In this conversation, Matt and David Roybal discuss the impact of commission changes on agents buying leads, the challenges for first-time home buyers, and the importance of re-educating past clients. They also explore David's unique approach to engaging past clients through charitable events. David shares advice for new agents and emphasizes the need for a plan and mentorship. They discuss the potential impact of commission changes and conclude with a focus on moving forward with confidence.
The Neighborhood Realtor is proudly sponsored by Treadstone Funding and Neighborhood Loans. For more tangible tips in real estate marketing, check out Matt's book, The Tangible Action Guide for Real Estate Marketing available on Amazon.
🔑 Treadstone Funding: https://www.treadstonemortgage.com/
🔑 Neighborhood Loans: https://neighborhoodloans.com
🔑 Real Estate Marketing Guide: https://www.amazon.com/TAG-Tangible-Action-Guide-Marketing/dp/1698339747
📲 Learned something new, or have a suggestion? Message Matt Muscat on Instagram!
🏛️ Treadstone Funding propelled by Neighborhood Loans NMLS 222982 “Illinois Residential Mortgage Licensee No. MB.6759826. neighborhoodloans.com/licensing/ For licensing information, go to www.nmlsconsumeraccess.org”
In this conversation, Matt and David Roybal discuss the impact of commission changes on agents buying leads, the challenges for first-time home buyers, and the importance of re-educating past clients. They also explore David's unique approach to engaging past clients through charitable events. David shares advice for new agents and emphasizes the need for a plan and mentorship. They discuss the potential impact of commission changes and conclude with a focus on moving forward with confidence.
The Neighborhood Realtor is proudly sponsored by Treadstone Funding and Neighborhood Loans. For more tangible tips in real estate marketing, check out Matt's book, The Tangible Action Guide for Real Estate Marketing available on Amazon.
🔑 Treadstone Funding: https://www.treadstonemortgage.com/
🔑 Neighborhood Loans: https://neighborhoodloans.com
🔑 Real Estate Marketing Guide: https://www.amazon.com/TAG-Tangible-Action-Guide-Marketing/dp/1698339747
📲 Learned something new, or have a suggestion? Message Matt Muscat on Instagram!
🏛️ Treadstone Funding propelled by Neighborhood Loans NMLS 222982 “Illinois Residential Mortgage Licensee No. MB.6759826. neighborhoodloans.com/licensing/ For licensing information, go to www.nmlsconsumeraccess.org”
(upbeat music) - There are going to be some sellers who are going to test the market. I feel like you better understand how to create your value enough so that you can get somebody to compensate you for your services.
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(upbeat music) - There have been a lot of changes since we recorded the last episode just a week ago. So I've never been more excited to be sitting down today and technically standing up and we're on Zoom and we're like in different time zones. But with a top producing realtor team leader broker who knows a thing or two because he's been through multiple markets. So today we're going to talk about everything from the commission lawsuit. We're going to talk about getting business from your sphere and getting business by kind of having fun and being charitable. So David, David Roybal,(...) Cal Williams, New Mexico, welcome to the show today. - What's up, man? Thank you so much. I really appreciate the opportunity. - Well, I just want to get started. Let's jump right in. So all of the crazy news is all about real estate right now which in theory would be good if it wasn't all leading headlines and misinformed news reporters.(...) But one of the things that we talked about before we started the podcast is that some people that are really going to need to watch out and really kind of craft their marketing strategy and figure it out are those agents and teams out there that are buying tons and tons, tens of thousands of dollars a month of leads a month. I mean, there are agents in every market who their main source of business is spending whether it's 10,000, 20,000, I've seen agents spending 100,000 a month on Zillow leads, Realtor.com leads, Sync leads, Commission, Zinc, et cetera. So what is going to change or what are these agents, what should they be thinking about with all of this new commission changes? - I'll tell you one thing. I am so thankful and I had this conversation with my team when we had our team meeting yesterday. I am so thankful that we are not one of those teams that are really stressing out right now about how this change is gonna happen because we do buy a little bit of leads.(...) We probably have about an ad spend right now of about $3,000.