Bonus Episode! Super Producer Leigh Brown: Everything you need to know about the NAR Settlement!

8 views

This week reg sat down with @LeighBrownSpeaker . Leigh is a realtor, past president of the North Carolina Board of realtors, Author, and policy guru. As both Greg & Leah are in real estate, they discussed the National Association of Realtors (NAR) settlement decision, what this means for buyers, sellers, and agents, the broader effects of this ruling, and where the real estate industry will be heading in the near future. This was informative and fun to record. Enjoy! Facebook Page: Dead Men Walking Podcast Instagram: @deadmenwalkingpodcast Threads: @deadmenwalkingpodcast Twitter: @RealDMWPodcast Check out our snarky merch here: http://www.dmwpodcast.com

0 comments

00:05
Exploring theology, doctrine, and all of the fascinating subjects in between, broadcasting from an undisclosed location,
00:13
Dead Men Walking starts now. Well, hello everyone, welcome back to another episode of Dead Men Doctrine Podcast.
00:26
I'm your host, Greg Moore. Thanks for coming along for the ride. Thanks for checking us out at dmwpodcast .com. You can find out more about the show, support us through there.
00:34
We appreciate bringing you guys good content. When you support the show, it does that, but first up front, I want to talk to you about one of our great sponsors,
00:40
K &K Furnishings. I've known both of these owners for a long time. They have helped me out professionally and personally. 70 years pastoral experience between the both of them, they decided to start a furnishing company.
00:49
So if you are a church, a nonprofit, a small business, heck, you're working remotely now, you need to renovate that office space, call
00:56
K &K Furnishings. They have fair prices, they understand budget constraints, and they have top of the line quality furnishings, 200 wholesalers and vendors nationwide.
01:06
If you're in Michigan, Ohio, or Indiana, they'll definitely come out and see you in person for a consultation. If you're not in one of those states, they'll jump on a
01:13
Zoom or video call and definitely tell you what you need to do. www .knkfurnishings .com,
01:18
they're a sponsor of the show, love those guys, go check them out, make sure we support them. Now that the business is out of the way, got an exciting one here.
01:25
As you guys know, if you've been listening for almost four years, I've talked about everything. We've had comedians on and congressmen on and scholars and pastors.
01:34
But the interesting thing about this podcast is I'm a little selfish, so I get to have people on that interest me and hopefully it interests you and we bring you guys good value and content.
01:43
And you know that I'm in the real estate business, been a broker for 12 years. That's my full -time job. My real job, as I tell people,
01:50
I wear a lot of hats, but that's the one that pays the bills and honestly, it's probably the most rewarding outside of being an elected official.
01:57
But all that and a father and a husband. Okay, it's maybe like fifth down, but it's still really, it was really high up there in real estate.
02:04
But so we're going to talk real estate today because there's a lot of stuff going on in the real estate industry. I came across this guest that's going to be on today, geez, just a few months ago and I went, why has she not shown up in my algorithm?
02:16
I mean, it felt like a stepbrother's episode when I was watching it. I went, geez, did we just become best friends after three videos?
02:22
Because I think our trains are running on the same track. So Lee is an author, public speaker, and real estate professional.
02:28
She has served as the president of North Carolina Board of Realtors, written multiple award winning books, and has a very successful YouTube channel, which we're going to talk about as well, focusing on real estate and policy.
02:38
She's sassy, she's Southern, and she's with us today. It's Lee Brown. Lee, how are you? I'm super honored to be with you.
02:44
And I guess if you've got a priority list, I'll be doing good to be like 11 or 12. So I kind of love that thinking out loud.
02:50
Great. Yeah. As soon as I said that out loud, I went, well, I better fill the wife, the kids. Oh, you know, they're going to, if they, they don't, they don't listen to the podcast.
02:58
Let's be honest. But if they do, we got to put them up there too. Joy of my life. But so you and I are both in real estate.
03:05
I've also watched some of your videos on policy. Obviously as realtors, we understand that there's some stuff going on with a
03:10
NAR settlement, but first, can you just give us like the little Reader's Digest 30 to 60 second bio of you and how you came into that.
03:19
And I just showed my age by saying Reader's Digest, all the Gen Z's out there going, what are you talking about? But yeah, give us a little background on you and how you even got into real estate and what you're doing now.
03:28
Well here, while they're Googling, I'll just say TV guide and now they'll be busy for days. I'm a 24 year realtor.
03:35
I am in Concord, North Carolina, where I own an independent brokerage.
03:40
I got into the business with my dad, who's a career realtor. He's retired now. I came to this business after finding out the corporate world wasn't for me.
03:49
So I sold chainsaws. I worked on Wall Street and this is my home. This very crazy business being a really, you're a servant leader to survive in real estate.
04:00
And in the past 15 years, I've also, in addition to building my brokerage, I've done a lot of policy work for the local state and national level.
