Why the Future of Real Estate Is Changing Faster Than You Think

Transcript

[00:00:00] My guest today has a prediction that's going to make a lot of people mad.

[00:00:04] He says, Zillow is melting ice cubes and that in five years, it won't be selling

[00:00:07] ads to agents anymore.

[00:00:08] It'll be one of the biggest brokerages in the country competing directly

[00:00:12] against you.

[00:00:13] So we're getting into that plus the housing bill sitting on the president's desk

[00:00:16] right now that almost nobody in real estate is talking about.

[00:00:19] And where an agent still adds real value in AI can already find the perfect

[00:00:24] home. That's today.

[00:00:25] Stay tuned.

[00:00:26] This episode of Keeping It Real is brought to you by Real Geeks.

[00:00:30] How many homes are you going to sell this year?

[00:00:32] Do you have the right tools?

[00:00:34] Is your website turning soft leads in interested buyers?

[00:00:37] Are you spending money on leads that aren't converting?

[00:00:40] Well, real geeks is your solution.

[00:00:42] Find out why agents across the country choose real geeks as their technology

[00:00:46] partner.

[00:00:47] Real geeks was created by an agent for agents.

[00:00:50] They pride themselves on delivering a sales and marketing solution so that

[00:00:54] you can easily generate more business.

[00:00:57] Their agent websites are fast and built for lead conversion with a smooth

[00:01:01] search experience for your visitors.

[00:01:04] Real geeks also includes an easy to use agent CRM.

[00:01:08] So once a lead signs up on your website, you can track their interest and have

[00:01:12] great follow up conversations.

[00:01:14] Real geeks is loaded with a ton of marketing tools to nurture your leads and

[00:01:18] increase brand awareness.

[00:01:20] Visit real geeks.com forward slash Keeping It Real Pod.

[00:01:32] And now on to our show.

[00:01:34] Today's episode is brought to you by corded.io.

[00:01:38] Are you looking for agents to join your brokerage or team?

[00:01:42] Now, as a real estate recruiter, I can tell you the answer is always yes.

[00:01:46] But most agents aren't looking to move right now.

[00:01:49] So how do you know who to contact?

[00:01:51] Well, what if I were to tell you there's a recruiting and retention

[00:01:53]

[00:01:53]

[00:01:53] tool powered by artificial intelligence that shows you exactly which agents

[00:01:58] in your local market are looking to leave their brokerage right now and

[00:02:02] which agents at your own firm are also looking to leave you.

[00:02:07] Now, I've been recruiting REALTORS for 15 years and I've hired over 2000 agents.

[00:02:11] I can tell you with no exaggeration.

[00:02:14] This is the tool I've been waiting for.

[00:02:16] Corded AI looks for trends across dozens of variables for each agent in your

[00:02:20] market and shows you which agents they believe are likely to move.

[00:02:24] Not only does it do that, but corded AI went and visited my recruiting website

[00:02:29] and read everything I offer.

[00:02:31] So now when I'm recruiting, corded AI tells me exactly what to say based

[00:02:36] on that agent's needs and what my brokerage can offer.

[00:02:39] It even writes emails for me.

[00:02:40] I've never seen anything like it and I use it every single day.

[00:02:45] Now, if you are looking to grow your brokerage, corded.io is the best tool out

[00:02:50] there. Visit corded.io to schedule a demo again.

[00:02:53] That's corded.io and now onto the show.

[00:03:10] Welcome to keeping it real.

[00:03:12] The largest podcast made by real estate agents and for real estate agents.

[00:03:17] My name is DJ Paris.

[00:03:18] I am your guide and host through the show.

[00:03:22] And today is our series called unpopular real estate opinions with Chris Linsell.

[00:03:29] And if you are new to the show, I want to tell you more about Chris and what he is

[00:03:35] all about.

[00:03:37] Bear with me just a second. I just lost my notes.

[00:03:40] Chris, I apologize.

[00:03:42] No problem.

[00:03:43] Something just happened.

[00:03:46] That is weird.

[00:03:47] Okay, hang on a second.

[00:03:48] I have to reboot.

[00:03:49] Guys, take.

[00:03:52] What? There we go.

[00:03:53] Okay.

[00:03:55] All right.

[00:03:56] We will we will try that.

[00:03:58] We'll take will not a take to, but we will continue on.

[00:04:01] So Chris Linsell, let's talk about him.

[00:04:03] He has spent more than a decade inside the real estate industry working as an agent,

[00:04:07] a team member, a senior strategist and a content leader, every role in between.

[00:04:12] Some of the most influential companies in the real estate space, including the close

[00:04:16] Elm Street technology and luxury presence today.

[00:04:19] He serves as the CMO chief marketing officer of the Mitten Group, a Michigan based

[00:04:23] brokerage where he leads brand strategy and agent development.

[00:04:27] He's a two time in men marketing all star a member of the so fire real estate advisory

[00:04:31] council and one of the more consistent voices writing and speaking about AI and the future

[00:04:37] of how agents build their business.

[00:04:39] He publishes a weekly newsletter called the bottom line writes at chryslynsell.com.

[00:04:43] He's based in Trevor's city, Michigan and you should follow him on Instagram,

[00:04:47] which is ask underscore Chris underscore Linsell L I N S E L link to all of his

[00:04:54] social and his website and the show notes.

[00:04:57] Chris, welcome back.

