Real Estate Community Network Podcast

Exploring the Evolution of Real Estate Practices with Steve Franco

• Mike Bazadona & Steve Franco • Season 3 • Episode 1

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Unlock the mysteries of real estate commissions and professional representation with our insightful chat alongside Steve Franco. We dissect the often-concealed world of real estate transactions, offering clarity that's been missing for buyers, sellers, and investors. From the nuances of being a licensed agent versus a realtor to the impact of commission transparency on the market, we provide essential knowledge that can empower your next property deal. The conversation takes a deep dive into the National Association of Realtors' (NAR) policies and their repercussions, ensuring you're equipped with the latest insights to navigate the real estate waters successfully.

The evolving real estate market doesn't have to be a riddle wrapped in a mystery inside an enigma. Join us as we discuss the future of the industry, reflecting on the value agents bring to the table and the potential shifts in the seller's market. Steve Franco brings a wealth of experience to the table, sharing his expertise on high commissions, the strategic importance of building the right team, and what the cooling market means for part-time agents. Whether you're a seasoned investor or contemplating your first home purchase, our episode is a treasure trove of strategies and insights that could prove invaluable.

Prepare to master the art of negotiation from an investor's standpoint. We break down the critical tactics for handling real estate commissions and delve into the importance of buyer's protection and ethical representation. Our final thoughts examine the power dynamics in high-value property sales and the shifting negotiation landscape. Don't miss our invitation to an upcoming real estate meetup, where we'll continue the conversation on diversifying your portfolio and the benefits of different real estate strategies. This episode is a must-listen, packed with actionable advice and a sneak peek at our next episode's special broker-lawyer guest.

Speaker 1:

Hey everybody, welcome to the real estate community network podcast. I'm Mike Bazzadonna here, my partner Steve Franco and little Mikey. He's gonna be joining us today. Also Welcome to the real estate community network podcast. Like I said, follow us on Facebook. Real estate community network pod PA, pa, the real estate community network, pa. Go find us. Nothing but good stuff on there. Post whatever you got. You had a wholesale deal. You're selling a house, you're looking to buy a house? You need a question? Ask, join it. Steve. Today's your topic. You're a realtor, so I'm gonna let you take it away.

Speaker 3:

Yep and me and Michael put our little inputs as investors in yeah, I mean, you know, being an investor and a realtor and a broker and also wholesale and everything else. I see this from the outside. A lot of people live and die off off the MLS, off their job as a realtor. The first thing everyone has to understand is that realtor and licensed agent are not the same thing. You can't be a realtor without being a licensed agent. So if the MLS goes away, those of us with licenses are basically fine because we have the state's permission to do the same job and it's important to understand that for professionals like me and Mike and Mike, we don't need agents very much when we're going to buy property as buyers. We don't need them because we know what we're looking at. Should we have a protection? Yes, is it good? Yes, but really this is about who helps the consumer, buyer, the regular buyer and seller and, frankly, national Association of Real Truth has done a very disappointing job, not only in letting it get this bad so a lawsuit was needed and those two or three major brokerage firms that don't represent the majority of us, frankly, but They've also done a bad job in explaining it, because the first thing is the buyer's agent gets paid. It's a professional you don't want to buy it like discount cookies at Walmart, I can get this for a dollar. If you're not a pro in the business, and even if you are, probably you want someone that can walk a property, advise you, help you understand it, and that person should not be the one that represents the seller and so really Saying, oh gee, I'll just take the cheapest real estate agent that I can find. Okay, go ahead, buy the cheapest attorney and then when your wife gets everything in the divorce, you're gonna have a problem with that. You want a good professional on your side. All the new rulings say is clarity, which should always have been a part of the game whether you want the buyer to pay the buyer commission and the seller pay the seller commission, great. A Smart buyer is going to reduce his price, his offer on the house, in order to cover that commission. If you as a seller say, well, I don't want to pay the buyers commission, great. Then there are certain buyers, agents who aren't going to bring your, bring certain buyers to your house Because those buyers don't want an extra fee. That's all fine.

Speaker 3:

Where NAR dropped the ball, I think most of all, is this it first of all, in Pennsylvania. There was never a set commissioned by any kind of organization. That was illegal from ever. As a listing agent can say I want to pay you, I want you to pay me six percent. Client can say yes. Client can say no. We can say one, two, three, four, whatever number he wants. I've had clients offer me 25 percent to sell their house. Um, they were offering, they were asking stupid money, so whatever. But the listing agent could never state I want to Only be paid this month. The listing agent can take the deal or not, but we could never force our sellers when the cloud has come over this for me. What bothers me the most.

Speaker 3:

A friend of mine had a problem because there was a property Listed in, whatever state she's in, I forget where. They stated a 3% commission last week for the buyers agent. As Of recently, the National Association of Realtors is taking all buyers agent commissions off the MLS. So if you're a buyers agent you don't know what's being offered to you. It. But that doesn't start till July, correct? That doesn't officially start till July.

Speaker 3:

But in this case this realtor jumped the gun. My friend showed the house 3% commission was on the MLS. Last week she called in with an offer and said I have an offer on your house and great, that offer sounds terrific. By the way, your buyer has to pay you your commission. Because my seller just took away the buyers agent commission yesterday and my friend said but you haven't on the MLS. The problem right now is by taking it off the MLS and trying to try to back up. Make this clear by taking it off the MLS, there might still be a buyer's agent commission means I, as a buyers agent, have to call Mike as a listing agent and say how much are you offering me? You're gonna tell me, I'm gonna text you and you're gonna text it to me so I have proof. And Then I go to my buyer and have a conversation. Is that helping the clients? Because we have to have this extra communication. Is that making anything more clear?