04:09
I have run for office unsuccessfully. So I'm the failed congressional candidate right here, but that's because that's not my mission field.
04:16
So I'm fine. But I have gotten myself very involved in the politics of real estate as a way to serve the profession on the bigger picture.
04:25
Yeah. No, that's so good. And I find - I have a husband too. I got messed up. I got a husband. I got two kids.
04:32
I got an amazing church home where the Holy Ghost shows up all the time and rattles our cages.
04:37
So there you go. Fix that. Yeah. I know you get realtors together and they forget that they have wife and kids and families and husbands and everything else.
04:45
But we started talking real estate. No, absolutely. So yeah, I've noticed too that policy goes hand in hand with real estate.
04:52
And it's funny you mentioned that. I was in a Fortune 100 company, thought I was on the VP track. And then my father had been in real estate for about eight years at that point.
04:59
Said, Hey, do you want to come do this crazy thing where we're doing thousands and thousands of BPOs? Or at least I think we can.
05:05
And most realtors look at me and go, a broker priced opinion. Those were paying like 50, $80. Why would you want to do that?
05:11
Go take pictures and write a report. Well, we brought, I came on and we hired full -time typists and full -time drivers and we're doing 75 ,000
05:19
BPOs a year as a little three realtor brokerage. And I tell realtors that they go, you're insane.
05:25
And I go, well, it was just that niche. You find something and you're good at it. So I was in Fort, what is 44 different counties in the state of Michigan.
05:33
And you can tell me a street, 17 counties away. And I can tell you the value of that house because my guys or myself are up there valuing it for banks and attorneys and municipalities.
05:43
And I say all that to say, yeah, I jumped out of a six -figure job at corporate America with full health insurance when my wife was pregnant with our first child and went into,
05:52
Hey, let's not be homeless next month. Let's start a business. But that's kind of the attitude I find in a lot of really good realtors of like,
05:59
I'm going to forge my way. I'm going to figure this out. I want to bring value to my client, all those things you do. So when we have something like this, you know, a shifting, as you would say, or as we could say in the industry, it's important to talk about it.
06:13
So I want to talk about it right up top. Maybe you can give us a little explanation from your view of the NARS settlement that's been in the news the last week or so.
06:21
And we have agents, buyers, sellers, everyone kind of freaking out a little bit about it going, what does this mean?
06:28
Could you give us your take on that? Maybe touch on those. So I'll speak to it from two viewpoints.
06:33
And the first one is the consumer standpoint. You probably don't know what we're talking about, because unless you read the mainstream media, this may not have come across your feed.
06:44
And because y 'all are listening to a very wise podcast, you already know that when the mainstream media has one talking point spread across all their headlines, they have received their talking points from the bureaucracy.
06:56
So you're getting bad information that says there's no more commission agents are dead. That's patently untrue.
07:03
And it's just designed to cause you to stop calling the realtors. So we'll talk more about what the settlement means.
07:09
But consumers, if you read a headline, that's fine, I guess. But read down to the last paragraph where they usually hide the facts.
07:17
And then you just go ahead and call your realtor for information. If you're an agent, you're thinking, oh, my
07:22
God, Lee Brown, everybody knows about this. I can't breathe. I can't die. Well, that's because we live in our silo of real estate.
07:28
And we have trained the algorithms to bring us real estate information. So those of us in the business feel like this is earth shattering.
07:35
Everything's over. It is the apocalypse. It's not even April 8th yet. And we're gonna talk about that because there's some wild things shaping up there from the prophecy standpoint.
07:42
But anyway, and so real estate people are looking at this settlement thinking real estate's over.
07:49
And of course, the truth is somewhere between those two things. The settlement that's happening in real estate is on the heels of a class action lawsuit where the realtors lost in October.
08:00
And when I say the realtors, I mean the National Association of Realtors, the world's largest grassroots trade association, over one and a half million members and four of the largest brands,
08:10
REMAX, Keller Williams, Anywhere Brands, which would be Cobalt Bankers, C21, Sotheby's, Better Homes and Gardens, and Berkshire Hathaway Home Services, a .k
08:18
.a. Warren Buffett. So those were the four companies sued along with the National Association. Three of the four settled.
08:25
Home Services, Berkshire Hathaway, is still figuring out what they're gonna do. And then you have the National Association of Realtors.
08:32
What they accused us of is not telling people how compensation happened.
08:38
It's patently untrue. Now, there may have been some agents out there that didn't explain things well, but let's call it what it is.
08:46
Every home seller that showed up as a plaintiff had signed a listing agreement with their agent and they had had information fully disclosed until class action lawyers came in and muddied the waters and said, we want to go get these realtors who make too much money because class action lawyers obviously are just like those pastors that run the furniture shop.
09:06
They're doing it for the good of mankind and not for their own pocketbooks. And I speak with a high level of sarcasm there.
