Latest / Mortgage Marketing Radio / The Role of Loan Officers in the NAR Settlement

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The Role of Loan Officers in the NAR Settlement · Mortgage Marketing Radio

• 0:00
  Well, good day. Listen to how you do in Jeff Zimper, your humble
• 0:14
  most of the mortgage market radio podcast. Thanks for tuning in. And if this is your first
• 0:18
  time listening, welcome. If you've been listening for some time and you'd like to share
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  your love of the podcast, hey, leave us a review if you don't mind. There's a link down here
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  in the show notes and it says enjoying the podcast, please leave us a review. That's how we
• 0:32
  reach more people. Appreciate that. And before we get into today's special guest, of course,
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  I've got a win of the week coming at you from our community of mortgage professionals.
• 0:42
  My agent classes, what we do is help originators attract versus chase realtors and build a platform
• 0:48
  that rises above the noise, help you become 15 mile famous and move from being seen as a
• 0:53
  solicitor and vendor to a partner and peer. Win of the week this week is coming from Mitch to
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  God. Mitch, what's up? Obviously, we are post NAR settlement. So the NAR settlement buyer strategies
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  navigating the new normal is one of the things we're leading with in terms of classes. We actually
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  have three different classes we're doing around the NAR settlement to help buyers level up their
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  buyer presentation, help them convert more people to right, signing those agreements and securing
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  their compensation and lots of other strategies around this. But my buddy Mitch put together an NAR
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  panel with inspiration from our group, our class and our content and he's doing it coming up in
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  September and he says agents have loved the idea of doing it a month out. So the dust can be somewhat
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  settled right post August 17th and have an actual meaningful panel conversation about what challenges
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  have been hitting the most right coming at about 30 days after August 17th. And the goal is to then
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  have a follow-up panel right after that as well and continue to do his monthly classes that he's
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  been doing in the meantime. He's becoming 15 mile famous when he submits offers people recognize
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  his name when he makes calls posts on social media DMs on social media people recognize his names.
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  Best part Mitch says he's got two top producing agents in the area on his panel who've never bothered
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  to answer his calls or meet before along with other another managing broker a title rep a builder
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  and attorney he's meeting them all on Monday to brainstorm and plan their capping the event at 75
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  agents. Guys this is called being smart this is called leverage right one too many if you're looking
• 2:30
  to accelerate your awareness engagement and conversations in your local market you can do it one on one
• 2:36
  one's easy to use and crawl and go slow or you can put yourself on the fast track right and become
• 2:43
  well known and attract people to you and build this personal brand that breaks through the wall of
• 2:46
  noise. I don't know if this is right for you we are taking a few more applications and the way
• 2:53
  you find out more about this if we're fit for each other is you schedule a call with me you go to
• 2:58
  mortgage marketing.pro grab a time on my calendar we'll have a 30 minute conversation see if we're
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  fit for each other so check it out all right my special guest for this week I'm really thrilled
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  about this conversation because I there's a few people I know and some have spoken to a lot of
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  haven't but few people I know who have their pulse their finger on the pulse of what's happening
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  in real estate two day right now especially in a post and air settlement world I'm talking about
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  my guest James DeWiggins is the co-founder and chief executive officer at next home he's also the
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  co-founder on a brand new tech startup called raise our a ys e you'll hear more about it in the
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  conversation there's a link in the show notes for everything we talk about raise is in mate I've
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  seen the demo on raise it's pretty mind blowing in terms of helping buyer agents demonstrate
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  and provide proof for all the work and steps and process that goes into leading up to a successful
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  close to purchase transaction so besides that James is the as I said the chief executive officer
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  and co-founder of next home and he's got a huge footprint of real estate across the country
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  he's got over 500 office locations nearly over 5,000 agents across the country he speaks to high
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  level people the CEO of the NAR and a lot of other industry leaders and influencers and this
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  is a great crash course in how to engage with agents so you deliver value and become a true partner
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  how to better understand what's happening post in our what to be aware of and look out for and
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  then kind of what's on the horizon long term so you can adjust accordingly and make some long
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  term adjustments to your strategies your conversations on both the buyer side and the agent side as
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  well so I know you'll enjoy this conversation by the way feel free to share it with your real estate
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  agent partners I think they'll find tremendous value in it as well check the links in the show notes
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  if you want to listen to James podcast it's fantastic real estate insiders unfiltered love it great
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  conversation so without further ado let's get into this week's show James welcome to the show
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  thanks for having me super excited to uh discuss all things
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  non-existent in residential real estate lawsuits so what do you want to talk about man want to talk
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  about music how about this let's talk about you grow up and slow right I did uh it was born and raised
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  in San Elizabeth, California I think was just voted in one of the top 10 cities to to live in the
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  United States saw in a magazine recently um called slow town but yeah it's born and raised there so
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  I know the area well my son is in his third year at Cal Poly
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  mechanical engineering oh mustangs oh mustangs it is the school for engineering uh it's a school
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  for agriculture yeah and uh a school for having the greatest bars downtown and a great knife so
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  sure I wish I had my I got a frog and peach shirt I wish I had got it just for sure
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  great great pub to go out of beer at yeah and he uh he's been in a band and they played at
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  frog and peach and a bunch of venues down there so I you know I was there I'm 44 and I grew up in
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  San Luis my whole life so I saw San Luis bespoke downtown transition from some of the original
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  ball bars to some of the bars they are now so it's yeah it's evolved a lot yeah for sure that's
