Today, on the More Cheese Less Whiskers podcast, I want to share an episode of the Listing Agent Lifestyle show I just recorded with my good friend Chris McAllister.
This is a great episode discussing the evolving role of real estate brokers, and I want to share it here because although we're talking about real estate, the real message is how to adapt and provide value in a changing world.
We explore how the rise of technology, particularly sites like Zillow, has transformed how clients access information and the value brokers provide. Chris traces the evolution of brokerage models from Remax to Keller Williams, and we debate the sustainability of the hundred percent commission shop model.
So, whether you're an industry professional, interested in real estate trends, or in any other business impacted by tech, this discussion offers some really interesting insights.
Summary:
1. This episode highlights the transformation of the real estate industry, particularly the evolving role of brokers, the impact of technology, and the value proposition of brokers in the age of digital platforms like Zillow.
2. We discuss the evolution of brokerage models, from Remax to Keller Williams, emphasizing the current shift towards hundred percent shop models and its sustainability.
3. Dean emphasizes the increasing importance of the shelter business and how brokers must adapt and reinvent themselves to remain relevant in this changing landscape.
4. We speak about the bifurcated real estate market landscape, highlighting transactions that are either very simple or require significant expertise.
5. Chris emphasizes the continuing importance of strong client relationships in real estate, even in an era of increasing digital automation.
6. We discuss strategies for creating a market-making culture, leveraging social media for Immediate Open Houses, and maintaining consistent communication with buyers.
7. Emphasis is placed on the importance of setting clear expectations for agents and the benefits of having an experienced partner to navigate the market.
8. We touch on the transformative power of technology in the real estate industry, including how platforms like Zillow have democratized information.
9. Dean and Chris argue that while technology has streamlined certain aspects of real estate transactions, the need for skilled professionals to guide and negotiate complex deals remains essential.
10. We end the episode with a discussion on the importance of building the right team in real estate and the value of having experienced partners to help navigate the market.
Show Links:
ProfitActivatorScore.com
BreakthroughDNA.com
90MinuteBooks.com
Roost Real Estate
Transcript - More Cheese Less Whiskers 254
Dean: Welcome to World Headquarters, winter Haven, florida. Dean Jackson here for another episode and we've got a repeat guest here, mr Chris McAllister. Hi, dean, how are you today? I am good here.
One of the reasons that I wanted to have this kind of follow-up conversation is to really kind of explore and just kind of have a conversation you and I to brainstorm around. I kind of thinking about it as the role of the broker, as a partner in the new real estate business, and things are changing every way we look at this right, it's one of the only constants. So I want to kind of talk about, I want to talk on some of the big picture things about the shifting purpose of the real estate business in society. I think is a good place to start. I'll unpack that in a minute. But then, specifically in the role of the broker, to become I think there's a real opportunity to become more of an active partner in the support of realtors in the new real estate business. And so I keep talking about the new real estate business and it's kind of timely because at this moment in time there's so much up in the air.
There's a lot of angst around the these big brokerage lawsuits, with the way that commissions are offered to agents or to, you know, the sellers are being forced to participate in paying the buyer brokerages and I haven't really talked with you about that, but I think people are their worst case fear. Their fear is that the buyer agents are going to go away, nobody's going to ever, nobody's going to get buyer representation, or that the need for real estate agents is going to disappear. You know there's a lot of. I just want to have this conversation around your take on the need for the real estate brokerage business in the new landscape of what's happening, because there's a lot of fear and angst around it. What's your initial take, kind of thing on that?
Chris: Well, I've got lots of thoughts on that.
So, I'll try to get us a little bit of stream of consciousness going. I've had my license for 22 years, coming up in January, and when I started, zillow and even realtorcom weren't anything like they are now. And when I got my license, there was a clear value add on the part of the brokers I went to work for. You know, they truly were bringing in business. They were bringing in leads. They had so many listings that they had to pass open houses out to. You know, those of us in the bullpen right there were calls coming in constantly because nobody was advertising their cell phone yet, right.
I mean they truly were getting paid, and paid fairly, for what they offered their agents. And we're not talking just about the local brand, we're not talking about just simply goodwill. I'm talking about solid opportunity in leads that those broker owners were generating and making available to the new agents who they chose to associate with on their license. And then, you know, the age of Zillow came in and suddenly information that was proprietary was suddenly everywhere. Things like cell phones. You know, I remember I put my cell phone in a newspaper ad. Remember those newspapers. I put my cell phone in a newspaper ad and I'll hell broke loose. What do you can't do that. You know the calls have to come through the office. And I was like, oh, I get that now.
But you know, in the age of Zillow, stuff that was proprietary is made available to everybody. And suddenly you know every phone number, every cell phone, every listing agent, everything is out there in the world. Everything is democratized, disseminated, you know, going straight to the agents, and very little at that point anymore is funneled through the brokerage. So what was a clear value proposition, offering leads, yes, mentorship and so forth in a brand was, you know, in many ways obliterated in the age of zero in Zillow. And not only did we, you know, outsource marketing right to a third party and then pay for the privilege to get to benefit of that information. We in effect outsourced sales training, you know, to the Zillows of the world who tried to make it so commoditized that there's no reason for sales training. Just sign up with Zillow, pay us money, you know, whatever money you used to pay your broker pay it to us and we'll make sure you get leads. And we all know where that led.