09:13
And so you have a pretty nasty setup to destroy the realtors in the pursuit of money, forgetting that realtors are all independent entrepreneurs, most of whom live below the poverty line, because as you've already acknowledged, it's hard to find your space in real estate.
09:29
It's a very hard hustle business. The ones who make it are really survival people with a high level of discipline and hustle.
09:36
And most people fail out of real estate. But of that was addressed in the lawsuit to take us down.
09:42
What most people don't know is that the Department of Justice has been trying to take down real estate for a long time.
09:49
And they did have their thumb on the scale in the settlement because they would like realtors to go away simply because consumers don't want to deal with realtors.
10:00
If you believe what's said on the internet, I take that with a grain of salt. Most consumers know they're going to do real estate two, three, four times in a lifetime.
10:08
And between those transactions, laws change, practices change, consumer behaviors change, the mechanics of real estate change, and they rely on that local realtor professional to help them get through the process.
10:21
The system knows that if you remove the realtor, a lot of the public would say, forget it, I give up too hard,
10:27
I'll just rent. So there's a lot of underlying currents going on. The settlement right now is proposed.
10:34
And what the settlement says, that's all your little backstory on what it is. The main point of the settlement is, historically, in our multiple listing service, which realtors pay to have access to, it's a paid membership, and it is egalitarian, it is the freest and fairest marketplace on earth.
10:53
If I become a member of your multiple listing service in Michigan, I've sold zero houses in Michigan, but I have access to the same information that you have access to as someone who's been productive for over a decade, and vice versa, the system doesn't care what color you are, what language you speak, who you're sleeping with, the system just says, if you've paid your dues, you can have access to the information.
11:15
The system required sellers to make any offer of compensation universal, did not tell them how much to make it, it said it had to be universal.
11:24
So if you offer it to one, you have to offer it to all, again, free and fair marketplace. What the settlement says is that sellers can no longer make a universal offer of compensation.
11:36
Buyers can ask to have their agent compensated through the system, but sellers cannot offer it.
11:42
And so it's taking a very efficient system and making it inefficient. Now for you consumer people, you're thinking, what does that mean to me,
11:50
Lee Brown? I don't belong to the MLS. Well, when you're ready to buy a home, you know better than to go to a website and click add to cart and Shazam, you have a house because it's a very intricate transaction, which involves your taxes, your finances, your savings, your title, your marriage, everything, your estate, the whole kit and caboodle is wrapped up.
12:08
You want that realtor professional. Well, now it's been said that you will have to pay that agent out of pocket.
12:14
For some of y 'all, you're like, that's fine. You know, dollars in, dollars out, it's all fungible. You're my educated listeners. And you who are also educated, but say,
12:21
I don't have a big pocket of money, Lee Brown, what am I supposed to do? Well, you're going to have to figure out how to wrap it into the transaction either in the way we used to by asking the seller to help cover the cost of your agent or by your lender allowing you to roll it in.
12:35
So again, the same dollars, same transaction used to be efficient is now about to be wildly inefficient.
12:42
But good realtors will figure out how to guide you through the process because your outcome matters to us.
12:48
And the banking system will eventually respond. There's just going to be a period of chaos because as we all know, the banking regulations, the government regulations don't exactly move in short order timeframes.
13:01
Yeah, now correct me if I'm wrong, because I'm agreeing with you that it seemed to go from efficient to inefficient, which in my estimation, usually what's usually is what happens when the government kind of gets involved in the
13:12
DOJ gets involved. They take something that was working in the free market pretty well, and everyone was happy on both sides, or at least compromised on both sides.
13:19
And they go, we're going to stick a wrench in it because the way I see it, and correct me if I'm wrong, why can't we write in concessions or lender financed payment?
13:33
Or there's all these other less inefficient ways to do it. And it looks like the settlement didn't really say anything about that.
13:43
So am I right in thinking there's just going to be five or six different ways to do this, and probably not the best way, but it's still going to kind of flow that way.
13:51
Because as you know, and I think in most markets, buyers are pretty strapped. We've seen home prices go up, we've seen, you know, bank accounts go down, we've seen rates go up.
14:02
So most of my buyers, unless they're selling a home, or they're in that certain tier financially, they might not have that extra three, five, eight, $10 ,000 to pay an agent.
14:15
Well, and they don't want to, right? Not necessarily, they don't have it.
14:21
And many of them don't, because I work with a lot of first time buyers. But there's other places for their dollars to go.
14:26
We're in an inflationary environment where going to the grocery store feels really painful. Filling up your gas tank is no small thing.
14:33
And then your kids bring home a permission slip for a field trip, and you've got to find that money. People have so many uses for their money, they'd rather have it really wrapped in the way it traditionally has been.
14:43
But to speak to the different ways that it can be structured, well, that relies on another party.
14:50
So now you've got to call your bank and say, Dear Mr. Bank, will you allow me to pay my commissions through concessions?
