home services that they have their
• 37:19
  Speaker 1: own Kirklands there they are acquiring the container Store the alpha.
• 37:25
  Speaker 1: I think that's a closet Alpha closet designs and closet works,
• 37:30
  Speaker 1: so Fathom in their mind fills that pillar. So the
• 37:33
  Speaker 1: vision is own the customer from home search to mortgage
• 37:37
  Speaker 1: to closing, to furniture delivery to closet organization.
• 37:40
  Speaker 2: Right.
• 37:41
  Speaker 1: So, and Marcus Lamonis talks about this, which is what
• 37:44
  Speaker 1: we talked about on multiple shows and becoming the Berkshire Hathaway,
• 37:48
  Speaker 1: which is why we talked about our get Residual Agent
• 37:50
  Speaker 1: network where you can go, you know, just go to
• 37:53
  Speaker 1: Residual agent dot com and see what we're doing to
• 37:56
  Speaker 1: help agents become their own Berkshire Pathway to become their own.
• 38:01
  Speaker 1: You know, we'll call it bed Bath and Beyond style
• 38:03
  Speaker 1: business now because everyone's doing this, and Marcus Lamonez talked
• 38:07
  Speaker 1: about it. He said, home ownership remains fragmented still. People
• 38:11
  Speaker 1: buy from one company, finance through another, furnished through a third,
• 38:15
  Speaker 1: renovate with somebody else. And so the bet is that
• 38:18
  Speaker 1: he can own all four of these. And they just
• 38:21
  Speaker 1: opened up their first co branded store, container store in
• 38:24
  Speaker 1: bed Bath and Beyond location and Fort Worth.
• 38:27
  Speaker 2: Oh it's in Fort Worth. That's cool. I love this acquisition.
• 38:33
  Speaker 3: I think that it's so smart. I don't think it's
• 38:36
  Speaker 3: going to work out at all the way that they
• 38:38
  Speaker 3: have presented it to the public. I think Marcus probably
• 38:42
  Speaker 3: knows that too. I just think the customer journey just
• 38:44
  Speaker 3: doesn't work that way at all right now. It doesn't well,
• 38:48
  Speaker 3: I mean.
• 38:48
  Speaker 2: In general, I don't think it does. I don't think that.
• 38:51
  Speaker 3: I think if you just look at the percentage of
• 38:53
  Speaker 3: people that visit bed Bath and Beyond online or in store,
• 38:57
  Speaker 3: the percentage of them that are in their home ownership
• 38:59
  Speaker 3: or the pre home buying, I don't think it's any
• 39:02
  Speaker 3: different than Walmart or any other store out there.
• 39:04
  Speaker 2: Well, the reason I love this.
• 39:06
  Speaker 3: This acquisition has nothing to do with the with the
• 39:09
  Speaker 3: verticals necessarily, like the idea of we want to own
• 39:12
  Speaker 3: them kind of soup to nuts and bed bath and
• 39:15
  Speaker 3: beyond and like that kind of home goods.
• 39:20
  Speaker 2: Vertical.
• 39:21
  Speaker 3: I don't think that fits nearly as cleanly as you know, mortgage, title, insurance,
• 39:26
  Speaker 3: trans brokerage, all that type of stuff. I just think
• 39:29
  Speaker 3: this is a great deal because you bought fourteen thousand
• 39:33
  Speaker 3: licenses for fifty three million dollars. That's the part that
• 39:38
  Speaker 3: is just astonishing to me here. This is very I
• 39:43
  Speaker 3: think clear the real estate agent industry is shrinking and
• 39:48
  Speaker 3: will continue to. Their parage and productivity is probably down.