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  cool yeah I always love to find um when people are like from there know there you know that no slow
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  no the whole community it's a very unique it's very cool vibe there you know yeah I dig it I dig it
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  but all right so we're not here to talk about that who is James Wiggins what's what's the
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  all about what do you want to tell the listeners who might not be familiar with who you are uh I
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  mean you know I he's talking about myself but um third generation in residential real estate my
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  grandfather started his real estate company in San Luis Obispo in 1967 ironically um both my
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  parents were brokers my grandparents were brokers so I worked in that side of the business worked in
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  prop tech uh starting sold a couple software companies in residential real estate uh and then
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  got involved in franchising in 2006 for a company called Realty World um eventually became the
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  vice president there and then uh my business partner today from next home and I bought that company
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  in uh in 2014 we ran that franchise here in Noracal with about 400 offices across the northern
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  california market and then we started next home in 2014 which is our current national franchise
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  and that uh after about a 10 year run it's about 630 locations uh across the US um we do
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  company does a lot of business you over 30,000 deals with over 12 billion in volume annually so
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  it's not a small business um it's been a fun ride and uh now we're in the thick of all the change
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  going on right so okay thank you for that and we're going to put links to everything we talk about
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  in the show notes uh as a matter of fact you're also our co-host of a podcast right real estate
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  insiders unfiltered which I've been listening to and you have some you have access to high level
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  people such as the uh current CEO of the NAR other folks so anybody who's listening mostly
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  loan officers listening to this uh first of all share this conversation with your real estate
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  agents by the way this is a great way to get some uh engagement and uh conversation with agents
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  but also check the links in the show notes um okay so we're five days in to this uh august 17th
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  NAR settlement thing kicking into official gear you've you've got obviously a very strong pulse
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  the real estate industry you've got thousands of agents uh do you have a report card yet from
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  the streets on how this has been going i mean i'll put it this way it's not it's all things not
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  unexpected um you know the companies that were prepared and had been really ahead of this like
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  my six thousand agents don't they're all very clear on what the rules are we retrain them before
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  the verdict even happened in october we retrain them uh starting the september last year
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  so you know when if you were in if you were in an organization that was understanding the changes
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  and wasn't fighting it and just kind of going this is where the puck's gonna be we got to skate
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  towards that um we're we're prepared i can't say that about everybody else um there's you know
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  there's a lot of people who waited till the last minute don't understand the rules don't
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  agree with the settlement don't agree with the terms we want to fight it and so we certainly
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  are seeing you know two camps the camp of this is the process this is how we communicate we're not
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  doing cooperative compensation any further um and this is direction we're gonna go and then you're
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  seeing people go screw the lawyers we don't care uh and we're gonna continue to do things the way
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  we have or try to find what we're calling workarounds all of which those people will eventually get sued
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  and there's been two interviews done by the main uh the plaintiffs lawyers uh or the past few
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  days on in menus Michael catchmark and Douglas Miller who was behind the morale case out of
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  Illinois who have put in no under no uncertain terms their intentions of making an example out of
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  uh additional organizations that are not following it or are trying to do workarounds and i
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  look i think that we're in the first inning for lawsuits um this industry as much as i love it
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  with a passion you know has a lot of people that just can't get out their own way and you're
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  gonna see more lawsuits occur and unfortunately these lawsuits are gonna be very expensive because
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  you know i am a name defendant in one of these cases and i can tell you the legal bills are massive
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  the only people winning on this is the lawyers of course and unfortunately smaller companies if they
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  get sued will bankrupt themselves they won't have the funds to defend it so i i heard a term it might
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  have been you who said this uh 20 to 40% Exodus uh the real estate population yeah yeah yeah i think
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  it's it's somewhere in that number keeping in mind we've already had some of that decline already
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  over the past 12 months but you're gonna see it really go into full effect here because this decoupling
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  of compensation is gonna it's gonna create the haves and have nots the agents that know what
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  they're doing and can articulate value or are gonna do just fine agents that don't or in it part
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  time we're gonna have a harder time with it um they'll see commission rates or compensation rates drop
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  i'm estimating anywhere between 50 to 100 basis points and uh and then you'll start to see some
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  pretty significant Exodus from the business so do you think um you know you you have a strong
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  tech understanding and you know market efficiencies and you know there's there's some some narratives
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  around you know the market will always find the most efficient way i guess if you want to kind of
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  use that angle do you think this is just was a matter of time that this was gonna happen and this
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  will bring additional call it efficiencies professionalism whatever you know anyway to the industry
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  uh long term yes short term i'm worried yeah i don't think it's gonna be smooth um i you know just
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  there's going back to even just cooperative compensation you know exp's out there said they're not
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  doing any further we're not doing any further um and so it there's a lot of companies that are