[00:04:58] Welcome back.

[00:05:00] We're here.

[00:05:00] We're doing it.

[00:05:01] Great to talk to you excited to chop it up a lot happening in real estate and technology

[00:05:05] right now.

[00:05:06] I got some hot takes that I'm making people mad everywhere I go.

[00:05:09] So let's see if we can get the audience.

[00:05:11] So it's simmering a little bit and make think a little bit more about what we're talking about today.

[00:05:18] I have asked the the AI gods for what person should I should should a certain percentage

[00:05:29] of the audience be sort of inflamed or at least disagreed,

[00:05:35] disagreeable with with you know some of the things that we're talking about.

[00:05:39] And they said actually in a really healthy discourse should be about 30% say no.

[00:05:45] These guys don't know what they're talking about.

[00:05:46] So I'm excited to get into it.

[00:05:48] We're not here just to start controversy, but really to have conversations that aren't being

[00:05:52] had elsewhere in the real estate space for REALTORS that they can actually take this information

[00:05:59] applied into their business and move forward.

[00:06:02] There's a lot going on right now.

[00:06:03] So where do you want to start?

[00:06:05] Well, if we want to get some people stirred up and feeling a feeling a little antsy,

[00:06:10] let's start with politics.

[00:06:13] There is an important thing that is happening right now that I feel like

[00:06:18] all the real estate agents I talk to I would say like one in ten are really dialed into what's going on

[00:06:25] and no more than like three in ten are like fully aware of what's happening.

[00:06:32] So the big the big news that I think we should kick off on is this housing bill that has passed

[00:06:39] both sides of Congress and has currently stalled.

[00:06:43] It is not it has not been put into law yet because President Trump has

[00:06:50] essentially refused to sign it until Congress addresses some of his other

[00:06:56] non housing bill related activities.

[00:07:00] And you know, frankly, this is a big deal to real estate professionals.

[00:07:04] It's a big deal to our country just at large and it is very unconventional,

[00:07:12] very uncommon for a bill that has passed with incredible bipartisan support to be stalled

[00:07:20] and not put into place because of other political priorities.

[00:07:26] So I'd love to start there.

[00:07:29] Let's talk about the it's called the 21st Century Road to Housing Act.

[00:07:34] This is the big news of the day and it did pass past the house by partisan.

[00:07:41] As you said support.

[00:07:42] This is not a ideological bill.

[00:07:48] This is something that is seen by both sides as good for the country.

[00:07:52] What it basically aims to do is my best understanding is build more houses.

[00:07:58] But in addition to that also banning some of the large private equity companies that come in the investors,

[00:08:06] the Black Rocks, I'm not naming them specifically, but that's the one that comes to mind.

[00:08:10] Coming in and acquiring all of the properties in a particular area where you know mom and pop

[00:08:17] who want to have an investment property now can't compete because Black Rock is in town.

[00:08:23] Basically putting some breaks on these bigger companies to come in and let smaller investors and developers build more stuff.

[00:08:31] Yeah, yeah, two things that I want to call out here that I think are really important.

[00:08:37] The first is what you just named I think is really it's really good content, especially for kind of broad strokes in the headlines of newspapers like New York Times that it bans, you know, investors from controlling certain percentage of inventory.

[00:08:56] And that's great. That's important. But what is more important in my opinion is that the like the most valuable part of this bill is that it streamlines significantly the review timeline and process for environmental review for construction and development projects.

[00:09:18] If anybody here listening has ever built a house or been a part of building new or selling new construction, you know that the environmental review like audit and timeline and process not only is it insanely expensive and timely and frustrating.

[00:09:39] It is it is a discourager to building new inventory. We are living in an inventory starved real estate world right now.

[00:09:53] And this is a major roadblock to creating more of this inventory. So the fact that the 21st century road act took it specifically as an issue to streamline and speed this up is going to end up.

[00:10:09] And we have an immediate effect in adding more inventory cheaper into our markets right now. So this isn't something that like will have an effect.

[00:10:19] It will have an effect. Excuse me six months, six years, 60 years down the road. It'll have an effect six months, like six weeks from now. We will have have positive effects on this.

[00:10:31] So the longer this bill sits on the sideline, the less of the busy season we have to take advantage of it. It just seems like such a waste of an opportunity.

[00:10:41] So right now it's it's on Trump's desk. He's got basically three options right he can veto it. He can approve it or he can do nothing.

[00:10:48] If he does nothing, it becomes law, if he vetoes it, I guess it kicks back down or he approves it. And I don't I don't know beyond this particular bill what what he's aiming for, but he has said about this specific bill.

[00:11:06] Kind of a kind of a man, not not that interested. It doesn't seem to think that this is very important.

[00:11:12] Yeah, and frankly, like I want to try to keep my own political views out of this conversation. But that's a bullshit response because anybody who says that housing is not important to the leaders of our country.

[00:11:28] It doesn't have to worry about where they're living. And it drives me. I'm trying not to say the bad words here. It drives me absolutely insane that somebody wouldn't prioritize housing as the number one policy priority for anybody who is leading a community, a state, a country.

[00:11:50] Listen, there is, I want to pull up the numbers here. I've got a guy right in front of me. Hold prices in the United States since the pandemic are up 50%. Rents are up 30% and in some places, it's much higher. Like these are averages here.

[00:12:06] Large institutional investors, meaning entities that hold something like a thousand or more homes, control half a million properties combined across the country.

