#203 Mail-Right Show We Discuss The Future of Real Estate Brokerages in 2019
We Interview Jay Kinder who is part of one of the fastest growing real estate brokers In the USA over the past 18 months eXp Reality & National Association of Expert Advisors. We discuss what is the real future of the traditional real estate brokerage?
Jay Kinder is CEO and co-founder of the National Association of Expert Advisors and co-host of the popular podcast, Face to Face with Jay Kinder and Michael Reese. Together they are taking their proven track records as successful mega agents and are doing what nobody else in the real estate industry has been willing to do. Focusing on agent productivity. In the 127 Billion dollar real estate industry, where none of the major brands manage the customer experience, they’ve carved out a niche by doing what Steve Jobs found to be true.
Jonathon: Welcome back folks to the Mail Right Show. This is episode 203. It’s a slightly different format than usual. We had some slight technical problems folks. So we lost the initial beginning of the show, almost all the relevant content is still there. And our special guest was Jay Kinder of EXP Realty and the National Association of Expert Advisors. And this is a fantastic episode. Like I say, we missed the first beginnings of it. As we find him we will be able to hear my great guest introduce himself. And we then go deep into this great new brokerage model. You are going to enjoy the show. Speak to you soon.
Robert: Yeah, so the growth charts. I highly recommend and if you’ve watched our show or caught up on it, you’ll know that I don’t view this much. But for everybody that’s listening, if you get a chance, I strongly recommend you go to jaykinder.me. This piece of content is somewhere about 35 minutes into his introduction video. It’s right there behind him. And what it is it’s a graph, a chart of growth that kind of talks about the different stages of a real estate business. And where you find yourself in it. I reviewed it and agreed with it. I’m sure that’s for my listeners. That’s not for you. That it works. But I’m just saying to the people that follow me that hey, this is a great piece of content. So having said all that, who were you with previously in terms of your brokerage and what made you decide to switch to a cloud based brokers as opposed to a traditional brokerage model?
Jay: So I think there are probably very few people that are as passionate about trying to fix what’s wrong with the, the real estate team model. So that’s been, as I built my business and literally went up against the challenges of trying to step out, had to jump back in. I lost all my top people at one point. The tear down, build it up again. And there was just something broken in the model. Inherently I was dead set on figuring it out. And mainly because I wanted to step out of my business so I could focus on helping other agents grow their business. So ironically that was what was keeping me from being able to do that. And so once we figured that piece out, we still had the challenges.
And I think most agents that have teams would agree that there’s the challenge of recruiting and retention of talent. Whether you’re an independent brokerage or you’re a team. That’s one of the bigger challenges you run up against when you get to the point of having enough leverage to kind of either be focused on the listing side of the business or maybe at some point step out of production. So we were always looking for like how do we make it so great working with us that you would never want to leave. You would never want to lose nothing that would be better. The future, your opportunity, everything that that would be to designed perfectly for you. You would have that in our broker. So we work as a large group of a mastermind of US agents that are clients of ours that we had helped over the years.
That was like the always the same topic. You know, we’re always marketing things, talking marketing to get listings. That’s always, you know, that subject and recruiting retention was always the other topic every single time at a high level. And so it was just part of the challenge that we were all trying to find. And we were definitely looking at, well, how you incorporate ownership into the opportunity. Or creating some type of an exit at some point for agents in the future so that they would feel like they have something they’re working towards at some point in their career. Because real estate agents just inherently barely save enough for taxes, much less their future. So those were issues that we were trying to solve in our own business models as independent companies.
Because we had come to the conclusion that it doesn’t make sense for us to pay a franchise anything at this point. I mean, if you’re paying them, you know, 30, 50, $100,000 in royalties and fees and things of that nature. It just doesn’t make sense. You should be independent at some point. There’s just not enough value there. And that’s been something that I think most of the top agents in the country realized at some point and ended up going independent. Not anymore. Now they come to EXP and that’s what we did. And the reason was because we saw in their business model they had solved what we felt like was the biggest problems and challenges in the industry. So the stock opportunities, the opportunities for you to earn stock. And the more that you produce, the more stock awards that you could, that you would be given.
And these are just stock awards that are given to you. It’s not like you have to do anything crazy. You do sell houses like you normally do and you’d get these stock awards. So 10 year career, you might have some stock, it might be worth something. We don’t know what the socks going to do could go up, could go down. But that was a piece of the model that made you feel good about being a EXP and we saw that that was better for agents. And we know if it’s better for the agent, then it’s better for us. So as we looked at the model, that was a big piece of it. The other thing that we saw that I’ve never seen in a business model before was revenue share. And so if you guys or your listeners have ever watched shark tank, Mr. Wonderful is notorious for the royalty deal at the end.