• 39:52
  Speaker 3: Their business model just doesn't create enough revenue in lean markets,
• 39:56
  Speaker 3: and they were going to lose agents like crazy and
• 39:59
  Speaker 3: probably close their doors. And Marcus Lamonis just bought them
• 40:03
  Speaker 3: for pennies on the dollar, probably cheap enough that if
• 40:06
  Speaker 3: they retro fit the business model to be more profitable
• 40:10
  Speaker 3: by cutting a lot of expenses out and maybe changing
• 40:13
  Speaker 3: their their revenue model with their agents, even if half
• 40:18
  Speaker 3: of them stay, then they're going to be a profitable business.
• 40:22
  Speaker 3: That's a really smart move, but it doesn't have anything
• 40:24
  Speaker 3: to do about bath and beyond.
• 40:25
  Speaker 1: So I think it's taken a long time. There's two
• 40:27
  Speaker 1: I have two trains of thoughts here. The first one
• 40:29
  Speaker 1: is you talk about change the commission model or the
• 40:33
  Speaker 1: revenue model.
• 40:33
  Speaker 2: Right.
• 40:34
  Speaker 1: For the longest time, we've talked about that transactional flat
• 40:37
  Speaker 1: fee model not working, not working, not working, and there
• 40:41
  Speaker 1: hasn't been a domino yet to show. This may be
• 40:45
  Speaker 1: that first domino. And I'm talking about the transactional flat
• 40:49
  Speaker 1: fee brokerage that charges what I think they charge five
• 40:53
  Speaker 1: hundred whatever they charge per per closing, and they grew
• 40:57
  Speaker 1: to fourteen thousand agents.
• 40:58
  Speaker 2: It works until it.
• 40:59
  Speaker 1: Doesn't because what you have there is there's there's when
• 41:03
  Speaker 1: you scale, when you increase, it can work at a
• 41:06
  Speaker 1: very very small clip. You've got a thousand agents, eight
• 41:09
  Speaker 1: hundred agents. If you're not charging a monthly fee, then
• 41:12
  Speaker 1: then you know you could probably keep it going a
• 41:15
  Speaker 1: little bit. But you know, for the most part, what
• 41:18
  Speaker 1: you don't hear about is you know, you didn't hear
• 41:21
  Speaker 1: about massive agent growth within that company or organization. You're
• 41:25
  Speaker 1: not hearing how what is the capture rate on their
• 41:29
  Speaker 1: their title and their insurance and their mortgage company, Because
• 41:33
  Speaker 1: you know if they had a if they had a
• 41:35
  Speaker 1: stronger increase in their mortgage company capture rate and their
• 41:38
  Speaker 1: title company and insurance capture rate, they wouldn't be losing
• 41:41
  Speaker 1: twenty million dollars as a whole, right, And so does
• 41:43
  Speaker 1: that mean that you've got a fragmented agent base that
• 41:46
  Speaker 1: really wasn't bought into the brokerage. They were just hanging
• 41:49
  Speaker 1: their license there because it's cheap.
• 41:50
  Speaker 2: That so this can be the death now, right?
• 41:54
  Speaker 3: How and how how you make money from on the
• 41:56
  Speaker 3: transaction side, I don't think is nearly as relevant as
• 42:00
  Speaker 3: as a recurring revenue model, whether you charge flat fee
• 42:03
  Speaker 3: for transaction or you charge splits or whatever. Understand as
• 42:07
  Speaker 3: an agent, the office fee or the monthly fee that
• 42:10
  Speaker 3: your brokerage just charge you is valuable because that is
• 42:13
  Speaker 3: truly what allows them to build a pretictable, sustainable business
• 42:17
  Speaker 3: that provides you tools and allows you somewhere to hang
• 42:19
  Speaker 3: your license.
• 42:20
  Speaker 2: It just it just is right when when.
• 42:22
  Speaker 3: You're doing budgeting as a brokerage, you've got to know
• 42:25
  Speaker 3: what is your baseline for revenue coming in, right, and
• 42:28
  Speaker 3: then all of your your A, B and C scenarios
• 42:30
  Speaker 3: from there, and so correct me if I don't know
• 42:33
  Speaker 3: if a Fathom had a monthly fee, I don't know
• 42:36
  Speaker 3: we could.
