Real Estate at a Crossroads

by Gregory Charlop

  Real Estate at a Crossroads

  The Insider’s Guide for Agents, Brokers, and Execs

  By Gregory Charlop

  Contents

  Interviews with the Experts

  Introduction

  Chapter 1: Agents and Future Agents

  Chapter 2: Brokers and Executives

  Chapter 3: Elite Agents

  Chapter 4: Virtual Assistants and Chatbots

  Chapter 5: Emerging Technology

  Chapter 6: Philanthropy and Real Estate

  Chapter 7: The Path Forward

  Endnotes

  All rights reserved. No part of this book may be reproduced or used in any form or by any means—graphic, electronic, or mechanical, including photocopying or information storage and retrieval systems—without written permission from the author.

  The scanning, uploading, and distribution of this book or any part thereof via the Internet or any other means without the permission of the author is illegal and punishable by law.

  Published by Gregory Charlop Walnut Creek, California.

  Copyright 2019 by Gregory Charlop

  Interviews with the Experts (in order of appearance)

  Tom Ferry, Top real estate coach, speaker, and CEO of Tom Ferry International

  Dave Phillips, VP of Industry Relations with Realtor.com

  Ken Potashner, Angel Investor, Chairman and CEO of Home Bay Technologies

  Nick Bailey, Former President and CEO of Century 21®

  Adam Gothelf, Co-founder and CEO of Disclosures.io

  Anthony Vitale, President of Talk2Tony, a residential real estate consulting service

  Nav Athwal, Angel Investor, Proptech enthusiast, and Co-Founder/CEO of District

  Matt Murphy, Venture capitalist, real estate expert, and partner with Montage Ventures

  Darren Johnson, Marketing expert, Co-founder and CEO of AgentZip

  Suzy Truax, Board of Directors, eXp World Holdings

  Kim Hughes, CEO of virtual assistant firm Kim Hughes & Company

  Tamir Poleg, Founder of Real

  Daniel Ramsey, CEO and Co-Founder of virtual assistant firm MyOutDesk

  Michael Lam, Chatbot expert and CEO of Kaydoh

  Bridget Frey, CTO of Redfin

  Ragnar Lifthrasir, Founder of the International Blockchain Real Estate Association

  David Ament, Philanthropist, international speaker, business advisor, and investor

  J.R. McKee, Philanthropist and Founder of Home In Silicon Valley.com

  Introduction

  The real estate business will never be the same. Here’s why

  Caution: The old world of real estate is over.

  You remember the whoosh of air when you pushed the door open to your first home showing. The new-house smell, the feel of cold granite and soft carpet, the squeals of excitement as the kids ran around their future bedroom, and the giddy smiles when the young family looked around with awe and disbelief at their new home.

  That is why you’re here.

  You’re here for empty nesters looking for a home that will preserve their independence. You’re here for the young college graduate buying his first home. You’re here for the adventurer looking for a new future out West, on a farm, or down the coast. And, you’re here for the retiree searching for a home near her new baby grandson.

  You change lives.

  But now, real estate is changing around you. Modern technology, radical transparency, empowered consumers, iBuyers, and internet brokerage companies are transforming the business of real estate into something new and nearly unrecognizable. It doesn’t feel the same.

  The real estate biz is changing.

  Those happy families and sold homes may become a distant memory unless you keep up with the new rules of real estate. You need to adapt. Unless you understand the influence of technology, you’ll struggle for business, be blindsided by brokerages, and miss out on what you love most: welcoming families to a new home.

  That’s why I wrote this book. I want to prepare you for the modern world of real estate. I’ll show you how social media, augmented reality, Zillow, internet brokerages, flash briefings, Bitcoin, the ubiquitous MLS, Facebook, artificial intelligence, robots, chatbots, and modern technology are transforming your job.

  If you’re a real estate agent, aspiring agent, broker, notary, lender, appraiser, real estate firm executive, or CEO, you need to know what’s coming. I’ll show you. I’ll give you the tools you need to thrive in our new era of technology. I’ll help you best your competitors and avoid costly mistakes.

  This book will pull back the curtain on the future of the real estate industry. Once you understand the transformative impact of technology on your real estate practice, you’ll make the right career decisions.

  Your team of experts

  To help you, I’ve brought together an army of the best minds in real estate. This team of power players will show you what’s going on in the real estate industry and what you need to know.

  For the first time, one book contains the candid advice of America’s top real estate authorities, including leading influencer Tom Ferry, CEOs, and top executives from Realtor.com, Redfin, Century 21, Real, and eXp. Several of the world’s top real estate technologists share their expert views about where tech is heading.

  Since you need to know how to use these tools, I interviewed the CEOs and founders of companies specializing in real estate virtual assistants, lead generation, chatbots, and Bitcoin. We also explore the world of philanthropy and chat with leading social entrepreneurs. We’ll show you how to help your community and your bank account!

