REality

Fostering Human Connection: Matthew Ferrara on the Virtues of Real Estate Excellence

• Gary Scott

Share episode

Discover what sets the best real estate professionals apart in a candid conversation with philosopher and industry savant, Matthew Ferrara. As your host, Gary Scott, I'm thrilled to offer you a treasure trove of insights on the heart of real estate - the irreplaceable human connection. Amidst a world where technology is advancing at breakneck speed, we explore the personal attributes that machines cannot replicate. Comfort, support, and optimism are just the tip of the iceberg as we unearth the value that agents bring to the table beyond their list of services.

This episode is a masterclass in the art of real estate professionalism. We're not just talking about skills; we're talking about the four foundational virtues: trustworthiness, integrity, professionalism, and competence. These are the pillars on which the trust of clients is built and are instrumental to our success as industry specialists. Join Matthew and me as we delve into the transformative effects of change and resilience, discuss the potential impact of an agent population decline, and highlight the fresh opportunities awaiting those ready to jump into the exciting world of real estate.

Finally, we gear up for the future, focusing on the influential baby boomer market and how their unique needs are revolutionizing our industry. You'll learn how to navigate these demographic shifts and the nuances of buyer agency to keep your practice thriving. We wrap up by emphasizing the enduring importance of fostering lasting client relationships and offering a standout customer experience. I'll even share a few personal recommendations to fuel your growth and productivity. Prepare to enrich your approach and elevate your real estate practice with these golden nuggets of wisdom.

gary:

This is the reality podcast and I'm your host, gary Scott. With more than 35 years of experience in the real estate industry, working in 10 major markets from New Jersey to South Carolina and now as the president of the largest real estate company in the Carolinas, allenentate Realtors, I know what it takes to be successful in this business. This is real life in real time, sharing real experiences of industry professionals to help both new and seasoned agents achieve their goals and realize their maximum potential. Allentate Realtors is a proud partner of Howard Hanna Real Estate Services, the largest independent, family-owned real estate company in the country, with more than 13,000 sales associates and staff members across the combined companies. You'll have the opportunity to hear from the absolute best in the business from the absolute best in the business. Join me each episode as we unpack the reality behind what it takes to make it in this great business. Welcome to Reality Podcast. I'm your host, gary Scott. Today we have a significant treat for the Alan Tate Company and everyone else joining Reality Podcast. We have Matthew Ferrara Matthew how are you today?

matthew:

I'm terrific. Thanks for having me on, Gary. Super happy to be here.

gary:

Well, I'm going to do something I don't always do, but I want to read this introduction. Matthew and I probably go back somewhere between 20 and 25 years, and I have watched him impact and influence the lives of real estate professionals for many, many years. And I know that recently, matthew, as you have been very active in social media, I get inspired and, as you know, I've shared some of your thoughts in blogs in the past. So, first of all, a great friend of past. So, first of all, a great friend of myself personally. Second of all, a great friend of the Allen Tate Company and, third, a great friend of our industry. So, matthew, we're super happy to have you. Let me read this to our listeners.

gary:

Finally, a trip down memory lane. Aren't you all dead? That's what most people say to me when I introduce myself as a philosopher. Thankfully says Matthew. We're not all dead, far from it. Philosophers are all around us, leading innovative businesses, social organizations and the family next door. We're just like everyone else, for better or for worse, and like most philosophers throughout the ages, matthew likes to give speeches, write books and share what he hopes are good ideas and, most importantly, improve the lives of friends, family and business clients. I want you to listen carefully. Improve the lives. Our goal in the next 45 minutes, matthew, is to improve the lives of our listeners, to give them one, two, three, four, five things that they can take, they can package and they can make their life better. They can make their family better and they can hopefully make the real estate business better. So again, welcome to Reality Podcast. It is great to have you. I've got 1,000 questions.

matthew:

Wow, are you ready? I'm ready with a thousand answers. That's, that's what we do. There you go, absolutely.

gary:

So I'm going to start, uh, with a little, a little curve ball. Matthew and I did a little pre prep work and I opened up my social media today and, uh, I've got a webinar that Matthew will be facilitating and leading. It's called articulating your invaluable proposition. Take us there.

matthew:

Sure, let me start by saying that this is one of my favorite things to do in my work, which is to have a little play on words, have a little play on our perspective. As you can tell, you know, I'm also someone who tries to look at things in a variety of lenses. I'm a you know amateur photographer, as well as some of the other things that I do. And so when it came to trying to do a program on value proposition which has been thrown around now for the last six, eight, ten months, everyone has suddenly remembered that they should have a value proposition and articulate the value proposition. I thought what would really be helpful is if we could express what makes us invaluable to our customers and clients, what makes us invaluable to this industry and, by extension, what makes us invaluable to our economy and to our society and to our neighborhoods. So we'll be focusing in this workshop on really that component of the proposition between ourselves and clients that is invaluable. If you remember that old television commercial of sort of things you could buy with a, with a MasterCard, and then some things are priceless, if you will. I sort of feel like that's an aspect that we overlook in this business, and so we'll be talking not about that great big, long laundry list of 111 to do's that people think that give them value. That just gives you a list of tasks.

matthew:

Actually, I'm going to talk about the things that people write in their thank you notes to you. If you really want to know what makes you invaluable, go read some thank you notes, go read some testimonials. Nobody says thank you so much, Gary, for signing us up to your automatic inventory drip, thank you so much for using your Bluetooth lockboxes, thank you so much for your document signature program. That's just a bunch of stuff that we do. What makes us invaluable is right there in our testimonials the ways in which we give people comfort, the way in which we innovate, support, encourage, problem solve, the way in which we're just funny or optimistic or energetic.

matthew:

Those are the areas that truly make us invaluable to the process, irreplaceable by technology and, by extension, regardless of any changes that happen in the real estate industry, make us even more desirable. You know, a statistic I love to quote to people is simply this In 1997, only 77% of people who bought or sold a home used a real estate professional, but last year, 90% of people who bought or sold a home used a real estate professional, and what that tells me is all the things that have been invented and added into the process over the years, and not just technology. The regulatory things that have happened, the changes in law and best practices, et cetera, have only increased our value. People want more of their real estate professional, not less. That's what I focus on when I challenge people to discover their invaluable proposition.

gary:

So that is so consistent with a couple of themes, matthew. Number one we really believe words matter and I think you know we've been hounding that with our team over the past year. You know words matter. Be very careful, be very intentional with your words. By the way, I have shared your 1997-77 statistic many, many times and I say that 90 to 91 percent of the buyer and seller have used us the last 36 months. I think that's about accurate. But I'm also reminded, matthew, if you remember and I know you were probably there in 1995, I think it was 95 when Billy Chee, at the time president of NAR, talked about the lion coming over the mountain, and when you think about that message in 1995, which was this internet thing is going to take you out, four years later or two years later, it's 77%. And now, 28 years later, it's 91%. The public absolutely needs us more today than ever before.

matthew:

I'm so glad you brought that up, that moment, because it brings up two aspects to keep in mind In addition to the public needing our help. They desire our help, they want our help, and that's another good wordplay in our brains. It's not just that we're valuable because a law prescribes it or an industry structure makes that possible. People seek out our help because they don't want the help of an algorithm when they have an important thing that's happening. They don't want the help of a bot or a vending machine when they need medical help, when they need legal help, when they need financial help, when they need educational help and so on. And the funny thing is we do all four of those things, including a little psychology, as we all say professionals. But I also want to bring up something else. I'm glad you brought up that moment at NAR where, basically, I consider that the first of the big scares in the big scare period, because if you and I think back over the last 30 years and I love being able to say that, I love being able to be one of the old men in the room now who says I remember when Well, I remember that every five years there's been something to be worried about.

matthew:

Technology was coming over the hill. Then it was different competitive brokerage models were coming over the hill. Then it was banks and real estate. Then it was, you know, the pandemic. I mean remember, even during the pandemic it wasn't even bad enough. We had a pandemic. They rolled out murder hornets. They were like you know, they tried to bring out, you know, even afraid of nature. You know, there's always something in this business. Now it's algorithms, now it's the lawsuit and the settlement. I need us to remember that.

matthew:

First of all, hardly any of the things that we ran around worried about actually took anybody out of the business. If anything, it expanded the business. You and I both know there are more real estate professionals in this business today than there were 25 years ago, when the so-called internet and the beginning of all those big scares were supposed to take us out. Our industry has expanded. The number of transactions we've done has expanded.