So I think it's sort of come full circle, you know, I think we're back at the point now that the business cycle has changed and clearly the brokerage business has changed. The selling business has become, you know, a lot tougher, with interest rates going up and a million other things. And now the question really becomes what's the point of having a broker, which you know, legally there's a lot of reasons. There's, you know, there's reasons from licensing law perspective. But I think the agonizing reappraisal is what is the value proposition of a broker these days? You know, what are you going to offer that you can expect to be compensated for as a broker? And if you're not adding value, then the agents might as well, go to 100% shop or give their money to Zillow. So what is that value proposition? Now, 20 years on after the agent Zillow, I look at it that.
Dean: So you know, I started in 19th and so at that point remax was on the rise in terms of, and their slogan was the cream rises to the top. That was the thing. They were one of the first, or the first, 100% brokers and the idea was that you come there and you pay a desk fee and then you get 100% of the commissions and you know how to run your business and spend that money, but then you'd pay a certain amount per month for that brand, right, and then the so everybody kind of that was the way. The thing was that it's for established agents, so it's like you evolve. You're not going to start out at a remax because you need to training and all that stuff.
So you're going to when you get successful, you come to remax to now you run your business on this. And that was the beginning. It was rare to have like assistants and a team that really was just kind of in its really infancy of that thing. And then the shift was then along comes Keller Williams and says don't spend, don't give remax $250 a month to for that balloon. You know how to spend that money. We'll give you that money to you. You spend that on your business. We'll support you and give you the training that you need. And, by the way, when you bring other agents, you can get money on them coming in creating it like a you know a business opportunity, right, and they became the fastest growing you know thing in the 90s and all the way. And then as we shifted into, as the internet shifted, we shifted into I like the distinction into Cloudlandia, as we call it that. Then that became now an opportunity for you don't need an office and training and all that overhead of everything. Come with us in the cloud here and be a virtual real estate agent and we'll give you the training and the community and the environment and you get 100% of the things. So it shifted.
You know, if you go all the way back in the old days, I would say the broker was. Their responsibility was to make the phone ring. That's the thing that evolved to where a point where the middle transition was that they were only responsible for making sure the phone worked. You're responsible for making it ring, and the new evolution is you don't need our phone, use your phone. You've got, you know it's like and you're a hundred percent responsible for all of that. And so it's interesting to see the way everybody, like the Hound Dog pack, kind of runs to a certain direction and everybody's moving towards that now, and I think it's almost time to come full circle to where there's a real opportunity to partner with a broker that can support you in the bankable results that you need to grow your business and actually make the phone ring again. I think that if we take that, make brokerage great again.
Chris: Make brokerage great again, and I like that
Dean: I mean, that's really what it comes down to right.
Chris: You know, it's Remax and I had Remax franchises. A couple of years after I got my license, I got my broker's license and had Remax franchises and I learned a tremendous amount from Remax no question.
But in Remax's heyday Remax was special. Yeah, remax was for people who hadn't established business. These were for entrepreneurs who understood the business of not just real estate but the business of brokerage. And you know there's two sides to it. Yes, remax was a hundred percent commission, which later went to 95.5 and other things. But the thing with Remax was in the perfect model, if you had a hundred thousand dollars worth of that's how much cost to keep the building open and you had 10 agents, then the math was each agent paid $10,000. So they paid that with a check every month through the broker, because it was their share, as well as fees were associated with being a franchise and that's how it was done. And some of those bills, you know they weren't cheap because you know they had to share the cost of the printer, they had to share the cost of the phone system, they had to share the rent, the heat, the toilet paper, whatever it was. But that was the original Remax business model. It's like you're in a cooperative, exactly. And that attracted people who knew their numbers, knew how to track what they were doing and were truly great business people.
Now, for a billion different reasons, you know that tended to get watered down and watered down and people kept talking about a hundred percent shops but they forgot about the other side of the equation that somebody had to pay for. So consequently, you know, brokers sort of got in the bind there. When I think of Keller Williams and I think Keller has done an incredible job attracting new agents and they do have incredible training if you take advantage of it and if you're self-motivated enough to find it, so to speak, and pick out the nuggets that are truly valuable and I think Keller sort of became this place for new agents and agents that we're looking for, sort of a safer haven than you know we used to say at RIMACS being a business for yourself, just not by yourself. But I think Keller attracted so many people early on was because it felt more like a job. You know, there were people in the offices, there was training there was you come to work, you come to work.
That's exactly right, and so it was more of a quote, a hybrid, I guess, between being a true entrepreneur and an independent contractor and having a job. And then things continued to deteriorate with Zillow and everything else, to the point where now you know there's these hundred percent shops all over the place and you know there's no money coming in outside of a transaction fee, or you know, and consequently the value proposition is, yeah, you get to keep everything you make, but you know, if you don't make anything, that's not our problem either. So, consequently, the agents aren't being served and certainly the brokers aren't being served.
Dean: Yeah, and I mean even though they've removed all the physical elements of the broker, like in the new model that you've seen EXP and real and other virtual brokerages that don't have the overhead of office.
Chris: The agents that are successful in that environment. First of all, they are. The handful of agents that are successful in the new environment are business people. They're truly entrepreneurs and they are professionals. So they know what they have to do to operate a successful practice. They know how to track their business, they know how to pay the bills, they know how to get paid. So to be able to do that within the hundred percent shop is great, but that's a minority of people with enough experience in the industry to you know. Quote pull that off. The reality is very it's a small minority. At best it's maybe 2%, quite frankly, of those people that are skilled like that, that are literally running a brokerage within a brokerage.