  The country’s top real estate experts are all here to help you and share their wisdom from the front lines of the real estate revolution. Take advantage of these great minds; learn their secrets.

  Some of you will read this and decide that it’s time to switch careers or take an early exit from real estate. After all, the new world of real estate won’t be for everyone. I’ll tell you right now, the job market will get tougher. Indeed, one of the biggest impacts of technology is that we’ll need fewer agents. You have to decide if you’re up to the challenge. Once you read this book, you’ll be able to make an informed career choice.

  I hope most of you will stay in real estate and use the tools and tricks outlined here to crush the market and make your financial dreams come true. If you embrace technology and use it to your advantage, your business will succeed beyond your wildest expectations. While we won’t need as many agents, it’s likely that the top agents will dominate the market. You want to be a top agent. This book will show you how.

  Even if you don’t use modern tech, your competitors will. Real estate firms, marketing tools, and client acquisition will change, whether you like it or not. The relationship between salespeople and their brokerages will transform in the next couple of years. Whether you embrace new technology or not, you should educate yourself so you’re prepared. While I believe that it’s possible that a low-tech agent could still survive in certain limited markets, it will be an uphill battle. The team assembled here will help you.

  Armed with their insights, you’ll be prepared for life in the real estate industry. We’ll help you answer burning questions such as:

  ● Will we still need real estate agents, or will technology replace them?

  ● It is worth becoming a real estate agent, or should you choose a different career?

  ● How can your brokerage remain competitive in the face of new, internet-based rivals?

  ● What technology should you use to supercharge your real estate career?

  ● How should you use technology to advertise properties and locate quality leads?

  ● Will v
irtual and augmented reality take over real estate?

  ● How should you keep up with the latest technology?

  ● What is Bitcoin and how will Bitcoin and blockchain impact real estate?

  ● What should you do if you want to start your own real estate technology business?

  ● How can you differentiate yourself from the other real estate agents/brokers/brokerage companies?

  ● What is a social business? Should you include philanthropy as part of your business model?

  This book is your one-stop guide, regardless of whether you are an agent, broker, or executive. It will give you a rich understanding of technology and the future of the real estate industry. Use the tools and skills in this book, and your career will flourish. Strap yourself in and prepare for a ride into the future of the real estate biz. You now have the best team as your tour guide!

  Changes are coming

  Recall the days before the internet. Most homebuyers and sellers were clueless about the marketplace. They had little idea about home prices, neighborhood demographics, or how to transact a home. They didn’t know what properties were for sale or how much they could expect for their own home. In short, the general public was nearly helpless.

  Back in the not too distant past, most people didn’t have an easy way to find a real estate agent. Nothing was transparent. They couldn’t just hop online and see the top local salespeople.

  Instead, someone looking to buy or sell a home would flip open the Yellow Pages (remember that?) and look for a real estate firm they recognized. Brokerage firms back then invested a lot in brand recognition because that’s what drove prospects to call them in the first place. The agency would then act as the matchmaker and connect the potential client with a salesperson and take a hefty cut of the commission along the way.

  The agent would then have to do all the heavy lifting: review books and binders with MLS data, create comps by hand, and photocopy listings to show to prospects. Since buyers were stuck with small black and white pictures, they didn’t have a good feel for a property before walking in the door. Home tours were difficult, frustrating, and inefficient. Agents worked hard for each client.

  The client, in turn, was dependent on the associate’s research and recommendations. Other than switching agents, the transacting public had nowhere else to turn. There was no Redfin or Realtor.com to research listings. Zillow and Trulia weren’t around with their detailed neighborhood insights. The general public was in the dark.

  At the same time, real estate salespeople were nearly dependent on their brokerage firms.

  Why? At that time, there was no way for the general public to determine the best agents in their community. The public didn’t know which associates made the best sales, and review sites were non-existent. There was no easy way for the public to track down good agents. Moreover, advertising was expensive and inefficient in the pre-internet days. Other than hosting open houses, sales associates were limited to branding bus benches, passing out pens and notepads, and papering neighborhoods with flyers and signs. Needless to say, none of these tools worked well.

  As a result, unless one of your clients sent you a referral or you met someone at an open house, you, as a real estate agent, were nearly dependent on your brokerage for prospects. You needed your firm to put food on the table. You needed their advertising and prestigious brand name to bring in business.

  In short, the large real estate agencies pulled the strings, the associates controlled the knowledge, and the transacting public was at their mercy.

  How times have changed.

  Thanks to transparency, the entire paradigm of a helpless and ignorant general public depending on “trusted” real estate brokerages to locate salespeople is out the window. Moreover, agents are now able to reach prospects directly due to social media and reduced advertising costs.