• 42:36
  Speaker 2: Look that up.
• 42:37
  Speaker 3: But yet we have talked about this before that the
• 42:40
  Speaker 3: model that we really never have seen work long term
• 42:43
  Speaker 3: is flat fee, no monthly is nothing like that. You're
• 42:47
  Speaker 3: so vulnerable to market environments there that that's how your
• 42:50
  Speaker 3: beer brokerage really can just go out of business overnight.
• 42:53
  Speaker 1: Yeah, and that's the that's the concern I have with
• 42:55
  Speaker 1: agents is you know, we look at the cheapest, the broke,
• 42:59
  Speaker 1: the cheapest brokerage options, and when we start to surround
• 43:02
  Speaker 1: ourselves with that, then you get what you I mean,
• 43:04
  Speaker 1: you get what you surround yourself with. And you know,
• 43:08
  Speaker 1: I thought the founder of Fathom, super Josh Harley, is
• 43:11
  Speaker 1: super smart guy. He believes he built something amazing. It's
• 43:14
  Speaker 1: not the first business he's built.
• 43:16
  Speaker 2: No, it's not. And he did a great job.
• 43:18
  Speaker 1: And I don't you know, I would love to have
• 43:20
  Speaker 1: him on the show and if he's allowed to talk
• 43:21
  Speaker 1: about it, I'd love to know his thoughts about this overall.
• 43:24
  Speaker 1: But you know, when when we think about this in general,
• 43:28
  Speaker 1: is that you know you're you were talking about Marcus Lamonis.
• 43:33
  Speaker 1: It might not it's probably not going to work out
• 43:35
  Speaker 1: the way he thinks it is right.
• 43:37
  Speaker 3: I want to be very clear the way that they're
• 43:39
  Speaker 3: presenting it. What he thinks is probably different than what
• 43:43
  Speaker 3: the front facing marketing is. Okay, fair enough, he's a
• 43:46
  Speaker 3: real smart guy, Yes he is.
• 43:47
  Speaker 2: Let me ask you this.
• 43:49
  Speaker 1: It won't work right now because the fragmented space has
• 43:53
  Speaker 1: not been trained and prepped right right. But the longer
• 43:56
  Speaker 1: that you have someone in your your eCos and it's
• 43:59
  Speaker 1: like the Dan Kennedy marketing bunnels right in the system
• 44:01
  Speaker 1: is like you can build on you. Once you capture,
• 44:04
  Speaker 1: you've got to build that high fence and that motorun
• 44:06
  Speaker 1: it so they never can they very few can escape.
• 44:09
  Speaker 1: And so that when you're continue to mark on them,
• 44:12
  Speaker 1: market on them, and they're like, hey, you know there's
• 44:15
  Speaker 1: I'm sure they would do surveys or they start training
• 44:17
  Speaker 1: their their customer service reps at the container store there
• 44:22
  Speaker 1: in Fort Worth, in bed bathroom beyond to start asking
• 44:25
  Speaker 1: question what has you coming in?
• 44:26
  Speaker 2: Are you buying? Are you selling?