(...) There are eight brokers on our real estate team. So realistically that may give an agent on our team an opportunity for maybe one or two leads a month. Our goal really is not to try and get people on our team or inside of our group because we're super focused on just buying leads. It's just kind of icing on the cake. But if you're a team out there who does operate like that, and there are several agents whose business model is that, and there are agents here in New Mexico that operate like that who do very well. I got a friend who has a flex team and they do really good. But I think the conversation now from a team leader standpoint into the organization is that they have to get very skillful on what their process is gonna look like right now on when they go out and have to meet these leads and when they go out and have to try and convert these leads, knowing now compensation is going to be possibly,(...) we don't know yet if every transaction is not gonna have compensation. I hope it does. But there are going to be some sellers who are going to test the market and choose not to compensate an agent. And in that particular situation, I feel like you better understand how to create your value enough so that you can get somebody to compensate you for your services. - Well, right. And when it comes to converting those leads, right? I think most agents should be able to convince their existing clients, their past clients, their trusted humans in their life of the value that they offer, right? And I think as agents, the main job is really at this point proving your value and making sure that you're demonstrating it. But for these random online Zillow leads, I mean, I think there were something like a hundred million leads sold, a hundred million dollars worth of leads sold last year. And I think there were 800,000 closings that said that they found their agent online. So these people, there's a lot of shoppers, there's a lot of wishy-washy buyers out there. And on top of convincing them that they need to buy a house and then finding them a house and then doing all of those things, you now have to convince them and get them to sign that you deserve to get paid. And if you're burning, if your burn rate is $20,000 a month on leads,(...) that can get scary pretty quickly. So, I mean, exactly what you've said is correct. You're going to need to make sure that there are some serious systems in place and possibly re-looking at who on the team gets those leads. Oftentimes, I think you were saying before, it's not always the best agent on the team that gets the leads. It's sometimes just the newbie. - Well, a lot of times what happens when people join teams whose model operates like that, what happens is they are basically just glorified showing agents. Their main job is to just go and open up the door. And a lot of these teams have business models where you basically just go show the house, the transaction coordinator writes it up, then the transaction coordinator handles the file and all you're basically doing is just showing up maybe to an inspection and maybe to closing, right? So that process, when you didn't have to worry about compensation so much works really, really well. I think a good agent, what separates a good agent from a great agent is that process. And then being able to keep that client as a real true client after the transaction goes down through touch and base with them, checking in with them, client events, I think we'll get into that in a little while. But yes, I think that you're gonna have to now be very skillful on your approach on how you're handling those objections, especially for a consumer. We're in New Mexico. So there's a lot of first time home buyers. There's a lot of people who don't have the capability of a down payment. They utilize an MFA loan. They utilize a grant.(...) So it's gonna be very hard for some of these buyers to even be able to compensate, even if they're willing to do that, if the seller doesn't have a compensation on the other side. - Right, and I think that's something that needs to be talked about more. It's not just whether the agent is able to prove their value and hopefully have that hard conversation. It's whether the buyer can actually afford to pay something. That kind of changes where I think we as agents and professionals need to be looking for and fishing for customers. - Well, now you're gonna have to really, your buyer basically presentation is almost going to have to get better than your listing presentation.(...) Your buyer presentation needs to really show how you get paid, right? We're right now creating a pie chart for our group where it shows how much of that commission actually gets,(...) after it gets broken down from the company split to taxes, to gas, to all of the things that we are spending money on, how much you actually make. And when there is some compensation being shorted from that 3% on the other side, and you're on a team and you have a team split on top of that, it's gonna get very, very tricky for the organization. It's gonna get very, very tricky for these team leaders who are buying leads at a high level because the ROI on that's not gonna make sense if they can't lock it down.