  The system used to function well for the brokerages. The large, powerful real estate companies served as a trusted point of contact for the general public who lacked easy access to information. The brokerage firms and their franchisees controlled the tools of the trade including MLS access, photocopiers, conference rooms, FAX machines, etc.

  The brokerage firms were the only entities that had the resources to create meaningful advertisements. They could afford full-page ads in newspapers and magazines. Most associates could only afford pens, notepads, and the occasional shopping cart display. The salespeople needed the firms’ advertising, infrastructure, and access to prospects.

  The brokerages served an important role as a central hub of supplies, information, and prospect/agent connection.

  Not anymore.

  When was the last time a home seller flipped open their Yellow Pages and called a real estate firm looking for a salesperson?? That era is over.

  The truth is, our current system of transacting real estate no longer makes sense. The internet increased transparency, and easy access to advertising blew up the old system.

  The marketplace can be cruel to outdated and inefficient systems. Just ask Blockbuster.

  Let’s do a thought experiment. Imagine that you are creating the real estate system today from scratch. You’re starting from a clean slate. What would the system look like?

  The process, of course, would begin with the clients. Imagine that Maria is looking for a home. She just landed a great new job in Colorado. She’s moving her husband, two tots, and family dog out West.

  What would Maria do?

  First, she’d hop online. Maria and her husband Joe would do their own research on websites that list all Denver homes for sale. Perhaps she’d even ask her Alexa. They’d narrow their search based on their needs. They’d review neighborhood information including schools, crime rates, commute times, local weather, access to parks, and walkability. They might even drive the neighborhoods themselves to see how they feel about the different communities.

  Once they’ve done their homework, they’d need a little bit of help to navigate the system. After all, this is their first home purchase. Maria and Joe wouldn’t quite know how to review inspection reports, arrange mortgages, file government-mandated documents, or negotiate prices. And, Joe wants to ask someone how difficult it is to replace popcorn ceilings. Maria needs some advice about whether it’s realistic to move into a 1,400 sq. ft condo with two young kids and a Dalmatian.

  Although they’ve done their research, Maria and Joe need a human consultant. They need someone with kindness and experience who will walk them through the process. They need a real estate agent.

  Again, Maria will jump online. She and Joe will look at the review sites and check out who had the biggest sales in their neighborhoods. They’ll probably read some bios and look for someone experienced in relocating families. Then, they’ll pick an agent.

  Let’s pause for a moment. While this flow seems natural to us today, it stands in stark contrast to the process from a decade ago. Today, homebuyers and sellers are empowered. Agents have a defined, consultative role.

  And the real estate brokerage firms?

  Welcome to the new reality of real estate transactions. Homebuyers like Joe and Maria can do almost all the research themselves. They don’t need you or anyone else to run comps or evaluate neighborhoods. They still need the insight of a human real estate agent, but that role will be more circumscribed. And, without significant innovation, the role of real estate brokerage firms may shrink beyond recognition.

  The impact of these changes cannot be overstated.

  Let me summarize. We have too many real estate associates. Agents are paid too much for some transactions. Underperforming and part-time agents will struggle. Real estate brokerages will need to reinvent themselves to survive. And, top agents will own the market.

  The internet changed the rules of the game. Technological supremacy will determine who survives and who is sent packing.

  We'll help you master the dramatic forces reshaping the residential real estate industry. Once you recognize the storm on the horiz
on, you can position yourself to be a winner in the new real estate economy. You'll learn how the current legacy system is poised to be swamped and how you can safely stay afloat amidst the changes.

  Don’t face your career and your business with your eyes closed. In Real Estate at a Crossroads, we will give you the real deal. We tell you the good, the bad, and the ugly. Know what’s coming and prepare yourself!

  Who should read this book?

  Future real estate agents

  “Why do these changes to the real estate industry matter to me?”

  If you are considering a career in real estate, you need to know what you’re in for. This book is your glimpse into the future. The current model of real estate employment is about to experience a major disruption. Most young potential real estate agents imagine that they will study, obtain their real estate license, and find a brokerage. The brokerage will tutor them and help them generate leads. The broker would provide them with clients, an office, and administrative support.

  Although new real estate agents understand that they eat what they kill, many still view the world of real estate as being somewhat protected. After all, you have an experienced broker who is looking out for you.

  Prospective associates assume the broker will train them, oversee their work, provide beautiful offices with computers, review their contracts, help them find health insurance, and generally keep them out of trouble.

  Moreover, potential real estate agents are drawn to the profession because it appears to allow for part-time work and work flexibility. You could work as much or as little as you want, the thinking goes, and still do well. If you only want to work 20 hours a week, no problem! If you want to work on certain days and be home with your family for the rest of the time, no sweat!