The Causey Consulting Podcast

Will realtors vanish?

November 09, 2023
The Causey Consulting Podcast
Will realtors vanish?
Show Notes Transcript

One of the most dangerous statements you can make is: "Well, that would just neevvvverrrr happen to me." Similar to people telling you that it's impossible for 2008 to ever happen again. 😒

Key topics:

✔️ After all the FOMO & YOLO in the markets of 2020 & 2021, what did you think was gonna happen?
✔️ Could a number of realtors be replaced by technology and FSBO scenarios? Yes, probably so.
✔️ Knowing your market and being TRUTHFUL about your market = you staying in business and having loyal clients when others are folding. Lying, cheating, maneuvering, getting out during a bust cycle, etc. = going under.
 âœ”️ In some respects, the death knell rang when the internet was released to the public. 🤷🏻‍♀️ Sorry, not sorry.


Links:

https://www.buzzsprout.com/1125110/11959824

https://www.buzzsprout.com/1125110/12016015

https://www.reuters.com/legal/missouri-jury-hits-nar-real-estate-companies-with-18-bln-damages-2023-10-31/

https://www.darpa.mil/about-us/timeline/modern-internet


Links where I can be found: https://causeyconsultingllc.com/2023/01/30/updates-housekeeping/

Need more? Email me: https://causeyconsultingllc.com/contact-causey/ 

 

Welcome to the Causey Consulting Podcast. You can find us online anytime at CauseyConsultingLLC.com. And now, here's your host, Sara Causey.