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- Real estate has a lot of contracts. I want our podcast to have a social contract as well. Here's what I need from you. Your listing's at the show and you get something valuable out of it, or you hear something that you think, "That's awesome. I want you to send me a DM on Instagram, or if you find my email, send it that way." The more feedback that I get, helps me to put together better shows and attract better guests. - So let's pivot the conversation and talk about how this looks for first-time home buyers versus seasoned home buyers. How do you foresee yourself and your team having this new conversation about value to your existing customers? - Well, I think that when a past client comes back into our world through being ready to sell again or being ready to buy a home, I think that you still have to do a full presentation again, right? So the buyer consultation right now is gonna be very critical, but I think that you still have to sit them down. A lot of times what happens, like for example, I'll give you an example last night, these clients bought a home from me and they are past clients of mine. And I sent them 52 pages on a DocuSign document. I said, "Hey, I'm gonna be able to go over the contract this afternoon. I want you guys to look at it, take a look at it, make sure you understand everything. And then I'm gonna go over it with you." And like within five minutes, the contract was signed and sent back and my transaction coordinator was like, "Hey, they've already signed it." Even though they trust me, I called them up and I made sure that we went over the talking points of what needed to be talked about inside of the contract
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so that they understood what it would look like if for some reason it went south or if for some reason we got into multiple offer situations. So I think it comes down to again, having the conversation upfront, having the consultation upfront and then just educating them on how the rules have changed for compensation right now. - Right, and I feel like a huge part of that, we talk a lot in our industry about education and educating our buyers and sellers. And I think going forward, a new topic is gonna have to be reeducation because a lot of people that have gone through the process, customers, sometimes they think they know everything. And some people have actually bought and sold and a couple of houses, but the market changes and we're the ones that are in the industry. So I think making sure we all have a higher focus on reeducation of both our past clients as well as our current clients is gonna be huge. Let's talk about your past clients. So I find this really interesting. You guys did as a team over 152 transactions last year in New Mexico, which is absolutely huge. You're one of the top Keller Williams teams in the state. Your average price point isn't $10 million a house. Like you didn't just sell a couple. You guys have an average price point of $400,000, which means you are doing the normal real estate line that people are all over the country in markets just like mine.
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You didn't just hold parties and send emails to your past clients. You guys really took a deeper approach and figured out what your clients were looking for from you guys. Can you walk us through that? Because this was one of the more interesting ideas for going after PCs that I've heard. - Well, the cool thing, and we'll talk about what we're getting ready to do for Easter, right? So this will be our third annual Easter extravaganza is what we call it. So I know there are some agents that'll be watching this podcast. It's a really cool idea for you guys to do.
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We basically put together a very big event for all of our past clients. So we do a couple of things. We do several client appreciation events throughout the year. This is our big one. This is what we as a team super focus on. And so what we're doing right now is we invite all of our past clients. We do over 2,000 Easter eggs. We have the Easter bunny. We have a face painting. We have food. And what we do is we, along with our sponsors,
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we buy a bunch of prizes, right? And so the way that it works is that you can come, you can buy a raffle, and then we have a raffle for all of the prizes, and we do these big raffle. And what we're trying to do is we're trying to give to the Presbyterian Ear Institute. So I would say agents, if you have your favorite charity, link up with your charity. And what we do is we do it to the Ear Institute. And what it is is it's for kids who cannot afford cochlear ear implants. And so what we do is we have a very large event. We do a raffle, and then we give all of our proceeds. We invite the entire school. All of those kids get to come to the event. And we basically give them money. And then what Delilah and I, Delilah is my, she's my fiance. She's also my partner in vertical. And what we do is we then match what we contribute. And the cool thing about this is that we have an opportunity right now to be able to share not only with our clients what we're doing, but we're also hoping to give back to our city. - I love that. And so not just the Easter event, but like almost all of the events that you guys do have some type of charitable, or I should call it like a impact focus. And we talk about all the things that Realtors do and some of the giveaways they do. And like, I don't necessarily need a beach ball with your logo on it. I don't need a knife with your name on it. But as a person who lives in the community, I wanna see the professionals I choose to work with giving back to that community. And you guys are doing that in a really big way. And it also becomes stuff that you can make phone call. It's the reason to make a phone call to those past clients. It's a reason to post on social media. So it kind of then gives you guys the ammunition(...) to figure out what are we actually gonna talk about in our marketing for the rest of the month and then the year. - Yeah, and we do a big food drive for Roadrunner Food Bank. We do a big coat drive for all of the kids.
