The more things change, the more they remain the same. Yes, technology is changing the way we do business in real estate. And a lot of us abandoned the practice of nurturing our database in favor of portal leads that offered instant gratification. But as platforms like Realtor.com and Zillow demand more and more of our commissions, the agents who survive will be the ones who diversify their lead sources and combine the old principle of building relationships with tech advancements like artificial intelligence and automation to stay in front of their audience for the long haul.
Today, I’m having a round table discussion with several big names in the industry, including Howard Tager and Jeufeng Ge of Ylopo as well as top producers Mike Bjorkman, Mike Bernier and Gary Ashton. We begin with RDC’s acquisition of Opcity, examining how the portals are shifting to become brokerages and why agents MUST diversify their lead sources to avoid big-time disruption. We debate the idea of being an extension of a brand like Zillow versus building your own brand with support from a marketing service like Ylopo.
We also explain how agents can compete with portals by ‘swimming upstream,’ leveraging AI and automation to nurture leads who are further out from a transaction and providing VALUE by offering sellers multiple options once they do raise their hand. Listen in to understand how the HUD lawsuit will impact your Facebook ads and learn why becoming a marketing specialist and building your own brand is more crucial now than ever!
Today’s Topics
- How RCD’s acquisition of Opcity is disrupting agent lead models
- Why agents need to become marketing specialists
- Why it’s critical to diversity your lead gen sources
- How to compete with portals by ‘fishing upstream’
- The idea of digital door-knocking to dominate a geographic farm
- Using AI to nurture your database + scale your efforts
- How a realtor’s skill set needs to change with the market
- Why building your own brand is more important now than ever
- How portals are becoming brokerages with ancillary services
- Competing against iBuyers by adding VALUE to the transaction
- The value in offering sellers multiple options
- How the HUD lawsuit will impact Facebook ads
- Leveraging the Facebook pixel to score your leads
Connect with Mike, Mike, Howard, Ge & Gary
Learn more about Ylopo at ylopo.com and connect with Howard and Ge on Facebook at facebook.com/ylopoinc. Get to know Mike Bjorkman at teambjorkman.com, Mike Bernier at linkedin.com/in/michael-bernier-1014a02b, and Gary Ashton at garyashton.com.
Resources
NAR’s Profile of Home Buyers and Sellers
Full Transcript:
A good realtor will spend three hours a day calling. This is not your typical boring real estate show. This is real estate marketing redefined, uncensored and unedited in what’s working today in the market minus the fluff. This is real estate marketing dude, because just having a license isn’t enough. Now please welcome your host the unprofessional professional, Mike Cuevas.
What is up real closers? There’s a lot going on in the real estate world today. And what we’re going to be talking about is the future potential lead generation how you can nurture leads through artificial intelligence. We’ve heard about this HUD suit against Facebook, what’s going to happen with that is that can actually change the way that we market our businesses on Facebook. How are you competing against the platform zillow.com realtor.com. And also does this mean is the reemergence of building a strong personal hyperlocal brand? We’re gonna find out we got three of the biggest influencers sitting in the exact same room where they can actually touch each other. And one of them is Mike Bjorkman. The other one is Mike Bernier and Howard cager of y Lobo and his whole team there, guys. So this is a doozy. And what we’re going to be talking about is what’s going on, folks, there’s a lot happening here. So let’s go ahead and bring on our cast of characters. But before I do, let me just please let everybody know how many of you guys want to do a deep dive coming up in May 23 to 24th it’s gonna be located in San Diego, California, featuring Sam correllian, Kevin Markarian and Tristan Hamada. So if you guys want to get more info on that, I do have that in the links for you. What’s up, gentlemen?
We’ve also got Jean from y Lobo, as well. And we’ve got Gary Ashton, who just won number one REMAX team in the world.
Damn, Gary, I sorry, I’d missed that hit show. Why don’t you guys tell me that? But five influencers? That’s awesome. Awesome. So folks, you guys, let’s get right into it. We got a lot to cover you agree? Let’s start off with nurturing leads and artificial intelligence and the future of what’s happening. I think we start off with the realtor.com announcement and let’s touch up on that and why we’re having this conversation. So I’m gonna let one of you guys go ahead and take it away.
Let’s start with Bernier. Yeah, so I’m still a little bit sore, but realtor calm. We’ve been heavy spenders a realtor.com. For years. realtor.com just recently bought up city, which is a national call center that basically incubates, you know, leads to appointments for agents, and they do it for a referral fee for a sweat, they have a brokerage license, they don’t have broker’s license to Yes. So we got the call a couple of weeks ago, that we are no longer have realtor.com connections that all of our leads are going to be going directly to our city. And if we wanted to participate with that city, here’s the instructions to do so. So in other words, they basically disrupted our entire lead model. Luckily, because I’ve known this guy for a while. We’ve been working on some alternatives. And we’ve been, you know, really investing heavily with why local and Facebook marketing, so we’re able to survive the shift very well. But a lot of teams I’ve talked to have not been so lucky.
Yep. And you guys remember when this happened with Facebook ads, five years ago or so and everyone turned likes and you have to pay to reach them. Now. It’s the same thing that’s happening. But again, you got to own your own media. You gotta own your own stuff so that this doesn’t happen to you in the future. Mike Bjorkman. Howard,
what do you guys takes? Well, I’m the I told you so guy that I said, this is going to be happening for a long time, right? When Zillow called me in 2009, said they were testing different beta models, and wanted me to join in this was one of them. It was a traditional model, flat fee model, and then this model, and of course, I told them, No, nobody believed me. And now here we are this. So I didn’t think realtor calm and be first to the plate. But you know what they want to they want to make the most money, apparently. So if you guys don’t think this is going to happen all around you absolutely crazy. And this is why I’m so passionate about just what you said, we need to be real estate agents. But actually, we need to be media companies with real estate licenses, you know, marketing specialists, real estate licenses and, and sitting in this room at y Lobo, especially in GE, watching what he’s doing right now with artificial intelligence and how we’re going to nurture means differently. It’s pretty fascinating. But I’m going to stand out and say, Look, everybody needs to stop. And I mean, stop buying leads. That’s my perspective. And I have people around me, they’re probably gonna punch me in the face. But I don’t care. You know, I mean, and what I’m saying buying leads from those guys like Howard and GE, they don’t want to take our business away from us, they want to enhance our business. That’s why we’re sitting while this room today these these mega tech companies that want to get rid of real estate agents are what we need to deal with currently.