Speaker 1:

and how's the first time home buyer are gonna afford and and like are you even gonna want to deal if someone calls you say, hey, listen, I want to look at this house and Therein lies the problem. What?

Speaker 3:

are you?

Speaker 1:

gonna say I need 10,000?.

Speaker 3:

Yeah and well, and and I was having a conversation with one of my agents yesterday that how do you represent buyers in this brave new world? Now we could always negotiate with our buyers. Every buyer that comes to me signs a kind of an agreement that says I get two and a half percent. If the seller pays that side, great. If not, you make up the difference. So my buyers come in the door knowing if you want me, that's, that's the deal. But the other problem you have is is like you brought up a great point is well, I'm just gonna go straight to the listing agent. The problem is, unless you sign a buyer's agency agreement, that agent, the listing agent, doesn't protect the buyer. If you call me and come see my house and refuse to sign a buyer's agency agreement, my responsibility is only to the seller. I have to be honest with you, I have to be fair with you. But all of the good stuff.

Speaker 1:

Yeah, so it's a You're not on, you're on the sellers team. Yeah.

Speaker 3:

I until until I sign a buyer's agency agreement and I'm a dual agent which has to one has always had to in Pennsylvania, be disclosed.

Speaker 1:

I'm on the sellers team, but still, even as a dual agent.

Speaker 3:

I don't know who you favor well you, I am very careful and and I it's, it's, it's a it can get I. I'm very I'm very unusual. First of all, I know a lot of agents that skip things like consumer disclosures. They skip consumer notices, they skip some of them skip sellers disclosures and that's pretty dangerous. But I've always been very upfront with my dual agent clients, especially Because 80% of what I sell on the MLS is dual agency. As soon as you list something today, You're getting, I forget do you have to tell them right away.

Speaker 3:

I tell them right away. They sign right away. And I tell them listen, if it gets dicey, it's in my, it's in my dual agency agreement. If there's a disagreement over inspections or whatever the disagreement is the buyer was the second one at the party I'm pushing the buyer off to one of my agents. I'm still the broker, but we're going to have two agents Because if there's a discussion, it is an argument over inspections, an argument over something not just a little back and forth, but something serious. I can do that, I can parrot. Seller said yes. I tell buyer yes, seller. Buyer said the sky is purple. I tell seller.

Speaker 1:

Buyer said the sky is purple, but I can't give anyone advice, it's still dual agency if it's under your company and you have two different realtors. One was the listing agent, one was the broker, the one that's still getting that 6%.

Speaker 3:

So basically I had a situation and said nothing to do with the NAR dispute where Tika was listing or is I guess listing a rental property up in commercial rental up in West Pitston and I took the buyer because she's a little new and I didn't really like the idea of a dual agency and something. And it was good because it got sticky over. Some stuff related to PennDOT eventually fell apart and I am legally the broker for both but my agent license. I owe my confidentiality to the buyer If there's brokerage stuff.

Speaker 1:

That's still a. You still have to send a dual agency thing, right?

Speaker 3:

Everyone signs a dual agency because the broker is dual. But Tika and I could go back and forth as enemies on the topic, because the house we just sold the golf course house.

Speaker 1:

Yeah, I saw. They didn't tell us they need to disclose it. It said, well, it did in the contract.

Speaker 3:

Okay when they sent it over dual agency.

Speaker 1:

I was like oh man, but then I asked her. She says well, a lady in her office brought the buyer.

Speaker 3:

Right, and that's called designated. Like my, brokerage was dual, but the agent that was designated for the seller was for the listing, was Tika, was a rental not a sale. The agent that was designated for the tenant was me, and that's great. You still have two licensed people fighting for their clients. Yeah, I listen, I don't care, it's sold. Yeah, but you know, but it can get, it can get dicey.

Speaker 3:

So the bottom line is, you know, to make this simple for everyone out there, and I am at Perkins on Tuesday at 6pm I'm not sure when this goes out, it goes out in time, but Tuesday, march 26th or whatever that is at 6pm. Anybody has questions or you have properties you want to discuss. But the thing you need to understand is that dual agency is not bad, but you need to have a plan if it gets sticky. Buyer is paying. Their commission is not bad either, but you have the buyer has to know it and if your agent does not give you an estimated cost disclosure, there's a buyer estimated cost and a seller estimated cost that you have to have that before you sign any document. You sign a listing agreement.

Speaker 3:

I give you a sheet that says you're selling for a hundred thousand, your commission is 6,000, blotty, blotty, blotty, blotty, blotty, blot your buyer. You're buying it for a hundred thousand. You're paying 3,000 in a commission plus, plus, plus, plus, plus, and it used to be pretty much you know, cut and dry. But now you've got to know because it's only fair to the buyer. The person who's buying a hundred thousand dollars has $6,000 is a lot to them. The person who's buying a $10 million commercial property, that number is a lot to them too. I mean, that's a lot of money.

Speaker 1:

Yeah, we're paying 25,000. Yeah, and I always, you know. My question is what you really do for me. I understand that, steve, I don't complain, but you know the house that we're going to be. You know we're going to start selling some houses at 850, a million. Yeah, that's a lot of money and so the 850, we're going to have to pay 51,000.

Speaker 3:

Yeah, and listen when you get up, and here's what everyone always says. When you get up, you know 51,000 is a lot.

Speaker 1:

It is. It is, especially if I'm only going to make, let's say, 250, 51,000 is going there. So now we're at 2, right, yeah? So now I take that 2 and then I get taxed 40%, yep, and they split it three ways with some partners.