matthew:

So I just want to remind everybody that the words that they say matter to the customer and the client, but they also matter in our own head. If we wake up every morning worried that there's another boogeyman coming of some kind and there'll always be something we could think about, we're just going to psych ourselves out Instead of psyching ourselves up that every single one of those things actually just created another opportunity for us to shine, for us to grow, for us to compete well and to do better. And so you know I look at them as actually the opposite of scary things. But many people really need to get control of the words in their head, especially these days, as we're now filled with more words all the time. We're constantly being given ways to think about the industry. That may not be our words and they may not be healthy words in which to frame our business.

gary:

I'm going to follow up on a couple of questions, but I will tell you the thing that scared me the most. I'm going to go back, as you said. You and I kind of like this because we're going to be talking about things that happened when half our listeners weren't even born, so we're going to enjoy the fun of today. You know, I remember and I've told this story, matthew sitting in my broker's class I got licensed in Wilmington Delaware as a broker in Wilmington Delaware. You had to be in the real estate business five years, sell an X number of houses before you become a broker. And I'm in my broker's class and buyer agents after five years of sub-agents. And I couldn't, matthew, for the life of me, figure out like we're going to call you this but we're going to pay you, like that I. I couldn't, for the life of me, figure like I was, like I drew a diagram and I couldn't, for the life I could not like it's so interesting, as you said, you know whether it magnificent job setting the stage for us is.

gary:

I believe this is the singular, most significant opportunity that our industry has ever had to increase the professionalism in which we operate our business. I believe that to the deepest part of my core. This is a moment in time that if we treasure it and we embrace it, we will dominate as a result of it. I do believe that, and you talk to a lot of brokers around the country. So, you know, expand on that a little bit and then I'm going to. I want to peel us back into some basics. You talked about note writing and I know that our listeners know this about me I'm old school. Hopefully we have an innovative flair for the future. But you know, personal notes work, so let's talk a little bit about the opportunity work. So let's talk a little bit about the opportunity. Now let's come back to some basics from your perspective that everybody listening needs to get back to Sure.

matthew:

I think opportunity perspective is critical. Where we are right now, we've got to train our minds to see the benefits of this moment, not the challenges. I think there's two camps and when change occurs, I understand we all experience some shock, we experience a little anger, we try to bargain our way around it, but ultimately we have to decide for ourselves are these prohibitions or are these permissions to exceed? And that really helps us, in our mind, turn all of our caution into calculated risks for growth. Let me tell you what I mean by this. First of all, the other day I was online and I was reading a comment, a post in a Facebook group, and I was just astounded by the comments 30, 40, 50 comments of people all trying to describe ways that they were going to get around to cheat, to sort of hack all the changes that are going on. Oh, you know, we could do this in the comments section and MLS. Oh, we could change the prices of our listings. So the last digit represents the, the compensation of all these crazy hacks. And I thought to myself why are they trying to cheat themselves? Not only of the situation you know, the opportunity to deal with the situation but the opportunity to grow. It's not a hack to try and figure out how to avoid a situation. It's a hack to figure out how to grow through the situation and come out better, come out stronger. So I think that there's an awful lot of good opportunity right now.

matthew:

Let me just mention two areas of opportunity that I think are great. The first is a lot of things are going to stop, and it's a good thing that these things are going to stop. Let me tell you what's going to stop, gary. We're going to stop driving buyers around until they buy or die. We're going to stop dropping the phone and running out to meet a stranger at a house that we've never met before. We have no idea who they are. We haven't brought them into the office, we haven't seen their identification, regardless of whether we have them under contract or not. We're going to stop working with buyers for months and months and months and months, only to have them either drop entirely from the marketplace or go do a deal and say well, you know, I didn't really have a contract with you, so I really don't have to pay you. We're going to stop all of those things.

matthew:

We're going to stop accepting compensation determined by a listing agent who may have given away the store. When they listed the home, maybe they asked for a compensation that's so low that they don't have anything to share with us, or only a tiny bit to share with us, and we were willing to fully do our jobs, to do our jobs at an excellent level, but accept that kind of pay because another listing agent took a discount listing. So again, there's a lot of things that are going to stop. These are all wonderful things that are going to stop and we're going to be fully in control not only of our compensation but of the level of performance we can give, the ability to compete by giving more, by being able to shine.