[00:12:20] Now, granted half a million only makes up something like a third of 1% of the total stock. But that is an outsized percentage in places where housing stock is especially short.

[00:12:34] Like where you really need affordable workforce housing is where that level of inventory is concentrated. So a bill that aims to address that specific problem is not a six month, six years sort of need. It's a today need.

[00:12:52] Additionally, additionally, this bill also creates this innovation fund that rewards cities and communities for cutting, permitting and zoning friction.

[00:13:06] It creates this one fifth of a billion dollars worth of resources that rewards communities to make it easier for them to build new houses. And the bill specifically does not touch local zoning.

[00:13:21] It says local communities should be in control of their own zoning as much as local communities make absolutely whacked out decisions. Sometimes it's not the federal government's decision or purpose or place to make those decisions for those communities.

[00:13:35] But it's incentivizing those communities so that they can make smart decisions for their overall trajectory and the housing needs of their communities, not just the people who are stuck in their nimvious attitudes and not wanting to actually create things that power the next generation of support and supply in their communities.

[00:13:55] This is like it's just such a no brainer that this bill gets signed yesterday. And the fact that it is not only is it being sloughed off and not prioritized that a president would look at it and say, yeah, this is not a big deal.

[00:14:10] I mean, I don't know about you, but I got a lot of people on my call sheet for whom housing is a significantly big deal. And that's not just because I'm a real estate agent.

[00:14:20] I got this family and friends and co-workers and community members who are genuinely looking for a place to live and they can't find it. Why aren't we fixing this?

[00:14:31] Yeah, this I think is a great opportunity for the National Association of REALTORS to communicate effectively to us. What are they doing to help get this bill passed?

[00:14:41] Oh, my God.

[00:14:43] I do have some communication with senior leadership over there. I have I don't know why it didn't occur to me. I am going to ask them myself.

[00:14:52] So if you have relationships with people in associations, this is a great question to ask. Hey, you know, if inventory is short in your market, I'm sure it is.

[00:15:03] I think it is certainly is here in Chicago. This is, you know, a potential solution. And we're not sure what's going to happen with it. He's got another week or so before.

[00:15:14] Yes, to make Trump has to make a decision. So we will see what happens, but exciting, hopeful news. I am always, I always try to hold on to hope that this will happen.

[00:15:27] This would be great for the industry, great for developers, great for the economy. And we'll see.

[00:15:34] Let's let's switch. Let's talk about another topic.

[00:15:40] Portals. So I've been really thinking about this a lot and it's funny. I was talking to Chris beforehand about this and I thought I had gone pretty deep into where where I believe portals,

[00:15:54] portals being places where consumers can go and basically shop for homes. These are places like, you know, brands like Zillow, truly a Realtor.com.

[00:16:06] You know, these are the ones that come to mind. And what is the future of these particular brands. And when we say, well, what do you mean? Well, if you've noticed, I don't know about Chris, I don't know about your search behavior or your way you interact with your phone or your computer.

[00:16:22] But I have prior to AI, I was going to Google and I was typing in long form, sort of key phrases for things I was looking for. Sometimes I type in a full sentence, Google might even auto complete the sentence for me, which was, was really cool.

[00:16:39] So now I am mostly going to my AI of choice and saying, can you do a deep research on X topic and bring me back good information. Now I am putting a tremendous amount of faith in AI that it's going to do a better job than I can.

[00:16:58] I don't know that it does or can, but it's easier. So I am doing that. I suspect we are all headed in that direction. We will all be talking to our devices and telling it what we need as opposed to, hey, let's, let's go on Zillow and browse.

[00:17:18] I don't know that that that's what the behavior will transition to. But I'm, I'm curious to get your thoughts on where you think portals are headed.

[00:17:26] Yeah, so in short, I think that the Zillow model of operation is riding off into the sunset. Actually, riding off into the sunset suggests that it's going there voluntarily.

[00:17:44] If I had to bet five years from now, if Zillow is still around that their business will look very different than it looks right now. And the primary reason is as follows. Right now, Zillow is a destination for anybody who is looking for anything real estate related.

[00:18:03] If I have a question about homes for sale in my area, most people's default behavior is to go to Zillow and browse that default behavior is changing just the in the same way that our default behavior changed when Google came on the scene.

[00:18:21] It used to be that when we had a question about something on the internet, we didn't know really where to go because the internet wasn't really organized very well. Maybe you would go to a well search.

[00:18:32] But there really wasn't a single place to get your questions answered. When Google came along, it became the serve all place to get your questions answered.

[00:18:43] Or at least not get your questions answered, but to provide you with the places that could answer your questions. Zillow took a cue from that and they said, okay, we're not going to answer all the questions. We're just going to answer the questions about people who are looking for homes for sale in their area.

[00:19:00] Well, a new technology has emerged that is allowing people to ask all sorts of questions again. AI is the new Google in terms of the way they are disrupting the way that we as people are consuming answers to our questions.

[00:19:15] No longer are we going to individual places like Zillow to ask our questions. We're going to Google now an aiportal to ask our questions.

[00:19:29] And we are getting an answer from that single source rather than going to each of the individual sources. Zillow's bread and honey is when consumers come to their site to ask questions.

[00:19:44] And then they get connected to a real estate professional for a fee. And the fee structures vary as many as flowers as there are in the field here. But there are that's how Google makes money is by connecting consumers with professionals.