14:56
It may or may not be allowed because as you reference the higher interest rate environment, many of our really savvy clients have said,
15:02
Hey, can I do the buy downs we used to see once upon a time? Actually, before you got in the business, this is how old
15:08
I am. We used to have higher interest rates and your older audience remembers, historically, the rates have been between 6 % and 7%.
15:15
They've just now come back to that. But if you give some extra money to your lender, you can take it from 7 % to 6 % and lower your monthly payment.
15:23
But that's a concession. So now can you simultaneously do that and pay your agent and not come out of pocket?
15:29
Well, those are rules that are going to have to change. The biggest problem we have is that this is a direct hit on our veterans.
15:36
Because the VA loan program, which is arguably the one benefit the government gets right for our veterans and our honorably discharged service people.
15:46
It's a very efficient loan program. Our veterans can buy a property with zero down with a good interest rate and with low fees.
15:54
However, there's a rule inside the VA program. Veterans are not allowed to compensate their own agent, even if they want to.
16:01
Even if they said, You know what, you're worth every penny. Let me pay you. The VA loan program does not permit a veteran to compensate their agent.
16:09
They can only have their agent compensated through the seller and the listing broker in the traditional way.
16:16
I'm either fortunate or unfortunate to have friends that are high up in the VA through the work that I've done and talking to them is, let's just say it's painful.
16:26
When I have had conversations with the VA over the past six, no, seven years, 2017 is the first time
16:33
I went on the record arguing about this rule needing to be changed because that's how long this stuff has been in the pipeline.
16:41
Please take that rule out. Let veterans do what everybody else does. Roll it in, pay it out of pocket, have the seller pay it, whatever.
16:47
Give the veterans freedom. The VA's response to me was always, but the system works fine and sellers will pay the veterans agent.
16:55
I'm saying you're not listening to me. You need to be prepared in the event of change. Now, we're facing change that is what, 90 days away.
17:06
Veterans, as it stands right now, their agents are not allowed to receive compensation through the
17:11
MLS unless the seller says yes. If the seller says no, the veteran can't pay an agent. Now, what do they do?
17:17
They go without an agent. It's ridiculous to me that you have one class of people that's being treated poorly.
17:24
It happens to be the one class of people who give us the freedoms that we're talking about right here, right now.
17:31
Wow. Yeah. That kind of rolls us into something I wanted to focus on for a few minutes, too, is just how this affects potential buyers.
17:40
Both buyers and sellers, but buyers specifically because there's going to be some buyers out there that go, hey,
17:46
I want to go at it alone. I don't want an agent, whether I'm paying or not. Hey, more power to you if you can.
17:52
Every time I've been approached with that subject, I can rattle off maybe 10 or 12 or 15 things that I've personally experienced and just say, how would you handle that?
18:02
How would you handle your rezone, or your setbacks, or your inspection, or it needs waterproofing, or your taxes that are prorated, or how much of an
18:11
EMD? How do you do if they dispute that? There's so many things, as you know, that we go through on both the buyers and the seller side as agents, where usually when
18:18
I present that, I'm pretty good at presenting value, my value anyway, to a buyer or seller. They go, oh, yeah,
18:24
I'm not scaring them, but I'm being realistic. This is what could happen in a real estate transaction. I just closed on one two days ago.
18:31
Oh, my goodness, Lee, it was up and down. I mean, it felt like it was those ones, right? It's never getting in.
18:37
We got to the closing table, and everyone was jumping for joy. My point is, I feel like with this decision, the buyers are going to be hurt the most.
18:47
Just because there's going to be now a lack of representation, possibly. You might have, look, an agent doesn't want to work for free.
18:54
We have families to feed. We need to make money as well. I think we're valuable, and we should. The Bible says, pay a man what he's worth, or count it evil unto you.
19:03
I'm for that. But at the same time, you're going to have some buyers that are going in blind, maybe first time.
19:09
I have a second time home buyer right now. He didn't even know how I get paid. He goes, oh, the first time my wife handled it, so hey,
19:15
Greg, how much do I pay you? That's what he said to me two weeks ago. 42 years old, and I've known him 35 years.
19:20
I go, you don't pay me. I'm working with the broker on the right. So there's buyers out there, all ages, all stripes, that just don't know, and they'll get into a situation where then they're not represented.
19:32
I feel like, how is any of this not taken into account when the judge and the
19:37
DOJ were going through this? It was just as blatant, hey, we don't care what the effects are going to be, and we don't care what the industry experts are saying.
19:44
On the realtor side, we're just going to do what we want. I know you can't speculate about that, but what do you feel was going on there?
19:50
Well, I've read the transcripts from the trial, and I will just say that one of the most powerful things any of us has available to us is the ability to tell a story.
20:01
I mean, look at how Jesus communicated with his people. He communicated through parables, because he knew that just telling the truth would not catch people and help them process it to understand it.
20:11
When you look at how the trial went, the realtors, we did not storytell effectively. We did not explain the day -to -day work of the practitioner.