Hello, Hello, and thanks for tuning in. As I've said many times before, in my opinion, one of the most dangerous statements you can make, whether you're making it to yourself to try to brainwash yourself, or you're making it to someone else to try to guess like them. Well, that would never happen to me and just never happen again, we would just never have another 2008 That was a once in a lifetime Black Swan event, it would have never happened again, right? Sure. Whether we want to use economist so called economists and big air quotes here, or we want to think about real estate agents and mortgage brokers who assured their potential buyers and sellers that we were not in an artificially manipulated housing bubble, and there would not be a housing bust prices, were only going to go up LDS overpriced due to poor homes, they're gonna hold their value, you better buy now this is the last chance Express FOMO and Yolo. Were essential workers even during the pandemic, because it's that important to get your behind and a house, marry the house date the rate, don't worry about it. Just do it, just do it. Just do it little baby. Sounds a lot like the narrative that we got from these page show dieticians who were exposed by the Washington Post telling people it's okay to consume artificial sweeteners and cakes, cookies and pies and sugars good for you. Just do it, just eat that pie, eat that cake, have that cookie, have that ice cream, just do it. Treat yourself as though there's no consequence for any of these actions. I'm rubbing my temples again. And before I really get too far into this episode, I'm going to put myself up on the chopping block. Because those of us involved in HR, staffing and recruiting, we definitely know what it's like to be in an industry where you get pummeled around and bruised a lot. Many people think of HR as the enemy HR is the devil, they ruin everything. And a lot of them have never a single day in their life worked in HR, they don't have any direct experience what it's like on the inside the belly of the beast, if you will, they just know that they get frustrated, or they want to jump on the bandwagon and seem cool to their peers. I'll let you in on a little secret. If you haven't figured this out. Typically HR is the scapegoat. They're hired and then told by upper management, you're gonna push our agenda, your job, if you want to continue to get paid here and continue to have your key turn in the door. Your job is to enforce whatever nonsense we tell you to enforce. So then HR becomes the scapegoat, HR becomes the enemy recruiting becomes the enemy. It's about like if you're working in a third party situation, it's about what your client wants you to go out there and find your opinion really doesn't matter. It's about what that paying client has told you to go and find. And within a company, it's about what the CEO or the owner has told you to do what kind of inane policies they want to implement this time. But yet, the punching bag becomes HR, staffing and recruiting. We get all kinds of bad press and negative information thrown in our direction all the time. In that regard, yes, I have sympathy for people that work in mortgage broking people that work in real estate because they get a lot of poopoo thrown in their direction as well. And I'm not gonna sit here and say that all realtors are bad or unscrupulous or all mortgage brokers are bad or unscrupulous because that's not true. There are people that get into their industries because they genuinely do want to help people. They want to make some money and provide for their families. But at the same time, they have a real passion for doing what they do. And it shows I feel like being in my market as I have been for over a decade, going through oil boom and bust cycles, broader economic boom and bust cycles. For me, it's all about knowing your market and being truthful. let's underline that and bold type it truthful about your market, staying in it Come What May the boom and bust cycles taking the bitter with the sweet and being honest with people about what's going on. That's one of the reasons why I started that secondary cite the job market journal. Because I realized there's not going to be any mainstream media news outlet that's going to pick me up. It's just not going to frigging happen. There's no resource out there like that that I've found. I mean, you have a site like layoffs dot FYI, that's really good at collating layoff data in real time, I think what they're doing is awesome in terms of being able to get that information out to the public. But in terms of somebody that's going to sit there and tell you the truth, as they see it about the job market, not the hot air in the hopium, not the bullshit, not the doctor numbers that are really begging belief. But somebody is going to sit there and tell you here's the truth, as I see it, here's what's going on day in and day out in the trenches of the job market. And someone who can read those ebbs and flows. And say, right now I'm already seeing the pullback or right now I'm already seeing the push for like it's starting right now, you guys, I just didn't see anything out there like that. And instead of wishing and praying and waiting and hoping that maybe somebody would do it, I just rolled up my sleeves and did it myself. It's important to me to be honest with people, clients, candidates, prospects, the general public whomever, to just be real about the job market and the status of recruiting what how are candidates behaving? How are clients behaving, what's going on behind the scenes, be real about that stuff. In my opinion, and in my experience, that's how you build your base. That's what keeps you in the market, even during a downturn. That's how you get those loyal clients and those loyal candidates that will come back to you time and time again, because they know you're not bullshitting them. And because you're not bullshitting them, they also know that you care. Just long pause there so that can absorb It's about caring about the other person enough not to gaslight them, and insult their intelligence. Whereas on the other side of the spectrum, you get people who lie, cheat maneuver, they jump in when the market is really good. And then they jump back out again, when the market is bad. They're not necessarily good at reading the ebbs and flows of their market, because the minute that the money dries up, they go away, they'll go do something else for a while, and then they'll come back when the money is easy. Why? Because that's all they want. They're only in it for the money. They're not looking to hone their craft. They're not looking to increase their intellect and figure out what what's the best method to help someone else get through this, they don't care about any of that they're just seeing dollar signs. Ergo, that's why they jump out when the market goes cold. As I've also said on the air before, there's a whole list of realtors that I dealt with that are basically on the list. People that I spoke to whenever we were on the real estate quest that failed, we just decided to roll up the sidewalk and postpone it for a while.

 

