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Is door-knocking dead? What about client appreciation events? How can an agent create quality time with your sphere in an era of social distancing? Many of an agent’s daily activities have changed — open houses, listing presentations, home showings, etc. — and others may still change in the months and years ahead.
The big question: Which of these changes will stick around for the long haul?
Top-ranked real estate coach Tom Ferry is back on The Walkthrough this week for part two of our conversation, and we’re focused on the future of these and other standard real estate activities. Tom also walks us through the money management advice from his most-watched video on YouTube (over 10 million views).
Links and Show Notes
- YouTube video: How to Properly Manage Your Money Like the Rich
- Connect with Tom on social media: Instagram | Facebook | YouTube | LinkedIn | Twitter
- HomeLight’s Agent Resource Center
- Subscribe and listen to The Walkthrough: Apple Podcasts | Spotify | Google Podcasts | YouTube
(SPEAKER: Matt McGee, Host) There’s no question that real estate has changed in the past few months. We’ve documented a lot of those changes right here on “The Walkthrough” — virtual tours, social distancing protocols, keeping homes really, really clean in between every showing, stuff like that.
Now that we’ve figured out a lot of that as an industry, here’s the next big question: How many of those changes will stick around?
Take something like an open house, for example. Many of you have been doing those on video, right? Well, is that a permanent change for you? I bet some of you listening right now are thinking, “Yeah, more virtual open houses for me. That’s definitely the way I wanna do them going forward.” But then others are probably thinking, “No, once things settle down and get back to normal,” whatever that is, “we’ll do open houses the way we’ve always done them.” It’s all good. There’s no right or wrong answer to that.
But what about something like door-knocking? What about client appreciation events? How is all that gonna work in the future? Well, today we’re looking ahead and we have a fantastic guest to join us on this journey. It’s part two of our conversation with Tom Ferry.
This is “The Walkthrough.”
Matt: Hello, hello, everyone. How are you? We have made it to the month of June, congrats all around. I’m Matt McGee, editor of HomeLight’s Agent Resource Center and your host every week right here on “The Walkthrough.” On this show, you’ll learn what’s working right now from the best real estate agents and industry experts in the country. At HomeLight, we believe in real estate agents. That’s why we created “The Walkthrough.” We’re on a journey exploring how great real estate agents grow their business, stand out from the crowd, and become irreplaceable.
We have two ways that you can contribute to the show: Leave a message for me anytime at 415-322-3328 or you can send an email to walkthrough [at] homelight.com. I do read and hear all the messages that come in, and I might use them on an upcoming show.
Our agenda for today is part two of our conversation with Tom Ferry. Afterward, I will give out a number where you can text Tom directly. He does that on his own podcast every once in a while. And also stay tuned at the end for our HomeLight Home Run segment featuring an agent based in the Dallas-Fort Worth area.
As I said last week, I don’t think I need to introduce Tom Ferry. He’s one of the top real estate coaches in the world, after all. He’s kind of like the Iron Man of real estate coaching, or maybe Captain America. Either way, it’s an appropriate analogy because much like the Marvel movies, it would help just a bit if you heard part one of our conversation. It’s not entirely necessary, but it would help.
Last week’s episode was basically a masterclass in getting more listings, which is so important right now. Tom talked about real estate being the solution to the country’s economic woes. For that to happen, agents, you gotta take three to four times more listings than you have right now, he said. That’s because inventory is so low. More listings means more sales, and that kickstarts the economy.
So, how do you get more listings right now? Well, last week, Tom walked us through six specific things that you can do to identify potential sellers in your market. Here’s a quick bit of what you missed or a reminder for those of you who already listened:
Tom: The average consumer has no idea and most of them are in your database. So what if, if you have 1,000 people, don’t do this with all 1,000 in your database, if you got 500, I probably wouldn’t do it. I’d isolate it. But if you got 100 or 200, send them all an email today. And in the subject line, put in ready, “Wanna know exactly how much your home’s worth during COVID? Fifteen minutes, just you and me.
Matt: That’s a taste of last week’s episode. So please do give that a listen later if you missed it the first time around.