20:20
We had people giving testimony who are very nice and smart people, but are not day -to -day active practitioners.
20:27
You had a jury pool that was half owners, half renters, which means half of them have at least been in the process, and half of them have not.
20:35
So there was also a terrible voice there in the jury pool selection. And I think that was a failure on the part of the legal team.
20:43
And that's me playing armchair quarterback, wasn't in the courtroom. I'm not a lawyer. I just watch them on TV. But I do know that you had an unfair audience, and then we did not try to convert them to our side through the powerful things that we've all seen and said and done.
20:59
So when you look at how that went down, that could, I think, been handled better. When you look at the other side of it, though, we have a sitting president who, on Tuesday, March 19th, in Nevada, gave remarks saying that realtors need to bring their fees down to reduce the cost of housing.
21:20
You have a press secretary, I hesitate to call her that, but you have a press secretary, that's her title,
21:27
I guess, who said on Wednesday, March 20th, that realtors' fees are junk fees.
21:33
So you have a messaging coming out of your current administration that is blatantly derogatory towards realtors, because they don't understand what we do either.
21:44
I doubt that Corrine Jean -Pierre or Joe Biden have actually talked to a practicing realtor, that they've had to scratch a down payment together and figure out inspections and surveys and all those pieces, because either someone's handled it for them, or it's been a long time since they messed with it.
22:00
So they've lost touch with the reality, too. And then you have to address the fact that every single day, there is a headline that says, renting is better than buying.
22:10
You will be a renter. Renting is good. The Gen Z's will never be able to buy a house. The American Dream is dead.
22:16
And there's all of this negative messaging around real estate, which I think fed the outcome of the lawsuit as much or more that the courtroom conversation did.
22:27
Yeah. So this, we're going to go off subject here just a little bit. And I don't want to seem too conspiratorial, but I'm a realist.
22:34
So I kind of look at the world as a whole. And you say, what makes sense? Right? You go, well, if A's happening and B's happening, then probably that we're aiming towards C.
22:43
And I've seen over the last 10 or 15 years, that we've seen a real push towards, you will own nothing and you'll be happy, right?
22:50
WF comes out and says that, and there's all these global elites that really like the idea of subscription -based and leasing and renting, right?
22:57
And I look at a decision like this and I go, yeah, and it's horrible that I even have to preference that with saying conspiratorial, when these are just things that they come out, right?
23:08
And saying, look, this is where we would like to go as a global community, right? And I go, well, one of the great ways to, to get people into renting is remove those couple million agents that are the last line of defense for both buyers and sellers.
23:24
And, and I'm not being, I'm not, this isn't hyper, you know, hyperbole.
23:29
This is, I've been in the trenches, you've been in the trenches, you understand your fiduciary responsibility to your client.
23:35
For all those listeners out there that aren't in this industry, we're talking a language you might not quite understand until you use a good agent that is going up to bat for you and defending you and making sure that they're protecting you against whatever it is, laws and rezonings and assessments and taxes and all these things that come across your way.
23:56
And I went, boy, what a great way to just to move towards that goal. Now, I'm not saying that there was anyone in the
24:04
DOJ office saying, hey, make this decision, or at NAR saying, make this settlement. But boy, just like you said, we've had this attitude now for the last eight or 10 years.
24:13
And then a decision like this comes down, the White House saying junk fees. I mean, it's insulting, really. I would love to see
24:19
Geriatric Joe come do my day, my job for one day. And look, and I know he's the president, respect the office, but I have no lost feelings for Joe Biden and his policies.
24:29
So it seems very like it's pushing towards one goal. And I kind of feel like as someone who's been in the business a long time like you and have lots of experience, you kind of step back and look at the big picture and you're kind of maybe seeing that same thing.
24:45
Well, we're not actually conspiracy theorists. We are coincidence spotters. And so all we're doing is spotting coincidences here.
24:52
It goes back to your friend that you spoke with, the second time homebuyer. This is infrequent for them.
24:59
And so because it's infrequent, that's where the realtor really does come in and keep the process moving forward.
25:05
Because if he let his wife handle it last time, and he's handling it this time, they're probably both busy.
25:12
They're probably at the age of, you said, 41. At that age, they're probably managing kids, which means they are chauffeurs as much as they are anything else.
25:19
They're working, they've got life going on. And so if they think about buying a house, our markets right now are suffering from a lack of supply, which means that if you see a house you like, you do not have a week and a half to say,
25:32
Oh, did I call the realtor? No, you're either jumping on it right away, or you've missed the house. And so if they jump on something right away, because the market's moving, well, now what?
25:42
And it's those next steps that keep a lot of buyers from buying when they start to go through the process with the lender and everything else that's involved.
25:52
So if you start adding up all those pieces, it is the realtor that does grab them by the hand and say,
25:57
I got you and explain it and answer it, explain it and answer it for weeks on end until we get them to closing. Not pushing anyone, but encouraging and answering the whole way through in what is for most people a foreign process.