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So we do a lot of different things. So our clients now understand that we're not just trying to get them into a home. We're not just trying to make a commission off of them. Our goal really is to make sure that they understand what exactly we're doing to try to help out the community and give back. Cause that really is the thing. I always tell people, we're not in the, I'm not in the real estate business. I'm in the people business. And I just happened to sell real estate. And as long as everybody knows that about me, then I will continue to keep having these opportunities. And that's what's important to me. - I love that. So let's talk about your longevity in this industry. You've been here for over, you've been here for over 23 years. You've seen many different markets, right? You lived through the 08 recession, you made it through COVID and now you're here with the changes we're experiencing in the industry. What do you think new agents today, and I know there's some new agents on your team. What do new agents today need to do differently, but also what advantages do you think they have now that you didn't have that? - Well, if I was a brand new agent right now, honestly, I would be on a team.
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And I know that a team is probably not for everybody.(...) And I'm not just saying that I think that they need to be on a team because I run a team. I just think that you have to have a mentor right now outside of just your broker at the office.(...) Because there are so many people now inside of a, like a Keller Williams or a Coble Banker, one of these larger organizations where you can get lost in the weeds really fast. So I think that in this type of market currently right now, you have to have somebody who has a plan. You have to have somebody who's gonna be able to guide you in the right direction. But I also think that being the new broker in the business right now, you just have to really understand and be as knowledgeable as possible with the changes and with what's going on. And a lot of these new brokers, it's not that they're not good at selling houses, it's their confidence. You have to be confident in your ability to be able to get deals done right now, pick up clients, explain to clients about compensation, both on the listing side and on the buying side. So I think there's a lot of changes that are happening right now. And if you just don't have somebody to help you through that, then I think it's gonna be really, really difficult. Because when I got into real estate,
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through the shift and through COVID, by the time I was in COVID, I was already running a team. But when I was going through the shift the very first time in 2008, I mean, I was 26 years old and I didn't really know what to expect.(...) And if I didn't have a good support system around me, luckily at that time, I was already producing quite a bit. And I had been taken under one of the owners of my company's wings. So he kind of saw that I was gonna be somebody and he took me under his wing. But that's not the case for a lot of these brokers. And if they don't have anybody to lean on right now, especially with all these changes, I think it's gonna be really hard for them. And I think some really good talent might be wasted if they don't have any guidance. - Well, I think that could probably also be a recruiting opportunity for some of the better, for some of the better team leaders out there, right? Because you have so many agents who have jumped to like some different, not to knock anyone, but some cloud-based brokerages where you're really not exposed to an in-person mentor. You're part of a community with a lot of other people. And that can work for some people, but if you don't actually have a mentor right now or someone that you can call up, go to and get personal one-on-one advice from it, your own personal sounding board, that's gonna be invaluable in this market. - I think another thing is, we all have, whether you're a top producing agent or brand new, we all have questions about what's happening right now because there is a lot of uncertainty. The Department of Justice doesn't even know what they're doing with this yet. So it's natural for any agent in person in the industry to have questions. You need to have a plan. You can have a plan, you can have a backup plan and you can have a backup plan, your backup plan. I think the agents are going to do the best through this for the ones, A, like you said, who are able to exude confidence, but that confidence will come from having a plan that you, your mentor, your broker have vetted and worked on. And if you're listening, I highly encourage you to start formulating that because that's what's gonna see you through to the other side of this. - Well, and the hard thing for me is that I am that.(...) For the last four or five days since all this stuff rolled out, I'm tired, man. I'm tired because I had to be the guy to figure out what does that pitch look like? I got a bunch of phone calls from a bunch of people inside of my company. I got a thousand phone calls from all of my agents. Everybody's freaking out. And for a couple of days, I didn't really know how to answer these questions. Honestly, I didn't really understand how things were gonna shake out, how things were gonna play out. You get on social media, you see all of these different people giving their opinions.