Let’s talk about the dynamic of what the big portal needs are, right? Really, who’s the brand? When the consumer goes online and looks for housing? Are they going to Mike bjorkman.com Oh, no, they’re going to somebody else’s large brand and we end up being an extension of that brand that gets to work that lead if we’ve got speed to lead and we’re lucky enough
But here’s the thing though, if you create if you’re the big player in the local market, and you’ve created a brand awareness, yes, what you’re doing is complementing what they’re doing. They’re bringing as many eyeballs on to I’m talking about Zillow, right? So there’s so well branded people going to Zillow. Well, I’m also still spending money in my market by promoting myself. Yeah, so I’m on the radio on billboards. I’m sponsoring two major sports teams. I’m also spending a lot of money on Zillow. So it’s when people come to Zillow. It’s that Jab, Jab, Jab, Right Hook, you know, the hearing on the radio. Yes. They see me on the billboards. Yes, they see me at the sports games. But anywhere they go to Zillow area, I’m again so
I’m leaving us with a point that Mike’s making which is which is Zillow is just one prong you have a multi pronged attack. You’ve diversified yourself. You’ve been put on the back of Zillow. I wouldn’t say I’m out No, no, I was sure but some at some point when we go to cry when they go that when they go to hurt the 50 Commission. Yeah. Yeah, the point is also to diversify. Right? He diversify. What are you saying is when they do that I don’t have all my eggs in one basket.
But you’re lucky some of our friends that got crushed last week or the week before they go, that’s it. That’s all my business got here. super smart. Here. Just when I said smiles, I look a marketing specialist with a real estate license. So you’re so well branded, you still have lead gen. You still have the money to bring it in. But if everybody had their eggs in one basket, which was to Zillow, realtor.com You know, when Zillow says, Oh, realtor.com stocks up and they’re making all this money, they’re gonna say, Yep, let’s turn the switch on and stream. Yeah, that’s it.
We were We were happy. We were fine with people getting realtor.com and Zillow leads because as much as we do a ton of lead generation. We’re also very, very focused on lead nurture. Yep. So we love it when you guys get leads from multiple sources that aren’t even why loco, because we’re nurturing all that stuff. We’re doing dynamic remarketing. And all of it we’re going to use AI behavioral texting. So multiple sources, right. But we had a lot of people who, you know, the funniest thing is, is, you know, Mike is like back in 2007. When we started tiger, right? It was all like the Wild West that it was, we were teaching people about paperclip, but it was all nurture stuff, right? Because there’s all Google paperclip. And we had to teach that and the people got really, really good at and they built these massive databases. And as your database ages, as long as your patience, people all of a sudden call me like, man, I wasn’t getting any closes like the first three or four months. But now it’s taken up and they go 12 months. And the cool thing was like every single month, you went deeper, good, more people fall off the tree right into your lap. But then when the portals came after that, and then everybody got used to just those immediate hand raisers. I want to preach about this a little go see it this week, so all became speech lead, and everybody forgot all their best habits in terms of how you deal with nurture, right? So then fast forward, then we know they’re going, they’re gonna be pushing more and more into digging into your permissions, which disrupts your models, it’s like, really, so so those folks who diversified their lead gen sources like you have you have your your okay, right. That’s where I think AI is gonna become so pivotal, because why everyone loved the portal leads was was this immediate? Sort of, you know, you were only talking to those people you want to talk to you, right? Yeah, right. So what we can do is say, okay, for the amount you’re spending on portal leads, we can get you 10 to 20 times the number of leads, they’re not all ready to go, and most of them are not ready to go. But then we use AI, to nurture them for you and communicate with them. And then we then know the ones that really start communicating, they become hand raisers. So that’s kind of what we’re focused on.
Let me add this for our listeners really quick. Because this is important for we get off track. The one thing that realtor.com has Zillow has in any of these tech platforms, folks is an audience. And once you have the audience, you own everything else that comes around it. And this is nothing more than a fucking giant game of attention. And the reason why Howard has to go and retarget all of these people is because the average consumer sees like 30,000 messages a day, from different advertisers, or 10,000, whatever the name is, and if your shit goes off pace, or if you’re gone for just 10 seconds, you have the chance to lose that attention to somebody else with a better offering. We didn’t have all of these different ads and whatnot. And I think that initial relationship that you build with these leads, when they see that human side when they see you popping up in different areas, even kissing your kids holding your kids hands showing the human side of your business. They’re more attracted to you because the only way that I think we can compete against these big tech companies is through relationships.
Well, the other thing that I was gonna say is we actually have the ability to compete very effectively against the portals by fishing upstream where that used to be like a disadvantage, like oh, I really want these downstream, ready to transact books. The way to compete against the portals is to go which we can do through social media and everything else. He’s gonna wait upstream fish the consumers out of the river, put them in your nurture fish pond, which is where we use remarketing and AI and all that kind of stuff. And guess what, if they’re on a really good search site, and they’re getting relevant home sets them all the time, guess what, they never go on to Z, they never go into RDC. And here’s the thing, though, exactly right.