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  moving to this camp of we're not gonna do things the old way and there's a lot of companies that
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  don't want to do that and so i think you're gonna see a lot of really shady practices somewhere
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  in the middle of all that for a bit until people realize that they need to start making the shift
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  and i do have some anecdotes um just in general i i think that people i i think the lawyers and
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  everybody who's trying to make these changes don't understand the psychology of buyers and sellers
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  they don't want to be unrepresented it's an infrequent complicated transaction um and they are
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  wanting to sell and buy a house and what i mean by that is the seller is interested in selling their
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  home whatever it's gonna take to do that and this is a part that i think is really interesting we're in
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  the you know not of arguably right now based upon the past few years not the greatest rate
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  environment you know we're used to much lower interest rates if you go back in time we all know
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  this is actually isn't that bad but that's not the point um and so the people that have been selling
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  their houses over the past you know 2022 and 2023 and so far this year have been having to sell
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  their houses because of life events like just life kids job transfer whatever it is and so we've
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  been around four million units annually those people want to sell their house so my point behind
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  this is it they're going to continue to do what it takes to make that happen and if it requires
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  this seller to pay the buyer's agents compensation because we all know who are listening to this the
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  buyer cannot afford more stuff out of pocket they're gonna do it and the anecdote is this on my
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  podcast we have a one coming out next week it'll be a very controversial podcast and i'm trying
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  to get canceled where we uh we brought a broker on who stopped uh offering compensation to the
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  buyer's agent november last year wow early bird yeah right after the verdict he decided to do
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  it and we brought him on to share his story and he did seven listing since then all of them
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  offered zero but he stated the sellers willing to entertain any and all requests just put it in your
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  offer which is what we've been teaching and i can tell you in every single one of those scenarios
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  where the the buyer needed the buyer the seller to pay the buyer's agents fee they did
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  and everybody got paid because the seller the psychology is when you sell your house you have equity
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  but it's kind of found money like you didn't have really access to it now you do and they all
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  want to sell their house so they're going to do what it takes to put a deal together so i'm not in
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  this camp of you know this is going to go the rate the the route of AI is going to do this whole
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  thing i think that's bullshit nobody wants to AI the sale of their home it's way too complicated
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  and frequent to do that um do i think technology will shift things sure in time but this is still
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  extraordinarily stressful emotional paperwork intensive and relationship based even on the
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  loan side like i it's it's still people want to sit down and talk with somebody and figure out
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  what whether making the right decision etc so short term i think you're going to see some of this
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  you're going to see things somewhat stays out as well before it changes so like any change right there's
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  the pendulum this wings um what then back to this whole uh you know we're not doing the cooperative
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  compass we're not advertising are we co-opping on compensation submit all offers
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  what have you and speak to what you're comfortable around or not but you know what i'm seeing is
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  certain camps provide training around advising the seller on the pluses and minuses of
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  transferring buyer compensation are you endorsing that as well 100% and it's a very simple
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  conversation so this is to me there only the only them would be controversial like a normal
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  amp the only reason a seller in this new world should be offering compensation in advance of an
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  offer is if it's a buyer's market where you've got just a couple buyers lots of houses and you're
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  going to try and incentivize a buyer to buy your home to over another here's the part this really
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  controversial this is what we get everybody thinking so effective august 17th mandatory buyer
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  rep agreement before you show a property which means that every agent is going to sit down with a
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  buyer have a conversation about their services what they're doing the products all of the stuff
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  including cop and the buyer in the buyer's agent will agree to those terms there's no scenario
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  in this new world where those rates don't vary significantly you know inexperienced agents are
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  going to charge a lot less to get a deal done experience agents are going to charge a lot more so
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  here's the rep in a world where that now exists the selling agent the listing agent knows that
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  rate is going to vary and you have a fiduciary responsibility to your seller which is going to be
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  to get the highest net price possible why would you ever offer or tell a buyer what you're
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  willing to do in advance of an offer because hypothetically speaking let's say an agent was paid
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  X and the list in the seller was willing to offer double that if you if the buyer's agent was
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  only going to be paid half of that amount based upon the agreement and you advertise something double
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  you just told what told the buyer what to put in the offer and now you just left money on the table
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  so the next claim that I think you're going to see and my lawyers have confirmed this is you might
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  see fiduciary breach claims coming from sellers saying why would you advertise this price
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  why would you advertise this rate when the buyer's agent was only needed X to be paid you just
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  literally screwed me out of whatever amount of money and that's an easy claim to show because
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  you simply you're just simply subpoenaing the records of the deal you can see what the buyer's
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  agent was paid what you advertise there's your damages and voila you've got another action class
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  action claim so what we're teaching Jeff is really important we're telling the seller this so Mr.
