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The Biggest Dirty Little Secret In Real Estate
How We Got Here
This will be a little special. I’ve got something that I want to get off my chest. It’s going to be a little different. I do care about you, the first-time home buyer. I want you to be armed with the best information. I feel so passionate about making sure that you, the first-time buyer hear the truth. It’s time to pull back the curtain and reveal the biggest dirty little secret in real estate. First-time home buyers, most realtors think that you suck. How do we get here? First, we’re going to start with a little history lesson. Understanding exactly how we got to where we are will ultimately help you determine how you can best navigate the current real estate market to help you with your ultimate goal. That’s buying a home and we’re going to get you there. There are some serious obstacles that you have to overcome as a first-time home buyer. They were all set in place by the realtors who think that you suck. The real estate industry is running scared. Frankly, it’s their own fault. There’s this newfangled device. Have you ever heard of it? It’s called the internet. It’s ruining the way things have always been done in real estate. Do you see how ridiculous that sounds? The internet has been part of our daily lives for over many years and yet the real estate industry is shocked that buyers are turning to the internet for trusted information. “They’ve always come to me because I’m the area expert, the king or queen of any town, USA,” not anymore your majesty. Here’s how it used to work. Homes for sale were printed in the big book that got updated daily. It was dropped on the doorstep of the real estate offices every morning. Buyers would drive around the neighborhoods and they would look for the big, “For Sale,” signs and then they would call the phone number on them. They had to drive home or go to a payphone. If that didn’t work, they would go right to the real estate office because they knew that those people got that special magic book. They’d ask to talk to an expert who had all the secret information. Sometimes it wasn’t always in the book. Sometimes they go big and do a huge advertising push. You might find that home advertised in the newspaper. Those you don’t know what a newspaper is, it’s like Twitter, except they printed it on paper. The brokers and realtors had all the information and that meant that they have all the power. They knew that the buyers would come to them. They were never worried about buyers. They knew you were coming. They’re only worried about finding sellers and eventually the buyers would have to find them on their own. That’s going to be the theme on this episode. This is for you to understand how the industry on a whole sees you. It’s been based on that fact for a long time, to make it big as a realtor or to make it as a realtor at all, you needed to concentrate your whole business on getting listings. That’s getting the homes to sell. Don’t worry about the buyers. They’ll come to us. Here in California in 1998 a few years later, that big book of homes, all the homes for sale, they went onto the internet. That’s the list of homes that we know as the MLS, the Multiple Listing Service. That was the place where the new secret list of homes would be shared, but it was only for the realtors. We have to get special passwords, secret codes and a little fob that you had to press in it and it will give you a special digit that you have to punch in. You were threatened with your license getting revoked if you dare to share this information within the lowly laypeople, non-realtors out there. Sooner or later, some smarties in Silicon Valley said, “Realtors and brokers, we can get a lot more people looking at the home that you have for sale if you share that secret book with us. We specialize in code, computers and all that fancy technology stuff. We can make a slick website. We’d love to put your homes on there and then you can tell all your sellers, ‘Look at the marvelous extra marketing that I’m going to do to help your home sell.’ We go the extra mile for you and we use this new cool thing called the internet.” You can imagine the realtors and the brokers love that idea. One of the things they didn’t realize is this would soon eliminate the need for their big reputation that they’ve built up as the keepers of this special secret list of homes. No longer did you need the area expert, Jolly Joan, in her perfect hair and that big giant broach that she wore on her blouse. Sometimes Jolly Joan even used to tell the sellers that she was such an area expert that she could sell the home without even having to go on the market. They used to do that. The whole listings off the market are called pocket listing. I know what you’re thinking, “Why?” That’s what I think too. Here are a few reasons. There’s greed, laziness or sometimes the seller asks for it. There’s a whole myriad of different reasons. My thought is that any realtor who has a listing and tries to sell a home without marketing it full blast on the internet, they’re doing a great disservice to their sellers. How many potential buyers are going to miss it? If a realtor says to a seller, “I have a buyer for your home,” and they don’t list it on the web, they’re cheating the seller. Tens of thousands of eyeballs on the internet want to see that home. 96% of buyers start online. We’re almost at 60% of buyers that search on their smartphones. These buyers never get to see your home because your agent thinks that they have some special secret buyer that’s right for the neighborhood that they know so well. How much could they cost the seller and all the competition that might have happened for that home? This type of thinking sounds like it’s screwing the sellers and I’ll tell you, it is. It’s also screwing you, buyers. The times were changing. Those dinosaur agents, they held a meeting every Thursday at 8:00 AM at the local pizza place. That’s where they pitch their homes for sale to other realtors. It’s because that’s the way they’ve