Speaker 3:

You know what I mean.

Speaker 1:

Like you know, the realtor made more than me, yeah.

Speaker 3:

And the same thing happened with.

Speaker 1:

That's not funny, Mike. That takes out of your pocket too.

Speaker 3:

When my brother and I sold our warehouse out in Boston, the seller's agent the listing agent had a 5% commission. He didn't care what the buyers had made. He's putting 50 grand in his pocket and in actuality he was, but he was worth it. It's the old story about the mechanic who hits the engine with this hammer and charges $10,000. He had that thing sold to one of his other clients in two hours for our asking price, so the 50,000 sucked. He made a lot of money in five minutes, but he knew who to call. Yes, you know.

Speaker 1:

Listen, I don't want to sit on it either, right, you know that's.

Speaker 3:

And the most important thing and this is where NAR is missing the boat and this is why those of us in the industry will be finding out about a separate project that I'm launching is that For years, real estate agents have considered themselves a special class and realtors, in particular your commercial guys. Miracle NAR, they don't use the MLS as much. They're probably realtors, they're probably list a little bit, but most of their stuff is elsewhere. Those of us on the MLS have considered oh well, if you want to buy and sell, you must be a realtor. You don't. The tools and techniques that the NAR provides are wonderful and I hope they get themselves out of this. But what is important for the consumers out there, for the investors out there, is that you need the right team in place.

Speaker 3:

An attorney called me and said well, I'm going to start representing buyers and for $2,500 I'll handle all the legal stuff a buyer needs to know. Flat fee, that's great. That's not the person in the field to help you with the deal, but that's a solution. You want to make sure you have somebody on your team, whether you're the seller or the buyer, walking you through it. You call me as a we buy houses wholesaler. I come to you buy your house for cash. I'm not your advocate, I am my advocate. That's right. I'm going to tell you the truth about the property when tell you what I could list it for what I could really do it. But if we sign a we buy houses contract, don't come to me and say, well, as a broker, you should have told me I'm not working for you. You want to make sure you have a somebody you have. I mean, if you don't have a license agent. Mike, you've taken the class, you're trained. I don't know if you ever passed your test, but I took the test, but basically you know it.

Speaker 1:

Yeah, you can't. He took it, took the same class.

Speaker 3:

Yeah, yeah so you guys have a thousand dollars to Larry, right, but you guys have the skills maybe not the licensing, but the skills to help somebody with it. Yeah, we just wanted to know right you know, I'm glad I'm not a realtor now, yeah, and it's not the end of realtors, it's not the end of whatever. It's the end. Hopefully. It's a. It's gonna get rid of a lot of people. It's gonna get a little.

Speaker 1:

It's it's gonna get a little rid of a lot of bad ones. You've been in it since 97. You're not going anywhere. But the people that would. Covid that's just putting out signs. Yeah, that's that's done.

Speaker 2:

But like think about the people that are working a full-time job and they're trying to like escape. They're nine to five, so they're being a realtor or like an agent and they're doing that part-time. That like kind of hurts them as well.

Speaker 1:

I don't think there's gonna be part-time anymore. Well, no, I think they're gonna be all right, they're gonna be all part-time.

Speaker 3:

I think I think they'll. I think they'll always be part-time, but I think to Mike's point is that you have to. I think that is. There's two things, that there's two tsunamis going on right now.

Speaker 3:

The sellers market is over or nearing the end. So all of those people who could wake up in the morning and say I have a firehouse, I want 40,000 for it and somebody's gonna give them 40,000, those people are gonna go away. The people who thought, the people who got in during the time was easy and the people who relied upon I Can show, my I can show. Someone told me this was, this was sexist, but I'll say it anyway. I can still show Barbie and Ken their dream home and I can make money because I know I'm automatically getting paid. No, if you have the skills, if you have the techniques, if you know how to work with investors, because half my buyers are out of market and my only purpose is I'm the boots on the ground and the fact that I can walk through a house and they can rely, they can make the offer based on what I'm telling them. You know, that's what is gonna survive in this industry and that's what we need and that's why this new organization that I'm launching, which is not in competition with NAR it's supposed to be the NAR for off-market, but it's gonna. You know, we're gonna let everyone use. It is about connecting you with the people with the skills License, non-license, whatever our members are gonna have the capability, and that's why we're gonna start doing these meetings once once, once a week, online in person.

Speaker 3:

You got a project. Come to it, you know. Come to us with it and let us help you figure out what you need. Don't be afraid of it. Agents, if you have questions, feel free to give me a call. 5707 987051. This is a change. This is not a disaster and for those of us who've been doing Pennsylvania law correctly, it's actually not a change. Nothing in that ruling is something we shouldn't have already been doing. And the last thing I want to tell everyone is don't cheap out when you're looking for a professional. When you have a medical problem, do you go? Which doctor is best or which doctor is cheapest? I want my, I want my, I want my heart operated on, but I want the doctor who'll do it for 599.

Speaker 1:

I.

Speaker 3:

Yeah, I really want to kick my wife's ass in this, in this divorce, but she's $200 cheaper, I'm gonna go there. Yeah, you're gonna pick. You're gonna pick your real estate professional the same way to it.

Speaker 1:

It's the same way with what our when we hire carpenters. Yeah, and you know these handy guys, you know we pay. We tried it the other way, Mike. It didn't go so well. It don't work that way. Learn the hard way.

Speaker 3:

Yeah, exactly if you make. If you make that mistake, yeah, and that's the biggest thing, and everyone is saying oh, they never did shit before. It doesn't matter, real estate don't matter. You know what you can say that about any industry.