Dean: And that's an advantage for the. I mean, it seems like, yeah, that it's almost like a loophole or an opportunity for some, for the agent who's business minded like that, to be able to orchestrate an advantage, but it's not really a sustainable or profitable model for the broker. It's not even close Right, Because there are lost leaders on those things Exactly and so many brokers have tried to make it up.
Chris: You know, trying to run a mortgage shop or doing title or this and that.
Dean: Yeah.
Chris: It's just been a race to the bottom in so many ways, and that's why we're seeing such consolidation in the industry. Right now. It's hard to make a buck. I look at.
Dean: You know, this is kind of my looking at the shift from 1988 to now. This November will be 35 years. Now Seems impossible, but I remember every step along the way, the whole progression, and you know what I think we talked about last time. The real the thing, if I look at the bedrock, like what's not going to change if we look forward now, in the next 35 years or the next 25 years, I think if we're, dan Sullivan has found our strategic coach. He's got a great. He's got a great thing of that.
All we're really doing is we're guessing and betting, and that's what we're doing. Our future is based on guessing what's going to happen and placing bets that this is going to be the outcome right. And if we guess right and bet substantially enough in something, you have the great opportunity for a big outcome. You know. And so if you look at the, I did this, you know 24 years 1999. I made a decision. I was, I had some money that I wanted to invest. I didn't want to learn anything about the financial markets or be an active trader or investor, I just wanted to put money in and I was really attracted to this idea of 25 year decisions. I heard Warren Buffett talk about that. He doesn't the reason he wasn't investing in technology back then, like, notably, he missed the whole dot-com boom and bust.
Chris: He missed the bust too.
Dean: That's important, that's exactly it, because his reasoning was I can't tell with technology who's going to be the winner in 25 years, he said. But I know for certain that 25 years or now, men are going to go to bed at night and they're going to wake up with whiskers and King Gillette is going to be there to help them solve that problem, just like he has been since 18, right, and that's a bet that I guess 25 years from now, people are. Men are going to be shaving some of them who knew that you could see the big beard trend coming in. But that was a good bet, and Coca-Cola is a good bet and hamburger you know I mean Dairy Queen and these things are long-term, durable, sustainable businesses with a competitive moat.
And so I look at it and I think I was thinking then, okay, if I wanted to make a 25-year decision with money, right.
So I was, whatever, however old I was 33, I think in there and I was thinking, you know, at 55, 25 years from then, I was thinking, okay, where can I put this money that I don't think about it for 25 years. And I wanted to pick three to put it in. And I thought, okay, if I could make, if I could have anyone manage my money, it would be Warren Buffett. So I bought Berkshire Hathaway, right. And then, yes, so at the time that a share of Berkshire Hathaway was $70,000, then I bought. I thought, okay, if I could own any business, like thinking through the next 25 years, which business do I think is really going to be around and thriving as the population grows? That's a trend that the world's going to keep getting bigger and bigger and we're, you know, crossed 8 billion people now. And I thought, well, procter Gamble has more number one brands than any company. They've been doing it since the 1850s. They're likely to be here 25 years from now and they're likely to be a bigger business 25 years from now. And then I wanted a growth opportunity stock that was not technology based because I bought into Warren's thing and I look at.
Starbucks was my growth one because I realized, okay, this is growing rapidly. They've got a super simple business model More stores equals more coffee, equals more money and they've got this huge runway. My barometer for it was where I live, here in Winterhaven, we didn't have a Starbucks yet in 1999. And in the suburb of Toronto where I lived in Georgetown, they didn't have a Starbucks yet and I knew that. But where I had that, three Tim Hortons, right. So I knew it could sustain it, right. And so I thought, as they grow and that wasn't even China and Europe and all the other countries that they had access to and so I made the decision that Starbucks would be, I think. So those have all been tremendous, like growth things, the right bet, right, guess, the right bet all through, and I haven't had to think about those for that whole period of time.
Now I look at going forward here. What are we guessing about? The need for, just as an existential thing, for the real estate brokerage business? What is that? You know? Like? I think if, and this is why I was so attracted to you and your approach on this that roost real estate you're buying into the housing environment, that housing is not going away Right 25 years. And now we've been. We've consistently, since we moved out of the caves in the huts. We've proven as a society that we enjoy living in climate controlled homes, right and sleeping in a thing with indoor plumbing and all of that, and that's not likely to change in the next 25 years.
Chris: Well, and that's why I like to think that we're in the shelter business, shelter.
Dean: I think we talked about this before. You know when I started roost.
Chris: I wanted to be in a business that could service 100% of the people that needed a roof over their head, not just the 55 or 60% of the people that own that roof.
Dean: And what are we at now in home ownership wise? What's the latest stats?
Chris: It depends on the market, but in Columbus, for instance, I think we're right around 62%.
Dean: And that's so. That hasn't changed much in 35 years.
Chris: It hasn't changed. It's been constant. It will be constant, going forward. So if you take the approach that we want to go deep in shelter as opposed to diversifying in the mortgages or title or whatever it, is you?
know we're in the shelter business, so we work with tenants and we work with owners, right? So that's the first thing it's never going to change. The other thing that I love about the shelter business is, you know, one thing that came out of COVID that I think is a trend that's going to absolutely continue is home means more now than it's ever meant before, at least in my lifetime, right when what COVID told us was that, you know, home has to become your school, your office, your entertainment center, your restaurant, you know, your hub. It's more important than it ever was. And third spaces are, or second spaces, if you've considered a work of second space, a Starbucks, a third space the second spaces are becoming less and less important and I think my lucky stars that you know we never got into commercial or office space and things like that because you know, I don't know how that's going to ever go at this point, but from the housing business I'm willing to guess that housing is going to become more important, more valuable, more personal
and we're still going to need to have a roof over our heads, but it's going to become that much more important and I'm betting everything I have on that, quite frankly. So, no question, that's what's going to happen. I'm going to stake everything I have on that. When you think in terms of the profession of working in real estate and helping people buy and sell houses and so forth, I think there's a lot of change. Some of it's brought about by all of it to some degree is brought about by technology, but I think there's some things that are constant there as well, and I think that leads to you know how I think we brokers have to reinvent ourselves going forward and where we position ourselves in the shelter business.