100% back to the brand and get what I was saying about, you know, RDC, and Zillow and when the consumer knows their brand, and you’re just an extension of Gary’s done a fantastic job would not have not happened because he’s hyperlocal. And well branded, extremely well branded, but most agents are, now we have the opportunity to do as Howard said, fish upstream. And for the next 612 18 months before they buy, all they’re seeing is our personal brands over and over and over again, and then fight for attention. You just mentioned, Mike, that’s going to be huge. Yeah, we
know that, that it’s hard for agents to just keep their eye on all their leads, and leads that are 12 months out, or eight months out of six months out. And that’s where the AI becomes really important. Because we can actually have, you know, a really good conversation with them. And those folks that don’t communicate yet, right, we’re just gonna keep getting them homes that we know are precisely targeting them. But then all of a sudden, those folks who respond like Yeah, actually, I’m interested in a four bedroom, three bath $3,000 home and I like to go boom, that’s when we this tapped me on the shoulder say talk to them, pick up the conversation,
by the way, here they are. Here they are. Yeah, I used to dominate a geographical farm back in the 90s. Right, it’s 1500 homes dominated it. And with technology today, we can fish upstream just like you said, and I’ve always been about going upstream because I hate writing 10 $15,000 checks to a portal. So if we can geographically target which we can I saw g do an amazing job where
I go now digital door knocking you actually don’t have go tell people to door meeting digitally door knock with tons of different messages all the time with video messages and the technology
we have it doesn’t only have to be so sweet. As much as I love remarketing, retargeting all that stuff, we actually can verify their data through all the technology now name, email, phone number, all we need is that data even more,
even more you can you can identify equity, you can identify the absentee land owners, you can identify the behind them paying the taxes and you can sniper hunt. Now, for individuals in that geo form like you never could before with your brand wrapped around the data.
So for mega teams like us and Gary, especially when 1100 deals or whatever, you just make that geographical farm bigger and bigger user personal database, your team database you remarket in, verify all their data. And now you can have literally 10s of 10s of 1000s of potential clients that are being nurtured. And that’s the name of the game nurture these people to where they do not have to go to a portal. And they feel like they’re in bed with you and they have a relationship with you. And and I always say when I finally meet a client that’s been nurtured, it’s always a hug, not a handshake. And that goes back to the, with all the old timers Well, I guess like me say, it’s still a belly to belly business. It’s still relationships, but with your technology with the technology available to us. We’re doing that we’re nurturing relationships. We just don’t have to do it. Like this. Yeah, Mike, we
had a post with Mike, we had a post yesterday in our wet elbow success community. There’s a private group for all of our clients. And it was a, it was a client and he was like, Oh my God, my boss, my boss, my wife comes in with a $1 million base. He was just he was giddy, you know? So
let’s go through why this is important. Guys. 76% of people actually use the first agent they spoke to period.
They did they did. But let’s also duck This is an important fact. When you borrow up a book title leads back in the day before portals Keep in mind, this was a manual job back then if you were going to nurture. What do you really did you had a couple of drip email campaigns fine, but you had to do all the dials on your own. Now, can you think about it, it might take 10 conversations with somebody before they buy, it might take 15 contact attempts in between those conversations. Can you scale that over 10,000 leads manually, that’s
pretty big to do. This is my CRM when we started, right right piece of paper with notes next to it and the next date you follow up and it had to fit back in my pocket. But Mike’s right it’s like how we use the automation is more for in other ways than just now business. And I think that’s the mental mindset that we all need to make. Right? Everyone wants now now now business but the ones that you when you start playing for business and a year from now, when it comes 12 months later, now you’re you’re tracking you’re not you’re not there anymore, because you’re building on that brand.
If you do it on such a larger scale leads, we’re talking about 1000s upon 1000s of leads you can manage through automation and wait for them to signal to you that there are handrails, which is huge. Yeah,
I also you know, look but the let’s be frank, right. The typical real estate agent is a bit sort of technology phobic right there. I mean, they’re, you know, a lot of folks are and you know, I don’t mean that in a disparaging way most people are like, it’s all scary stuff. And, look, I’m a great real estate agent, but I don’t want to have to become an expert, digital marketer and an expert at AI and all that. So that’s also really critical for you know, and I agree with you
agents have two options right now, okay, like the markets change, you don’t change with it, you’re going to be just like Jurassic Park. One, find a company like Howard’s to do it for your to frickin do it yourself and figure it out skill sets change as the market changes and always has, like in 2009, that skill set was short sales and reo. Right that people are still buying and selling houses. But the skill shot changed. So we just got to change with it. Any other thoughts on that before we get to the HUD?