Like he’ll stay at would be the last one there at the table. Okay, I have a deal for you. I want to get a royalty on everything that you sell from now until forever. And the reason that royalty deals such a good deal for Mr. Wonderful is because he doesn’t have to worry about operations or anything. He gets paid off the top regardless of how well the company does or doesn’t do. He’s guaranteed money off the top. And there are just very few opportunities like that, that are around. And we’ve never really seen one with this kind of compensation structure. And so there was a huge opportunity in that for us to just become aligned and help agents, grow their business. And there was some financial alignment for us to do so. So that was unique. That was super unique.
Never seen anything come and didn’t think of it. I mean, it wasn’t even on our radar. And so those two things alone. We just saw the future that the cloud really the cloud was the disruptive technology that allowed them not to have to go to the traditional model of having a region that goes in and gets franchisees. That goes and hires staff and brick and mortar and spends all this money and then goes and recruits agents. When you have the cloud office, you eliminate that but you also eliminate the growth vehicle for the company. So how are we going to grow this thing? We’re going to let the agents grow the company and the agents will tell their friends and if they love it here and we make a great company.
I’m speaking in Glen Sanford’s voice basically like I’m guessing these are the conversations he was having based on conversations I’ve had with him. I know they’re pretty close. But you know, that’s basically what he was looking to do. And we’ll let the agents make a little bit of revenue share off the agents they bring in now. Because we don’t have regions, we don’t have any, you can recruit anybody anywhere in the country. There are no boundaries because we’re cloud based. So they just unlocked an opportunity that I’d never seen before. And once I finally took my ego and put it aside and looked at it really closely and really analyzed it, met the leaders in the company. It was a no brainer. It was just a better business model than anything we’d ever seen. And the thought crossed my mind for about two seconds to try to build a model similar. And then I realized, no thanks, don’t want to do that. I think I just want to get on board with this great opportunity and add values. And to help grow this great company. So that was our story. That’s why we joined. And I feel like that’s what kind of disruptive about it.
Robert: Okay. So a little bit of explanation for our, for our audience. So number one, Glen Sanders, he’s the CEO and founder of EXP. That is the name that Jay kind of threw out a little bit ago. I’m sure that you got wooed by him at some point and that’s why you got to sit down and talk to him. Because you bring a lot of value to the table if you transferred over to EXP. And then a couple of other things because I think that the concept of virtual and cloud, it escapes a lot of the people. I’d say 90% of the people they show are probably in traditional brokerage models. So for those people, since this falls kind of like in tandem to my expertise. What he’s talking about is they’re using virtual tools like Facebook workplace and these virtual meeting places where you get a little icon of a human being. And you walk into this meeting, but you’re a virtual representation of yourself. And you’re doing a lot of your group communications and building through tools that are incredibly common but not necessarily in real estate.
It also use slack as an example, but you’re not, I know you’re not. But that’s what you could do if you wanted to. And so all the communication, it would be more like you’re in your home and now as you’re getting your day ready, let’s say that you have to attend a company meeting. Instead of going to an office per se, you’re going to sit down at your desk at home. You’re going to log into these tools. And then maybe and I’m just guessing if you’re on a guy like Jay’s team. He might have something posted to you that are motivational or instructional during the day. So you log on, you watch this video. And then bam, you go right into your routine about however it is that you’re generating your real estate business. Contacting your work contacts, making phone calls, but you never leave your desk. That’s a virtual workspace. And what Jay is talking about, correct me if I’m wrong in any of that.
Jay: Yeah, that was a great explanation of exactly how my day goes every day.
Robert: Okay. So having said that, you’ve got traditional. Versus you’ve got the way that it used to be and you got the way that you’re doing it now. And you’re coming from, if I understood correctly, you’re coming more from, you take your leadership role. It looks to me like you’re kind of like a super coach. Like you just kind of put everything in place for all the people that work for you and you make success easy. Is that right or wrong?
Jay: Yeah, that’s pretty close. I mean, from a leadership standpoint I try to surround myself with people that are better than me at their jobs and what not. And I try to help them succeed by giving them the ability to do the things necessary to succeed.
Jonathon: Okay. We’re gonna have to go for our break, actually Robert. And when we come back, we’re going to be delving some more with Jay in this great story. And great company. We will be back in the moment.