Today, as I mentioned, the focus shifts to the future. What is real estate going to look like a year from now or a few years from now? Listen as Tom and I talk about open houses, client appreciation events, door knocking, and more. And not just agent-focused things like those, but we also talk about how buyer and seller behavior might change in the weeks and months ahead.
As we rejoin the conversation, Tom has just shared those six specific tips for getting more listings and growing your business the rest of this year. As we wrapped up that portion of the conversation, Tom mentioned another upcoming event that he thinks will have a big impact on the real estate market. Here’s part two of my conversation with Tom Ferry.
Tom: What am I committed to going forward? That’s what matters right now for people. And I know the person listening right now, you know what I’m saying — it is about designing what May, June, July, August, September, October is gonna look like because heads up, what’s also coming in the go-forward plan, without a shadow of a doubt, is gonna be the most tumultuous presidential election we have ever seen. It is gonna be so ugly that it’s gonna freak people out even more, right? It is gonna be doom, gloom, disaster, times 10. So guess what? I’m telling my agents, you better make it rain in May, June, July, August, September, October, and have monster closing months in November, December because it’s probably gonna be middle of October through … call it the end of December where the vast majority of consumers are gonna be in a state of PTSD from the election.
Matt: And you’re absolutely right. I’m getting the sense, too, from just the conversations I’m having with agents that they’re switching mentally and actually into, “All right, what are we gonna do for the rest of the year?” So, let me do a fill in the blank with you. The agents who…
Tom: C! [laughs]
Matt: [laughs] It’s always that! Yeah. The agents who will have a great second half of 2020 are the ones who … blank?
Tom: Implement two of the ideas that I just discussed with so much rigor, grit, and intensity, that they tell everyone in their family and their loved ones, “I’m gonna make all of my money for 2020 between May and December by doing the right stuff between May and October.”
Matt: Awesome. I love that. And that harkens back to what you were saying earlier about the potential of the election starting to mess with people’s minds, and plans, and that sort of thing.
Tom: Matt, don’t sugarcoat it. It’s absolutely going to mess with people. We’re gonna see one of the worst back and forth presidential election nonsense that we’ve ever seen in our lifetime. And look, I am like Switzerland, brother. Like, I made money with, you know, Clinton, with Bush, with Obama, with Trump because I pivot, navigate and I don’t buy into that BS. I focus on serving my customers. But remember, our customers, some of them get caught up in that nonsense. So it’s gonna impact housing. It’s not gonna be devastating, but I would expect a 20% slowdown after the rush that we’re gonna have May, June, July, August, September.
Matt: We’re looking ahead to the election a bit. I would love to look ahead to the future of real estate, say a year from now or three years from now. And let’s just maybe talk about some lists of traditional real estate practices, and you tell me what you think they’ll look like a year or three from now. Right? So, open houses, will agents want to do open houses? Will buyers and sellers want open houses?
Tom: Listen, about five or six years ago, I put on my first set of Oculus. And I remember, you know, I think I was at like, Comic-Con or something with my, at that time, younger children, now older. And I remember taking it off and saying to myself, “This is how we’re gonna buy houses.” Right? This is exactly how I’m gonna pick my neighborhood. This is how I’m gonna walk outside and see what the backyard looks like. And if they could just add the scent, you know, of the cookies inside the oven, I’m gonna buy the house sight unseen, right?
So I think it’s gonna come down to…you’re ready? It’s gonna be split. I think the vast majority of people are gonna recognize that we’ve gone into that, my goodness, I’m trying to think of her name, the incredible author who wrote about this a million years ago, Faith Popcorn, who said, “We’re going…” By the way, this was written like 1991. She said, “We’re going into a world where people are gonna cocoon, and they’re gonna be sitting and living in front of their screens, and they’re gonna be just fine with it.” She wrote that in 1991, right? Futurist, right, Faith Popcorn.
So I think it’s gonna be split. I don’t know what the percentage is, but I think a lot of people are gonna say, “Hey, you know what? You can sell my house without a bunch of strangers coming through? Let’s go ahead and do that.” And some are gonna say, “Hey, because of the uniqueness of this property or the situation of this property, the more people we get through, we can create a bidding war to maybe drive the price up.” So I think the future, what’s so exciting is, is it’s gonna be both.