Dean: And that. So I love that, this idea that even no matter what happens, I always take great comfort in the fact that we're agents in a way. Right that there's, and by agent that means you can move to wherever the I was thinking. You know, in tennis I learned that psychologically, you know, every shot makes somebody happy. That's a great way to think about it, right, but to not get attached to the in or out of the ball, but to take the observer, the umpire perspective that the ball is just in or it's out. It's not good or bad, it's just. That's the fact, right, and we want to try and get it so that we get more balls in and they get more balls out.
But whether the shift goes from 60% home ownership to 50% home ownership, that they're not giving up. We're not going back to caves, no, we're not going to huts and sleeping under the stars. So somebody's going to own the shelter that people are choosing to live in and whether that's investors or institutions or whatever that is, it's going to be still an opportunity that the transaction, the exchange of ownership of real estate, is going to continue for guessing and betting. That's going to be on there and I've always said looking forward. Everybody tries to, you know, disrupt the real estate business. They look at those commissions as the big fat sitting duck kind of thing. But the reality is that excuse me, there's. The reality is I've always said the still the thing that hasn't evolved with technology or our human brains and emotions, and a real estate transaction as an individual thing is always a negotiation between at least two completely irrational people negotiating the market value of the only property like this one in this moment in time, and that is unalgorithmable. You know you can't.
Chris: That's exactly right. So there's, it's like I think you said, the last 100 feet.
Dean: You can't digitize the last 100 feet.
Chris: You can't digitize the last 100 feet. So when you think about those things that you mentioned early on, that there's all this pressure on commissions, right? And there's all this concern about lawsuits and antitrust and so forth. I think the thing that is also going to remain constant is there is a place for a real estate professional in the shelter business and there's a place for that professional to add value, and there's a place for that professional to get paid for that value.
You know one thing I say about professionalism is, at the end of the day, professionals get paid and that's what separates the professionals from the amateurs. So, you know, I think there's always going to be a space where somebody owner, occupant, investor, whatever is still going to want to contract with a professional, just like they contract with a doctor, lawyer or accountant, and they want representation, and they want somebody to, you know, guide them.
Dean: And they don't want to deal with them, and they don't, yeah, yeah, do it for themselves, or whatever.
Chris: They need to do the things that make them a living and they're basically going to outsource the rest to people who do this for a living. So that's never, ever going to change. And how that commission is structured, I guess, or how that payment is structured, that could change, but I just don't think it's ever going to be outlawed that a seller or a buyer or a seller, I guess, is not going to be allowed to contract, you know, with a broker and agree with where that commission dollar is going to go and how it's going to be paid.
So, I don't lose sleep over that kind of stuff.
I think, ultimately, there's going to be a room for professionals right. I will say, though, that we have far more I guess I would call it value added opportunity right now in the real estate business than we ever had before. It's almost like all the transactions are. It's a bifurcated market. Many transactions are easier and quicker than they've ever been, and the rest of them are harder and require more expertise to negotiate and get through to the closing table right. It's like Diane said this morning getting it under contract is 20% of the game, getting it actually closed and getting the deed transferred, that's the other 80%. So I lost my train of thought there for a second. But the so, on the value added side, that creates incredible opportunity for the true professionals among us, and I think we've seen Zillow make it easier for sale by owners and people to do it themselves, and I think there is places where people can do it themselves.
I think bank owned property is going for sale on auction. It makes a lot of sense. It takes money out of some agent's pocket from where we were 10, 15 years ago. But I don't think you can stop the march of technology right. So there are things that can be done. No access to information.
Dean: Exactly, that's really what Like when I started in 1988, the only way to get information was you had to, and I lived in a suburb of Toronto, right on the outskirts, like in what's called the GTA, so I was on the outer, the edge within the GTA. If you wanted to come to Georgetown, the Houghton Hills, the only way to get information about Georgetown would be you had to drive out there. Yeah, and that's why having a good, clear, recognizable brand with a nice looking office, on the main streets.
Remember the MLS books, right and I was going to say that the catalog was the Bible. That was the thing that people had to come in. You had the windows of the real estate offices. You could come in the real estate office, you could drive around and find open houses, or you could pick up the weekly real estate section to see what the homes were available. Right. So being in the office on duty was that was a good thing you could count on.
Chris: Absolutely. That's how it was as a broker.
Dean: You could count on getting business by being.
Chris: And that was the value add the brokers provided, that's exactly right New agents like me. And all I'm saying is I think there's still tremendous opportunity, but we have to get better at what we do. But there's also things that are never going to necessarily come back right. I think it's easy for people let's say it's in a state sale and it's a house that has no emotional connection to them, and they just want to get it sold and move on.
I think there's a place for those simple types of transactions that require less and less quote expertise Rational between rational side, right, exactly the non-emotional side.