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Jonathon: We are coming back. We’ve had the initial great discussion with Jay. We got lot more to discuss. Before I hand over back to Robert. I have a quick question myself actually. I am based in Northern Nevada. And Lake Tahoe and Reno. It’s a very competitive market because of Lake Tahoe and San Francisco. And there are some large franchise brokerages, but there’s also about free, very large regional brokerages. That has an essential presence in the market. Their business model really seems to be to attract a very large number of agents between two to 300 agents in various satellite offices. And what most of those agents produce between four, eight transactions a year. I don’t think the brokerages give a law. And a lot of value to the clients and doesn’t seem to be offering a lot of value to the agents. Would you agree with that? And do you think that model is fundamentally the kind of traditional model that most brokerages are adopting?
Jay: Yes, I definitely agree that the consumer could care less about the brokerage. And I think there’s proof in that. If you think about it, if you take your real estate agent hat off, anybody who’s listening and you say, well, what’s the difference between, it be whenever one of these regionals are, or a Coldwell banker or a century 21 or a Keller Williams. Or even an EXP for that matter. What is it that’s different from a consumer perspective and any of these brokerages? And we would all struggle to come up with differences. We might come up with differences from a real estate agent’s perspective. But from a consumer perspective, the real estate industry is just one of these strange industries where you could get a really dumb bad agent at any brokerage, including the XP.
Unfortunately, it can happen. You could have a really good agent or a really bad agent. Fortunately if you have a really good agent, you’ll go back to that agent. And it doesn’t matter if they’ve got balloons on their sign or if they’ve got what color it is. It doesn’t matter. You’ll go back to that agent. But if you have a bad experience, you might not go back to that broker. You might not choose an agent from that brokerage again. So that’s really kind of proof that the consumer really could care less about the brokerage that you’re at. And so now you’re left with was an agent. What’s the value that a brokerage is providing and how much do I have to give them for that amount. Whatever I’m giving them, is it worth it in trade for what I’m getting?
So generally speaking, I would say that most agents are looking for training, support technology. And those are things that are either they’re doing a good job or a bad job at in terms of the trade amount that you have to give them in commission. So we see a lot of these 100% brokerages that are charging just a transaction fee and they’re doing very little, if anything, value to those agents. And I think the traditional brokerage model of giving a lot of your commissions to the brokerage for very little in return is just something that’s continued over the years. I think remax was the first major disruptor in this direction. But it’s going to continue in that way. The agent is in control of the transaction in the business. And the company that serves them the best is going to be the winner.
Jonathon: Over to you Robert.
Robert: So I don’t know if this is a good transition or not, but what this show, Jay, we typically focus on the marketing side of the real estate business. And I noticed in my review before he came on the show that you guys, that EXP Realty seems to be focused on the cloud based real estate marketing solution that is most prevalent in the real estate industry, which is inside real estate, better known as KV Core. And I’m kind of curious to know what your overall take is. Because I’m assuming we can ask him for a non-biased opinion about the tools that you used in the past versus the tools that you’re using right now for your business. I am here for the marketing summit. I’d love to hear your thoughts on that.
Jay: Yeah great question. Robert since being in the business and tools were always a big part of how do you acquire a customer. So there’s the traditional agent has their sphere of influence and the referrals from the people in their sphere of influence and past clients that know, like, and trust them. And outside of that, and really liking the stages like you were talking about earlier, you kind of get this stage one or two. And either you have some referral business, but you know, it’s not very consistent. So you can’t say, hey, in three months I’m going to get three deals from my referrals. And so you have to learn how to acquire a customer through marketing if you want to have a sustainable and predictable business.
Like that is something that you have to learn how to do. And over the years we’ve used a lot of different tools for that. The very first tool we use was Tiger Leads, then Boomtown. And then we were much tied in with the Dwayne the gate and helping build commissions Inc. And help them with really the shaping of what that product was in the beginning before they sold to fidelity. So, we used all the tools. Like a bottom all, just like every real estate agent that buys everything. And technology is a tricky thing. And tools can be a tricky thing. But what is the problem that you’re trying to solve? Or what is the system you’re trying to create? And how does the tool help you to execute that?
So like, a lot of people just buy a tool and then say I’m going to implement this. And I’m going to implement Infusion soft, for instance. Well, that’s impossible. What is the process you’re trying to create? And how has the technology or automation going to help you to do that faster or better? So it all depends on what someone’s trying to solve. But as an out of the box tool, I believe KV Coe is probably right up there in the top five or 10 tools that there are that are out there. And there’s variable differences between some of it’s just kind of really more or less look and feel and usability. And things of that nature, which is hard to describe. You know what’s good and what’s bad. But I think, you know, some tools may be easier to use and simpler.