Matt: What do you think is the future of a tactic like door-knocking?
Tom: You know, I think my dad went into real estate like the 1960s or, you know, I guess, it must have been maybe ’60s, maybe early ’70s, and he made his entire living on that. And I know, you know, tens of thousands of agents, including some of the most successful high-end luxury brokers, that when they’ve exhausted every possible resource to find a home that isn’t available for their buyer who wants something very specific, will knock on their door and say, “Hi, my name is Maxine Gellens with Berkshire Hathaway,” and usually, you know, the client’s like, “Oh my God, you know, you’re one of the most successful agents. This is nuts. Right?” You know, I know that’s not the case for everybody, but it’s a true story with Maxine, who, you know, in, like, late ’70s did that, did that in the early ’80s, and said, “You know, I got a buyer.”
So, you know, look, I think it’s gonna be a mixed bag. Again, I think the PTSD coming out of this is gonna be, you know, pretty strong for some people. You know, I mean, you know, people that are mask shaming today, which I think is just hysterical. Right? And, you know, I mean, I get it, right, but, you know, some people are taking it just a little too far. I think some of that’s gonna carry all the way through 2021. So, door-knocking if I had to bet, I’d minus it by like 90%.
Matt: It does still work for some agents. And so, I’ve connected with a few of them over the last couple of months, and so I’m worried about what the rest of their year is gonna look like.
Tom: If that was my only strategy, I’d be pivoting hard.
Matt: I totally agree with that. I also know some real estate agents who do great business through regular client appreciation events, right, getting their sphere together, you know, get 100 people at the ball game or whatever. What’s that gonna look like in the future? Can we keep doing that kind of thing?
Tom: I think it’s gonna be state by state, right? I think, you know, if you’re in a state that is overly regulatory, I think you can plan on more clamp down for a while. I mean, look at what the mayor of LA just came out and said, you know, “Basically, we’re gonna be closed until there’s a solution.” Well, I mean, you know, what does that like…? I don’t even know how many people, 10 million, 15 million people that are like, “What do we do now?” Right? So, you know, those agents will pivot and those buyers are buying, those sellers will sell and they will navigate through this.
So when it comes to client appreciation, which I’m a huge fan of, it’s a strategy that everyone should be taking on, it’s gonna depend upon what state you’re in, what country you’re in, you know, and what’s the mindset of your clients. I know people today that are throwing parties in all kinds of states and getting together with all kinds of people. And they all say, “You know, hey, we’re social distancing to a certain extent, we’re not letting people come in that are sick.” That’s going on right now. Right? So, guess what? That’s gonna continue. We as human beings are social creatures. We are gonna find ways to connect, and to hug, and to smile, and to toast, and to say happy birthday. We’re gonna do all of that stuff. That’s not gonna end.
Matt: That segues right into the other thing I wanted to ask about the industry itself, real estate agents themselves. Do you foresee agents wanting to get back to the office or will there be an increase in work from home and remote work?
Tom: You know, I gotta tell you that if I was a real estate broker today, I would definitely be second-guessing my square footage. And I coach a lot of CEOs of very large companies and, you know, some smaller, you know, 500 agent companies, I will tell you that every one of them is looking at that. Probably the last business I wanna be in right now is commercial high rise.
Matt: Right? Yeah, that’s…
Tom: Because, I mean, what this has shown us is that we can work from home, that we can connect via Zoom, we can maintain our culture and our communication, whether it’s with Slack or email or some other form. So yeah, I think there’s gonna be probably the demand for smaller footprints, lowering the brokers’ costs or, you know, the agents’, you know, square footage. I can absolutely see way more…
And we’re talking about doing our own business. I’ve got, you know, 45,000 square feet and 175 full-time employees that are, you know, used to coming in every day. Now, we’re like, “How do we reorganize this place?” And I’m in California, where it’s a little more crazy than most states, right? It could be every third desk or every two out of three get removed. So we’re gonna have to completely reimagine the workspace and it’s gonna be integrated with technology and communication, like we’re doing now on Zoom. That’s just gonna be the new norm.