[00:19:59] Well, if consumers are not going to Zillow for their questions any longer, the entire business model breaks. So will they be here in five years? It's a great question. If they are, I don't think their business will look like it does right now.

[00:20:12] Yeah, I agree. I remember I was at a Zillow conference many, probably four years ago and they were talking about the Zillow ecosystem, which at that time all the tech companies were that were consumer facing were trying to get you in.

[00:20:30] They were trying to be an all in one. So Zillow wanted to be an all in one real estate solution, whether it's loans or you know even building homes or, you know, any part of the home buying and selling process.

[00:20:44] They had a solution for. And the idea was that once you're in their ecosystem, you'll use their services and products and they had a pretty decent run for the last couple of years implementing some of those.

[00:20:57] And now Chris is really put his finger on something. We're not going to other people's ecosystems as much. We are going into while we're going into an ecosystem, but not that one.

[00:21:11] We're going into our AI of choice. And we are now talking to it the way people converse with each other. And we are literally it is the Oracle Adelphi.

[00:21:23] We are asking it questions and is coming back to us with answers in the in the way that is tailored for us individually.

[00:21:33] So so Zillow is is a is a wonderful service that will have to figure out how do we serve up our what what makes us special is our search experience.

[00:21:48] Well, the search experience on Zillow is bar none the best there is there just isn't a better option. And so that's why they're so successful.

[00:21:58] Yet I don't think people are going to be going to Zillow.com to search for homes. I'll tell you a really quick story.

[00:22:05] I had a friend of mine. He's a Compass agent and he reached out to a N.F. NHL player. I believe a hockey player who had just been traded into the Chicago Black Hawks.

[00:22:18] And I might have the wrong sport. It might maybe it wasn't that, but I think it was. And he saw that he had been traded in and just for fun. He sent him an Instagram direct message. Congratulations.

[00:22:30] Hey, by the way, I guess you're moving to Chicago. You probably need a REALTOR. I would love to help you figure out he's like 20 years old, you know, figure out what to do. Sure enough kid road back.

[00:22:39] Like I actually do and I'm going to spend, you know, five grand a month and he was just going to run to place.

[00:22:45] So my friend said, I want to see how good AI is right now just for fun. He took all the information that this hockey player who had never been to Chicago. Mind you.

[00:22:56] Didn't know where he wanted to live. Didn't know the neighborhoods. Didn't know what the inventory didn't know the pricing. And but he said, well, just tell me what you want.

[00:23:04] You know, and he started telling him, but what's your budget? Okay. So he put all this into clot or whatever AI. And it's said, come back with me. This is a 20 year old hockey player. This is what he's into his interests.

[00:23:16] He's just, these are hobbies. This is what is, you know, demographics are in a subject of stuff and came back with.

[00:23:24] He said, bring me the best couple of options you can and I'll present them to my client.

[00:23:29] And it gave him one option. And he, you know, some, some condo or with rent somewhere. And he presented it to the hockey player and he said, oh my god, that's exactly what I was looking for. And he said, he said, that is.

[00:23:44] I mean, I don't know, troubling is it maybe the right word, but that is amazing. And he said, this is where we're at, you know, we are at we are there right now.

[00:23:54] So right now, you know, people can start doing things like this, whether you're an agent or not. And this is something where Zillow is going to have to pivot and figure out how do we, how do we still stay in the conversation.

[00:24:09] I don't know how it is. Is it, is it through advertising through AI? Is it through please, please, please use our data, not the MLS's data or I'm not sure.

[00:24:22] Yeah, well, I want to respond to that because you surfaced a lot of really interesting ideas that are, I think, important to double click on.

[00:24:30] First of all, I was talking about Zillow's the threat to Zillow being on the horizon right now, like as consumer behavior changes and we go to different places to get the answers to our questions.

[00:24:43] That's a fundamental threat to Zillow's business, but that is that's that's up that's up the road a little ways here.

[00:24:49] There are raiders right outside of the gate right now in in of Zillow's castle and it is places like Compass and and other other entities that are refusing to allow Zillow to have a monopoly on the use of the data that is publicly available to everyone.

[00:25:16] So let's think about for a second, what is Zillow's main value proposition? I would say that they have created the best way to search through and aggregate all of the data that belongs to everyone else.

[00:25:33] Zillow's data is important and interesting, but their data is based on the consumer experience, not on the inventory.

[00:25:43] Zillow does not own the inventory data. They have rented the data from everyone else and that rental of the data is a fundamental flaw.

[00:25:54] It is a vulnerability in their business and we're seeing that play out as Compass continues to badger and push Zillow around through the use of removing some of their data from that ecosystem and saying, you know what, we own these listings.

[00:26:13] And in fact, if you have ever run in brokerage operations, you know that agents don't actually own their listings. The brokerage has their listings. The brokerage is the one who has a imminent control over that data.

[00:26:27] We simply agreed to release it to places like MLSs and to these cooperative experiences that have then themselves agreed to release and license that data to third party places like Zillow.

[00:26:42] So Zillow's castle is built on sand here, not on bedrock. It is this fundamental idea that they are the best one at organizing and creating this search experience based on data that they are renting from somebody else.

[00:26:58] And we are seeing a fundamental threat to that business as businesses like Compass come in and say, no, actually we're not going to share with you all of the data for the listings that we own. We're creating our own ecosystem.