Speaker 1:

A lot of people say that, yeah, you know, I mean I deal with a lot of yeah, won't be sell a home to somebody. They always complain like I can't believe and in my head I'm going you're not paying them and and I'm not lowering my prices. The ARV is the ARV. Yeah, right, that's how I decide what I'm gonna sell my house for. So people don't. I don't want to think a buyer to think, well, it should be cheaper. Now right, I'm gonna be cheaper. It's actually gonna cost them more money.

Speaker 3:

To get a house and the other thing you have to remember when you hire an agent, which you don't have the same protection. If you hire your attorney to do your paperwork, attorneys have their own protection. They're wonderful. I'm not saying that when you hire an agent, what you've really done as a seller or buyer is you've offloaded your liability to me. I Right now I'm having to switch insurance companies for my errors and emissions because of something.

Speaker 3:

I didn't do wrong. Even the insurance company and three attorneys tell me I did nothing wrong and yet I'm still involved in a lawsuit that will never actually get solved. It's gonna be. It's been going on for a while and I did nothing wrong. But guess what, I have the insurance for it. So okay, pass it off done, move on. If you buy and sell a house without a licensed agent who works for a broker who has the proper insurances, there's no E&O for you. You buy it from. You buy it from me as a we buy houses. My we buy houses company doesn't have errors and emissions. My broker's firm does. You have. You're paying for that a portion of your $51,000. I'm not saying a large portion is for that safety.

Speaker 1:

It's paying for your boat, yeah well, shut up, I Want a boat.

Speaker 3:

No, but I mean that's the thing. Is you look for a professional To help you through it and to what, and to wave and to reduce your liability?

Speaker 1:

where there should be some kind of. I gotta think as an investor now when we start selling. You know well, I gotta wait till it gets there.

Speaker 3:

Yeah, I mean as a seller.

Speaker 1:

Because now I might have to offer things to buyers. Yeah, maybe I'll pay your closing. Yeah, you know, maybe I'll do this or whatever.

Speaker 3:

Well, you raise interesting points. So as a seller I offer. I've always offered. This has not changed. This process does this reality doesn't change my life at all.

Speaker 3:

I always said to them I can list you full commission for four, five or six, depending on. I've got different ways to depend on what kind of deal it is and that's split evenly. I'll do two, three or four if I'm only covering myself in the equation. Or you give me $3,000, a 2,000 or pick a number and I will put your property on the MLS, I'll do the pictures, I'll handle all your paperwork but I'm not taking a call about it. All the calls are all going to you. It's called transactional.

Speaker 3:

Now you as a seller would actually have a marketing advantage. This is one good thing that's coming out of all this. You could say in your ads, meaning your agent can say in their ads because usually advertise that buyers, your buyer's agent commission is paid, no matter who the agent is. Your competitors probably aren't going to do that. So if you're a smart volume seller, you'll at least consider keeping your commissions up higher, making it even making it a split commission and publishing buyer's agents protected. That's why you see those signs for all the commercial brokers protected. Brokers protected that's what that means. Brokers getting paid yeah, okay, so you have the opportunity of helping the buyers agents choose you first yeah, I'm just going to figure something out.

Speaker 1:

I'll wait till I hear you cry what's working or not, and then I'll figure it out from there. But I'll be happy if I could pay less.

Speaker 3:

Well, well, here thing, but remember cost versus value. If you're paying less commission because, think about it if I'm sitting here as a buyer's agent and should we do this? Probably not, but does every human do it If I'm looking at four properties and this has been true forever there's a 1% buyer commission, a 2% or 3% buyer's commission, which one am I taking my client to first? Which one am I pushing my client on first? The one where I have to beg them for more money or the one where I'm already paid? Now, they can pick it in whatever order and I have to follow that.

Speaker 1:

But if I know selling Mike's house gets me money. So now they don't list that on there, correct, Right? So if I would have to call as an agent, I would have to call you if you had a list in and say hey, steve, exactly what am. I getting, so your advantage, and you say nothing.

Speaker 3:

Yeah.

Speaker 1:

Click.

Speaker 3:

Exactly because think about what that means. And that's why you, as a volume seller, should say to your agents put in the remarks and the private remarks that we're giving 2.5% to every buyer's agent. It's built in. Make that part of your advertising. Because here's what has to happen is, my client says I wanna see 123 Main Street. I call the agent. There's no commission on 123 Main Street. I gotta call my client back and say yeah, I can show you 123 Main Street, but in addition to whatever you offer, you're paying me 3%. If you don't want it, we're not going to the house. You're gonna sign that right now, before I leave. Now, the one thing it's hopefully gonna do because every buyer's agent that isn't doing this now should have been. If you aren't signing a buyer's agency agreement and this goes back all of this predates you have no right to getting paid. Without a buyer agency agreement, the seller's agent has always been able to keep it. I found that out from Larry when I closed my first $2 million sale.

Speaker 1:

So you can as a buyer, do I have to sign one agent?

Speaker 3:

I could. You don't have to. However, technically, every buyer's agent, every agent, when they take a buyer out, is supposed to sign a buyer agency, even if it's only in that property, because otherwise, you don't I'm your friend and I think you made me sign one, but that's besides that. Because without it I have no legal requirement of confidentiality. I went mess.

Speaker 1:

I went fuck over a friend, I know but yeah. No, I'm just trying to think. I don't understand this whole thing. I just see all these realtors on Facebook, instagram, everywhere.