But heads up, for everyone out there listening, what if I told you that there is a gazillion agents that work from home, and that’s where their most productive activities take place? And even today, they’re having their assistant or their buyer’s agent or their marketing director are showing up to their house, and they’re working, and they’re very comfortable in that setting. Right? And I know entire businesses, you know, Matt, where everybody is remote and they were built on a virtual platform. And I know agents that work in second-home communities that have done listing presentations over the phone, via webinar, via Zoom. And they’ve been doing that for five years. So most of us, we just got forced into the digital transformation of the workplace. And now that we’re here, I don’t see us going back.
Matt: What about buyers and sellers? How do you think this is going to change what they are doing, what they’re looking for in a home, specifically buyers? Are buyers gonna want an extra bedroom that they can use as an office? Are they gonna want more space because the kids are gonna be home, the spouse is gonna be home? Do you foresee that they’re gonna want different things in a home?
Tom: Yeah, but I think it’s gonna be short-term. You know, do you remember post-9/11 when everybody said, “Everyone’s gonna leave the downtown area. No one’s gonna wanna live in the financial district. Everybody’s gonna wanna leave.” And you know what? That was all BS. Right? I mean, you know, sure, a percentage of people are always moving in and out of New York City. And it’s a good thing because more people wanna move into New York City and there wasn’t enough inventory. I think there’s gonna be some reimagining of our homes, but I don’t think it’s gonna be, talking to homebuilder friends of mine, right, I don’t think it’s gonna be so massively transformational that we relook at our homes in that way. I think it’s very short-term. Right?
Like, listen to me, for the person listening, I also think that what we’re experiencing right now is also very short-term. In the course of your life, this is short-term, a moment in time. This is going to end and we’re gonna move through this, and there’s gonna be a lot of what we’re accustomed to right around the corner.
Matt: You just mentioned home builders, and that was sort of the last on this list of what the future is gonna look like. What are you hearing from the home builders that you know? Are they planning to maybe adjust how they build and what the layout of a home is?
Tom: No, no, but here’s the real issue. You’re ready? If your state has lots of regulation, home builders don’t want to be there. If your regulations are a little bit looser, and I don’t mean, like, looser in a bad way, like, “Yes, go and title more land. Let’s get that done quickly. Let’s meet the demands of buyers.” You know, we got this enormous wave of younger, you know, men and women that are coming in and wanting to buy a house, right, and there’s no inventory. So, you know, again, you go state by state, and you see building happening everywhere now…I’m in Newport Beach, California, there’s like four, you know, mega-mansions around me, you know, that are being built as we speak. Two of them prospect, three of them for the people that wanna live there.
So, look, I keep saying it again, it’s a moment in time. So I don’t think… Just like I remember after 9/11, working with so many people, right, especially the high-end brokers, Matt, like, “Oh my God, is anybody ever gonna buy a house again?” And when all this was unfolding, “Oh my God, the high end is gonna be totally decimated.” I’m like, “No. Guess what? High-end now has to be … anything four years or older is now really old.” Like, that’s the truth. And if it’s not turnkey and great, guess what? It’s gonna sit for a while. And if it is ridiculously overpriced because the agent wasn’t a good negotiator and the seller was better at it, that’s also sitting. But guess what’s also happening? Nice, newer, right, priced reasonably well, they’re selling every single day because people with money can still buy those houses because the financing they can get by going to their bank and borrowing against their assets at 1%, right, those deals are being done. The hard part is you got way too many agents that let the seller be the better salesperson and they overprice these, you know, crappy homes or homes that aren’t configured right for what the demands are.
(Woman: Hi, everyone, if you’re enjoying “The Walkthrough,” we’d appreciate it if you tell the real estate agents and your network about us. Even more, please rate and review us on Apple Podcasts, Spotify or wherever you listen. Your feedback helps us get better and in some cases, can also help new listeners find and hear us. And when we get around to having you on the show, the more listeners the better, right?)
Matt: I have been to your summit, by the way, the last, I think three years. And one of the things that you coach your coaches and have them coach their clients on that I really value, and I wonder if you can sort of maybe wrap us up in this way, is you talk to them about keeping their finances in order. And I’m sure that, you know, there are some agents, even some successful agents have taken somewhat of a hit over the last couple of months. So as they’re looking ahead to the next 6 months, then again to 2021, what kind of things should they be doing in terms of keeping their own internal house in order?