26:10
And this is where a good realtor does stand out from a bad realtor. And I don't think either one of us is making apologies for the bad agents out there.
26:18
There have always been bad agents, there are bad actors in every single profession, real estate is not unique to that.
26:24
I think the only thing that's unique when it comes to real estate is that every transaction is different because of all those humans involved.
26:31
And because every transaction is different, the skills of the agent are going to be different transaction to transaction.
26:37
So I'm needed to behave differently in an estate sale than with a first time buyer, because I'm handling a different type of process with a different desired outcome based on the humans involved.
26:49
And that has huge value. So if you start looking at how much we have kept the
26:55
American dream alive as little tiny micro businesses, market by market, well, now let's look back at 2008.
27:02
You know what happened in 2008? Most of us that were in and around real estate were painfully aware of what was happening in real estate because the wheels had come off the 18 wheeler and it had gone straight down the hill wasn't even done going down the hill.
27:16
Well, in 2008, that was the first time that the bank started selling foreclosures to hedge funds.
27:22
Prior to 2008, the investment world was controlled by investors like you and me, the mom and pops, the hedge funds swooped in because the banks had a great swath of foreclosures, and they enjoyed selling them as a portfolio package to reduce friction and cost in the process.
27:40
Well, the hedge funds figured out very quickly, these are wonderful performing assets. And so you start to see them pick up more and more properties.
27:47
You fast forward to today, and the thumbprints of BlackRock, State Street and Vanguard are on so much in and around real estate, whether it is the automated valuation models that are being proposed to replace appraisers, whether it is the purchasing of individual houses, or whether it's the building of whole neighborhoods, the
28:06
BTR movement, which is known as build to rent. And for those of y 'all that aren't aware, that's an entire subdivision looking area of single family homes, little fenced yards, little stone, little vinyl, very cute, some hardwoods and granite, just we love it.
28:20
But nothing is for sale, everything is owned by a hedge fund. So the renters in there feel like homeowners, but they are not homeowners.
28:27
And so there's also a psychological effect happening there. But you go through and look at this, and there's a stated goal of the
28:35
ESG funders, BlackRock, State Street and Vanguard to own 30 % of U .S.
28:40
housing stock. Why do they want to own that much housing stock? Well, it's a great performing asset. But it's also a control mechanism, because if you don't own the property, you're less likely to be heated up about property taxes, you're less likely to clean up the monument, show up at the schools and be involved in community.
28:56
So as much as we sound like we are down a rabbit hole here, everything I have just said is verifiable.
29:02
Everything has been stated on the record and is shown historically. And so as realtors, we think our job is always to gather information and tell you because you the consumer, you the agent, you are grown people generally pretty good at making decisions.
29:16
And what I would say right now from the Lee Brown perspective on things, and I'm going to wager you'd agree with me here, you buy real estate right now if you can somewhere because you need to be locking down your piece of real estate before we see the next level of attacks on this beautiful example of what the
29:33
American dream is. No, I 100 % agree. My grandfather told me at seven years old, they're not making any more dirt, and ended up being a realtor.
29:41
So once I stuck with me, you know, very wise man. So let's shift gears here as we wind this down.
29:48
I don't want to get too nuanced. But there's going to be a lot of people that are going to listen to us that are that are realtors are in the industry or possibly going to sell their house.
29:55
What does this mean for the seller? This decision because I've always positioned myself at the listing table as look at you're going to pay me this percentage, and then
30:05
I'm going to handle the buyer and I want to make sure the buyer is represented. So we have a smooth transaction and that buyer doesn't freak out about something that might happen and that they have a professional working on their end.
30:15
So I've, I've never said, Oh, you're paying me and then I'm paying them. It's just looking, here's my fee.
30:20
And out of that, don't worry, I'll take care of the buyer side of that. Because it's really what's happening is broker and broker getting together and exchanging monies.
30:29
The seller isn't really technically exchanging any monies, right? So how does this decision change for sellers and sellers agents then when they're sitting at that listing table?
30:38
Or, you know, when the seller says, Well, I don't want to pay? I don't present it that way.
30:44
But a lot of agents do I don't want to pay a buyer's agent? What would you say a response to that would be? Or what would you say?
30:50
I guess the thought process should be for both the agent and the seller. Well, the first thing is, it's always the seller's choice what they pay.
31:00
And it's the agent's choice as to what they accept. So if you can't come to an agreement, then you shake hands in part ways.
31:06
It's always been like that, because we've always negotiated with people. So the conversation just changes for me, if my seller says,
31:14
But I don't really want to compensate a buyer's agent, I think they should pay their own agent, I understand that I value their viewpoint.
31:20
What I ask them is, if an offer comes to us, and there is a request to pay the buyer's agent,
31:27
I'm going to ask you to consider that because if that buyer doesn't have the funds, I don't want that buyer to lose out on homeownership, because we were unwilling to work with them.