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Well, I had to really pay attention to the people and the information that I was looking into right now. And so now I feel like we're pretty confident in our approach. Is our approach gonna be perfect? Probably not. It's probably gonna change a little bit, but I'm confident enough right now(...) for me to have the conversation with a seller when they're feeling like they don't want to compensate an agent and I'm confident enough right now to make sure that the buyer knows that there may be some compensation that they would have to bring to the table for me if I'm not able to get that on the other side. So I feel like we're gonna be okay. Honestly, my honest opinion, right? I don't think there's gonna be that big of a change. I think the biggest challenge that we're gonna run into(...) is that the buyers who are not confident to be able to have the talk about compensation when there is zero compensation being offered to the buyer, broker,(...) that's where I think, that's what kind of hurts my heart a little bit because I think that's where the value of an agent and their commission is gonna go down because unfortunately there are going to be people who are going to be desperate, who are going to need money, who are going to do a deal for $500,(...) a deal for $1,000 and that's gonna suck and that's gonna hurt our industry. I think what we're gonna start to see is we're gonna start to see some flat fee
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buyer brokerages come out of this. You're gonna start to see some agents who are gonna create those. There are flat fee listing brokerages already out there, people that will do it for a flat fee or people that'll do it for 1% or whatever but I think we're gonna start to see that on the buy side and that's gonna be a little hard for our industry especially if you are running an organization and you're running a team and there's already splits on top of splits. - That makes a ton of sense. So what do you have planned for, like moving away from all this commission stuff and all this sensationalism on the news, what does your team have planned for in 2024 to ensure that you guys have a killer year? - Honestly, we're just gonna take it day by day. I think for right now, our mindset, we're operating on what's called a 12 week year and so we are just taking it day by day, chunking it down, doing what we have to do. We have a tracker in place for all of our calls, we have a tracker in place for all of our appointments and so the reality is is that we don't know what to expect. We just know that we don't have a choice.
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We just know that our back is up against the wall this year and we're just gonna do everything we can to make sure that our clients know that we are going to guide them in the right direction no matter what and I think at the end of the day, we just need to make sure that the consumer is aware of the changes and we just need to make sure that we can't stop doing what we're doing.
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The last couple of years have been weird with rates anyway and we've all adjusted and we're continuing to press forward so I think that's kind of our mantra, that's kind of our model is that we really don't have a choice, we just gotta keep pushing. - I love that. So David, if someone has a client, they wanna move to New Mexico, how do they get a hold of you? I'm assuming you're accepting your clients, you guys obviously do so for the community. What would be the best way for a realtor to get a hold of you? - I just wanna tell everybody that we have a real estate team in Albuquerque and we also have a real estate team in Santa Fe so I don't know if anybody's been to Santa Fe, you and I, Matt, talked a little bit about that, so nice, so beautiful.
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You guys can get a hold of me through socials, you can just find me on Facebook, David Roybal, you can find me on Instagram at 1DRoybal and I would love to be your New Mexico referral partner, I would love the opportunity, we have people that can help service any of your clients in the New Mexico area really. We do Albuquerque, we do Rio Rancho, we do Placitas, we do Las Lunas, we do Santa Fe all the way into Los Alamos and Española, so we got a big part of the state covered
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and we would love the opportunity to help.(...) - Awesome, thank you so much, David. - I appreciate it, man, thanks so much. You guys have a great day.(...) (upbeat music)