Tom: If I could wave a magic wand and I could, you know, remove two issues from every real estate agent on the planet, number one would be, ready, that they believe in themselves, and number two would be that they’re responsible with their money. And I mean, that’s probably totally Pollyanna but, like, if I died tomorrow and those two things happened, right, I would die a very happy, a very successful human being.
So here’s the issue when it comes to money. Most agents don’t have any money skills, which means they have Uncle Larry doing their taxes. Uncle Larry is a moron, so their taxes aren’t done correctly. They’re not maximizing all of the — very limited today — opportunities to be better when it comes to taxes. They don’t have someone that is helping them manage their money and talk about what they need to do to set themselves up for retirement. Is that buying more real estate? Is it being in equities? Is it buying bonds? Right? They’re not disciplined. So what happens is they get a check, they’re not incorporated, right? They don’t have an LLC or an LLP or an S Corp or C Corp or whatever, you know, because Uncle Larry’s doing their taxes, and he’s a dumb ass, and hasn’t told them that they’re a business working inside of a business as an independent contractor, and you have rules and things that you can follow to be in a better situation.
So they get a check and poof, the money’s gone, right, versus what I’ve been teaching forever, which is, you get a check, and it goes into your, you know, Matt McGee LLC, and 35% to 40% goes directly in your tax account, do not pass go, do not collect $200, it goes right to your taxes because that’s how it works. And then another 30% goes to run your business or 20% to run your business, and the balance goes to your home account. And if you’re really good, when it gets to your home account, it’s then reallocated for long-term savings, debt reduction, you know, manage the house, pay for the kids to go to school, etc., etc., etc.
And most agents, like it’s common sense, it’s the most-watched video I have on YouTube, north of 10 million views and what’s hysterical is, you know, 27% of the comments are like, “This is too basic. This is stupid. Who is this guy? You know, blah, blah, blah,” right? And I just giggle my ass off. Right? Because thank you all of you because, by the way, you just helped the algorithm of YouTube, get me even more views, you know, without having to spend $1 on advertising. So thank you.
But here’s the thing, you ready? This just like 2007, 2008, 2009, what I hope it calls for people is to move common sense to common practice, right? Common sense says, “I’m a business, therefore I must incorporate.” Common sense says, “Whether I make $30,000 a year or $30,000 a day, if I’m not a money master, I better surround myself with people that have an inkling of it because whatever advice they give me, that’s the direction I’m gonna take.” And if I’m taking that from Uncle Larry, metaphorically or Aunt Susie, who, you know, is just kind of good with a calculator and has figured this stuff out, you’re probably not getting the advice that’s gonna help you retire one day or be in a better position to win. So, I think it’s about surrounding yourself with that. It’s also about creating a family dynamic, where you discuss money, right? I tell people all the time, like, I have, like, 33 questions and it’s like, “What’s your earliest memory of money? You know, what’s the pain point moment you can remember in your life where money became an issue? How did you bring that forward into your life and how does it control the decisions you make today?” You know, if that wasn’t true, where would you be instead? And you start to get people to unravel that money, weight, relationships, spirituality, politics, most of those five completely freak people out. And it’s the only stuff I like to talk about.
Matt: As we wrap up … on a scale of say, 1 to 10, you’re looking ahead to the rest of this year, next year, whatever it might be, how optimistic are you for real estate agents?
Tom: One thousand. Scale from 1 to 10? 1,000. As a matter of fact, I’ll make this statement. I think of the 400,000, 500,000 agents that are busy and active… By the way, you and I both know, that’s the same number of agents that are active anyway. You know what I mean? There’s really only 400,000 or 500,000 agents that really actually do anything. And I’m a part of, you know, The Wall Street Journal, America’s best top 1,000, America’s best top 15,500 — you know, to be on one of those two lists, you know, the top 1,000, they’re the absolute creme de la creme. The 15,500, you have to have done $20 million in volume or 50 transactions. It’s a small number of agents that are operating at that level.