[00:27:12] And we think it is better for the markets that people can come to multiple places to get access to these listings rather than one centralized location like the one that you have created.

[00:27:24] Zillow is not a national MLS. It is not a utility that is created for the benefit of all consumers. It is a company whose primary purpose is creating value for their shareholders for the owners of the company.

[00:27:39] This whole problem gets solved if we have a national MLS that is sponsored by and operated by the government whose whole purpose is service rather than profit generation, but that's not the world that we live in.

[00:27:52] So we think to ourselves that this is why I'm so convicted that Zillow, if they exist in five years that their business model will look completely different because they don't own the data that is powering the value of their business.

[00:28:07] So they have to get value other places. They don't own consumer behavior because AI is disrupting that. So the value that they bring to the table of their business saying that our business is worth, you know, um, $10 billion because we own the place where search is happening about real estate.

[00:28:27] Well, that's changing. That is that is fundamentally changing as AI disrupts consumer behavior. And that actually leads into another thing that I want to talk about, which is another fundamental disruption in the way that behavior is certain consumer behavior.

[00:28:42] We understand consumer behavior, which is the introduction of listing ads from Google where we are no longer we are removing another layer of algorithmic delivery no longer are people having to click through to Zillow to get listing information Google is displaying the information straight on a search results page.

[00:29:07] So I want to dig into that a little bit, but you know, from my take here, Zillow is a melting ice cube. There are a hundred different reasons why this business model doesn't work in five years.

[00:29:20] Now that's not to say that I don't think that Zillow doesn't have an opportunity to be successful. I just think that if their businesses here in five years, it will look completely different.

[00:29:29] Yeah, I think what they know better than anyone is the online web shopping experience. They understand that for homes and they are the Amazon of home buying.

[00:29:45] And if they can somehow take all of the IP that they've figured out from that and using it to, you know, somehow with our new AI.

[00:30:04] I, you know, it's going to be very interesting to see if they can implement some of that that knowledge into some of these these new practices. I don't know. It's very easy. You brought up a really good point is they they rent, you know, the inventory they rent inventory and, you know, of course, inventory can be taken Compass in Zillow are in court right now today in Chicago.

[00:30:33] So fighting battling it out for this exact type of situation.

[00:30:39] Now with that being said, let me give you one controversial take that it's actually not that controversial because they already do this.

[00:30:47] But here's what I think Zillow will be in five years. I don't think Zillow will be in the business of selling advertising. I think Zillow will be without a doubt.

[00:30:56] One of the top five brokerages. Absolutely. I think I think Zillow is going to move away from providing advertising services for real estate professionals and move toward providing real estate services for consumers.

[00:31:12] Because who do they know better than anyone else? Where is their moat in terms of what they have separation from all of their competitors and it is understanding the behaviors of people who are looking to buy a home.

[00:31:27] And all of a sudden if you make your business about servicing those people, you get an incredible lift because nobody knows those that that a total well addressable market better than you do.

[00:31:41] And you have access to more historical shopping data than anybody. I mean I guarantee you Zillow is sitting on a literal data lake full of information about what it takes to get the right property in front of the right person at the right time.

[00:31:57] They are going to take that knowledge and start servicing clients in a way that we have never seen before. And if Zillow is not a brokerage in five years, I mean my hat. I mean I think that is just inevitable for them.

[00:32:11] I incredibly difficult to compete with.

[00:32:14] 100% agree they are probably right now with their Zillow flex program, which is the leads they provide to other, you know, other brokerages for a taste of the backend eventually they will just pull that pull those agents in house they will be Zillow agents and they will be a brokerage.

[00:32:35] So, you know, Zillow Compass maybe the maybe those will be the two big brands going forward. So, now what do you think that means that let me let me give you this if there are two let's say that there are three big brands I'm going to give you this is my prediction for in five years there's going to be three big brands in real estate.

[00:32:53] It's going to be Zillow, it's going to be Compass and it's going to be a yet to be determined virtual brokerage like a version of like if real and eXp and I can't think of a third off the top of my head.

[00:33:10] But like if like a version of real eXp. Yeah, like if those got together and made some sort of super brokerage that is structured to be a completely online virtual experience with zero brick and mortar anywhere.

[00:33:25] Those are going to be the three big players in real estate five years from now does that mean that all of the industry consolidates into those three places or does it become the moment for indie brokerages to be able to say like yeah we've got 50 agents and that's the one of the best things we have going for us is that we're not part of this big nameless faceless machine.

[00:33:49] We have people working here who really know their community who really know their clients on a street level.

[00:33:56] This is not corporate America. This is not Wall Street. This is Main Street and most people live on Main Street. Like is this the indie brokerage moment?

[00:34:04] It is however so I work at an indie brokerage you work at indie indie brokerage as well.

[00:34:10] And so we have our own particular opinions and takes but here's the thing is that the Wall Street is trying to control inventory.

[00:34:22] So Wall Street is trying to get access control access to inventory in particular. This is what Compass is doing.

[00:34:30] But it's not too difficult to see they you know acquired what almost 20% of all of the real estate agents in the country as of today and they want to bring listings in house they want to say hey we have an exclusive network of you know brands and we can basically because they know whoever controls inventory controls the market essentially.

[00:34:58] And so they are wanting to build a wall garden with their own inventory which for independence might pose a huge challenge because they might not let us in to see the inventory before their own agents get access.