Realtors that would just it was like they wanted to lie to you and the truth would suit better. They clearly had no idea what the hell they were talking about. And every everything was in high demand this is going to sell in the next 20 minutes. And if you're interested, you need to ask more than they're asking or you need to offer more than they're asking. I mean, it was just this even even thinking back on it gives me a headache. Because there were so many lies so much BS so much ill treatment to it was like at that point in time. The sellers are God's prospective buyers are pieces of trash in the gutter and should be treated as pieces of trash in the gutter. If you don't show up, and offer more than asking price, even if the place is a dilapidated shotgun shack, then you're dead to us. And I knew right then and there, this is not gonna go well for them. Because these boom bust cycles, they happen and they happen and they happen. But see, you get people that go into a hot market. Whether we're talking about the housing market, the stock market, the job market, it doesn't matter. You get people that go into a hot market, and they're living off the fat of the land and they don't want to accept the fact that the gravy train is going to end at some point. Maybe it lasts a few months. Maybe it lasts a few years if you get lucky. But the air is gonna come out of those tires. It does every flippin time. And then you get to separate the wheat from the chaff the people who really prepared and they're they're ready for the downturn, they care about the market, they care about their customers and their prospects versus the people who don't. And let me tell you, there were a great number of people on that list of Realtors I will never do business with would never put a dime of money. in their pocket. They're not in business anymore. They're already gone. Is that a surprise? No, hell no. After all the FOMO and the Yolo and the craziness and people grossly overpaying for these do to poop houses getting in and even in situations of new construction, finding out that they had bought a complete POS, what did you think was going to happen? You know dobro pathology of America. Nobody wants to exercise Caveat emptor. It's like nobody wants to take a step back and go, you know, it seems like maybe this realtor and their crony mortgage broker are lying to me and I need to cool the hell off. I mean, I could see this coming from mile down the road I'm like, people are gonna start getting sued for this that you're gonna have too many people with severe buyer's remorse and they are going to be pissed the hell off and they're going to look for somebody and take it out on now. Here we are. On Halloween the story broke and I'm reading from Reuters I'll drop a link so you can read this for yourself. US jury finds Realtors liable for inflating commissions awards 1.7 8 billion with a B $1.78 billion in damages Bauble Bar and here we go. Reading from this we find and us during on Tuesday found the National Association of Realtors and some residential brokerages, including units of Warren Buffett's Berkshire Hathaway liable to pay 1.7 8 billion in damages for conspiring to artificially inflate commissions for home sales. The verdict by a federal jury in Kansas City, Missouri could up in decades old practices that have allowed real estate agents to boost commissions. As home prices and mortgages. Mortgage rates rise, hurting consumers by making housing transactions more expensive. plaintiffs in the class action included sellers of more than 260,000 homes in Missouri, Kansas and Illinois, between 2015 and 2022 who objected to the Commission's they were obligated to pay buyers brokers I'm gonna butt in and say so this even predates the FOMO and the Yolo and the insanity that we started to see during the pandemic. This goes all the way back to 2015, which I find interesting. The verdict followed a two week trial. That's seems quite short to me. The verdict followed a two week trial, and the damages award can be tripled under US antitrust law to more than $5.3 billion. Today was a day of accountability said Michael catch mark, the lead lawyer for the plaintiffs. The defendants included Berkshire owned home services of America and two subsidiaries as well as the realty Keller Williams which that's a big name probably in the United States. Any of you listening to this broadcast, there's a Keller Williams Realty somewhere close to your to your town. Nar spokesperson Montel Williams said the trade group plans to appeal and seek reduced damages. Home Services said it was disappointed in the verdict and plan to appeal while Keller Williams spokesperson Darrell Frost said the realty company would consider its options for an appeal. This is not the end, Frost said. Broker compensation in the US has typically been about five to 6% of a home's sales price, with about half paid to a buyer's broker. home sellers complain that this model suppressed competition by keeping commissions for buyer brokers in the two and a half to 3% range, despite the brokers diminishing role with many buyers able to find homes independently online. Yeah, I'm gonna button again and say I feel like the death knell for this profession rang out when the internet was released to the public. If that offends you, I am so sorry. But I am not sorry. I'm just telling you. If you don't know DARPA had access to the internet long before John and Jane Q Public ever even knew about its existence. But once that genie was let out of the bottle to the public, and these websites started to spring up where you were no longer dependent on a realtor to tell you what the listings were. You could just go online