31:38
So will you work with them? I have not had anybody tell me no, they won't work with somebody. The one place
31:43
I will dig in my heels, though, is I explained to them veterans by law cannot pay their agents.
31:49
So if we get an offer from a veteran, a VA offer, you're going to have to compensate their agent, will you?
31:56
Of course, provided the numbers work, it's always provided the numbers work. If that seller won't work with the veteran,
32:01
I'm not likely to take them on as a client, because I feel so strongly about protecting and preserving the rights of every single person who wants to get the right kind of loan for them in this great country.
32:12
That to me would be a warning sign that I have a seller who doesn't share my value set, and then we can part as friends, and they can find another agent.
32:19
I also haven't seen that, though, because I think I attract people that are very focused on America First with the way that I do my marketing.
32:26
So you just got to think about this. And if you're a seller, you definitely interview agents, but see what they bring to the table.
32:33
And if they can't explain what's happening, you might want to talk to an agent who can explain to you the way things work and what your options are and are not and what benefits you and what doesn't benefit you.
32:45
I have told my sellers that it benefits them to consider compensating the buyer's agent, because it widens the buyer pool.
32:52
It doesn't widen it for any nefarious purposes. It just means that the buyer who cannot compensate their agent could buy your house, and the veteran who cannot compensate their agent could buy your house.
33:03
That is a broader market pool that's good for our sellers. And I have to add one thing here, but I know we're wrapping up.
33:10
I need everybody to understand something. There is a huge line of messaging going on that says this is going to bring the cost of housing down.
33:19
And I need everybody to understand the cost of housing is a straight supply and demand equation.
33:26
We have increased demand across the country, simply because our Generation Zs are starting to buy.
33:33
The Millennials are late to buy. They didn't start buying as early as the Gen Xs and older did because they're later to household formation.
33:41
And so we have a very good buyer audience. And in that buyer audience, you also have to consider the number of illegals that have come into the country.
33:49
And so they might not be purchasers, but they are living in real estate somewhere as being purchased by someone.
33:55
And so you have an increased number of people demanding housing, and we haven't increased the supply to catch up.
34:02
So when you're being told by the media that taking commissions out is going to make housing affordable, just slow your roll and ask a question.
34:11
How is this going to make a seller take less for their house? Because if the seller can get $500 and suddenly they can save $10 ,000 in commission, they're not going to take $490 out of the goodness of their heart.
34:24
They are going to take $500 in pocket 10. And so ask yourself where those fungible dollars are going and what you're sacrificing.
34:31
Because if you're sacrificing a professional guarding you and the largest financial instrument that you ever put your money behind, then you're going to put yourself at risk.
34:42
And that's all we ask is that you ask great questions and don't put yourself at risk. If you're qualified to go it alone, we wish you every success.
34:49
If you're not, we're here to help. Yeah, absolutely. You know, when I first saw this, too,
34:55
I said, Wow, this is really going to this isn't going to be that big of an issue for realtors that understand how to present their value to buyers and sellers.
35:05
And I think that's one of my strong suits, because I've been doing this a while and I understand my value. And I've walked away from listing tables and said,
35:11
No, I don't discount here. I can't do it for that price. I know what my time's worth. I know what value I bring to the table.
35:17
That's fine. Take someone else. We're not the right fit. I get that. But at the same time, I said, Man, the realtors that don't understand how to present them, you're going to see a real falling off 1 .6
35:28
houses a year is what the average realtor in Michigan sells. That tells you how many part time realtors we have 1 .6.
35:34
Can you live on 1 .6 houses a year? No, you can't. Neither can I. So that's how many they're ones and twosies and threesies out there, right?
35:41
So this is really going to affect them too. And I said, Well, sometimes that can be a good thing, though. You know, you kind of shave off the ones that maybe only had one foot in it in any way.
35:50
And I want a realtor two feet in it and running full steam towards the client. And it also maybe some of the older ones that went,
35:56
Hey, it was time to retire anyway. And then, you know, they kind of fall off. And then you get this kind of pruning, you get this kind of in the middle of going,
36:04
Okay, we're going to double down, we're going to figure out how to make this the best we can for both our buyers and sellers.
36:09
And it might help the industry. I'm an optimist, you can tell maybe sometimes too much, and maybe lift that market up, you know, go,
36:16
Okay, now we have, we've gotten rid of the two edges, the ones that weren't really in it or didn't know their value or sat down a listing table got spun around by a seller asking a million questions.
36:25
That's fine, either get more education and training or quit. That's, I know it sounds harsh. But if you're in my industry,
36:31
I want you to be a professional, I want you representing my industry the right way. So I look at it almost optimistically to and go,
36:37
Well, if we have realtors like you down in the Carolinas, if we have guys like me up here, I know some down south in Florida and out west, we have these good realtors that go,
36:46
Okay, but what can we do to make sure our clients are still getting the absolute professionalism, fiduciary responsibility, all those things, then
36:54
I think we are going to be okay. Which leads me into my last question, where do you see the industry, the real estate industry in the next 5, 10, or even 20 years?