One because things are kind of like they go in cycles. You know, 20 years ago, what Mike was saying back in the old days, when we did this, what we did is we actually created a brand for ourselves. That’s what we did, you know, and people were drawn to that brand. We got away from that. Because of these big portals we need to deal with Gary is a prime example of this famous built a brand that everybody has marketplace knows his own personal brand that he could probably you know, his his website hits alone are probably huge, because people know to look for, that’s what we got to get back to doing again, is start building our own brands and being in business for ourselves and have companies like this that don’t work against it. The difference between the portals and why logo is doing instead of you being an extension for the portal. Now these companies like why local are now helping you build your brand and your business. That’s a huge difference. Yeah,
totally agree. If you guys want to get in submit some ins and outs, how do you feel like what do you mean, build the brand? I see a lot of people confuse what a brand is, folks, a brand is nothing more than just how many people know who the hell you are and what you do. Let’s not overthink it. You have to consistently create content and our media or an excuse to stay in front of those people in order to do that. And it’s consistent communication with your audience is how you build the brand. And I’ll give you an example. If you don’t talk to your wife for 10 months, are you going to get a divorce? Yes, absolutely. Because you got to consistently communicate with one another. It’s no different than how we market a brand to a business owner. And it’s how every business markets their business, you have an ongoing story,
media, video and print, right, totally based around relationships. So you got to find every way that’s affordable and effective to ramp that up for your team. And what’s funny is all the big portals are going towards all of their affiliate agreements. So they’re effectively going to make more money off of the ancillary products that they will the Commission’s at some point. So if you don’t think Commission’s are going to be compressed more and more and more based on that you’re crazy. And now what are we going to be doing running around for 1%? half percent or 2%? And it’s getting crazy. Can you please
clarify what you meant by that Mike, dump that down for me a little bit more so that every understands what he said. So break that
down for us. Most people know that I owned a big brokerage right. And I was into title escrow any other ancillary product possible. But the big ones the big moneymakers. And I can feel my it’s really looking at me now. But they’re all going to go Consumer Direct. And they’re not going Consumer Direct. Only they’re going direct portal direct. So at the end of the day, the real estate agents commission is going to be less and less and less valuable because they’re going after the side money. And they’re going to go after our consumers directly. And they’re going to build relationships with the portals that are going to matter a lot. So again, it’s more important to build our brand now than ever, because we can always diversify and have insurance companies and painting companies and landscape companies all that good stuff. But the average agent or the average huge portal, that commission is going to compress more and more Redfin is the first one to prove it, right. So they straight out advertise everywhere, we’re going to sell your house for 1%. And then they get their dingling $50,000, a year agent to facilitate that. Well, how many are willing to do it for less? And then at what point does it come to how many commissions Do you see compressed in the computer in the MLS? Already? I’m seeing him under 2%. Now, let’s get to get crazy. But
let’s talk let’s talk about the ancillary. Right, so what it is, and this is this is how the portals I think are gonna affect this. So with the Commission’s with model without city that goes, you know, nationwide, which, you know, if you’re buying a $200 million company, my guess is you’re going to fully integrate it. So let’s just say they’re going to go nationwide. Now, how much of a stretch is it going to be that that 35% turns into 50%. And when that 50%, commission split, good, so how much of a stretch is going to be that if you use our title and mortgage or guess what you are using our title and mortgage and you’re still getting 50% if you want our absolute leads are going to push our ancillary so now you’re going to disrupt the relationships that the agents have with their own ancillary companies and or vendors or partners. Now that’s going to happen, I believe, with every portal, and I believe the commission compression you’re seeing with the companies like red fin, well, you know, it’s a loss leader to beat ancillary.
That’s what it all Can you guys explain. Now this is basically like open door business model, because that’s the next question that’s going to lead to, you know, how are you going to compete against the open door offers because it’s not just the tech companies coming after your guys’s commissions, guys, you guys got AI buyers coming on into the scene too. And there’s a major opportunity here but break down their business model just so everybody understands what you mean by Cuz they’re doing it what you just said in that
escrow title, all that stuff, the big moneymakers, the mortgage. I mean, Gary Keller, one of the smartest guys in the world says I’m going straight after mortgage and property management, right? We’re a tech company. Now we’re not. We’re not a freaking real estate company. So when you’re going after a phrase that let’s go to relo and Aria, when we got out of Oreo in 2011, came around and our reo market crashed. We were as reo agents actually only getting 50% of our normal commission. If you get a reload today, I don’t care what part of the country and that referral fee is 45% and agents are gladly taking it. So to Mike’s point that is coming to 50% tomorrow and there’s companies out there that will say right on their website we just wish you use our referral partners will list your home in the MLS for free. So I’ll tell you about that i buyer thing with a lot of people don’t realize is Google invested millions of dollars and some auction companies, right we have options calm xoma super smart. So what they’re trying to do is a buyer, the commission reversal, this reversal is just what they’re doing. There’s a buyer premium on there. So the I buyer programs are getting more and more convenient. And it could become this as world war three, right? It could become a resume and auction calm and a couple other people that flip into the auction model like Zillow, probably well, the buyer premium will be normal. So now they’re gonna have the power and the audience, like you said, I mean, what does Zillow and Redfin have, like, the most accurate databases next to Facebook? And, and frickin Amazon? Of course. So they actually do have that audience? And how hard will it be for us to compete with the actual seller saying, look, we can do things better than them? At what point do you lose that market share. So if the buyers of the eye buyer programs come by, and they say, look, we’ll buy your house, and we already know from looking at our groups, they’re doing it for hardly any commission. Now, if they just flipped that buyer premium on, it’s a done deal. So that movement is already taken place. So we have three things happening at once the portals taking over the agents fighting for their business, and then the auction, fire commission reversal programs, one of these three things have to survive. So see the agents grow some and and stick up for themselves, or we just all go work for portals and banks, or we go to auction models, and we all become investors and just try to find the deals ourselves. Because as the prices of homes go down, and the Commission’s are just taken out of them and that standard for the buyer to pay that commission. It’s not a big deal. Well, let’s