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  Mrs. Seller here's the deal what's most important to you and they go the net great we figured that
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  would be your answer so what we're going to tell you is this we're going to say seller is willing
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  to entertain any and all requests put it in your offer the list in the or this by an agent calls
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  what are you offering sellers will entertain any and all requests put in your offer so you're not
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  offering compensation no we're not saying that we're saying we're willing to entertain any request
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  that your buyer has just put it in the offer and so we take the offers in we look at those offers
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  we come up with a strategy to respond counter all of them accept it whatever you want to do
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  but the point here is even when the seller is saying I don't want to offer any compensation
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  to the buyer's agent we go Mr. Mrs. Seller I'm gonna I'm gonna you're entitled to do that to be
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  clear and we're not suggesting otherwise but I'm gonna actually suggest that you don't do any of
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  that let us just get the offers in and then we'll respond because Mr. Mrs. Seller this is most
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  important you said net correct and they're going to go yes by the way this is real world examples
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  of what's happening you may get two offers one of them's all cash at asking price with the buyer
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  saying they'll pay their buyer's agents fee and you're going woohoo great I got what I wanted but
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  what if a second offer came in a hundred thousand dollars over but asked you to pay the buyer's
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  agents fee through the closing process but it netted you fifty thousand dollars more which one's
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  actually more a better offer and they go oh I didn't thought about it that way so don't leave
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  all that stuff off the table we're just going to bring offers in and then figure out our strategy
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  forward yeah plus that that also positions the listing agent to to provide more negotiation
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  more value to the transaction you know the whole point that the thing to me about what I I'm
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  I'm trying to educate the industry on this they just are not there yet they'll get there
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  it doesn't matter it in the world of negotiation it means nothing I don't give a shit if the seller
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  says sold as is okay my buyer wants the couch so like it's going to get put in the offer and you
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  as a seller can choose whether you want to accept it or not like it just the whole point is there's
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  a house for sale there's a buyer who wants to write an offer be it that's just the whole the whole
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  conversation is going to boil down to that we just are going to get it's going to be a lot of
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  waves to get to that point so let's let's go devils advocate here for a minute because I think you
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  and I have a mutual acquaintance yeah with Christy Janks over there and this was a response to
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  that scenario you basically just laid out was you know submit all offers all offers you know
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  will will entertain and of course there's an agent who responded um there are buyers already
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  stating that they will not visit a home that's not being offered comp blah blah blah right so you
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  get the whole I don't think that's a strategy of work for them so we need to know ahead of time
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  whether there's comp by the seller or not how do you respond to that the buyers agents not doing
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  their job correctly okay we're really simple so mr. and Mrs. buyer so I'm going to give you the other
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  script so in this new decoupled world this is my fee this is what we agreed to this is my
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  service is blah blah blah blah okay we have a couple ways that we can do this for for payment you
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  can pay it is one way to do it or we can put that request in the offer as the second step so we
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  can ask the seller to pay my fee directly or the third option is we can ask a seller for concessions
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  that go to you and then you can turn around and pay their my fee and put it towards other closing
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  costs whatever it is mr. Mrs. buyer you need to understand that in this new world every house is
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  for sale and it's my job to get you into that property so any house you want to look at we're
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  going to look at it we're going to tour it we're going to write an offer on it and then I'm going
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  to negotiate with the listen agent on how to make this all work for you and if for any reason they
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  won't do it and you can't pay it well then we'll have to adjust at that point in time but
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  every house is for sale I will show it to you we will write an offer we will negotiate and here's
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  the thing I guarantee you sellers are wanting to sell their house so we'll try to figure out a
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  strategy do that and then I'll add the fourth piece we're going to work with our loan officer
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  so all loan officers listening on the strategy on how to do all of this stuff too so that we can