Dean: That's what I'm saying when at least one side of the transaction is a rational thing.
Chris: I see automation taking that over, and that's fine. Those were not exactly the most rewarding transactions to begin with, but I think, as we look forward, I think that people actually will need a skilled professional now more than ever, and that's the second thing I'm willing to bank on for the next 25 years.
Dean: So I look at that as if we were to drop a pin. Right now, compared to 35 years ago, everybody has access to every property on the market or off the market, the whole history of what's happened with that, plus four or five different blended estimates of what the actual value of that property is. To get a good sense of everything that's all available. But if we look going forward, we just dropped a pin and what's reality right now You've got some things that are on the rise, like I think that we still have to do pretty extensive title work and all that stuff to close a transaction and I think that as that becomes, that all becomes like digitized and completely database driven, backed by BLM, that, as we shift that, I think, the transfer securely of property back and forth is going to become a click of a button easy, and that's why we
may not bet on the title business.
That's exactly right, and the mortgage business is that.
I think that all the data, the big thing is the underwriting risk of whether somebody is going to be a good risk and whether this property is going to be a good risk, that I think what's happened is that companies like Rocket Mortgage have thrown their hat over the fence to say, make the promise of push button, get mortgage, which, even though that's not what's happening right now.
There's all the stuff the mechanical Turk machine happening in the background that I think we're headed in that direction, that we're all going to be walking around pre-un for all manner of credit, whether we've got we're already like pre-risk profiled, and there'll be an invisible marketplace ready to fund any loan instantly. You already see this. There's already companies online where you can get personal loans in minutes, like that. You just fill in the thing, yep, ok, there you go and the money's in your bank account, and I think that's going to improve the mortgage experience that we'll all know and being able to access capital from the equity in their home. So all of that, the money stuff, is going to be, I think, if we fast forward, instantly available and without real emotion or no question about it.
Chris: It's going to be instantly available, but there's still going to be a space for good advice and counsel. Just because we can go to our app on our phone on Robinhood and buy any stock available doesn't mean we should and it doesn't mean financial planners are extinct now.
Dean: Oh no, I get it.
Chris: I'm talking about the logistics of it, the logistics of it are going to continue to get easier and easier and I still maintain that I think we absolutely agree on this, that the hub of the business is that realtor, that trusted advisor in the middle. And, yes, it will get easier to underwrite alone it will get easier to transfer title, all of those things. But to me I see it as not usurping our place in the world but, I, think it enhances our place in the world if we choose to embrace that.
Because, it's additional responsibility. It means we have to learn new things. It means we have to have additional capabilities, we have to add more value, we have to get better at what we do constantly and keep up with the change. If we're going to be the hub of the experience, then we have to be worthy of being the hub of the experience.
Dean: Do you see a place where the way Airbnb has provided shelter? In a lot of ways for people who are increasingly adopting this nomadic life of mowing around and not having to deal alone or have a long term lease.
That I might come and do the thing and I think I read about their evolution now of some multi-city subscription home type of thing where you subscribe at a certain level and you pay a membership thing and you can stay in any of the properties all over the world, kind of like a we work for we live or whatever I think was what the thing was. So I love those big meta shifts that I think are really moving forward, moving the ball forward.
Chris: I think it's exciting as hell. I mean, there's just so many options and opportunities now for again, not just homeowners, but the investors who make those opportunities possible.
Dean: But what we're not going to get away from in 25 years is that it's gonna be individual people making those decisions for themselves on that lifestyle, Whether they're going to choose to rent and just live in the homes, take advantage of that shelter ecosystem, that somebody's going to invest in those properties and provide that level. And so there's. I just think being taking this shelter business approach is the safest bet for the future and being able to then surround with agents in an environment that supports them in being of service in all of those things right.
Whether it's finding and buying investment properties, getting counsel and advice and help guidance on analyzing property options, acquiring the properties, managing the properties, keeping them rented, maximizing the return on those getting out of that property, rolling into bigger properties or expanding their portfolio and if only a fraction of that can be digitized.
Yes, that's all, but at all, the two things that it's gonna have in common 25 years from now is a single person buying the property and a single person selling a property. That's the business right. So the relationship is even gonna be the more. That's gonna be the more powerful thing and being able to communicate bond become be thick. I think it's scary where things are going with AI in terms of the ability to give the appearance of someone real. Yeah, yeah.
Chris: Well, we do. I mean, obviously we help people buy and sell houses, and our agents do a fantastic job of that, but we also have a property management team and we work with, I think, roughly four or 500, maybe 450, let's say different owners right now.
And most of those relationships with the owners, some of those relationships we've had for over 10 years, those are the best clients we've ever had. But the trick is that we have to make sure that we're doing what they hired us to do right. So we have to keep their properties rented, keep them in good shape, help them, make sure the bills get paid, whatever. But the beauty of that is that's another 25 year thing. Yes, they get paid electronically now. No, we don't have to write checks. But at the end of the day, it's still a relationship either with a customer tenant or a client owner. And those relationships for us as a broker are wonderful because they also create opportunities for our agents when somebody in that group wants to expand their portfolio right.
And it gives us an opportunity to make markets within. You know if somebody says I want to sell this property. We can go to our owners and say is anybody interested in buying? Here's what we've got. And you know, we've got our own little ecosystem there. I mean it's like you teach market making to the nth degree.
It's a beautiful thing and I think that's one way that our company selfishly, I guess, to promote our own company. But you know, we're adding value to our client base because we're providing a service that, quite frankly, not a lot of other brokerages want to offer. So you, know our agents know that they can count on our property management team to take care of their clients. They continue to sell to them. We manage them. You know we all win.