and look at the pictures and look at the information and make decisions for yourself. More people started to feel like what is the point? What what do I need you to do other than you punching in a code on a key box, taking that key out of the key box and then turning it in the log and walking me around? What is the point here really? I actually the first time that I bought it was during all that mess that was going on in 2007. And I did buy a foreclosure home largely because that's all that I could afford. And I only avoided that by the skin of My teeth. But then the next place that I bought, I basically use like the person that was selling that house along. I use the realtor, I'm trying to get this straight in my mind. I use the realtor who was helping me to sell my house. And then she was also helping me to buy the house that I bought next. But then when I got ready to sell that property before I purchased my farm, I had had a really negative experience with a realtor, I mean, a really negative experience. And I could tell that the house was just gonna sit there and sit there and sit there and I'm like, okay, nobody got time for this. I'm trying to handle my business here. And I just did for sale by owner. I mean, I already knew a lot about sales and marketing techniques because of my background in recruiting. Nana mansplaining, or the other day trying to tell me like, I don't already effing know this, trying to tell me that recruiting is a business. And I thought, well, No shit, Sherlock. Who said it wasn't? Did somebody come out and tell you that they were doing recruiting as a charity? I mean, maybe there's some non for nonprofits, not for profit companies and charitable organizations that help with job coaching in such line. But if somebody is in a for profit, private business, yes, of course, recruiting is a business if you've been under a rock dude. So I already knew some some sales and marketing techniques from being in recruiting. And I thought, I've got nothing to lose, I will see if I can sell this place on my own. And I did. I feel like nobody's gonna care as much about your investment and making it happen for you as you care about yourself. And so if you know what you're doing, and you can partner with somebody else that can help you through the legalities of it all. I mean, for me, it was a no brainer. So I hooked up with one of those companies that does exactly that. They will list you on the MLS. And then they help you through the legal paperwork they had like, seems like the company had someone who was a licensed real estate agent, along with someone who was a real estate attorney. So they knew how to handle the contracts and all the legal ease because I didn't and I would never pretend that I knew how to do all of that stuff. I knew how to market the house. I had it professionally photographed. I mean, that kind of stuff. I knew how to do already. And it was a great experience for me, I would I would 100% do that again, and had planned to do that again. By the way. If we had been successful in the real estate quest, that's what I would have done is I would have listed this place for sale by owner, gotten it offloaded and moved on to greener pastures, no pun intended. But the market had other ideas, man plans and God laughs But to me when you start thinking about the internet, and people looking on websites, like Zillow, or realtor.com, I mean, the potential buyer is going to look at that information. First, they're not going to rely on a real estate agent, like back in the 80s. When it was like, hey, this place just came on the market. I will take you there, can you can you go for an open house at 4pm on Saturday, people are just not dependent on that anymore. I mean, now you can even get a video walkthrough. If you want to take like a 360 degree tour or have somebody go through and do a video walkthrough before you ever even show up in person. That's an option now. So I think it's a valid question like What is the point of having a real estate agent? Let's let's go back one more time and reread this from Reuters. home sellers complain that this model suppress competition by keeping commissions for buyer brokers in the two and a half to 3% range despite the brokers diminishing role, with many buyers able to find homes independently online seller said the arrangement had severe anti competitive effects and make no economic sense except for the buyer broker unquote. I mean, hello, I, I could easily see a scenario where more of these companies like the one that I used pop up where you've got somebody there who does understand real estate as well as real estate law, they know what kind of contracts you need to have in place for your state, and more people doing it themselves. If you had some kind of website, and this may already exist, and I'm just not aware of it. But if you had some kind of website or some kind of app where everything was plug and play, you could take pictures or you could have a professional photographer, take the pictures and load them into the site and then type up or have a sales copywriter. Get a freelancer do it for you type up some kind of hoo ha about hey, this property is whatever whatever whatever. Put in the key components of it, what kind of foundation doesn't have what's the lot size, what's the age of the house, et cetera, and then just list it yourself. I think a great number of people would do that. If it were just that simple that add water and stir and you didn't need to go through the hoopla of dealing with real estate agents to get it done. I mean, to me, that seems very intuitive. One of the most dangerous things, in my opinion is saying, Well, that would just