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  write it a write a contract that is getting win out on others will come up with a strategy
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  together so we can make this happen that's the pitch that's it there is nothing else to it other
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  than that and so any buyers agent that is not doing that to be clear because I hope want them to
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  hear this you are violating your fiduciary duty you are not following what you should be doing
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  and you should leave the industry because if you can't do your job correctly then you don't
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  belong representing buyers in this market it is that simple it's just that simple so see some
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  tantrums happening across the country it is and it's and look I mean I'll share with you I saw
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  some stuff today where I'm just like they're creating forms which I'm going to tell you right now
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  because I have deep connections as you are aware to a lot of the people in the industry including
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  the plaintiffs in the department of justice brokers that are creating forms and having buyers
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  sign them that state they're not going to be shown houses that don't offer conversation advance
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  will get sued that's not steering really that's called steering and then when they're doing it
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  together with other companies it's called collusion and so I found out about three of them doing
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  it today in a market that they're colluding to make this so it keeps things standardized every
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  single one of those brokerages will get sued and they will spend a hundred thousand dollars a
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  month in legal fees defending themselves or if they can't afford it will bankrupt their company
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  that is literally where this is going to go in the two comments that were done by Douglas Miller
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  and Michael catch mark over the past two days was exactly that they are going to target people
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  and they will make an example out of people that are doing it yeah wasn't a catch mark who said I'll
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  be watching they are they both are yeah Douglas Miller was involved in the in behind the scenes on
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  morale and then catch mark was obviously Burnett and Sitzer they're all collaborating together
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  because it's all one big class at this point all right but well okay so you mentioned the loan
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  officers and and seeing as that's who's mostly listening to this but if you did receive this
• 23:48
  podcast by way of a loan officer you're a real estate agent make sure you thank them and ask
• 23:52
  them more about this um strategy we're going to talk about right now which is what happens when the
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  buyer can't pay the agent out of pocket what are the options and say the seller isn't paying
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  this is where financing right creatively comes in and uh as I'm sure you will know James
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  been others that are listening you can finance that into the loan or finance that into the price
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  um do you have any opinions on that other than what you just said those are the options I think
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  that I'll go deeper a little bit in that I believe for every loan officer listening here you have
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  the greatest opportunity of your career so just for clarity we have a mortgage company as well
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  um and I can tell you what everyone of our loan officers is doing we told them get your butt on
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  the phone call every single agent you've ever worked with ask them to sit down so that you can
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  talk about strategy on how to get your compensation covered your buyers into a house both strategy when
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  you're asking for excuse me concessions when you're asking to have the seller pay it directly
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  like this is the time where you create a much tighter bond between you and your agents and I will
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  go as far as saying I think it's smart that the uh the loan officer even even attends some of these
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  buyer consults and sits down and articulates value on what they do so I love this idea of an agent going
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  here's the 150 things I'm going to do in a real estate transaction over the next 90 days and this
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  is my job by the way this is this is Jeff my loan officer he's a badass and these are the extra 230
• 25:32
  things we got to get right to make sure that your loan gets approved qualified gets through underwriting
• 25:37
  we we make all the stuff to come together so we're going to jointly talk about what this experience
• 25:41
  looks like two things occur there one is credibility two complexity we want the consumer to understand
• 25:46
  this isn't an easy thing to do and three that they feel like they have a team working for them
• 25:51
  I think that's a huge thing I'll go step further than that I think it's important that loan officers
• 25:55
  are talking with listing agents having them understand the different ways to receive offers
• 26:02
  and how they can make sure the seller understands that it's not just about whether you're paying
• 26:07
  compensation or not there are ways that you can get a higher net by having offers structured
• 26:12
  in such a fashion to do that that example I gave you of you know AB so to me this is a this is a
• 26:18
  huge opportunity for the industry to collaborate more closely and educate I would tell you I think
• 26:25
  there's so much freaking confusion out there every L.O. and the agent should be doing sessions for
• 26:31