Dean: Create more opportunities on the road and imagine there's opportunities too when some of the renters want to end up buying their own home.
Chris: Yeah, that does happen from time to time. But what's really the more interesting phenomenon is we've had tenants stay with. You know, we don't own our houses. We manage for other people, of course, so, but they'll stay a customer of Roost, right, but they'll go from house to house, but they only want to be managed by Roost. We've even had some to the point where they not only like Roost but they also really appreciate the owner, and when it's time for them to move to a different place a bigger place, whatever they'll hold out to wait to stay with the same owner in a different property. So there's just no substitute for that belly-to-belly.
Dean: Even in the lab there's something. Yes, I've got a friend in that.
Chris: Yeah, and you know, I'd much rather get a referral for a tenant, I mean, you know, from somebody who's a successful tenant with us. Yes, we're still going to run them through the same screening process, but obviously that referral from a tenant for another tenant is just as valuable as a tenant from a buyer for another buyer.
Dean: I've got it.
Chris: Everything's about relationships in this business, yeah.
Dean: I've got a friend in Nashville who has a business their property management and investment business called a Good Landlord.
Chris: Mm-hmm, it's a great name. It's a great name a.
Dean: Good Landlord. I think I'd shared that with them. There's like, I think there's a company in Australia that has a similar name, but they've got that's their model is taking being on the side of being, you know, renter friendly, like a Good Landlord, and that's, that's referable and that's it's all in that relationship.
Chris: It is, it is.
Dean: Yeah, it's. I don't think we're going to go wrong with I think we're going to, as things become more and more digitized, and you know.
Chris: Cloud based automated yeah.
Dean: But I think also the you know, digitized kind of relationships. I think we're going to really crave and still appreciate the real, authentic relationships 25 years from now.
Chris: I think so too. I think that's a absolutely. You know, it's sort of like those automated touches are an amplifier or a reinforcement of a real world belly to belly relationship. It's kind of like how we talk to talk about Facebook, right, mm-hmm? Facebook isn't going to generate a real estate business on its own, but Facebook will amplify the connections you've already made in the real world and expand your reach, you know? So, yeah, it's not a substitute.
And so, 25 years from now, we're still going to value belly to belly, one-on-one personal, real world relationships.
Dean: I love these ideas that if you are creating this culture of being a hero to the home owner, to the, you know, to the people who are providing this shelter in that environment, and then, on that foundation, create a brokerage that is aligned with being a hero to the real estate professional that wants to serve those people, that opens up a whole. That's where we talk about then making it in the new real estate business and that's.
Chris: I agree completely and you know, I think that's, if you talked about the evolution from, I guess, Remax to Keller, to EXP, to, I'll just say it to Roost.
Dean: Yes, exactly, I'm glad you said it.
Chris: That's the fourth turning, the fourth incarnation. I think the thing that comes back to is what are the core values? So, yes, we know shelter is going to stay the same. We know people are still going to be irrational, right, we know technology is going to take care of the easier transactions, but I think there will always be a place for relationships. I don't care what business you're in, I don't care who you are. I think the people that value relationships over transactions have the longest, most satisfying and enjoyable careers period. So you know, I know there's another way to do business. I know people do it. I just don't know. I know it wouldn't be sustainable for me. So you know I build a business around what works for me. So relationships are where it's at. We don't just work for anybody. You know, if we don't see eye to eye better, we part ways now than you know have to hurt each other a year from now, whatever it is.
Relationships matter, right fit matters, I think, from an agent point of view, you know, as we go forward, you know there's seven or eight things that we talk about a lot, but I think the core of it is professionalism, and for me, professionalism is about respect. It's about respect for the profession itself, it's about respect for the people that you're working with and working for and, more importantly, it's about respect for yourself and seeing yourself as a professional right and everything that entails. It means greater responsibility, but it also means greater freedom. I think the other thing that is never going to change and in fact it's probably going to become more and more pronounced is that those of us in this shelter business and the real estate business agents and so forth we have to see ourselves as independent contractors, which we legally are, and we have to see ourselves as entrepreneurs and we have to embrace the risks and, more importantly, the rewards that come with that. So you know, I think people in this business have got to take responsibility for their own well-being right.
Dean: Their own outlook.
Chris: They have to see themselves as business owners. So that's key. Relationships are key, professionalism is key, and the only other thing I would say that is just I'm really passionate about is we have to continue to add value. We've got to be open to learning. We've got to consciously and intentionally upgrade our skill set, add more tools to our toolbox and if the market shifts that you know, more and more investors are in the market because more and more people are renting or doing Airbnb or whatever it is we've got to evolve to be able to add value to those new owners, right, or those new people that are changing the way you know they live geographically or whatever that looks like.
So that whole thing about being open to getting better and see, I could go on about this, but I'm just going to say one more thing because, I really think it's sad what's happened to our realtors and I think it's sad what's happening to brokers.
I think that we outsource so much of our responsibility to Zillow and third parties that we forgot how to add value. So I think it's critical that we brokers get back to the point where. What are we going to provide our agents? What's that going to look like? How are we going to be fairly compensated for it? Because, at the end of the day, the realtors are only as strong as the brokers that they associate their licenses with.
Dean: And I think that part of the thing up until now all of that point has been that the models are trying to drive down what the agent is paying to the broker and in exchange they're getting less and less. They don't get an office, they don't get an environment.