never happen to me. That will never happen. Even if somebody came out with a website or an app like that people would still just choose real estate agents, I was done, oh, if you're in this industry, it might be time to think about what you would do is a plan B, I've had to have those conversations with myself about staffing and recruiting. I'm not going to sit out here and be so arrogant and humoristic as to think, well, there's just no possible way. There's just no pot No, no balls alone, what, there's no possible way that AI and bits of technology couldn't take human resources jobs. Of course it could. I'm not saying that's going to happen tomorrow. And I'm not saying that there won't be some kinks that have to be worked out. Probably at the beginning phases of any of that there would be some disastrous stories. And then people would say, Well, Steve, that's proof that AI won't take our jobs. No, it's just going to tell the developers what they need to do to work the kinks out. I know that probably sounds really Debbie Downer. I'm just trying to be honest with you could a number of Realtors, not all of them, but could a number of them be replaced by technology and for sale by owner scenarios? I think so. I don't see why not. Again, I go back to the artificially manipulated markets, the FOMO, the yellow, the heat that was in the streets, the craziness, what did you think was going to happen? At some point the tide was going to turn people were going to be super pissed about the experiences that they had not only realtors, but brokers I could very easily see some lawsuits coming down the pike for unscrupulous mortgage brokers. What did you think what's gonna happen? If I were involved in real estate, if that's the primary way that I made my money and fed my family? I would I mean, without question, I would be looking at a plan B, plan C, what are some other transferable skills that I could use some other industry I could get into? What could I do to protect myself and my family in case this dries up? What if the company that I worked for goes under? A lot, there are a lot of what ifs here. And then you also have to juxtapose that with the potentials for the 15 Minute cities. I watched a documentary earlier today. It was actually not a documentary was really just more like an expos a interview type thing. I plan to record another episode about that because I also watched another news story about destitution in Britain. People that by the time they pay their bills on the you know, supposedly just wonderful universal basic income that we're all supposed to be getting. By the time they pay their bills, they have 30 pounds left over for a month. And there was a guy on this interview that he can't take his clothes to a laundromat anymore, he has to just wash them in the sink because he can't afford the laundry mat. And his meals, he's down to one meal a day. And it's usually whatever canned goods he can find from the food pantry. Very, very, very scary stuff. So you think about like universal basic income, you've not single DVB happy, and the 15 Minute cities and just getting everybody into some hive, where everything that you do is within 15 minutes you rent you don't own. Everything is within 15 minutes, the grocery store, the doctor's office, the dentist, anything you want to do is within this area when you're driving anymore, because there's no need, you don't need to have a car, just stay in the hive. Everything that you need is in the hive. So just stay there little peon and enjoy it. Oh, and have no privacy either. When you think about the direction that these things are going with build back better agenda 2030 and the 15 Min cities. I mean, how many residential homes are you going to be selling anyway? And again, am I talking about tomorrow? Next week, next month, next year? No, I'm just thinking like, broader, huge brushstroke here. I mean, is that is that a profession that eventually could just go away completely? Maybe except for selling properties to the power brokers? I mean, I don't know. I don't pretend to have the answer to that. I'm just thinking out loud. And as I said, if it were me, if real estate or being a mortgage broker, if that was how I earned my living and how I fed my family 100% I would be looking for plan B plan C, thinking about other things that I could do in case that line of work dried up and I it just wasn't an option to keep food on the table anymore. Just my opinion that I could be wrong. I just don't think that we've seen that. And of this backlash, though, I think you've got so many people that got so freakin mad about the way that they were treated. And yes, absolutely the argument the devil's advocate argument could be made in reverse, use good judgment, coffee out and tour, look out for yourself. Don't trust somebody that has a vested interest in parsing you from your money. I have said those things on the air and on my blogs umpteen million times. But look, we don't live in that society anymore. People don't want to use coffee on him to work. Most people can't engage in real critical thinking anymore. Anyway. They want you to tell them what they want you to tell them and if they want to hear this is the last chance expressed by this house today or you're not going to have another opportunity ever again. It is what it is. As I said, if it were me, I yeah, I just don't think that we've seen the bottom of what's going to happen here. So if it were me and I were in that industry, I would absolutely be looking for some way to make a living if I needed to hit the exit. Stay safe, stay sane, and I will see you in the next episode.

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