  the consumer like explaining the new world what does all this mean what does it mean to you
• 26:36
  no you don't actually have to come out a pocket to pay your buyers agent that all the stuff that
• 26:42
  press and all the stupid mainstream media continues to put out is not accurate we all know it's not
• 26:47
  accurate but buyers are only hearing what they see in the New York Times or Wall Street Journal
• 26:52
  or whatever and we have to have such a louder voice about what is actually happening boots on the
• 26:59
  ground which is a huge opportunity to to get you know new business but we're not like no one's
• 27:05
  doing that I don't see any of these webinars or seminars going on on on you know social media
• 27:10
  right now at least I'm not getting asked to attend them so I think there's a tremendous amount
• 27:14
  of opportunity to collaborate with this agreed I just wrote that down because as you may recall
• 27:18
  that's a lot of what I do is help originators put on events and classes so yeah just out of that one
• 27:23
  down do the because everyone's still yeah the home buyer seminar about how about in the new world
• 27:28
  right of home buying all that I mean every home buyer thinks what they're reading online
• 27:33
  and the stuff that all the mainstream media is putting out is like okay buyers have to pay for their
• 27:37
  agent now it's not yeah no that's not accurate at all like yeah and I love the fact that you took
• 27:42
  the listing agent angle which I've been preaching for years I used to go after listing agents when
• 27:46
  I was originating and you know for multiple reasons but like they want to make the listing as
• 27:50
  attractive as possible they know they're going to have buyers who can't pay out a pocket so
• 27:55
  loan officer you can work with your listing agent to structure finance flyers scenarios whatever
• 28:00
  put the cool videos together that shows hey here's your four options forgetting in this house
• 28:05
  right under the new rules also I would consider doing more open houses then you've done before
• 28:12
  we're past COVID we're all live still like least he's here so like my point is just go like if you
• 28:19
  got opportunities to bring buyers in to your point have those financing flyers give them options
• 28:24
  help them understand there are ways to do that another thing to add into this is you can throw
• 28:29
  on the webinar that you're going to do or what anybody else is going to do the legal risk
• 28:35
  of being unrepresented in a transaction which buyers are going to be thinking about this
• 28:41
  significantly is massive and one of the other talking points we do with sellers is to go look
• 28:50
  where you're going to see a couple things happen number one you're going to see buyers ask to be
• 28:55
  dual you know dual agency I'm a huge huge like I hate dual agency I think it's a
• 29:01
  abomination for the industry it's there's no scenario where somebody doesn't feel screwed in
• 29:06
  that situation and so you know we're teaching we don't do dual agency here I want my representations
• 29:13
  to you if you share it to you specifically that's why you hired me but mr. miss seller I also think
• 29:19
  it's incredibly important that we have the buyer represented by somebody who understands how to
• 29:23
  do this process because if we don't there's a much higher chance that this whole thing could end up
• 29:31
  in litigation and that cost of litigation is going to be significantly higher than making sure
• 29:36
  that there was representation on the side I don't care if it's a lawyer I don't care what like the
• 29:41
  quality of the agent I just want somebody on that other side with an EEO policy to represent them
• 29:46
  so there's the most sellers go yeah that makes sense like you know so that there's there's these
• 29:52
  multiple pieces to talk about with educating people on this on this process and we're just not
• 29:58
  having those discussions the final thing I'll throw in ENO coverage going to be a big big topic
• 30:05
  coming up because all the agents that are doing dual agency you're going to see litigation increase
• 30:10
  which I've talked to any of companies I know this litigation will go up ENO carriers will go yeah
• 30:16
  we're not doing that anymore if you want to do dual agency your coverage costs are going to double
• 30:20
  or triple we don't know how insurance works and then eventually they'll just go nah we're not
• 30:24
  going to cover anybody doing dual agency and before you know it all these companies are like whoa
• 30:30
  we can't get ENO coverage and so you can see what this next like massive problem coming a lot of
• 30:37
  what needs to happen is setting proper policy now so that you're not dealing with these issues
• 30:43
  right in six months to a year love that good notes there for everybody listening what have you done
• 30:52
  then around coaching training your agents buyer side I'm sure you do both but obviously particularly
• 30:59
  on the buyer side because you know to use the old example of like you know what did somebody I was
• 31:06
  talking to thousand while consulting and they said you know if you're if my price to work with you is
• 31:11
  zero I can't value you you know what I mean like how do I value what you do so I'm working a lot
• 31:17
  right as a matter of fact I have a slide deck here in front of me which is for long officers to
• 31:21
  teach agents about how to level up their buyer presentation value proposition and all that
• 31:26
  stuff what what do you been doing with your people on that so two things number one you're you know
• 31:30
  I'm involved in the venture called raise which is this new prop tech company that is basically
• 31:37
  tracking I'm going to simplify here but it basically tracks everything a realtor does
• 31:42
  all their phone calls a log their time their mileage you know how long it takes them to write email
• 31:46
  everything kind of like a lawyer and concept creates this collaborative cool experience for the
• 31:50
  buyer to see everything the realtor is going to do an amazing buyer presentation laying out the
• 31:54
  195 things are going to do in the process the app to collaborate and then the closing report which
• 31:59
  is just killer so it's everything they did over the course of you know 60 70 days whatever the
• 32:04
  time frame is the agents are taking those reports on their next buyer console going here's the amount
• 32:09
  of work involved to work with you know to get to get you into a home and they're showing examples
• 32:14
  of that very specific details that's the first thing yeah articulating your value very clearly
• 32:19
  because nobody knows what the hell we do so now we're bringing to light all of this all of these
• 32:24
  activities the second thing which is where we've moved we've been training our people on this for a
• 32:30
  while is you have to treat your buyer like a seller and what that means is you don't go out on a
• 32:36
  listing presentation and just hand them the listing agreement you do a consult you talk to them