• 44:27
  Speaker 1: Or are you remodeling whatever that may be. Now they're
• 44:30
  Speaker 1: looking at the entire platform and ecosystem and is this
• 44:35
  Speaker 1: now the start? Because we've seen rocket and Redfin Rocket
• 44:38
  Speaker 1: Mortgage and Redfend real Estate. I've seen their first ad saying,
• 44:41
  Speaker 1: if you use the combo, find out how to save
• 44:44
  Speaker 1: up to twelve thousand dollars. Right, So now we are
• 44:48
  Speaker 1: starting to see that beginning step towards the complete package
• 44:53
  Speaker 1: and then driving down the overall cost, which is why
• 44:57
  Speaker 1: we're going to hammer I'm going to hammer this into
• 44:59
  Speaker 1: on Bleu in the face until people just unsubscribe and
• 45:02
  Speaker 1: tune out. Because what you don't get, and what you
• 45:06
  Speaker 1: don't understand, is you need to capture every revenue piece
• 45:09
  Speaker 1: of the transaction. Even if you're a small agent. You
• 45:12
  Speaker 1: don't need to be a bed Bath and beyond. You
• 45:14
  Speaker 1: don't need to be a Berkshire Hathaway. All you got
• 45:16
  Speaker 1: to do is go to get residual Agent or residual
• 45:19
  Speaker 1: agent dot com. Get residual agent dot com, Get residual
• 45:23
  Speaker 1: agent dot com.
• 45:24
  Speaker 2: Go there.
• 45:25
  Speaker 1: Just sign up on the list. Understand what we're what
• 45:28
  Speaker 1: we are doing. The reason why we're doing this is
• 45:30
  Speaker 1: kind of perfect timing because we started talking about this
• 45:33
  Speaker 1: last year, even before all this stuff coming out, But
• 45:35
  Speaker 1: now it's now it's moving faster and faster and faster.
• 45:38
  Speaker 1: Is that the point of this is like you, as
• 45:40
  Speaker 1: an agent, have the opportunity you control that that chess piece.
• 45:44
  Speaker 1: You should get a piece of of of as much
• 45:47
  Speaker 1: of that pie as you can. And it starts out
• 45:50
  Speaker 1: with protecting your database, not letting Bed Bath and Beyond
• 45:53
  Speaker 1: get it, You're not controlling them going to that store
• 45:56
  Speaker 1: once they launch it, right, going on their website, and
• 45:58
  Speaker 1: now what are they doing when they buy something from there?
• 46:00
  Speaker 2: They have all their information well and they're taking a
• 46:02
  Speaker 2: piece of your pie. Right, So this is I mean,
• 46:04
  Speaker 2: you make a great point.
• 46:05
  Speaker 3: We talked about this with the with the Taylor Morrison
• 46:07
  Speaker 3: acquisition two weeks over last week. Right, let's just say this,
• 46:12
  Speaker 3: this is how it plays out over time. A customer's
• 46:16
  Speaker 3: journey begins at either virtually or in person at the
• 46:20
  Speaker 3: bed Bath and Beyond slash container store megastore, and they're
• 46:24
  Speaker 3: at checkout and the rep is like, are you moving
• 46:26
  Speaker 3: anytime soon?
• 46:27
  Speaker 2: Whatever? It is?
• 46:28
  Speaker 3: Right, Bed Bath and Beyond now generates that lead. Okay,
• 46:32
  Speaker 3: their customer journey is what put them down funnel to
• 46:37
  Speaker 3: where they're now being introduced to a real estate professional
• 46:40
  Speaker 3: to represent them in the purchase or sale of their home.
• 46:43
  Speaker 3: Bed Bath and Beyond has generated that lead out of
• 46:47
  Speaker 3: their stack. They are a customer that walked into a store.
• 46:50
  Speaker 3: We talked about this last time that every time the verticals.
• 46:53
  Speaker 3: Every time you have the verticals, now then you only
• 46:55
  Speaker 3: have to acquire the customer once, whereas every service is fragmented,
• 46:59
  Speaker 3: they all have one hundred percent acquisition costs of that customer.
• 47:02
  Speaker 2: Right. Do you think that that.
• 47:06
  Speaker 3: Bed bath and Beyond aligned agent who works for Fathom
• 47:10
  Speaker 3: Realty is getting the same commission on that deal?
• 47:13
  Speaker 2: They are not.