Chris: But what's interesting is, zillow is taking that cash. So the cash that used to go to the broker is going to Zillow now.
Dean: And so I think that, because I look at the next 25 years, I love the real estate business and I love marketing and that intersection has been the big thing for me and I really look at these bankable results. What are the actual things that have to be addressed? Where are the actual bedrock opportunities that are not going away? And it comes down to the. I've identified the five bankable results that if you're going to be successful in the real estate business, you've got to have a way of getting referrals from and business from, the people who already know you, like you, trust you right. That's one thing. The opportunity to make the most of every listing and buyer opportunity that you have by multiplying them into multiple transactions. That converting the leads that you're generating, taking a bulletproof kind of leak proof bucket. That when you put people in, when you come across people, you don't lose them.
You don't lose them. Nobody's leaking out the bottom of your bucket. That alone can have a huge impact on the things. You've got to have a way to find buyers and preferably a way that's going to find buyers that are going to be strategic in helping you get listings. Those five things getting referrals, multiply your listings, convert more leads, find buyers and get listings All of that comes into this overriding thing.
Chris: It does. But think about how the thing of those five things that we've outsourced is finding buyers right, that's what we pay Zilliforce to find buyers. We share those potential leads that we're paying for with a handful of other agents in the market and it becomes a free-for-all right.
Dean: It's why finding your own, creating that system, and that's where creating this.
Chris: That's exactly the key going forward. I think that's where we can add value.
Dean: Yes, that's why I think so. I've thought about that as the brokerage business. The thing that a broker can create an environment for is to help create the underpinning for all of those things, for the age, to help them that's exactly right. Help them nurture relationships with their top 150. I look at it that you look at your this one of the things that you do that is so impressed by is that you're supporting the agents in maximizing the referral, repeat and direct business opportunities that they get. I bet, if we put up your on average agent and measured their what we call return on relationship, that they're doing far better than the agents that are not focused on that or in an environment where I would take that bet. Yes, they're not, absolutely. You mentioned it that you looked at the people who have 150 people in their CRM, that they've identified those relationships and you, as a broker, are sending out the.
Chris: We're scrambling. Every month we do a forum.
Dean: Every month and that you've correlated that with $150,000 income that the agents that are doing. That's what happens. I think that's what I've been an advocate for you for, in this idea of helping present your competitive advantage to people who are thinking, well, how do I know if it makes sense to partner with Roost, to partner with you.
Chris: Well, it is a collaboration. That's what it is. It's more than on the surface.
Dean: It's not just about getting. It's not getting the minimum amount that you're going to pay to the broker. That's not the measure. It was like counting everything up but it's not taking into account what is actually going to come because of If you get aligned with you. Look at some of these If you're 100% broker and you've got a certain cap rate, that you're at misaligned values in the way that the agent's idea is to pay as little as they can to the broker, exactly, and the broker is then disincentivized to do they want to spend as little to support so they get the highest margin on that cap, keep their operating expenses low, whereas if you can get into alignment, where we're going to provide all of these services for you, provide all these opportunities and make the pie bigger, not worried about the thing. I think it's very limited thinking and you think about if, every time organizationally, you get a listing, you're looking to multiply that listing and raise collectively the listing multiplier index, by creating a culture of market-making.
Chris: Exactly that's why we do your listing open, instant open houses.
Dean: Instant open houses.
Chris: And we promote the crap out of those on Facebook instead of promoting a Zillow link right, Because we're not shy about generating our own buyer leads and keeping them in a database and staying in touch. And that's the beauty of the Instant open house.
Dean: Yes, and then, as a broker, being able to create that baseline of a weekly communication for all buyers that goes out in the name of the agent. So they just need to throw people in the pond. You're going to feed them, pond and continue. We're going to take care of them and get it.
Chris: And whenever they're ready, they jump in the boat. We're going to give them a base presence on Facebook. Professional presence for Facebook. We try to do as much as we possibly can to almost be like a personalized advertising consultant.
Dean: Right, right.
Chris: I look at it as we're talent agents. Honestly, we're in this together. As we talked about last time, agents have certain things they have to do. We have certain things that we have to do and if we both do them, we all win. But I hate to dwell on the negative, but I can't help that whole thing with 100% shops. It's antagonistic, right? The broker wants to get something, the agent wants to pay nothing and the agent expects nothing from the broker. And that's fair, because the broker expense even less from the agent. It's just a race to the bottom, whereas in a true collaboration which I think is the way forward for the new real estate professional is, there are certain expectations that we have to have of professional realtors, right.
In real estate agents, and so I want to say we have some standards, but by the same token, I want the agents to have similar standards for us, and I want every agent listening out there to establish some basic standards for the brokers that they're working for now. What are you getting for your money? And if you're not paying anything, what are you getting, and is that worth it as well? But anyway, I get a little passionate about it, so forgive me.
But it is a collaboration and we both have a part to play in this collaboration and if we both play it, our agents, on average, do much, much better than the NAR average and we get paid as a brokerage for the value that we provide. But the minute that we stop providing value. I know I don't deserve to get paid.
Dean: And that's where I think this whole you and I've been talking about is laying out the actual comparison, like showing people in a one-on-one way that how it's actually going to affect them, like who's your ideal agent. If you're saying, if you're looking, I was, we were joking about Dion Sanders. I've just been. It's been so amazing to watch what Dion Sanders has been able to do in Colorado and for I was on board starting when he moved to Jackson State with the HBCU to see them. You know gum, I just think that guy is. There's no doubt in his mind that they're going to be national champions at some. That's the place they're headed right and that he's crystal clear on what they need to do to get there. He's surrounded himself with the greatest coaching staff for each of the elements of the offensive coordinator, defensive coordinator, the position coaches and this overriding scheme that they're operating. But what I found really interesting is their clarity on the values of who they're looking for, that they're looking for five things from there.