• 32:42
  here's my marketing my advertising what I do this is the social media stuff is how we're going to
• 32:46
  create you know all just the whole list of stuff nobody does that on the buyer side right like
• 32:51
  nobody does that and so we've created an entire new package for our agents to sit down with a buyer
• 32:59
  do the consult go through things with raise here's what you know here's everything that's going to
• 33:04
  happen what I'm going to do in the experience and here's an example the services I'm going to provide
• 33:07
  so I'll just give a couple for a context so we cut a deal with a company called Kubikasa they do
• 33:12
  floor plans and it sounds weird but only 30% of listings have floor plans it's ridiculous but
• 33:18
  that's the number and so as a service we go mr. missus buyer any house you look at that you're
• 33:24
  interested in potentially write an offer on let me know and I'll go out there and create a floor
• 33:28
  plan for you and so they create the floor plan for the for the buyer to see like what the house
• 33:33
  is that it's an experience of not having to go toward the home that'll do it for you ahead of time
• 33:38
  and it's an extra service they'll do a thing like we call a revive remodel here's what the current
• 33:45
  state of the home is we think you could put 50,000 into this particular property and the upside
• 33:50
  leg potential on it is an extra 250 we'll do a quote on that get like a whole process together on
• 33:55
  what we think the home could be with a certain amount of investment because it is an investment
• 34:00
  and so we want to tell them here's where you're at here's what you could do here's the cost to
• 34:04
  do that and here's what the upside you know potential might be we give our buyers an app called front
• 34:10
  door at the closing it's this really cool app where it's like a handyman in your pocket you have
• 34:15
  a problem you can't free I'd use the thermostat pull up front door it's branded to the agent
• 34:20
  and all of a sudden they can contact front door it comes on video chat and they'll show you how to
• 34:24
  use the next thermostat so we just we're thinking about how do you create services to increase your
• 34:31
  value that you would same concept on the list side on the buy side and man it just works it's not
• 34:37
  it's like buyers go shit like I make complete sense I love it I love what you're doing I'll pay you
• 34:42
  that and then we have the conversation with them about here's how my compensation works if we
• 34:47
  can't get the seller to pay it and we can't get you a concession then either you have to pay it
• 34:51
  or we have to think about looking at another property or coming down in price we can get more
• 34:55
  aggressive on the price when we're a little bit down in the price rate like this this just strategy
• 34:59
  right that's it that's all it is yeah reminds me of back in the day you just work with Walter
• 35:04
  Sanford at a long beach oh man that's a name I haven't heard no Walter yeah with a little dynamite
• 35:10
  thing yes the dynamite mailers yeah I did that as an L.O. I was sending those to realtors also
• 35:16
  so Walter was an amazing marketer but he was like I think early on and of course a lot of
• 35:23
  people use this or used to I guess but seems like it's gone away though but like that concierge
• 35:27
  service right where here's a list of my like you're to but you've got the modern version right the
• 35:32
  front door the the cuba casa but he had like all carpenters builders whatever and we do the same
• 35:37
  thing here's our here's my role it acts of people to work with that's part of it as well but we
• 35:41
  actually are putting services like paid services into it and I've told agents look you should be
• 35:47
  taking 10% of whatever compensation that you have that you're making should go back into products
• 35:52
  and services provided the bar and we also know this so we're teaching to you know different levels
• 36:00
  of service this is my tears tears and there's I don't it sounds dirty and bad word but like it's
• 36:06
  not because if I bought a home before right and I've been through the process I don't I probably
• 36:11
  don't need as much of that hand holding so to me that's like your your tier one your tier two is
• 36:17
  your first time home buyer who is just needs to be held through the entire experience that's this
• 36:22
  level of service and then there's the Ritz Carlton tier three and I love to use one of my business
• 36:27
  partners one of the coolest people possibly is my coast on the podcast I love him dearly and I
• 36:31
  would say this to his face one of the laziest people I know as well who who's the guy that would
• 36:36
  pay a premium and did when he bought his house to have somebody pack all his shit unpack all of his
• 36:44
  stuff have the landscapers there have the cleaning company there like he just wanted to be able to
• 36:51
  move and move in and didn't want to deal with anything else and pay the premium to do that and
• 36:57
  I think there is a whole market for that too so what we know for fact is that Americans are
• 37:04
  we we are in a world where it takes two incomes to make a living anymore for almost anybody in
• 37:09
  this country 60% dual income households now and nobody wants to do this on their own and we're
• 37:15
  also all about convenience and service that's literally every survey you ever read is Americans
• 37:20
  want convenience think doordash we pay just as much to have the food delivered as the food itself
• 37:25
  and service create those experiences people pay board two quick things one of the the tiered
• 37:30
  service reminds me of a story I heard years back I forget it was it was a high level executive I think
• 37:35
  of a tech firm he was moving and talk about like he didn't want to be involved at all he had photos
• 37:41
  taken of all his furniture and everything in the existing house so that the movers could put it in
• 37:47
  the new house in the right exactly where he wanted it and like two weeks later he moved in just
• 37:52
  open door boom ready to go I mean that's brilliant Keith had Keith had a spec a specific individual
• 38:00
  who came in to figure out how to I don't even know what you call it feng shui the kitchen so that
• 38:06
  all of your stuff is put away in a logical place right like pots and pans in this story because it
• 38:11
  makes are you right hand or you left hand like yeah but that's my point somebody's willing to
• 38:15
  pay a premium for all that right yeah you shouldn't you shouldn't like pre-judge on what people
• 38:20
  want to pay for yeah speaking of that this is the last point that we're wrap up and you're busy
• 38:23
  is we're already seeing it you know the flat fee on the buyer side which are take on that do these
• 38:30
  new business models and how do you think those will play out in the market it's going to come down
• 38:34
  to one thing it's going to come down to how good of a job buyers agents do and explaining to buyers
• 38:41