[00:35:16] So is it a moment for independence to rise up yes and to pay really close attention to what Compass is doing to see how are they going to shit are they going to play nice with independence I don't know.

[00:35:31] Yeah it's it's wild it is it is a wild time and it is I can confidently say it.

[00:35:40] The future has never been more uncertain in terms of what's actually going to happen but I tell you what like I got the popcorn right it is going to be a crazy ride.

[00:35:51] Yeah and at the end of the day for everyone listening experience is still the trump card that is to it's the slow and steady wins the race if you know your market if you know you know what happens when and how and you've studied it and you've lived it and gone through it you are valuable that is still something that AI struggles to solve for we're talking about you know boots on the market.

[00:36:21] So if you're in the ground experience if you have boots on the ground experience you are valuable if you are somebody who wants to make your hyper local community better if you want to beautify your your local community there's value in that you know supporting local businesses knowing you know just how to how the infrastructure works and how to help these businesses thrive and if you can get into that head space you can get into that head space.

[00:36:51] So you will be valuable to your community and you don't need to be valuable to the entire country you need to be valuable to the people closest to you geographically.

[00:37:01] Yeah yeah that's the truth that's the truth and you know ultimately and I tell I tell agents this every single day at the mitten group is the most important thing the most your biggest priority for building a real estate business is to figure out who you are.

[00:37:22] Who you want to serve in which communities you want to be a part of those are the three things if you can nail those things are like nail those things down who am I what do I do what's important to me what are the things that I do better than anyone else who do I want to serve what are the clients that I'm looking to create value in their life you know what what am I looking to make easier who am I looking to make things easier for and where where am I creating value what what are the communities that I'm actively working with.

[00:37:51] I'm working with in to create value for the consumers that I'm targeting if you know those three things then everything else falls into place behind it you don't care I mean of course you care like a human being but you don't care about what's happening outside of communities that you don't service of course you care as a person who wants other places to be successful but if they're not your target consumer whether or not they are successful from a real estate perspective.

[00:38:30] And the other thing I'm curious to say about the importance of a real estate business.

[00:38:39] that allows us to really create a choose your own adventure path to prosperity and success and opportunity.

[00:38:47] You don't have to follow the path that any other agent does.

[00:38:51] Or there is even an opportunity for you to create a brand new path that nobody has followed before.

[00:38:57] Because of a unique combination of those three things.

[00:39:01] Who you are, who you serve, where you work.

[00:39:04] Those three things allow you to create a perfect plan, a one of one.

[00:39:10] All you have to do is be committed to those three things and figure out what mechanisms allow you to tell your story,

[00:39:20] connect with the people that you're trying to serve, and be a part of the communities you want to work in.

[00:39:25] That's it. It's actually a pretty simple formula.

[00:39:28] The execution. Yeah, there's some challenge in there and we can go down rabbit holes on that.

[00:39:33] But at the end of the day, you are not competing with agents in Malibu, California, and Omaha, Nebraska, and Baton Rouge, Louisiana.

[00:39:44] You are only competing for market share in the communities where you're targeting.

[00:39:48] So don't worry about what everyone else is doing. Focus on those three things and I guarantee you you'll be able to build the business that you want.

[00:39:55] I was just talking to one of the biggest agents in the country.

[00:40:00] Her name's Valerie Fitzgerald. She was on selling L.A. for many seasons.

[00:40:07] She went to L.A. as a struggling young mom, no money, no real estate experience prospects.

[00:40:15] And she's built this incredible business.

[00:40:18] And I was asking her about what does what is she doing right now? What does she see?

[00:40:24] She's got this big brand to protect and to grow.

[00:40:28] And what was so interesting is I asked her, what are you doing on social these days?

[00:40:33] Because I was just curious, you know, and what's working for you?

[00:40:37] Because she has big social following. And she said, well, in this ties to what you had just said, she said, I'm doing away with all of the just listed and just sold posts and the bragging.

[00:40:50] She goes, I've learned and I have data to now support this that the consumers don't want that.

[00:40:58] What meaning her clients, her clients don't want to see that she sold a $30 million home.

[00:41:03] I mean, it's cool. It's interesting. I guess, but she said, that's not really what they want.

[00:41:08] They want me solving problems for them. So she said, we have completely shifted our social media strategy into what you were saying.

[00:41:17] You know, those three questions, I am a problem solver. Here's what I do for people and creating content specifically around solution.

[00:41:27] And that she says is, it's number one, it's fun to do.

[00:41:32] Number two, it's actually helpful to people. And number three, it's what they want.

[00:41:37] So this is the playbook people. If you are wanting to build your brand, a hyper local brand or even a larger non hyper local brand, you have to solve problems.

[00:41:50] And that is what social media allows for is for you to tell your story.

[00:41:56] Sorry, not tell your story to forget about your story. Nobody cares about your story to address the problems of the people that are scrolling on their phones.

[00:42:05] If you can get them to stop because you speak directly to them, I can help you. I can solve this problem for you. You will be, you will be absolutely needed.

[00:42:16] Yeah, 100% without a doubt. We are, it is a farce to think that, you know, people are stopping because they want to hear your story.

[00:42:27] No, they want to hear the solutions to your, to their problems. If you have generated a unique novel solution to a problem, they can't solve.

[00:42:37] You have their attention. Otherwise, you are just noise.