always done it. The last time I checked, I still think they do. That’s how they felt like they were serving their clients. They didn’t understand the internet so they didn’t embrace the internet. While they weren’t paying attention, a slow movement was beginning to grow beneath them. See those smarties at Silicon Valley, they were much smarter than the big brokers. They had a plan. They were building consumer trust in a user-friendly site. Soon more folks were going to these public sites, than going to their local realtor to get all their real estate information. Right there on that site, it had all the real estate information they could ever want. The realtors were thrilled because someone else was giving their listing, their home that they were trying to sell some free exposure. They sit back and watch the buyers pour in and it cost them nothing. These public sites, they were in the driver’s seat and then the real plan came out. Now that all the buyers were going to their site, the Zillows, the Trulias, the Realtor.coms and the Redfins, they were going to sell advertising space on their public site back to out-of-touch realtors. Who think that their poop doesn’t smell because they are Sally or Sammy Big Wig, the town’s top realtor. When all this was happening, you’d think they would have started looking for ways to talk directly to the buyers themselves. That’s what we’re trying to help you is figure out why aren’t the folks talking directly to you. The public property sites are the main place that buyers go to look for a home. Realtors never advertised directly to the buyers because they’ve always had the power. They put up that secret home for sale and the buyers came on in. They got a home. They got a listing. They advertise. That’s how people knew about it. That’s how buyers would come to them. The buyers are finding them on their own on let’s say a site like Zillow, yet the realtors still didn’t adjust and spend any time researching on how to reach the buyers directly. They think that the way to be a mega agent is to get people to hire them to sell their homes and the buyers will come to that listing. How upsetting must it be to have the biggest financial transaction of your life, and you GET passed to a trainee. Click To Tweet They’ll call the number from the sign in the yard and eventually, they even got these fancy 800-phone numbers on the sign that had a recorded message for them. They bumped that up to a text message, “Text message me for more info,” and they even tried those QR codes. Those little boxes that you click it and all of a sudden you get all the information, but soon all that information that a buyer could ever want was right there in their laptop. They are sitting there in their PJ’s before smartphones, on their computer. They can find a home and say, “I’d like to see that house. I might want to buy it.” All of that out-of-touch brokers, who never thought this internet thing was going to catch on, they’re light years behind. They could never catch up to the millions of dollars being spent by these technology’s sites. The buyers were flocking to see these homes. The realtors, the brokers and the agents who always got to hold this precious information of the homes for sale. Their special secret book at their office, they were begging to be seen on these sites. Does Zillow put the listing agent’s picture next to the house? Here are the secret. They do not put the picture and the phone number of the person selling that home. The old school relics, who didn’t see it coming don’t have the power anymore. Zillow knows that. Zillow charges other agents who want to attract those buyers to put their picture next to homes on their site. Some random agent pays beaucoup bucks. I’m talking sometimes up to $50,000 a MONTH to have their contact information and their picture right next to homes that are for sale in certain zip codes. Zillow even puts a fake contact number on there near the listing so when the unsuspecting buyer calls it, thinking that they’re calling the realtor or the agents that are selling the home, they’re getting their call forwarded to the agent that paid for that fake number. That agent who paid for that number, on their caller ID shows them that it came from Zillow and which home it came from. Since all the information is out there for everyone to see, the realtor has that information even though it’s not their listing. They answer the phone and act like they know everything about the place. Often since the prices are so steep to purchase this advertising space for these zip codes and these phone leads, it’s usually a bigger team or one mega agent, someone who’s doing well, who buys the ad space. For instance, Big Buffalo Bob, the real estate king of Anytown, USA. Big Buffalo Bob takes the call, but here’s the secret. If it’s the first-time buyer, he passes that to the lowest ranking member on his team. That’s where you rank, the bottom. Now, you’d get the so-called buyer’s agent. There are some good ones out there, but a lot of times buyer’s agent is real estate code for a guy or a gal with little experience, very few deals and very few clients. They’ve got tons of free time. They’re very enthusiastic and energetic. They’re going to work all weekend long and show you dozens of homes because they’ve had their license for three months and back home, there’s someone saying, “When are you going to get a sale and make some money?” That buyer’s agent is desperate. A lot of times, they’re inexperienced, unqualified, untrained and sometimes they’re clueless. Does the buyer know that this jacked up process is how they got the representation for the biggest financial transaction of their lives? No, they found it on the internet and they saw Buffalo Bob. Maybe they even looked up Bob and saw that he had good stats, a good reputation. When Bob’s team said that they could show them the house that they were asking about, they assume that they were getting Big Buffalo service from the town professional, not knowing that they got passed off to the rookie agent on the team who might not have a clue.