• 47:15
  Speaker 3: Your commission will be going down because they're giving you
• 47:18
  Speaker 3: that customer. So that's how they That's going to be
• 47:21
  Speaker 3: the redfin rocket scenario as well. Right, how do you
• 47:26
  Speaker 3: save twelve thousand dollars by using both of us? We
• 47:29
  Speaker 3: don't pay our agents as much, we don't pay our
• 47:32
  Speaker 3: lenders as much. We take away the cost of customer
• 47:35
  Speaker 3: acquisition for them. By the way, it doesn't mean that
• 47:37
  Speaker 3: as an agent you won't make a lot of money
• 47:39
  Speaker 3: because you probably won't have the same expenses in customer
• 47:41
  Speaker 3: acquisition costs.
• 47:42
  Speaker 2: But do you know who makes more the top? Right?
• 47:45
  Speaker 3: Oh?
• 47:46
  Speaker 1: Yeah, right to top one hundred thousand dollars and guess
• 47:49
  Speaker 1: who gets who who's getting cut the agent, the mortgage,
• 47:53
  Speaker 1: the title person, and so like, if that doesn't make
• 47:57
  Speaker 1: you angry and doesn't want you to figure out that
• 48:00
  Speaker 1: other piece, and maybe the industry is not for you.
• 48:04
  Speaker 1: Like I don't say that to be mean. I say
• 48:07
  Speaker 1: that to say, open up your eyes. Let's expand the
• 48:11
  Speaker 1: mindset here and understand what is happening. Because if you
• 48:14
  Speaker 1: build your own mote, you're gonna be able to have
• 48:17
  Speaker 1: a better relationship with that client tele because you're closer
• 48:22
  Speaker 1: than that big corporation. Right. The only thing that those
• 48:25
  Speaker 1: corporations can offer are discounts. They're not truly offering the relationship.
• 48:29
  Speaker 1: They're not inviting them out to family knights, to game nights,
• 48:32
  Speaker 1: to the ball games or whatever that may be. They're
• 48:35
  Speaker 1: not throwing the client relationship parties. All they're saying is, hey, Brian,
• 48:40
  Speaker 1: you come shop at bed, bath and beyond. I know
• 48:42
  Speaker 1: that you just have a you have a newborn, You've
• 48:44
  Speaker 1: got this, you know, a little girl. Because you're they're
• 48:46
  Speaker 1: gonna collect all this information. Yeah, right, by the way,
• 48:48
  Speaker 1: come over here. Are you wanting to upgrade your house?
• 48:51
  Speaker 3: You know?
• 48:52
  Speaker 1: You know we have we can get you discounts, this, this, this,
• 48:54
  Speaker 1: and this. I mean bed, Bath and Beyond was notorious
• 48:57
  Speaker 1: before they went bankrupt for all we mailing out the
• 49:01
  Speaker 1: oversized coupons.
• 49:03
  Speaker 3: Yes, at the end of the day, people still want
• 49:06
  Speaker 3: to work with people that they know, like and trust.
• 49:08
  Speaker 3: You need to be investing in your relationships in your
• 49:10
  Speaker 3: database at a significant clip right now.
• 49:13
  Speaker 2: Just truly. I can't hammer that enough.
• 49:16
  Speaker 3: I hate to put this on you, Jesse, but I
• 49:18
  Speaker 3: do want to do like a comparison how many a
• 49:20
  Speaker 3: comparison how many how many agents did Remax have when
• 49:24
  Speaker 3: when Real acquired them? And can you see what they're
• 49:27
  Speaker 3: like revenue versus profits were. I just want to get
• 49:30
  Speaker 3: an idea of how good a deal this was for.
• 49:34
  Speaker 2: The profit.