Speaker 3:

The process is really simple Bugging out. Yeah, they're all bugging out they're afraid of it or they're playing the other side. Like the experienced ones Noreen Clark, who's like you know what I can change my business a bit, because if you've been doing it right, this doesn't change anything.

Speaker 1:

If you're a pigwake and you get tons of listings to begin with.

Speaker 2:

Yeah, so I have a question. So you were saying if you're a seller, like say, I'm the seller I'm selling you a home and I used you as a broker to sell my home for me, but I don't offer that buyer protection. 2.5%. I'm just sticking straight to 3%. The seller the selling side of the agent gets the money Exactly.

Speaker 3:

So, basically, and again, all of this predates. This is why I look at this as being a problem, a solution without a problem, Because in the listing agreement from the day I got licensed in 2015, it has had a section that the seller initialed Well page. The initial page never said what, which said buyer agent gets this, what they call it a sub agent with somebody who pretended to help the seller agent gets this. It was half the commission for the buyer agent, zero and zero for the other two. That's always been there. And if you said 0% for the buyer agent, zero, zero, I'm only paying the three, the two and a half, whatever, whatever seller side is only then the buyer's agent's on their own, yeah, and the buyer agent figures it out.

Speaker 2:

So if, like the way you were saying it was like some you know, some brokerages might be like, oh well, this guy, I'm not making any money from a buyer side, like there's no buyer protection, what's stopping? Like that person that's selling the home through, like you are another brokerage from, like all right, my house isn't selling, let me go find somebody else that's gonna really push my stuff, like because if you don't push it, then you're gonna lose the deal, right, and you're gonna make zero.

Speaker 3:

So basically it doesn't change anything for me as a listing agent. For me as a listing agent, I've made a deal with you that I'm gonna do all these things for this percentage as a listing agent. Whatever the trick is, if you and there's nothing wrong with this, the wrong to me is that the NAR doesn't wanna publish this anymore. They don't wanna publish what the buyer's getting. Because if you as a seller, have said I'm paying, mike as a seller says he's paying the buyer's agent 3%. He's doing 6, 3 and 3. You're only doing 3 for the seller's agent. That's not published. So me as the buyer's agent, I don't know the difference between you guys. When I make the phone calls I know the difference. Then I call my client and say well, listen, if you buy Mike's, house.

Speaker 1:

But then that comes in the steering. Well, no, because you're steering, nope To where you get paid more, I'm not steering.

Speaker 3:

What I'm saying to the client, yeah.

Speaker 3:

No, I'm saying you know what? I can show you that one and the price you sign the contract at is the price you pay. You sign that one. The price you sign the contract at plus 3% is the price you pay. I'll show you the both. But understand, yeah, you're gonna come out of your pocket on that one, you're not gonna come out of your pocket on that one. Can you tell a buyer no, I mean, I'm an independent contractor. I can refuse to show, I can say no, but I would never say no. I would simply say, sir, your buyer agency contract on Mike's property says you don't owe me anything. You buy our agency contract on Mike Jr's or Mike the third's property. You owe me money.

Speaker 1:

Yeah, call him the third he doesn't like Jr. Sorry, little Mike's. Yeah, that's even better.

Speaker 3:

So basically, but the problem is that's an extra step. I have to ask you because it's no longer published, and then I have to go to my client.

Speaker 1:

It almost discourages your client, right, you know. And you gotta come back and say listen, I don't know how I'm gonna approach it.

Speaker 3:

To be honest with you, and for the lazy agent who's not. They're not supposed to do this, but if they get all the if you, let's face it every buyer's agent right now, I don't know why they do it because they're showing 14 properties and not getting any of them, unless you're overpaying. So I call 14 agents, I write down 14 commissions and I somehow keep it all straight because it's not published anywhere. In what order am I gonna discuss those with my client? I'll discuss them all, I'll pretend I'm doing it right and I'll discuss them all, but what order am I putting them in?

Speaker 1:

That's a lot. Your phone, is your phone rings enough? Yeah.

Speaker 3:

And what if I? Okay, you tell me 4% for the buyer's agent, I write down 4% and then later you say no, no, I said two. Now we have a lawsuit over who said who said Where's the NAR helping the world with that? But it publishes. If the publishes zero, the publishes zero, publishes four, publishes four whatever.

Speaker 1:

Yeah, cause now you're gonna go to court and it says well, on the MLS, it says nothing.

Speaker 3:

Yeah, and I actually had one, one of my first short sales. We got to closing and I walked away with the check for the brokerage firm, walked away with the check for $500. And I went to Bob Vanson and I was like Bob, commission was $8,000, we got 500 bucks. He's like you didn't read the MLS. It said flat fee to buyers $800 and $500. He's like you don't have a leg to stand on. You just didn't read it. That was back when it was published, publish it. And then I know I, okay, I screwed up.

Speaker 1:

Yeah.

Speaker 3:

I should have looked. But what so? To simplify all this, if you're a buyer, you need. If you're a common, typical buyer, you're a volume buyer, you're a professional, maybe you don't need the handholding, but if you're a once in a while buyer, you buy two or three flips a year. You bought a couple rentals. Get an agent, get someone to be on your side. If you have to pay them hourly, however, you need that professionalism. And If they tell you that that listen, the seller is not paying a commission, I need you to pay a commission. Realize you were paying it before anyway. It was just built into the price. You decide what the house is worth and that's what it comes down to.