look at the NAR lawsuit. You’re not even gonna touch on that yet. Because the I mean, yeah, the NAR lawsuit, you know, is again attacking the seller paid buyer agent commission model. Right. So but that is something that you mentioned, but you know, should we just go work for the portals, I think what we need to really, really focus on now again, back in 20 years ago, the reality is most people are putting a house on the market. They’re waiting for somebody to go show it somebody to write an offer. And really, they’re almost like a professional door opener, there’s really not a lot that they’re adding to the transaction. And I think that’s part of the problem. Yep, is what can we really do to add value back into a transaction. And I think if we focus there on adding real value and significant value, I’m talking about beyond the showcase study that our property sold. In this lunchtime, we had this much of an audience we had this many offers. And our last four properties won this month over asking price in this amount of time. Because look at the eye buyer program, what they’re alleging is that our processes are irrelevant, clunky, no longer necessary, and they can automate most of our processes away. And you know, if they’re trying to create the car lot experience, you drive your car up, you take a 20% loss in your car, you go pick up your new car, in between you sign a couple papers, and you drive off the lot. They’re trying to create that experience and they’re trying to feed their ancillary companies by doing so because you’re gonna sign you know, paperwork with their ancillary,
and it works. Look at carmax number one used car dealership in the country that power took over the same, they don’t care, they won’t negotiate, they don’t have to negotiate,
don’t think it splits on three levels, you’ve got lower, and it’s all super price conscious. That’s going to be all the bad stuff, then you got the mid level, which I think that’s where the realtor is still going to be valuable. You’ll be adding value. Yep. And then you got the luxury market where you got to do all for me, and I’m willing to pay to do
right now you’re getting in a specialization where there’s like the commercial real estate agents, for the most part will always be around. I mean, you can bid auction calm and buy a really nice commercial building, but I’m in the business and I’d still be freaking out. Right. So when you talk about specialization, like I would never plan a European trip without a travel agent, right? I’m not flying to Vegas, you know, so, specialization is a totally different thing. Oh, I was gonna say with my property management company. So we have 5060 listings on the market at all times. We’re carrying a lot of liability. Watch this. I put out one post in our local Facebook group. I said, Hey, agents, if you will show our properties for 20 bucks a showing you get to keep the buyers and just pay me 50% referral fee. Yeah, 25 people. Our sounds
awesome. Guys, check this out. So let’s touch on a couple points. You guys. There’s just two different things like brands Isn’t advertising advertising isn’t brand new, there’s two different things going on there. So don’t confuse the two. But I do think it’s going to be a mixture of building on the personal brand, as well as changing your USP. And here’s some of the conversations that we’re having over here. And I’m happy to share, I think that we’re going to have to offer an optional model one models facilitation, only one model is contracting to help them flip their own house once actually give them the fucking money to flip their own house, I always see that as the those options are the only way we’re going to compete against the I buyers? Because that’s one of the ways that they can’t that any emotionally, right. Yeah, you see the optional thing coming into big I think it’s gonna be huge.
Blitzcrank plays over that. Because number one, what you talk about is becoming a first and only point of contact, though what’s happening in the buyer, is you’re getting the call after the words and afterwards and say, Sorry, Mike, I just sold my home to open door. Why didn’t you call me I’ve got an eye buyer program, or I could have helped you What if you’re not branded, that’s totally the eye contact, you have to make sure they’re calling you, not other people. And if you want an Xbox solution, I got two or three of them. I’ll walk you through it. But what you just said to this, I’m talking about putting value back into transaction. Yeah, somebody comes to me and says, I really want to put my house on the market, but I know they need 10 or 15 or $20,000 with the carpet and paint but they can’t afford it. Well, if I have the ability to finance that, get the work done or and put it on the market, now they make more money, then that’s that’s value to a transaction. Now,
let me give you a hypothetical real life that’s happening right now. So we get a referral from one of our guys in Tampa. And someone has a house here in San Diego. And it’s been not touched, like updated since the 70s. So we know it’s a rehab, but it’s an inherited property from someone passed away. Long story short, the owner of the property the fourth wife, I guess, doesn’t want to pay commission. First thing she says, right, I don’t want to pay commission I want to pay commission. Well, the only reason we got the appointment with there is because we’re giving them three different options. One will buy your house right freakin now, too. We also have a contractor team, they’ll show you how to, you know, we’ll coach you on how to get your house, I just wanted to listen, we’re not gonna charge you a GC fee or anything like that, I’m gonna show you what type of cabinets to replace what type of hardwood floors to put in. And if you don’t have any extra money, we’ll actually lend you the money. And we’ll let you flip your own house. But let’s give you all three options. Let’s figure out what the hell you want to do. And you make the decision. Here’s not sheet one, here’s not sheet two, here’s that sheet number three, here’s your walk away with each one of these, this one’s gonna take a little bit more time, but you make more money, this one will be done tomorrow, this one will be middle of the road, right?
So what we’re talking about, though, is exactly why open doors finding success, because we’re not just talking about who’s going to sell at a higher price you’re talking about, here’s your net on three options, which one sounds best to you. Because it’s not always what the highest sale price, sometimes it’s about being in alignment with the way that they want the period, just the ease of the transaction, it is
totally, there’s tons of contractor partners that are already reaching out to us saying we’ll do this for you. compass is already doing that for their agents. So what you said is a big deal. So you right, you have to offer the plans eye buyer, the transactional and the full
Look, if you’re if you’re straight up traditional, put your house in the market and wait for somebody write an offer, you’re going
to get more time you’re done. I want to make one point which is we’re in a 10 year bull market. So this is all great i buyer programs are all great homes are appreciating 8% a year, right. And when you put a for sale sign, and you’ve got multiple offers, and all that kind of stuff, but what goes up comes down, I’m old enough to know what goes down goes up. So I can tell you that, you know, there’s a lot of Wall Street money being thrown at all this stuff, every sort of now publicly traded or pre publicly funded program. I’m not gonna name who these big brokerages are all these big eye buyer programs. You heard it here, I’m telling you, the party will end at some point. And they will not sit on inventory that they can’t move. I always have to remind people, you know, during the last big recession we had, you really didn’t want a listing, that listing cost you money and you couldn’t move it right buyers were gold, right. So so i think i think you have to just sort of factor that in as well, which is the dust is gonna settle. And it will take a mini recession or, or a average recession to make the dust settled. But what you guys are talking about is very valuable to any agent that’s sitting out there, which is, you know, don’t be afraid about all of this, grasp it and use it to your advantage. And that’s where hopefully gene I can come in and think about how to create these automated marketing programs that basically help you come say, Look, I’ve got all the options for you, in a sense, like I am your agent, I am your broker, right and I will be your go between to get you the best deal, whether it’s this eye buyer program, my investor, rehab flip, or whether it’s me actually getting whatever you want. We’re going to show you all the options. They need that counsel, and that word, that advice, counsel, that’s really what you guys do, and anybody just like I don’t want to They just treat you as a salesperson for they’re absolutely their most valuable asset in their life.