[00:42:42] Agreed. Okay, let's talk. Let's pivot again to talking about, I want to go back to AI in a sense.

[00:42:53] I want to talk about this a lot. We talk about this a lot. We say, okay, you know, I just gave the example of the NHL player who could have ultimately done this on his own.

[00:43:05] And soon we'll be able to, you know, without, without much prompting, be able to find the perfect property for your particular needs.

[00:43:15] And you're going to be able to do that. AI is going to solve for that. So I don't, I don't think picking and choosing properties is where real tears are going to be very shortly because AI is going to figure that part of it out.

[00:43:29] But where does the agent still add value?

[00:43:35] Or do you disagree with that?

[00:43:37] Yeah, I think that, well, I think two things are important for, for this conversation. The first is, right now, I think that, well, okay, let's, let's, let's, let's, take a step back and frame a definition of what AI is.

[00:43:58] Because it's helpful for this conversation.

[00:44:01] AI, as we understand it right now, the, the, the I in AI intelligence, I think is actually kind of a misnomer because these models, AI, LLMs are not smart.

[00:44:15] They're just incredibly resourceful.

[00:44:19] AI is not generating a novel idea based on a question that you've asked.

[00:44:26] It is just the most advanced, incredible miraculous technology for examining the corpus of data that has come before and making a prediction about what the most likely answer to the question is based on what we've already heard.

[00:44:43] So when I ask, when I ask you what you think the best neighborhood in Chicago is your response is going to be based not just on the data that you have in your head, but on your personal experience.

[00:45:00] And it's going to create, and your response is also going to be creative in the sense that you have a novel, a unique perspective through literally through your own eyes that nobody else has and that cannot be replicated because you are the only one of you walking around.

[00:45:26] AI, as we understand it, is not bad. AI is simply a consolidation of all of the responses to questions similar to the one being asked and creating an answer that is approximated to the best of the models ability to be the most likely to be correct based on the correct answers that have been given before.

[00:45:53] And so there is no novelty in what AI creates where I think real estate professionals true value will be at least for the short and medium term is providing the novel unique insight that cannot be mapped to a corpus of data that has that exists somewhere in a database.

[00:46:16] So your value is a real estate agent.

[00:46:19] Honestly, it hasn't been for a while and it certainly won't be moving forward in your ability to immediately recall the price per square foot stats on the Miracle Mile in Chicago.

[00:46:33] That data is being is is data that or that answer is not an insight. It's just a database knowledge. Now where your insight becomes novel and unique is okay, but where is that $249 per square foot worth it versus where is it not worth it.

[00:46:58] Yeah, and that is a unique insight that AI cannot reflect. So agents need to be figuring out how they create this unique novel value to their clients that isn't driven by your ability to recall statistics statistics and what exists in the existing corpus.

[00:47:18] What do you think about that?

[00:47:19] I agree and I think REALTORS could transform over time into more of a lifestyle sort of consulted.

[00:47:32] So the REALTOR knowing the hyper local community is going to because again, you're not going to need the REALTOR to find the home.

[00:47:42] You don't need the REALTOR to date to find the home. You can just go to Zillow. Zillow has been around forever. You can find the property yourself. You don't need that.

[00:47:50] What what are you going to pay a REALTOR to to do?

[00:47:54] Well, you're not going to pay them for the price per square footage or data because data is going to be instantly available to everybody.

[00:48:00] All the data in the world is going to be available for basically for free or for a small cost to a consumer. So that's not your value.

[00:48:07] The value is that people say, well, the value is the relationship. Well, what does that mean? What do you mean the relationship?

[00:48:14] What how do you monetize a relationship? Okay, I'm not saying that's not possible. I just have a hard time when people say it's all about relationships.

[00:48:24] That's wildly non-specific. I'm like, what does that actually mean? What what what I think it means is, hey, I know you, me as an agent, I know you clients.

[00:48:37] I you tell me the lifestyle you want. Where how do you want to live? How do you what do you want around you? How do you want your kids to grow up?

[00:48:49] How do you want to service your your aging parents? I as an agent know the best way to do that. And that is going to be through experience.

[00:49:00] That's going to be hey, I I'm on the streets. I live I live these in these neighborhoods. I know where you should be for your goals of your of your life.

[00:49:12] And I think that's where REALTORS are headed. It's not so much where's the best priced home. It's going to be what's the best price home. It's going to be, you know, specifically where and

[00:49:28] that's all going to come from experience, I think.

[00:49:31] Yeah, I'm going to push back on you and and take your statement one step further. I think that middle of the road or even bottom of the market agents are going to take exactly literally that approach that you just laid out.

[00:49:48] I think the top performing parts of the of the market of the agent market like the agents that are most successful. They are not going to say, tell me about what you want.

[00:49:59] They are going to identify a this is who I help this is what I specialize in. If you want to if you want to live an athletic lifestyle. If you want to be on.

[00:50:11] If you want to have like a lifestyle based around the water or based around your job or based around public transportation like whatever it is.

[00:50:21] The agents who are going to absolutely be the accelerant in the market are going to niche down in a new way. We are used to tell agents niche down in property type.

[00:50:32] Now we're telling them niche down in lifestyle. It is not going to be just, oh, I'm the best person to help you buy your first condo. It's I'm the first I'm the best person for young professionals who are new to the city and looking to create

[00:50:48] opportunity for themselves and treat their first property in the city as a springboard to their second property like niche down in terms of lifestyle and goals.