• 49:35
  Speaker 1: Well, we can look at making a tough one, Jesse,
• 49:38
  Speaker 1: because he's got to switch back over to me on
• 49:39
  Speaker 1: the camera, but we can look at like, you know,
• 49:42
  Speaker 1: the main thing while this is getting pulled up is
• 49:45
  Speaker 1: that you know, brokerages are on sale and it's buying
• 49:48
  Speaker 1: season for the brokerage to own a brokerage business. And
• 49:52
  Speaker 1: Remax was down eighty five percent from its peak value
• 49:57
  Speaker 1: and they had approx. One hundred and four five thousand
• 50:00
  Speaker 1: agents approximately, But you got to remember they're they're international too, right,
• 50:04
  Speaker 1: they're big, they're big globally, and and.
• 50:10
  Speaker 2: Redfin was down. Redfinn was down ninety five.
• 50:15
  Speaker 1: Percent from its peak when when they were purchased, when
• 50:18
  Speaker 1: bucket mortgage bottom anywhere. Real estate was down ninety five
• 50:23
  Speaker 1: percent when they got acquired by Compass, so the industry
• 50:28
  Speaker 1: and then look, Fathom was acquired as zero point one
• 50:31
  Speaker 1: to three x times multiplier, right multiple, so like they
• 50:36
  Speaker 1: didn't even get a one they didn't even get a
• 50:37
  Speaker 1: one x multiplier on on their revenue.
• 50:39
  Speaker 2: Okay, so this is this is this is wow.
• 50:42
  Speaker 3: Okay, so remax for everything that we can see here,
• 50:44
  Speaker 3: they they had two point three billion in annual revenue
• 50:47
  Speaker 3: one hundred and fifty seven million eba dah against a
• 50:50
  Speaker 3: twenty million dollar loss for Fathom. They were purchased for
• 50:54
  Speaker 3: eight hundred and eighty million, and Fathom was purchased for
• 50:58
  Speaker 3: fifty three basically ten times the amount of agents, but
• 51:02
  Speaker 3: only sixty percent of the value per agent.
• 51:06
  Speaker 2: If you just did ten times fifty three.
• 51:08
  Speaker 3: Million, like five hundred thirty million against eight hundred and
• 51:10
  Speaker 3: eighty million, that's like sixty percent of the value. So
• 51:14
  Speaker 3: basically every Fathom license was purchased for sixty percent of
• 51:19
  Speaker 3: what a Remax license was purchased for.
• 51:21
  Speaker 2: I don't know that's a good dear a bad deal.
• 51:23
  Speaker 3: There's more variables like how much you know with the
• 51:25
  Speaker 3: revenue per licenses and stuff like that, But I just
• 51:28
  Speaker 3: think that's it. I wanted to think about it in
• 51:29
  Speaker 3: those terms, like that's that's interesting. I think that this
• 51:34
  Speaker 3: was a really smart move by bed Bath and Beyond
• 51:37
  Speaker 3: overstock Marcus Lamonis.
• 51:39
  Speaker 2: I think it's a really smart move.
• 51:41
  Speaker 3: How it plays out long term. I it could go
• 51:44
  Speaker 3: a lot of ways as far as like the customer journey.
• 51:46
  Speaker 3: I think Nick's probably right. I just think that man
• 51:49
  Speaker 3: a fathom, it seemed like was going to get acquired
• 51:52
  Speaker 3: by somebody.
• 51:53
  Speaker 2: Well they had to be there.
• 51:54
  Speaker 1: They were burning, yeah or shut down, right, they were
• 51:57
  Speaker 1: twenty million dollars burned.
• 51:59
  Speaker 2: But who is out there? Like if we start looking
• 52:01
  Speaker 2: at you know.
• 52:03
  Speaker 3: It's we talked a few episodes ago about like what
• 52:05
  Speaker 3: our predictions for whose buyers and whose sellers. I didn't
• 52:08
  Speaker 3: think Bed Bath and Beyond was coming into the equation. Well,
• 52:10
  Speaker 3: I don't even think we had fathom. We didn't have
• 52:12
  Speaker 3: fathom the seller like you know, yeah, and honestly, they're
• 52:17
  Speaker 3: all their information is public, so we probably could have
• 52:20
  Speaker 3: done a little bit of digging to find out that
• 52:22
  Speaker 3: they were burning cash and taken along because that's public information.