The group below that, Matt, I wish I had enough private equity money to go buy 25% to 50% of every one of their businesses based upon a 3 or 5X EBITDA. Right? Like, really. Because the upside potential of those agents in this environment is so tremendous, I’d invest, let’s call it, you know, I don’t know, 750 million bucks to buy 25% to 50% of every one of those businesses. And I would 4X that return in about 2 or 3 years because once I owned 25% or 50% of their business, guess what? They’d have a business plan, a marketing plan, a budget, they’d be shooting videos, they’d be making phone calls, they’d be working on their presentations, they’d be growing their market share, we would just… [vocalization]
That’s how bullish I am on the industry. Are you with me? Like, there is gonna be so many great agents that are birthed from this. Right? I’m excited just thinking about it. Because all the great companies of our time that we admire today, all started in financial crisis times, Facebook, Amazon, right, Instagram, no, but, you know, Disney, IBM, Apple, all these iconic brands, all started during recessions. Congratulations, everybody, it’s your time.
Matt: If you can get through this, you’re gonna get through anything. Tom, I love that and I’ve taken you right up to, I think we’re right at about an hour. So, hey, thank you so much for coming on “The Walkthrough” and…
Tom: Thank you guys for doing what you’re doing and helping so many agents. And for everybody out there, I wish you blessings, health and vitality, and the resiliency, and the grittiness to go out and kick ass between now and the end of the year and help a lot of people buy and sell real estate. They need you right now.
(Speaker: Matt McGee, Host) Well, I sure hope you enjoyed that as much as I did. It was really, really fun to talk shop with Tom Ferry and get his thoughts today on the future of real estate and then last week, those six tactics that he shared for getting more listings.
Now, Tom did say I could give out his text number and invite any listeners to send him a message. Are you ready for that? I’ll give it out twice. The number is 949-216-5466. He did say that it might take a couple of days to get a reply. He gives that number out quite a bit and gets a lot of texts, as you can imagine. Again, the number is 949-216-5466.
All right, let’s do our takeaways segment and then we have a HomeLight Home Run from an agent in the Dallas-Fort Worth area, and then we’ll wrap things up after that.
Number one takeaway, Tom wants agents to make it rain between now and November because he expects this year’s elections to put a damper on the market at the end of the year.
Number two, he thinks some sellers will still want traditional open houses while others will prefer the virtual open houses that many of you have been doing this past couple of months.
Number three, if door-knocking is your main lead gen strategy, Tom suggests you pivot hard right now.
Number four, he is more optimistic that we’ll eventually find ways to make client appreciation events work for all involved.
Number five, Tom gave a great quick lesson on money management. So listen back to the last say five or six minutes of the conversation if you’ve missed that. It’s based on the most popular video on Tom’s YouTube channel. And I will link to that video in today’s show notes.
Okay, if you have questions for Tom, questions for me or HomeLight, you can leave a voicemail anytime, it’s 415-322-3328. That’s 415-322-3328. You can also send an email, it’s walkthrough [at] homelight.com. In fact, call or email me with your biggest win of the week or of the month and I’ll try to share it in our HomeLight Home Run segment.
Here for example is this week’s Home Run. It comes to us from Beth Steinke. She’s an agent working in the Dallas-Fort Worth area. Her big win was getting a difficult home under contract. She says the home itself was beautiful, but it came with a difficult solar panel lease. How bad was it? Well, the buyers would have to assume an extra $200 to $300 monthly debt for the next 18 years. Ouch! Beth says she could have sold the home 100 times if not for that lease. She eventually did get it under contract after a little more than two months on the market. She says two weeks is about normal for a home like this one. Well, that sounds like a home run to me. Beth, congrats on your perseverance, and thanks so much for sharing.
Hey, listeners, can I ask a quick favor? If you listen on Apple Podcasts or if you have an Apple account, would you mind leaving a rating and review of “The Walkthrough?” We have about 25 to 30 ratings the last time I looked, and I’d love to see that number get up to like 50 or 100 or more.
All right, that’s all for this week. Thanks again to Tom Ferry for joining us. Thank you for listening. Remember, at HomeLight, we believe in real estate agents. That’s why we created “The Walkthrough.” We’re on a journey exploring how great real estate agents grow their business, stand out from the crowd, and become irreplaceable.
Go out and safely sell some homes. We’ll talk to you again next week. Bye-bye.