37:03
What is your outlook? When you're looking out over that span? Where do you think we're going? Well, provided that we can protect private property rights in our constitution, and that's,
37:15
I have very intense concerns about the sanctity of our constitution right now.
37:21
I'm not going to lie to you about that. Yeah. Provided that we can preserve private property rights, houses will always be bought and sold, commercial property will always be bought and sold, land will always be bought and sold.
37:31
The question is, who's going to be there to guide the process? Now, I don't believe that we'll have this many agents in the future, because as you said, you're going to have some attrition of the ones who aren't willing to completely dial in.
37:43
I do think some of those 1 .6 transaction people are going to wind up being amazing, because they're going to be refined by the fire, they're going to learn how to be more knowledgeable and more confident, they're going to decide to get great.
37:55
And so you'll have great people in every market. I do think the business is going to wind up stratifying finally, and this is something
38:01
I've been fussing about for years, but I haven't known the perfect answer. If I go to a hair salon, this is expensive.
38:09
I'm just going to say it, I have to look expensive, I've earned it in my life. I am not going to go to Supercuts.
38:15
But there is somebody for whom Supercuts is the perfect solution. I go to a highly trained, educated man who is known as the blonde whisperer, because it's bottle blonde,
38:25
I have to have a pro. I pay out the nose for him. That's going to happen in real estate, you're going to have the consumer that says,
38:31
I want the absolute best and I'll pay for it. And the consumer that says, I just need some help. I'm really not that vested in this, and they're going to pay less.
38:40
I think that's going to shake out. Structurally, I do think that some of these rules are going to wind up backtracking, because they are terrible for the consumer.
38:49
And I do think that when we have a new DOJ and a new Attorney General in the Washington, D .C., you may see some different approaches to how they can stop stomping on realtors.
38:59
That's, that's my dream and my hope, and I'm optimistic too. But I do think that the National Association of Realtors won't look like this.
39:06
If it survives all of these attacks, it will have to be very much streamlined. And I think you're going to have to have an entirely new group of leaders who have a different viewpoint on how to pivot.
39:18
Instead of digging heels in, we're fine, we're fine, we're fine. But it may not be the
39:23
National Association of Realtors. It could be a new trade association that comes up out of the ashes like a phoenix.
39:28
Regardless of who it is or how it's structured, there will be a voice for real estate.
39:34
The question is, will it be us, the practitioners, or will it be a Zillow or a CoStar, which has money as their ultimate goal too?
39:42
So something will emerge, property will sell. And if you're a consumer, you just need to be discerning.
39:50
And if you're an agent, you need to be all in. Yeah, no, I like that. Leigh Brown, thank you so much for being here on this episode of Deb and Walking Podcast.
39:59
Let me give you the final word for consumers out there. We've talked a lot about agents, both on the buying and selling side, brokers.
40:06
If a consumer is listening right now and says, I just saw some headlines, like you said, at the top of the show, just read a headline or two.
40:13
What would you tell them? Give them a paragraph of what they should be thinking right now when they're hearing all this coming down.
40:21
If they're a consumer that's potentially selling or buying, let's say within the next year. And that's very real.
40:28
I've had a couple of my listeners use me to buy and sell. So if they're out there listening, what are they going to hear from Leigh Brown?
40:34
What's the number one thing they should take away from this whole thing? Number one thing, turn off the mainstream media. If you didn't already know that, turn off the mainstream media.
40:43
And then the second thing is whenever you're thinking about buying or selling, you call that person closest to you, which is your local realtor, and have an educational conversation.
40:51
Great realtors don't try to push you or pester you or sell you anything. They want to educate you on your pros and cons and your options.
40:58
That's the way real estate's always been at its best, and that's not going to change in the future. Awesome. Leigh, thank you so much for being here, guys.
41:06
Thanks for listening to another episode of Deadman Walking Podcast. Appreciate you sticking around. Appreciate you rating, reviewing, subscribing, all those things.
41:14
You can find us anywhere online, Deadman Walking Podcast. And remember, the chief end of man is to glorify
41:19
God and enjoy him forever. God bless. Be sure to check us out at dmwpodcast .com, where you can purchase the best and snarkiest merch on the internet, support the show, and leave us a review or message.
41:27
Deadman Walking can be found on Facebook, Instagram, and YouTube at Deadman Walking Podcast and on Twitter at RealDMWPodcast.
41:32
The Deadman Walking Podcast is part of the Fight Laugh East network. For exclusive show content, be sure to download the PubTV app and become a member.
41:37
If you're a business that needs to reach hundreds of thousands of potential customers in your demographic, podcast advertising might be for you. Send all inquiries to DeadmanWalkingPodcast at gmail .com.