How To Buy A Home Podcast
Since anyone with any experience didn’t want to be bothered with you, a waste of time, you first-time buyers. I was part of the problem. I was enabling the broken system. I was hurting the industry, but more importantly, I was hurting you, the first-time buyers. The ones that got stuck with the rookies that I trained. I told myself, “At least they’re getting some understanding from me about the gravity, the importance of their job and their responsibility to these people.” I tried to teach them, “You have got to take this seriously. This is a big deal.” I thought that was better than nothing. Frankly, right now, I don’t think so. It’s not better than nothing. I quit and I started my one-man crusade. There’s going to be a lot of pissed off agents out there at me, a lot of angry brokers. I’m definitely not going to be invited to the Annual Realtor Barbecue, that is for sure. Maybe by talking into your ear holes while you’re on the treadmill or through your speakers, if you’re in your car or I don’t know if you’re in your kitchen doing your dishes, maybe you will know the truth. You’ll know that somebody out there cares for you. If you search hard enough, you can find them in other places too. Somebody cares that you’re getting screwed by the industry that missed the boat. Don’t worry, I’m going to tell you how to find that other person in your area who cares about you. I’ve got a playbook for you. I’m going to teach you how to find a realtor who likes to and knows how to work with first-time buyers. First, I’ve got some dirtier little secrets I’ve got to get off my chest.Not All Realtors Are Clueless
Here’s one, not all realtors are clueless. I know that. Some of them saw what was happening and we as an industry could have developed a way to reach first-time home buyers better, earlier and help them stop renting earlier, which would have saved them tons of money. It was easier to knock on sellers’ doors and see if they wanted to sell or call people who own their homes. Put up a sign, have an open house and wait for the buyers to come to you. Those buyers who showed up at an open house, a lot of them had on their own, put themselves in that position to buy after probably renting for years longer than they needed to. Why didn’t anybody talk to the renters losing $25,000, $50,000 or $75,000 renting for an extra one, two or three years after they could have purchased? Many of the realtors didn’t care. They knew or maybe they were trained that eventually, the buyers would come to you someday. “Go after the sellers and wait for the buyers to come to you. They are a steady stream as long as you keep going out there and getting those listings.” Now, we can talk to you more directly. Thanks to that fancy new toy called the internet. Here’s a juicy, dirty little secret for you. This one is going to make some people mad at me. The realtors in my old office, they would go to these cult-like training sessions. They would every 45 minutes to stand up and chant, “I’m a great salesperson,” over and over again, jumping and cheering. It was a Tony Robbins’ style. I believe in affirmations. I believe in positive thinking.