I think that’s a good point. Because you see this chatter happen up into groups all the time. They’re like, Oh, they’re not going to pay me a 5%. commission, I’m worth way more than that screw that member, they’re still buying a house you’re paying a commission on, I’ll take any listing at 1% and lose it, inherit the relationship and get paid on the buy. Like, you got to start thinking outside the box, we’re not entitled to jack shit, guys. We need to earn every dollar that we make going forward. And the only reason that we’re in this spot is because we’ve been entitled for over a fucking decade. But here’s the thing, like what you’re talking about, and this is this goes back to how are you? Right? We live in the group. That’s awesome.
I don’t think I’ve been for the last 10 years to get to work. But the thing is, the difference is I’ve reinvested the money I’ve made to create the brand. And so totally, hopefully, I’ve created that relationship within the community. They know who I am. So in an ideal world, they trust me, they know me, they’re aware of me, the eye buyer stuff is still Who is that?
The portals? Really, I think they’ve really sort of figured it out without telling everyone what they really figured out. That eye buyer program for them is all marketing. It’s the world’s greatest listing. It’s the world’s greatest selling, they’re not going to send all that inventory and they’ve actually also figured out how most of that I figured out how to become brokerages without you guys have all been brokers right and you know the operating nightmare of owning and running a brokerage they figured out how to go eventually get 50% commissions with without having to have the operational headaches for brokerage. That’s what the the benefits of taking commission splits without having any operations of actually having to you know, run those deals.
Here’s a good point too is like five years ago I was really involved in the investor community they’re also competing with the mom and pop real estate investors like that’s another group that’s very not happy about this whole situation however, I think where they got their lead gen there’s not a better seller lead tool ever then I buy your house or I will buy your house or I’ll buy your ugliest house whatever the hell it has been around. It’s been forever and that’s the only thing that still generates a seller lead which is why it works for the rehabbers to me the i bar Yeah, I agree with you. 100% It’s a marketing ploy you’re creating seller leads worst case scenario, the tournament, the listings,
who cares but but let’s let’s look at the silver lining, I agree with Howard, I don’t think you’re gonna see I buy especially in a recession do have what they think they’re gonna do or what they say they’re gonna do. But what it did for us is it start exposing the fact that in our transactions, that a lot of agents and I think I’m gonna use the word entitlement maybe a little different than you do. But a lot of agents have really produced, you know, really bad habits and bad experiences for the consumers. And in these companies have come out and said, you know, what, we’ve heard the consumers demand, we’re gonna, we’re gonna do something better than what you guys are doing. You know, and to be honest with you, in a lot of cases or right, a lot of agents are doing very little for a lot of money. So I’m thinking about how we can add value to really secure our future as an industry is something we should be thinking about with or without this eye buyer pressure or portal question. We’ve looked at home
and home appreciation absolves all since these people that buy homes, I’m going to fix you up for 50,000 of it ends up costing me 80. Well, what does that homes kept appreciating, they don’t lose their shirt, they probably even still make some money. But I’ve seen this, like everybody was buying and flipping homes prior to the Great Recession, everybody in their uncle was in that business. And people will make even more money running webinars how to be in that business, right? Well, guess what, we’re back to that same thing. But the second that homes don’t appreciate, you’re no longer absolved of your mathematical errors, or your remodeling errors, all that kind of stuff you’re exposed. And when that portfolio is sitting, and sitting and sitting, right, and you’ve got a cost of capital, that’s when you’re gonna see flush that so I’m always about, like, trying to look around the corner, we always and that’s what he’s kind of forums are kind of cool. Because, like, get a lot of really smart guys to think about what’s coming around the corner, what’s coming in two years, what’s coming in four years, what’s coming in six years. And that’s how you stay important, relevant and how you grow your business. It’s not right now, because right now, all these people that are doing the home flips that I buy your stuff, they’re gonna get flushed away. Right. So guys, let’s, uh,
let’s talk a little bit about this HUDs. Next, we’re right at about that 40 minute mark. So let’s hit this HUD suit questions unless you guys want any finishing points on this any good to say something. Gee, come on.
So a lot of people are reading about Facebook being sued by housing and urban development. And Facebook themselves came out with a policy statement recently. And they they isolate three areas. One was, you know, anything to do with advertising poems, right. So maybe you can sort of clear up exactly what what’s going on, and why people should or shouldn’t panic about this. People who have found success advertising on Facebook. Yeah, absolutely.