Kids are looking for smart, fast, tough, disciplined, with character. But you look at you know who is the ideal Like. I think that same way about Argo agent community, the person that I historically have been able to help the very most is someone who has been in real estate for at least one to two years, who personally works with buyers and sellers, who lives in a market a viable market, meaning over 20,000 people who personally works with buyers and sellers, who's got time to work with more people and the desire to do that and is friendly and coachable. There you go. That's who I'm looking for, right that that, if that's you, I'm your guy. I can help you.
Chris: Let's get your license moved over today, and that's the thing, right.
Dean: That's where I look at it, that I look at these, I look at it that but those are standards, Dean, and not everybody has standards.
Chris: No, I look at that.
Dean: Yeah, that's the thing I look at Channel D on. Like if somebody wants to grow their business, I'm the guy that can help them get right.
Chris: And that's where we I hesitate to say, but that's where we excel. So it is same with us. We have had great success with agents who didn't come to us first. Right, they went to one of the big legacy brokerages and they lasted a year or two. Maybe they got on a team, but it just didn't turn out as they had hoped. It wasn't what they were promised.
But that group of people, I call them the disillusion. They're not ready to give up and they want to live their dream. They wanna do more. They have a passion for real estate. If we can find those people at that moment, oh my gosh, it's a match made in heaven, because we know exactly how to take them from where they are to 150 grand over the next two, three years.
On the outside right, the system works. The other group that I've been thinking a lot about is and this is a whole other discussion but teams and teams are a big thing right now, I do think that the people put together teams for the wrong reasons. But if somebody is putting together a team for the right reason, maybe that they have way more opportunity than they can handle and they're not able to take care of the business they have. That's when it's time to just create a team. So, again, it's people that are on the cusp of a certain amount of business, but their motivation is to go to the next level, right? So if you've got people who haven't quite made it, that wanna get to a base $150,000 level, and then you have people on the other extreme, they're doing really good business as a solo agent, but they wanna go ahead and either get more time from themselves or increase their production, whatever it is, we can help them.
And then the third one, which is not as obvious we don't. I don't find these folks as much, but there's this whole swath of people that have been in the business for a while, that are truly successful. Now, maybe they still have to ride the wave of whatever the market's doing, but they've been in the business for a while, they're really good at it, they've had some success. But there's a few of those people. I love these people, right, they, they, they, they, well, but they still want something else. Right, they still got a bigger future for themselves. They may not know exactly what it is, but they, they feel like, wow, I've done this, it's time to, it's time to reinvent myself again, right. So you know those people are great fun to work with. Those people tend to be a little fewer and farther between you know we broke them down into four avatars that we have so when we call it because predominantly women in real estate.
Dean: So we identified Betty as the new agent, who's bright-eyed, has high hopes, coming into the business, wants to do well, doesn't know what to do yet she got people. But if she can make, if she could get some footing, she's got the potential to be at something. And Betty would make a great team member, exactly. And then Veronica is the person who's been in for a couple of years, is a competent real estate agent, does a great job of working with people, people like her. She knows all the moves, she knows, she's seen a thing or two. She knows how Dotloop works, she knows how to do all the paperwork and do all of the stuff and get properties closed. She just needs more opportunities to do it.
Then there's Ginger, who's the glamorous real estate agent that we typically see, the one who's just this whirlwind of active. It's a personality business. She's been in forever. She's the glamorous, busy real estate agent. People come to her and she's burned herself out and she's got a team of helpers, of people who just support her as assistants, but she's the star and the focus of the business. And then there's Martha, and Martha is building an organization, a team, and so I look at those.
Chris: I love Martha.
Dean: And that's what we want is. My ideal is to help now become Martha. That's the way, because the dangerous path is going down and just becoming Ginger and getting burned out, becoming a commodity. You don't have any time. It's impossible. Ginger's set in her ways. She's always. This is the way we've always done it.
Chris: That's why we don't attract a lot of Ginger's.
Dean: That's the way it's right and it's all about the. I'm established and I'm the star, and that's great, but that business is only gonna get.
Chris: That's so funny. So Veronica and Martha would love it at Roost. Yes, betty would love it at Roost. Yeah, we could set her up with the right Martha.
Dean: Yeah. The last one is Betty on her way to Veronica. You know that Exactly. That's really the things.
Chris: Yes, your ideal client is my ideal client. The question about it, yeah.
Dean: That's what I'm excited about. Our collaboration Like working able to do that, and I can't think of a better brokerage environment to be able to support people in installing our listing agent lifestyle approach to it.
Chris: I appreciate that that means a lot coming from you.
Dean: So I think let's call it out that if people are. I feel like Dion Sanders, like get me in the game here, juan. I wanna get in there, so let me look at the camera. Listen. If you are in Ohio or you're in Florida right now and you want to grow your business as much as you possibly can, let's talk. Let's put me on the team, do you wanna do this? Let's see what we can do to support you in that I'm excited about this.
Chris: I am too. I'd love having these conversations with you because I just get that much more excited.
Dean: Send me an email right now. Deanjacksoncom, let's go.
Chris: I'm excited about it Me too.
Dean: All right, thanks. Chris.