Speaker 3:

Next thing is, if you're the seller, you really have two choices. You can have the marketing advantage of saying I pay a buyer's agent. Buyers, agents don't have to worry what they get paid, or I don't, because I don't. I want to feel like I'm paying less, but realize that a smart buyer saying the house is only worth a hundred thousand, I'm not paying a hundred and three. I'm not paying a hundred thousand to you and the three thousand to an agent. I'm gonna offer you 97 and pay them three and I'm still. I'm still at a hundred. Now you brought up a good point before the show and I don't want to leave without mentioning it. What are the VA, fha, blah, blah, blah of the world doing? I've never done a lot of them, so I'm not the expert, yeah, but I believe they've always protected but the separate buyer agency commissions, because they've always been states which did it separately, yeah.

Speaker 1:

I was watching something on One of the social medias you know and they said the FHA and the VA, something about it gets more complicated.

Speaker 3:

I know it does, yeah, it's yeah, but like I mean, I mean like like you know, manhattan, for example, tenants pay the broker, the, does the, the around here, I, if I'm gonna listen, the MLS, I paid it, I paid the person who brings it, brings the tenant in New York, the buyers always paid. So they've been states where it's always been that way. Yeah, but it gets more complicated when you deal with does the lending institution have rules? And this means all the buyers have to have conversations with all your mortgage brokers and say the pre-approval you gave me means what? What does the pre-approval you gave me Do as far as this new potential, new world? And maybe it doesn't change anything. But you now, as the buyer, have to ask your mortgage broker what happens and you have to ask your agent what happens, and the agent has to have the listing agent what happens. And I'm not sure what we've accomplished, I'm not sure how this has made it better for the client.

Speaker 1:

Yeah, I don't know who is trying to help and and what? We were caught. I see a lot of investors say, hey, that's great, I'm cutting my commissions in half now.

Speaker 3:

Yep and what you hope, steve, but I know, I know it doesn't work that way. And if you anything, listen if you're. If you want to cut your commission in half, that might work for you as a seller but if I'm selling a house for 800, a million, 50, 60,000, so so a lot yeah.

Speaker 1:

so if there's 30,000 on the table. Yeah, 15 you, 15 them, that's still a lot of money.

Speaker 3:

Yeah, and, and I mean so, so, so. So basically, if you're, if you're an investor and you cut your commissions in half right now in a sellers market, you can probably get away with that in 2012. You don't want to be cutting your investor. You know you're cutting what you're paying. A sell is dating because they're working pretty damn hard for you now, always on the jumbo sales when you're selling a million, two million, three million. I had it with my Indian friend one time the night before we signed the agreement it was two and a half million dollar sale.

Speaker 3:

Steve, I remember I was so mad for you. He's like we're not signing. I told us I'll give you four because I'm a dual agent. He's like I'm only signing if you give me three. You know what? I still made $48,000, not that sale.

Speaker 3:

Yeah, that wasn't cool that it wasn't cool, it was wrong, I was mad, but I'm still walking away with a chunk of change. So it was like make 48 or make zero. When you're at those jumbos you've got a lot more negotiating power, but you did a lot of work, I did. I did five hundred sixty eight hours. Yeah, I had a lot of that months and months.

Speaker 1:

Yeah, he's always in your ear and and there was in.

Speaker 3:

There was partners everywhere right, and that's also the difference. I was selling 11 buildings, 47 units, six different, three different cities that are there. I'm working pretty hard for that. For that 40, 50 grand.

Speaker 1:

Yeah, and your deal. I don't even know you could do that right, it was portfolio sale.

Speaker 3:

But in your deal that agent comes to one house, takes one set of pictures You've already taken with your yeah everything, drone footage, everything here you go, here you go, it's done so. They come to that house once and they get 30 40,000. That's a great negotiable position. Say listen, dude, I'm giving you everything. Yeah you're my tour to the MLS and guess what, if you, I mean.

Speaker 1:

I don't want I don't want to show it. Yeah, I don't want to show it. I don't want to see the people now.

Speaker 3:

Now I'll give you the secret for you and I'll be happy to be your transactional agent. Do a transaction, don't have a listing agent. Pay me a few grand to throw it on the MLS and the buyers agents can go figure themselves out.

Speaker 1:

Yeah, well, we're not there yet. No, and I don't know.

Speaker 3:

I mean, I I probably wouldn't even be the guy for that in that area because I'd have to add a new board and whatever. But the point is where you're turning everything over to them. You can go to them say, listen, I only need to give you one and a half percent, because what are you doing? You're comping the property, you're putting it on the market and you're getting the. I'm giving a three-agent, three percent agent buyer commission.

Speaker 1:

If you've got the buyer, you go get you know, and I'm gonna try to sell before I get it.

Speaker 3:

Yeah, it's done right, you know so.

Speaker 1:

I'm gonna have my own signage out there, yeah, before, but that doesn't mean anything.

Speaker 3:

No, but, and I'm not saying you don't need a good agent, but I'm saying you're an unusual case because you're doing a volume, you're doing all the media, you've already had the appraisal before you bought the property, yep. So what it's worth is pretty well known. We're close, you know so really, your agents not working for their 60 grand or 30 grand or whatever they get.

Speaker 1:

Yeah, I'm not saying they're not wonderful, no you know, but I can't trust their their ARV, right, you know they they are close. But yeah, the the appraiser found stuff that, yeah, they couldn't find that. I was shocked.

Speaker 3:

I'm like wait a second and and that's because, as I'm sure you know, because they're trained better to comp than we are lovely, there's better out.

Speaker 1:

That's your job, that's. That's not a nice job, you know. I get a picture of his license, everything you know.