So basically, in a nutshell, what’s going on is that prior to this HUD suit, and really the HUD suit is tied into a hunch of discriminate lawsuits that Facebook recently sell and in Facebook has already made a commitment that by the end of this year, they’re making some major changes from advertising perspective for the three segments that the Howard is talking about, right housing being one. And the primary goal of these changes is to take away some of the levers that agents could have taken advantage of to discriminate from a housing perspective, like for instance, excluding certain demographics, or zip codes, putting certain people at the backgrounds and so on, so forth. Right. So you know, from a operational, so let me first stop talk start from principles perspective, right. So first off, even before, you know, Facebook took away these restrictions, the HUD discrimination laws and rules and regulations have always been there, right. So if you were leveraging discriminatory ways of marketing, you were in trouble beforehand or after. So in some ways, what Facebook is doing is helping you because they’re putting guardrails around how to prevent you from not making major mistakes, right. So that’s number one. The second is that if you were using Facebook’s demographic targeting and all that kind of stuff, from a perspective, not from discrimination, but trying to actually isolate people were actually interested in buying and selling. The good news is that even though there are going to be changes, those changes will not impact you, as long as you understand the science of what’s happening with Facebook. Right. So let me first explain tactically, what’s going to change, right. tactically speaking, what’s going to change is that in probably September or October of this year, when you go into Facebook, and you create an ad related to real estate right now, how are they going to know if you’re creating an ad related real estate or not? Probably at some point, you’re going to identify your business on the ads manager, as this is a business dealing with real estate, your house, right? Once you have identified yourself as a housing advertiser, when you go into the targeting section of Facebook, you’re going to have a restriction when it comes to geographic targeting, and you’re gonna have a restriction when it comes to interest. Right? geographically, Facebook is going to not allow you to target include or exclude an area without a minimum of a 15 mile radius. Right. So that means that if I were targeting, for instance, the, you know, City of Nashville, right, or Brentwood, Tennessee, you know, when I created an ad for that environment, I’m going to be targeting that particular city plus 50 miles around right. Now, the good news on that is every single ad that why local runs today for all of our clients, which is 1000s of agents across the country, they’re already all 50 mile radius targeting, right? Why is that because based on our research, the average home buyer looks to buy a home within 50 miles of where they currently live, right? So that 50 mile radius restriction is really not going to do much for you know, it’s not going to change the economics that much in terms of the targeting problems, right. The second is interest targeting. So you won’t be able to, for instance, target people, by ethnicity, exclude people by language, all those things that, frankly, you shouldn’t have been doing anyways, you’re not going to actually be able to write. So you know, bottom line is, why is it that we don’t think this is going to make a major difference, right? The reason is because at this point, from a Facebook advertising perspective, you picking what demographics you’re going to target from an advertising perspective, is not how you get the best results from Facebook, right? Because Facebook has invested billions of dollars every single year into AI and machine learning and data science, right? what you’re trying to do is tell Facebook, from the advertising that you are already doing, who you should have clicking on those ads, right. So for instance, when you’re running a standard ad with a conversion objective on Facebook, Facebook’s first inclination within that first two weeks of running that ad is if you’re targeting 1000 people, Facebook’s gonna figure out who are the 100 people, they’re most likely to click on this ad, right? They’re not serving to 100% of those people, 80% of those people, even 50% of those people, it’s the 100 people that are going to most likely, right. So if you, for instance, are advertising, a luxury listing, and based on the price point of that home, the advertisement the photos used and all that kind of stuff, you are communicating to Facebook, you are already a luxury audience, the people we’re going to click on those ads are going to be luxury buyers, right? So as long as you have the appropriate marketing intelligence of how you’re going to go about understanding Facebook’s targeting mechanisms and how they go about targeting the right people. And then make sure you’re creative and what your advertising actually matches up to your objectives. You’re going to be fine. You know the last time Facebook made a major targeting change across the board our clients cost from the drop by point percent, right? Why because it got a lot of the advertisers who didn’t necessarily know what they’re doing to move out of the marketplace, you know. So I think this is going to be an opportunity for everyone to go deeper into the science of Facebook, and people will understand it, who take the time to learn it, or leverage partners that do are going to come out,
sometimes a 15 mile radius, actually does include a bunch of areas that you don’t really cover as a realtor, right? So even if we’re bringing in all those folks, you know, we have the ability to ask questions, you know, sort of during the funnel non discriminatory questions, we can ask questions about, you know, the price range of the home that you’re really in your buyer timeframe, right? Do you really want to rent, you really want to buy a whole slew of non discriminatory questions that can be asked, Where we’re still going to show every single consumer homes, we’re not gonna like, not show them as you can show them all, as naked, all have access to great home search. But in terms of actually siloing, like, you know, let’s say, you know, Mike really just wants people that are, you know, looking at five or $2,000 plus homes within want to buy within six months, therefore, not writers, we can still do that post the lead coming in.
But can I just make this comment? Because, gee, what you just said, should scare the pants up. Everybody could not try to do this on their own, and hire professionals. Because the last thing we need to do when we’re trying to sell real estate is follow Facebook and all the changes, they make hire professionals, I do this for a living, if you want, it really can be done at a high level.
Hey, it’s Monday, I have a question. So what about? And that’s very well on how you explain that. I didn’t know that. So here’s my question. For people that work in dense areas, like if I were, I used to work in Chicago, and one mile outside of my market, sorry, walk down the street, you’re getting shot. Alright, so 15 miles is a huge radius, I could be in all different types of neighborhoods, I could be marketing a house in the Gold Coast, that’s $3 million. And within three miles, you’re in the hood. Okay, so like, for that area, it does make sense to target a zip, because that’s the people in the neighborhood, just a different neighborhood. It’s not that we’re targeting demographics, but what you’re saying is that well, based upon the copy that you have, in the ad, that Facebook will intelligently find people on whom that should be served to anyways.
Yeah, so So, you know, this, this might be getting a little too, too dense, right. But there’s a couple of different things that you can do. And again, this is where you’re either gonna have to invest the time to figure this out, or, you know, invest in a partnership that already can set this up. Right. So this is a pretty conventional problem that happens across all industries, right? You have people who have higher lifetime values or lower lifetime values, how do you solve for that beyond just, you know, telling Facebook, like, here’s the only people I’m trying to reach? Right? So there’s a couple of things. The first is that you’re creating is definitely going to matter, right? The more you’re created as targeting, from a perspective of Who am I trying to speak to directly, right, the better you can make that creative, that’s going to make a huge impact, right. The second thing that’s going to make an impact is giving Facebook, the signals of who is valuable that comes to your website, right. And that all happens via the facebook pixel. Right? So with the facebook pixel, if I install that, on my website, I can tell based on every single time a consumer to come to our website, a lot of information. So for instance, if this person came to my website and was looking for homes that are over a million dollars, I can give that lead a score of five, right, or 10, you know, a lead that comes in and looks at a dim price point, I can score with a lead of one or two or three, I’m just simplifying. But obviously, there’s a lot of different grading systems, right, based on the number of times that person comes back to the site, the frequency based on you know, the types of homes, they look at all that kind of stuff, I can send that signal back into Facebook, and Facebook can use that to optimize against all those variables right now, those are tactics that in e commerce and in auto and a lot of industries they use from Facebook perspective for years and years now, right. And at this point, with residential real estate, we’re gonna have to all level up to use that technology in the same way to accomplish the objectives are not. Very well explained. Interesting.