• 52:26
  Speaker 3: So you know, if we look at it, Fathom agents
• 52:29
  Speaker 3: pay about seven hundred a year plus a four hundred
• 52:32
  Speaker 3: and sixty five.
• 52:33
  Speaker 1: Per transaction fee to be there. Yeah, yeah, right, and
• 52:37
  Speaker 1: there was no you know, they they went there. They
• 52:41
  Speaker 1: went there for the economics of it. And when we
• 52:44
  Speaker 1: look at how the real estate industry is right now
• 52:48
  Speaker 1: going into when you tip traditionally and typically when you
• 52:52
  Speaker 1: go to one of those those kind of budget friendly brokerages,
• 52:59
  Speaker 1: you typically less sales happening.
• 53:02
  Speaker 3: What's interesting about I want to like tell agents this
• 53:05
  Speaker 3: because we see this in the Facebook of all the time,
• 53:07
  Speaker 3: Like we're the brokerages that don't charge any fees because
• 53:09
  Speaker 3: I just want a place to hang my license because
• 53:10
  Speaker 3: I'm part time. It's like, but you're broker's full time, right,
• 53:14
  Speaker 3: So you're looking for a place to not have to
• 53:17
  Speaker 3: pay anything, but your broker still has to show up
• 53:19
  Speaker 3: to work every day and give you a place to
• 53:22
  Speaker 3: do deals. So just understand, you get what you pay for.
• 53:26
  Speaker 3: And I just I've never understood I would never As
• 53:29
  Speaker 3: a business person, I don't know how I would ever
• 53:31
  Speaker 3: go into business with a non with no like, no
• 53:35
  Speaker 3: sort of guaranteed recurring revenue as a broker, I think
• 53:38
  Speaker 3: that'd be really difficult because, yes, again, the agents that
• 53:42
  Speaker 3: do tend to go and gravitate towards those brokerages, they
• 53:44
  Speaker 3: do so because they're not really trying to grow their businesses.
• 53:47
  Speaker 3: They normally are doing it on the side or have
• 53:49
  Speaker 3: some sort of other job and it's part time or whatever.
• 53:52
  Speaker 3: But you, as the broker, you're still running a full
• 53:54
  Speaker 3: time business. So without that guaranteed base of recurring revenue,
• 53:58
  Speaker 3: you're just always vulnerable. That's really hard way to run
• 54:01
  Speaker 3: a business. Sure, as I mean, last of this is
• 54:06
  Speaker 3: think about it this way. Overstock dot com and e
• 54:08
  Speaker 3: commerce brand bought a dead brand for twenty one point
• 54:14
  Speaker 3: three million, so what do you think of it? The
• 54:16
  Speaker 3: next then they took on that brand because it did
• 54:18
  Speaker 3: have I mean, brand name is something. Oh you mean
• 54:21
  Speaker 3: when they bought bred bathamye right now, Yeah, a brand
• 54:24
  Speaker 3: name is something.
• 54:25
  Speaker 1: And then that led them into now for fifty three million,
• 54:29
  Speaker 1: buying Fathom, which you know from a brand name, you know,
• 54:33
  Speaker 1: I don't think they have a strong, big brand name
• 54:35
  Speaker 1: from a consumer side, A lot of agents probably know them.
• 54:38
  Speaker 1: They're in forty something plus states, fourteen thousand licensees, but
• 54:45
  Speaker 1: they're in the overstock in their leadership and now Marcus
• 54:48
  Speaker 1: slomonis they're they're in the industry of buying distressed brands
• 54:53
  Speaker 1: and turning them around.
• 54:54
  Speaker 2: Yeah. I think we're just going to see more and
• 54:58
  Speaker 2: more of that.
• 54:59
  Speaker 3: I'm curious now that it's kind of just opened up
• 55:01
  Speaker 3: my eyes as to what is possible out there.