Jonathon: That`s interesting that you brought that up. Because obviously Dissolve you’re speaking my thought. Because I’ve built my own platform. The reality and I want to see if you agree with this. When you are building a platform, there’s always a conflict between ease of use. And basically what the application can do. The more functionality application has, it tends to, in UX to become more complicated. The larger the onboarding, the more requirement for training. For inconsistent training and for the agent or the users to be prepared to have a lot of training. And to work through them learning an interface because it does a lot of things. So there’s always a struggle because it is impossible to get something that’s easy to use that also has a lot of functionality.
Would you agree with that?
Jay: Yeah, I mean, 1000%. It’s probably the hardest thing about building technology in my opinion. Because some people are gonna want all the additional functionality. But it does create like, okay, what does this tool do? Like even when we started the show today, I got a sense that you guys built an amazing tool with a lot of functionality. It can do a lot of things. How do you describe that in a short introduction? It’s impossible. It’s impossible. So like that’s the hardest. I get it. I totally get where you’re coming from. And I think the approach sometimes that, that, and we built some technology over the years and things of that nature. And very challenging, no question.
And I think the only way I could describe it is to help an agent. And this is why a lot of companies such as Tiger Leads. And at least back then, now he’s onto his most recent local. All these companies, they used to come to our events and they loved us because it hits on their wagon up to us. Because we were good coaches and we help people get clear on what their priority was and then how to implement, then go buy the technology to help execute on the priority. Not just buy a tool and not really know exactly or put together a good sales pitch. And they get excited and buy it. And they never use it. And you have churn and stuff like that. And so as these technology companies recognize that, hey, we provide a really good customer that will stay, that will learn the tool and do the right things in the right order and become a long-term customer. And client of ours, they were jockeying over sponsoring our events.
But I think that’s the piece that makes it the hardest is that the agent is using the technology has to have a clear understanding of what is my priority, what does success look like, and then implement the technology based upon that. And then move to the next priority and how’s technology, how’s this still gonna help me do that. And if they get clear on that, then they tend to be better clients and tend to have a lot more successful with the tools.
Jonathon: That’s great.
Robert: I couldn’t agree with you more. It’s funny because my business has grown to the point where I’m not as excited about being doing the one on one consultation anymore. But the weird thing is that what is desperately needed is the actual one-on-one touch. Where you really deeply go into what somebody’s like, what are you trying to achieve? Because all of these tools to a degree are the same. The differences are minor. But if let’s say, I’ll give you a big one. Sync doesn’t, isn’t uploading your old contact lists successfully. It took me like 20 hours of research to fricking get one thing working. But guess what? If you’re a mega agent like you and you’re sitting on 10,000 names and email addresses that for you is probably a huge requirement.
Jonathon: I know a system where you can upload videos.
Robert: But that’s what I’m saying is that what you just described and for our listeners as well. Because I am trying to make a point that we’ve been trying to make. It makes so much sense to measure once, twice, three times before making a one year, 18 month commitment. That includes to me, John or anybody. I’m saying everybody should take your time and understand what is it you think you’re going to use? Do you really need to like connect with your people on Twitter and send them a tweet as part of your technology package? Yes or no? Probably not.
If you’re an agent, probably need an automated series of tools that sends out emails and kind of touches them in automated ways over time. All that you might need, you might need a Facebook Bot. Maybe if you’re doing Facebook marketing and if you’re not, if it’s a goal and objective that haven’t yet achieved, you probably don’t need to spend a lot of money on it until you’re actually there. That would be my thought.
Jay: I agree with you. That it’s the thing that we’ve been preaching for a long time. And it’s hard because agents are consistently getting pitched different things at any given point. And so they don’t know without the proper guidance, they don’t know what tool or they should be getting or whatnot. So yeah you’re hitting the nail on the head.
Jonathon: We’re coming close to the end of the podcast part of the show. Jay, hopefully you’re okay to stay on for a while. Because I think we’ve only scratched it. And that will you be able to see and hear listeners by going to the Mail Right YouTube channel. And also you’d be able to see that on the Mail Right website with a full set of show notes and written transcription of the full interview. So Jay, just to wrap up the podcast part of the show. How can people find out more about you, and your thoughts and what you are up to?
Jay: So the website has got the most information and connection to all of my social media and how to get in touch with me. Its jaykinder.me. It’s the fastest way to find kind of everything access to me.
Jonathon: And Robert, how can people find out more about you and what you are up to?
Robert: inboundrem.com. Go to my about page if you’re interested in learning about me and if you want to learn about what my company does, just go to my services page, which are located right next to each other on the website.
Jonathon: And if you want to find out about more about Mail Right. Go to the Mail Right website. And if you want a demo of our great software package, you can book that free. And it’d be me personally that we’ll be showing you how Mail Right system works. We will be back next week with either a great internal discussion with my great host, Robert. Or another great guests like Jay. We will see you soon folks. Bye.