Alright, guys, well, I think we covered quite a bit, let’s get this wrapped up with some closing thoughts. Everyone sort of wants to just sort of take a stab at it, and we will get this wrapped.
I would say I’m a sky is not falling guy. There are a lot of changes going on in the industry. But I think there’s a way to, to make lemonade out of the lemons that you perceive, embrace technology, embrace what’s happening in the marketplace. And understand that while a lot of things are changing was really interesting, because it is my second company in the space. Well, a lot of things are changing. There are a lot of things that just haven’t changed, right? So for example, in the old days, as you were saying, you know, manually you manually had to get listings out to your to your buyer and say what do you think about this and we think about this and when you think about this very time consuming. I tried to Have over 100,000 times, right? You run out of time in the day? Well, we can use technology now to automate that process for you. And you’re still delivering value to that client or to that buyer that no one else is delivering. And you guys talk today about how to deliver more value. There’s so many eye buyer programs, it’s so overwhelming, and there’s investors. And there’s what happens if you flip or you know, remodeled, there’s all these options. And my Quavis I love, what you’re saying is, is you are the counselor, you’re the advisor to show them those options. So it’s these unique selling propositions, which I think are greater than ever, both on the buy side and the left side. As long as we’re thoughtful about it, I think that we’re gonna crush it,
I want to give a closing thought to. So if you look at what like the most coveted or valuable piece of real estate agents business, it’s really the pipeline, you know, that’s what really drives us to be able to do businesses, our pipeline, one of the mistakes that I’ve seen over the last many years, we’ve gotten ourselves in positions where we have all of our eggs in one basket, and our business model depends on one of the person’s business model. So if a portal shifts, all sudden, 5060 70% of our business goes away overnight. We don’t want to do that I think diversifying and getting a lot of different lead sources, you know, not just being a referral agent, but you know, being a referral agent, but doing other things too, getting really, really in depth and go deep on lead generation. And if you can do that, and you got leads coming in from all directions, then which is going to happen at one thing shifts, you’re still going to be okay. So you know, again, I’m not a skies balling person either. But what I think I’m really trying to say is making this build your build your database from 1000 sources that that lead pipeline, that database is going to be your key to survival no matter what, here you
go. I like that as a final thought, too. We’ve talked about diversification a few times. It’s diversification in your business, diversification in your marketing, and diversification in your database. All those three things will keep you safe, no matter what happens, like Howard said, always embrace technology, because it allows us to do things we never could before. For example, like I made that geographical farm for something that would take years and years to do, you can do within 90 days to six months now, based on technology, which is amazing. And don’t live with your head in the sand, watch be part of masterminds, we’re going to be in four days of masterminds coming up, it’s going to be intense. And because of those things, we’re going to learn how to say the market. If you ignore things like that, you’ll be left in the dust. So
I agree. Speaking of masterminds for those of you that are interested. This table actually Oh, sorry, guys, I thought you guys were all gone. Alright, come on,
I was gonna say it’s like to say, but from my point of view, what we’re doing is really investing the agents, because essentially, all you’re going to do is really, you have to add, add value. And we are still the focal point of the transaction. So the more that we add value, and it doesn’t, just like everybody was saying, Just got to become aware of what’s going on, keep investing in yourself in your business learning. I mean, just comes back to what everybody else has been saying, essentially, go with your final thoughts, gee,
the only thing I’ll say is, you know, we are, we don’t do this often. But we made a pretty major enhancement to our product suite around AI about two weeks ago that I would say, has blown me away with how powerful it is. And I think that, you know, any agent that is looking to grow their business understands the pain of bringing more leads and bring on more process, which means more people, right. And I think that AI is finally at a level where they can insist that we’re going to do a webinar, well, oboe is going to do a webinar for prospects around just this technology next Thursday. So if you go to our white lopo page on Facebook, you can sign up for it. Even if you have no intention of using our platform. You know, I really recommend that you go on that webinar, because you’re going to understand this is the type of technology you need to aspire to have whichever partner right? And so highly encourage that. Oh, be very educated.
Yeah, I mean, I’ve been going to real estate conferences for well over a decade. And one of the things that doesn’t change is everyone always talks about how when you call a real estate agent, they don’t answer right. Like it’s like astonishing the the sort of bad response rates statistics in the industry. This is where AI is a is a game changer, because AI is not lazy. AI is not emotional and AI is not taking kids to soccer practice. AI is always on to communicate with your consumers when you can.
So I just want to do we all did our final thoughts and then Howard had to jump back in and get the last hour.
All right, well, I’m going to cut all of you off right now. And speaking of mastermind, guys, if you’re not aware of this event, it is coming up on May 23 and 20 Fourth in La Jolla, which is near San Diego, California and it’s all it is a mastermind This is a deep dive Sam premium Kevin Markarian interesting hamata will be leading that if you guys are interested in that, click on the link deep dive 2019 calm and go ahead and fill out an application. But you guys great conversation. I think that was an amazing conversation tons and tons of insight. I’m going to be seeing you guys this week and I think this conversations gonna continue over a campfire maybe a couple beers. So appreciate everyone tuning in. Today’s a lot of fun. You folks, things are changing. Keep your eyes like Mike said don’t put your head in the sand. Keep your eyes wide open. Now’s the time to be wide open. And if you play your cards right, there’s a major opportunity here. If you know what it is. Talk to you guys later. Appreciate it.
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