Speaker 3:

Yeah and so. And so you're in a situation where you say you know what, like I sold a $2 million house for 3%, because the guy Frankly kind of stiff me if I'm selling your and if I'm selling your $2 million property, I know it's, you know twos, but whatever yeah, but you know, if I'm selling your $2 million property. I can go lower. Yeah, because that's only one property, one stop shopping and I'm talking as a listing agent.

Speaker 1:

You know that's one stop. We have two houses 850, 850, right, yeah, right next to each other. That's why they're like, well, we'll do it at 4.

Speaker 3:

Yeah.

Speaker 1:

Wait till July. We're not signing yet because they're building right right so they'll, they'll be done before that, I think I wouldn't know.

Speaker 3:

But? But I mean, in those kinds of situations and when you get to the jumbo deals like I'm Partnering with somebody on a probably three or four million dollar self-storage, what will be when we sell it? Three to four million self-storage facility, I don't expect to pay a lot in the commission on that. I'll probably pay three, three or four and that's split. But it's self is a self storage category. I'm going to the people's who mark them Da-da-da. When you're at those jumbo rate, jumbo rates you do have some negotiation power, yeah, you know. And when and when you're at simple single property deals, the biggest thing, though, is if you're the average person now I do two percent's all they get. Okay, go go buy the cookie at Walmart for 25 cents.

Speaker 1:

Listen, I can't wait to see that show on Netflix. What is it sunset?

Speaker 2:

Yeah, the real estate one. Now, what are you?

Speaker 1:

gonna do my profit, my commission, 1.5 million yeah.

Speaker 3:

Well, it's funny there's. There's one, and I know she's tongue-in-cheek about this. This is one lady on on Instagram who's a realtor, but she's kind of playing the sexy side of stuff, yeah, and she was always professionally but short skirt dressed and kind of like sure, on the borderline. When this came out she's in a bikini. She's obviously selling the other website at that point.

Speaker 3:

But no, I mean, I mean I don't think if you've been doing the real estate business right, this is should not change you at all. If you're one of those of us who was always done the disclosures, always done the dual agency the one thing I would encourage you is, if you are a dual agent, if you're going to, if you're working with a dual agent on a property, have that discussion of what happens if it gets sticky, what happens if the two parties just won't agree and and and it's you you want to give advice to your client, that's what you want to do. But if you, if you're bound to both of them, you have to a certain point, not it'll be neat to see how it plays out.

Speaker 1:

Yeah, I hope it. I hope it weeds those. Yeah those crappy ass realtors. You know there's a lot of them. There's a lot of them that don't know cap rate, don't know this, don't know that. Exactly they don't know the rent roll. They tell me there's people you know it could make, right, you know, we've been to a couple houses where, yeah, oh, the bar is making 50,000 a month. We go there. There's no bar. If there was a bar, yeah, if there was a bar.

Speaker 3:

Oh boy. I've done, I've got. I've got two or three exactly the same deal. And the other thing is don't and I'm a wholesaler, mike, both of these guys on here, all of us are wholesalers Don't think that's equal to those of us with a license. That's a totally different skill set. We're trying to accomplish a totally different thing. Oh absolutely and as a wholesaler. We are not your friends. You know that. You know we are honest Hopefully many people but we are. Do not say it's equivalent.

Speaker 3:

Don't say you're, you're yeah. Don't. Don't say your brother Joe, who knows things, no, and please don't go to the estimate. Don't tell me the house is worth this. On Zillow, you, if you aren't super experienced like one of the probably 15 people we can think of, you, need someone helping you.

Speaker 1:

You just do. Yeah, I'm separated my head.

Speaker 3:

Yeah, so anyway, tuesday 6 pm. If anybody has any questions or you've got property deals, I'm gonna be there for about an hour. This isn't a meet-up. This isn't an official anything. Perkins and Wilkesbury, right off exit 165.

Speaker 1:

Okay, so you can see Steve there Tuesday 6 o'clock.

Speaker 3:

Yeah, tuesday 6 o'clock and Just, I'm just gonna sit around for an hour and I'll probably do these once every 10 days or so, and you can always come to the office. Just just message me first, 5707, 987051, or hit us through real estate community network, pa. Calm.

Speaker 1:

Yes, please join that on the Facebook group.

Speaker 3:

Yep, everyone join that. Even if you're not in the business, we want to see you. Let's, let's, let me work.

Speaker 1:

That means Steve alive. We have a meet-up every second Wednesday. Up at Kings beats a mountaintop. Yep Come come join us, meet us.

Speaker 3:

Yep, and actually I'm trying to get someone, I'm trying to get a. I'm changing up who I'm bringing next week. I want to bring a lawyer.

Speaker 2:

Whoa, whoa not next week or next month.

Speaker 1:

Okay, next month, don't confuse me.

Speaker 3:

I'm trying to be trying to bring a broker who is also a lawyer to talk about this NAR crap from a very official level and try to break it down break it down and and hopefully he could tell investors I don't know it's got to be an easier way to work with realtors now.

Speaker 2:

I mean it's it'll definitely be a good meet-up, for sure. Yeah, I really thought for realtors.

Speaker 3:

Yeah, yeah, well and and also for investors, because we have a cheat sheet that is almost finished. I'm having him verify it before it Before we make it public. It might even be ready for Tuesday, but probably not. We have a cheat sheet on figuring out whether it's best for you to pay a buyer agency commission, whether it's best for you to, as a seller, pay, or about pay a buyer commission. How should you handle this as a seller? How should you handle as a realtor? What does the math say? And and also, who's protecting those different situations?

Speaker 2:

It's a big thing to see, because there's really no. You can't really tell until it starts to happen. Yeah, yeah, we don't know. I'm right now, it's all.