Be Careful Of First Time Buyers Seminars
Nobody told me anything. Now, it’s time to spread the word. I’ve got to tell you, I could have used all that extra cash I would have had if I hadn’t thrown rent away for nine years. Here’s another dirty little secret, don’t be fooled. I’m glad that you’re out there looking for education and that’s great, but be careful with those first-time buyers’ seminars. There are some good ones out there, but most of them are taught by the rookies. It’s the only way for them to get any clients because they’re brand new. Haters, go ahead, tell me, “I run a great first-time buyers’ seminar.” Good for you. If you run a great first-time buyer seminar, you’re in the industry that means you know that a lot of rookie agents are told, “If you don’t have any clients, go get a lender. He’ll partner up with you. You guys can both get a whole bunch of new clients because you’re going to get a bunch of people that don’t know anything about real estate.” They’ll think that you are a seasoned veteran. The longer that you rent, the more money you're throwing away. Click To Tweet You’d still think that this can’t be true. That there have to be more people out there that care about first-time home buyers. I’m not saying there aren’t, it’s not how the industry trains people. It’s not the gold standard. Go look at Instagram. Look at the realtors that think they’re influencers. There are more airbrushed Photoshop photos on Instagram. All of them trying to look all swank, none of them trying to give you any actual information to help you buy a home. They’re fronting. They want to be the million-dollar guy looking to try to get into another reality TV show. All the information they’re putting out is all about them, it’s not about you, the buyer. I’m just one small guy fighting against the big lie. Everyone’s Facebook and Instagram life is showing them as a super boss badass. I’m a badass realtor, but I’d rather show you that I care about you and your financial well-being. Is the goal of an agent to become the big celebrity luxury agent to the stars or is it to help as many people as you can? While you’re out there on Twitter or Instagram, check out #FirstTimeBuyer. I did it and one of the first things I saw was ten pictures of mansions, no explanation, just pictures of mansions. Whatever first-time buyers are thinking about or it’s shots of homes that the realtors are selling. Telling you that they think that home is going to be a perfect fit for you. You, the guy or the gal that they’ve never met before. “Were the ads in the #FirstTimeBuyer showing you hundreds of homes or the ten best-valued homes for sale in a certain market? Were the ads saying, “Which one of these homes do you think is right for you?” The ad should say, “Buyers, there are a lot of great deals out there. Let me show you the best ones.” The idea of selling to first-time home buyers is you’re trying to not sell them your listing. Instead, you’re trying to help them get ready for a time to buy. When they’re ready, you want to show them the best options out there for them. Before that, we got a backup. We’ve got to start talking about helping you guys with the budget, with credit, with financing, with neighborhoods and a million other things. These Instagram, million-dollar wannabes and fronters or putting up pictures of themselves saying, “I’ve got a new listing and it’s #PerfectHomeForYou.”Area Experts And Part-Timers
Let’s go to another dirty little secret, the area expert. This is an old school dinosaur idea. Let me ask you, “Did you pick your last apartment because of the cul-de-sac street that it was located on? Did you choose someplace that was no more than a quarter mile from everywhere that you had to be? Did you choose your apartment because you want a cool place that was close enough for you to drive or Uber to work in some fun places?” I worked with a lot of first-time buyers and around here, homes are expensive. We’re talking $400,000 entry point for a condo. Most of the people are not thinking they’re going to live there forever. I’ve done about 60 transactions with people from Disneyland because I’m in Southern California. All of them have said to me, “Go to Disneyland and go ten miles in any direction.” That’s a pretty big circle and nobody can be an area expert in all of those zones. Yet, a lot of these older agents or a lot of the newer agents who were being trained by the older agents are trying to market to the buyer saying, “I’m the area expert. That’s why you should use me.” Here’s some scary stuff, dirty little secret. There are sweatshops of people that sit with headphones on and make phone calls all day long trying to get people to sell their homes. It’s like Boiler Room. Those folks are there and they call and call. There are people that are answering their phones, talking to people or even talking to people at open houses who they assume are specialists and professionals. A lot of those times, that person is not even an agent. The straw that broke the camel’s back for me was a couple of days before I left my office. It was when I already decided that I was going to leave that office, get out there and start talking to first-time home buyers. I talked to a guy who I thought was an agent because I’d seen him in the office for three years.
Important Links:
- Multiple Listing Service
- www.Realtor.com
- Redfin
- Trulia
- Zillow
- Twitter – David Sidoni
- @DavidSidoni on Instagram
- How to Buy a Home – Facebook
- iTunes – How to Buy a Home Podcast
Instagram @DavidSidoni
Tik Tok @howtobuyahome