[00:51:05] I wish in 2001 when I moved to Chicago that somebody I could have just gone to somebody and said, hey, where should I live? This is what I want to do. This is the kind of lifestyle I want to lead. Here's what my social life I think should look like. Here's what my physical life should look like. Here's my financial life looks like.

[00:51:30] Here's all the things I want to do and I would have paid. I didn't have any money 25 years ago, but I would have paid the little money I had to have somebody say, oh, I totally understand you, you need to live in this neighborhood for the next year.

[00:51:46] And then from there on out, maybe you can go to this neighborhood or this neighborhood. I want somebody to tell me I understand you and I see what you want to do. And this is the place for you.

[00:51:57] This is the apartment or condo or home for you. This is the area that you can thrive in. And I think REALTORS are heading in that direction. I mean, I wanted that 25 years ago and good REALTORS do that now.

[00:52:13] And that's something that, you know, again, I hope AI cannot solve for in the future, but we'll find out.

[00:52:24] All right, Chris, I think this is an amazing place to wrap up. We have gone hard and deep into your mind and obviously our audience loves hearing your perspective.

[00:52:39] So tell us a little bit more about what's going on in your world. How can people tell you?

[00:52:46] Yeah, absolutely. Well, it's always a pleasure to be here, DJ. Thank you. Always happy to come back, chop it up, get ourselves in some hot water on some of these more controversial takes.

[00:52:57] If you want to follow along with what I'm doing, you can do that in a couple of places. You can go to Instagram. I'm at Ask Chris Lensel.

[00:53:04] You can follow me on LinkedIn. My name is Chris Lensel. Not many of us out there. I will tell you I am not an English biology professor.

[00:53:13] So I'm the other Chris Lensel, not the guy who works at an English university in London.

[00:53:18] If you want to follow along on another level, you can check me out at Chris Lensel.com. I write mostly about the industry. My takes on technology, that sort of thing.

[00:53:31] And I have, like I said, I'm like DJ said earlier, I'm the sheep marketing officer of a real estate brokerage in Michigan called the Mitten Group.

[00:53:41] We are the most interesting, exciting, innovative place to hang real estate license.

[00:53:48] We build a brokerage that agents actually want to work for and we would love to talk to you about working here.

[00:53:54] If you have dreams of coming to the Mitten State, you know, based in Traverse City, fluent in every shoreline.

[00:54:00] So come on up, happy to have you.

[00:54:02] And if you are out and about attending real estate events, you might see me, especially if you're in California.

[00:54:09] I have a wonderful partnership with the California Association of REALTORS.

[00:54:14] I am a keynote speaker at their AI now conference events.

[00:54:18] If you're up in Fresno, come see me next month.

[00:54:22] I'm super excited to be back in Northern California.

[00:54:26] And also working on some more speaking events, including continuing to work with National Association of REALTORS and the California Association of REALTORS and the great folks in MEN.

[00:54:37] So yeah, look for my name on speaking bills and come see me in person.

[00:54:43] Love to hang out, chop it up, get an argument with people.

[00:54:46] Got an argument with somebody on the plane the other day about a real estate thing.

[00:54:49] And you know what? It was one of the most productive conversations I had all week.

[00:54:52] So come challenge by unpopular opinions.

[00:54:56] Write DJ angry emails, if you don't agree with what he says.

[00:55:00] I like hearing about that sort of thing.

[00:55:02] Yeah, absolutely.

[00:55:04] We are so grateful to Chris for sharing his perspective, his point of view.

[00:55:10] And that is, you know, we need more voices like Chris talking in this industry.

[00:55:16] So we are grateful Chris has been with us for years and years and years.

[00:55:20] And we have seen him go to the national stage.

[00:55:23] We've seen him go to the regional local stage.

[00:55:26] He has very well formed thoughts and opinions.

[00:55:30] And we are super honored to have him on the show.

[00:55:34] Please do him the service of following him.

[00:55:37] And also on social media, of course.

[00:55:40] And if you need a speaker for anything related to where.

[00:55:45] A technology where real estate technology is headed.

[00:55:49] I don't think there's a brighter mind out there than Chris and sell.

[00:55:53] So please reach out to him.

[00:55:54] He has lots of great ideas and happy to share them with you.

[00:56:00] So Chris on behalf of the audience, we thank you on behalf of Chris and myself.

[00:56:04] We think the audience as always the best way to help us continue to grow.

[00:56:07] Telefrand.

[00:56:08] Think of one other agent that really really needs to hear this.

[00:56:12] And again, Chris and I may be inaccurate with with our predictions.

[00:56:17] But the future is now we are we are experiencing big changes.

[00:56:23] And we want to we want you to be part of the conversation.

[00:56:27] So please shoot this over to someone.

[00:56:29] You know, maybe Chris one day you and I will do this live on air and we can take.

[00:56:35] You know, take other people's opinions as they come.

[00:56:39] I think that would be kind of fun.

[00:56:40] So one day we'll do that.

[00:56:42] But for now just pass this over.

[00:56:44] Thank you.

[00:56:45] Sport our sponsors and we will see everybody on the next episode.

[00:56:49] Thanks, DJ.

[00:56:50] Thanks everybody.

[00:56:50] We'll see you soon.

Subscribe: Apple Podcasts | Spotify