• 55:03
  Speaker 4: Now.
• 55:04
  Speaker 2: What do you think? Where do you think we go from?
• 55:07
  Speaker 3: Uh?
• 55:07
  Speaker 2: Here? I think mister Beast buys Exit Realty. I don't know.
• 55:12
  Speaker 3: I don't know how is Exit still I DOEA Yeah,
• 55:17
  Speaker 3: I don't know how many licenses Exit has right now?
• 55:20
  Speaker 2: They've just needs to give this micro Yeah, where's your
• 55:25
  Speaker 2: mic jes. Yeah.
• 55:28
  Speaker 1: I mean, look, I think that the changing in the
• 55:30
  Speaker 1: Guard we know it's it's already started. It's happening, and
• 55:35
  Speaker 1: I mean it's going to be a fun wild ride.
• 55:37
  Speaker 1: And I was saying, one it gives us something to
• 55:40
  Speaker 1: talk about on the show. We're still gonna We're still
• 55:43
  Speaker 1: going to sell real estate, We're still going to do
• 55:44
  Speaker 1: our stuff. We're still going to be here for your
• 55:46
  Speaker 1: property management needs because you're not seeing a lot of
• 55:48
  Speaker 1: the big waves and property management, so which is good
• 55:51
  Speaker 1: and bad. The bad news is a lot of property
• 55:53
  Speaker 1: managers aren't making money. So if you're referring business to
• 55:57
  Speaker 1: a smaller property management company, just know that they're they're ready,
• 56:00
  Speaker 1: and they're struggling. They don't have enough resources, enough people
• 56:02
  Speaker 1: to keep that watchful eye on your client's property, and
• 56:08
  Speaker 1: that's a concern to me.
• 56:09
  Speaker 2: Homework doesn't have that problem.
• 56:11
  Speaker 1: They've got tons and tons of resources, They've got the manpower,
• 56:15
  Speaker 1: and so you need to connect with Duncan and Dana,
• 56:18
  Speaker 1: the head property managers over there at Homeward at DFW.
• 56:21
  Speaker 1: Just go to HOMEWARDDFW dot com and submit your referral form.
• 56:25
  Speaker 1: They'll take great care of your clients, even if you
• 56:27
  Speaker 1: just need a lease up happening right, don't mess up
• 56:29
  Speaker 1: the lease ups. And then from remodeling, your clients are
• 56:33
  Speaker 1: going to remodel, especially if you want to get a
• 56:35
  Speaker 1: household today, either drop the price drastically or have them remodel.
• 56:39
  Speaker 1: Pro Care Home Solutions has some great financing options. Just
• 56:42
  Speaker 1: go to procaredfw dot com. Sym mature information in there
• 56:46
  Speaker 1: and talk with Chris Troop. Find out what kind of
• 56:48
  Speaker 1: financing options that they can offer your clients. To get
• 56:51
  Speaker 1: a full remodel, to make sure that you are selling
• 56:53
  Speaker 1: the best property.
• 56:54
  Speaker 2: On the block.
• 56:55
  Speaker 3: Love it another episode in the books. Invest in your
• 56:59
  Speaker 3: relationships and everything else will fall into place. Get up
• 57:02
  Speaker 3: every day and keep working. Listen to the show because
• 57:05
  Speaker 3: it's fun for us to talk about, but don't get
• 57:07
  Speaker 3: fixated on these things. Don't spend lots of time dwelling
• 57:10
  Speaker 3: on these things. Get up, make your calls, build your relationships,
• 57:14
  Speaker 3: go sell a house. Everything else is going to fall
• 57:16
  Speaker 3: into place, and we'll see you next week.
• 57:23
  Speaker 2: Turn it up your real estate a weekly podcast.
• 57:34
  Speaker 4: Super Agent to actually give pay party Moved Listening, Heap
• 57:38
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