  how compensation will be paid and what I mean by that is if the buyer thinks they have to come out
• 38:47
  a pocket every time then I think you'll see these business models pick up if the buyers agents
• 38:52
  you know get their head out of their butt and like think about this a little bit and actually
• 38:56
  explain to the buyer that this isn't really something you have to do and we can probably get the
• 38:59
  seller to do it and have that conversation then I'll go back to the comment I just made and I can
• 39:03
  give you some statistics for this so I think most Americans don't pre they don't know most people
• 39:10
  don't prefer to work with what they perceive as a discount service they want a full service
• 39:16
  experience yeah here's some examples of that red fins been around for a long time really really
• 39:22
  struggled to take off there's still a very small company in you know the north the north the
• 39:26
  the northwest most of the stuff is referred out across the U.S. Foxden's came over from the UK flat
• 39:33
  rate business model I think it was like 3995 bankrupt within 18 months purple breaks most recent one
• 39:39
  came over 2017 bankrupt Americans love this idea of having somebody handle everything for them
• 39:47
  and they're getting the full experience they like a discount price but they want a full experience
• 39:53
  so it's going to end up with this one thing if the industry does a good job of of showing and
• 39:58
  explaining to a buyer you can get full service and you're likely not going to have to come out of
• 40:02
  pocket on that then I don't think those business models take off if they can't get that figured out
• 40:07
  I think you'll see these things game or market share so makes me think whatever happened to help
• 40:11
  you sell 1976 was when they were founded and they're up they're a tiny tiny player in the market
• 40:18
  yeah and you would have thought during the greatest real estate you know uptick people would have
• 40:24
  used them and they just people want the what they do with the physicals why are fizzbo such a small
• 40:29
  percentage still seven percent last year lowest in recorded history yeah yeah and of course
• 40:34
  as you know the percentage of people using realtor as increased not decreased over the years it's
• 40:40
  because it's a complicated transaction and attorneys despite how much I don't like them because
• 40:44
  of all of this nonsense that they're doing they've made it more complex and people also realize
• 40:50
  that it's incredibly complex paperwork intensive risky transaction and so that's that's also driven
• 40:55
  that up so that's the only time I'm going to thank lawyers for what they do so yeah it's a it's one
• 41:01
  of those things where it's it is it's all going to be it's all going to rest on leadership in our
• 41:08
  industry and how they teach their people yeah yeah which which by the way or one quick question
• 41:12
  before I let you go if I'm correct did I read that they just appointed a permanent CEO to the NAR
• 41:18
  they did yeah Nicky how do you point out permanent CEO like isn't that anti you know what I mean
• 41:24
  like how do you know that's always going to be performing well I mean all I can say is through all
• 41:29
  the drama they had over there between Kenny Parcell's departure you know the former CEO Bob Goldberg
• 41:35
  departing they brought Nikiya right in his you know I interviewed her if you guys want to check
• 41:39
  that out it's on our podcast we just did that interview last week um you know she's very smart
• 41:44
  she's very bright she has a significant business background she's not from real estate but I also
• 41:49
  admire about her she doesn't pretend to understand her industry like she knows it all she's she's
• 41:53
  willing to listen um they had her in as an interim while they were on a CEO search but then they've
• 41:59
  decided to keep her on for as a you know instead of interim it's now permanent um I don't know what
• 42:05
  that contract length is that was not disclosed was not told so um we've got you know she's in the
• 42:12
  seat and certainly we're wishing her the best and I know that we're gonna try and help her as long
• 42:17
  the way to help get this industry back on the right track so I promised last question but I lied
• 42:22
  then do you also see a mass exit us out of NAR itself I know you guys by the way I listened to
• 42:25
  that podcast and we'll link it up in the show notes but it was a really great conversation about um
• 42:29
  you know the value uh of NAR for members and advocacy and things like that but do you see people
• 42:35
  bailing on NAR I think NAR has some pretty significant issues it needs to come to grips with
• 42:40
  and I don't believe that they see it yet um I think there's a little bit of some word I'm looking
• 42:46
  for I don't know we'll just say that they are not was that mutiny um well I was gonna say that
• 42:52
  I think there's maybe a little bit of uh they're being a little naive to the amount of discourse
• 42:59
  towards NAR right now um you have to remember that in the settlement anybody who did more than two
• 43:05
  billion dollars in volume was left out and so all of those companies might included got sued
• 43:11
  separately and had to do separate settlements and negotiations on that and so the problem with
• 43:17
  what they did and I know they had to do it I'm not a hundred percent agreement they had to do it
• 43:21
  that way but let's just go with the fact that's what it is yeah is that you know 70% to 80% of the
• 43:27
  realtor members work for one of those hundred companies right and so there's a lot of discourse
• 43:32
  there if NAR was being incredibly strategic right now they would be figuring out how to build a
• 43:38
  bridge back to those companies and if they don't then I do think you'll see a mass exodus from
• 43:44
  NAR and that will be a shame because to the comment you made and we can wrap here is
• 43:50
  it NAR what its greatest strength is is its power in Washington DC just like NBA like the whole
• 43:56
  you know getting the VA to make changes was because NBA and NAR were working together and
• 44:01
  there are very strong force in DC politics if NAR is weakened in size or position
• 44:06
  there's a there's a very strong chance politicians who we all can all agree or for the most part
• 44:11
  completely useless will write bills that will not be favorable for home ownership and then it
• 44:16
  will affect all industries and the lending industry included so it's a it is a concern that if they
• 44:21
  lose their membership they'll lose their power in DC all right well this has been a fantastic
• 44:26
  conversation for those listening please check the links in the show notes to all of James resources
• 44:30
  podcast company new startup rays are a YSE James thank you so much man I appreciate it of course
• 44:38
  my friend thanks for having me on you bet listeners you know what to do if you like this episode
• 44:41
  there's a link to also leave us a review so do that in the show notes and we'll see you on the next one