Speaker 1:

I got excited, cut our commie. You know that's 51,000 with the 25. I was, I was excited, but we know that's not happening.

Speaker 2:

But I'm sure there's some ways, like as an investor, that you could take advantage of this early on. Yeah, the same for a broker like there's definitely some type of competitive advantage you can get over other broker.

Speaker 1:

Listen, it's like when a new car style comes on, I'm like I don't like that car you know what they do to it.

Speaker 2:

No, son, I love it you know it just whatever.

Speaker 1:

It's just gonna be a different way of doing business. It'll get rid of people that do nothing.

Speaker 3:

Now you have to work a little bit harder and I mean, and I keep thinking about you guys and wondering if one of you should get your license and just list them but also remember builder licenses. You don't even need a full license because you're part of a builder.

Speaker 1:

Oh, that's, true too.

Speaker 3:

I mean and I don't know a lot about it it makes certain things easier. Now, what you don't get from that is you don't get Whoever your super agent is in that market having those, those pocket buyers. But since the whole world is changing, you don't really worry about buyers anymore. Yeah, this is something for you to think about, you know.

Speaker 1:

Yeah, we're just, I think we're five. We're doing maybe five new houses, yeah, and then tomorrow we're in New York, would have meet up for our 51 lots, okay, and then, yeah, I couldn't even imagine if 51 goes through or.

Speaker 3:

You're done. You're done for for quite a while, I don't know what to even think.

Speaker 1:

You know, yeah, we're doing a lot yeah that's great.

Speaker 3:

That's great.

Speaker 1:

And our flips.

Speaker 3:

Yeah.

Speaker 1:

Yeah, yeah.

Speaker 3:

I mean and and same with you. I mean yeah, I mean, I mean, I mean think things are growing so much and that's why, personally besides the fact that I've been doing this for almost 10 years now and I Everything they're arguing over I've already been doing, but also, you just got your broker license, though you know.

Speaker 1:

Yeah, I'm like uh, that's not fair to Steve. Well, it hasn't changed in the head.

Speaker 3:

No, it has not changed anything because I've done everything, as you know, so absurdly over the top. Anyway, yes, all the time.

Speaker 1:

I've always done over the top, I'll have to admit. Always he's like check your email. There's a doc you sign for what? Just do it, okay.

Speaker 3:

I had a closing last month with a title company was like can you take all these different addendums and put them into one AOS?

Speaker 1:

Yeah, yeah oh, that's, that's if what. You send me addendums all time, yeah, then I'm a denim.

Speaker 3:

Addendum. Like Steve, every hour is an addendum, but, but, but. But also because Everything has to be reduced to writing. Yeah if you tell me you're paying the buyers eight and four percent, do you think I'm not sending you a text message to verify that? Oh, I, I'm not getting in a fight later, do you want to?

Speaker 1:

show you text messaging but the but.

Speaker 3:

But the other thing is is none of us at this table and none of us in as, as Members, board members, whatever, of our a? Cn? We all do different. We all do a bunch of different businesses.

Speaker 3:

Yeah, I don't eat. I listen. I love gorilla real estate. I love my, my new name. I love the fact that we're gonna have a giant gorilla dancing at different events now, but in heels she's not cute enough. But I don't. I don't worry about it, because Brokerage is one of the different tools in the box, sure, and if you're and you know, if you're looking for an investor agent, mike, we've always said if you're looking for a homeowner agent, you want a tikka, you want a someone who focuses on residential. If you're an investor, you want an agent that knows that. And if that agent knows that they're doing other pieces of that, they're flipping, they're renting, they're managing, and that's who you want, sure, and you want to pay what the quality agent for that purpose wants, you want to make a deal with them, you want to negotiate with them, because you want their skills.

Speaker 1:

You're not just. I agree, you get what you pay for. Yeah, that's what it comes down, though.

Speaker 3:

And so anyway, everyone come on out. So Tuesdays. It's Tuesday six at Wilkesbury Park, kids over exit 165 and the second Wednesday of and what time.

Speaker 1:

Yo, I said six o'clock, yeah, okay and seven thirty. April 10th. April 10th it's the second Wednesday. We don't know. We have a speaker Right.

Speaker 3:

Yeah, I, I've invited a lawyer broker. I'm waiting for confirmation, so I don't want to name him yet.

Speaker 3:

Okay but that's the plan. We want to cover this topic so that everyone gets real information. Do not listen to the, to the chicken littles. Do not listen to the realtors who don't deserve their money. Do not listen to the. We don't need this anymore. Do not listen to our industry's ending. You know it's over. It's over. You know what. If it's over, let's all remember real quick. For those of us, it didn't take Larry's class. I'm screwed licensing. Why are you screwed if it's over? Listen, houses are free.

Speaker 3:

Yeah rent is zero. I deserve free or free housing. Mike, I want your next waterfront house free, because I deserve it yeah.

Speaker 1:

I deserve. That's what I feel like it's gonna be and.

Speaker 3:

But we all remember where the national association of realtors started Was service to clients agents who were licensed by the state. We're doing stupid crap and nar said we want to make it better. This is a correction. Every organization that gets too big gets too fat and makes stupid mistakes. Yeah, this is a correction. It's not the end of the world.

Speaker 1:

See everybody on tuesday and and april 10th Yep kings pizza, mountaintop 7, 30 to 9 o'clock. Sounds good, all right, thank you for everyone for listening. Make sure you join our facebook page Real estate community network pa. Thanks for listening, everybody. We're out, take care.

Speaker 3:

Thank you, bye, bye.