matthew:

So there's a lot of things that are going to start as a result of this. We'll right size our business ratio so that we're not necessarily you know so buyer centric. We'll be a little more listing centric. We'll create deeper relationships. As you can see, I get very excited here because the opportunities could fill pages if we pause and stop being focused on what's being taken away and instead look at the green light that's been given for us to finally move forward with things that we're ready for as an industry and that every one of your listeners is ready for individually, personally, professionally and as part of your great organization.

gary:

You are on Reality Podcast guest Matthew Ferrara. For over 30 years, matthew has been sharing insight about our industry. I love the play on I don't call it the play on words, but the invaluable proposition. I have overused value proposition and I won't ever do it again. But and again, he's spoken to groups from six to six thousand and it's just a treat for us today on Reality Podcast to have Matthew Farrar with us.

gary:

I pulled up something that I read I think it was either yesterday or today, and so I'm going to read it. It says it has also reminded me of how great professionals are using the upcoming changes as an opportunity to excel, to grow, adapt and demonstrate the values that customers truly desire. Customers truly desire, like I think Matthew already talked about that earlier today no-transcript, not worried about what's going to stop. Not necessarily be better at my craft, how am I going to go around it? And there are four things he put in this last article and I want to hone in on it and have you expand. What if we think about these four things as real estate professionals? How about trustworthiness? How about integrity and honesty? How about professionalism and competency? We are about to enter a summer where the best will rise above the rest. Will you expand on that for us please?

matthew:

Sure, I think those four words are often overlooked or taken for granted in terms of what customers describe what we do with them when we help them buy or sell a home. The funny part is that a lot of these words are right there in front of us. They are the subtext of people's gratitude. They are also, quite overtly, what customers tell us when we survey them what are you looking for? What traits are you looking for in a real estate professional? And what they don't say is I need a fast typist. I need someone who can trick AI into giving me a top 10 list of how to stage my home. Like they, that's par for the course. They expect the real estate professional to do those things, in the same way that you expect your surgeon to understand how to use all the tools in the surgery room. But that's not what you ask for. You ask for someone who is trustworthy to put your financial hopes and dreams into their hands. You ask for someone who has the integrity to make sure that everybody gets a square deal, that it's a process in which both our party and their party emerge with everything we need and a little bit about what we want, and it's good for all it's about standing for professionalism so that when the press says, well, you know, these are just a bunch of overcompensated, under-tra trained professionals who work part time, you're able to say I don't know who they're talking about, because that's not me. I'm a full time professional who's constantly training, constantly investing in myself, and I can stand with pride behind that claim and ultimately I'm going to be able to shine through my competency. You know we don't.

matthew:

We're one of the odd industries in which an entire industry wakes up every morning unemployed. We wake up every single morning and have to actually go get our job, if you will. We have to go get our next opportunity to earn a commission. No single commission in this business has ever been mandated to us. We have to earn it every time. We have it contractually obligated to us every single time.

matthew:

This, of course, is partially some of the frustration over the press and the lawsuit recently is that we've been described as if we just show up and somehow scoop a little bit of this revenue off of a table unearned. Everything we've ever done has been a result of our competency, our trustworthiness, our professionalism and our integrity, because without those four things, nobody signs a contract and, in real estate. Nobody gets paid without a contract, and so those two things are actually. They go hand in hand. No one is hiring us for our task list. They're not hiring us for what we do. They're hiring us for who we are, for who we be. Our to be list is more important than our to do list for them, so I certainly would make an asterisk.

gary:

You note, takers, to be not to do so. I think that's a super interesting way for us to think about it, as Matthew and I prepared for today, and both of us have been really looking forward to just spending some time together. As I said, we go way, way, way back. So I did pre-prepare some questions and so now I'm going to go to those. We've been kind of off the grid.

gary:

You read about pundits, right, the pundits, the experts. I use those terms, I put them in parens and I put an asterisk next to it and then I say what makes them pundits? And experts, fundants, experts suggest that potentially up to 50% of the real estate agent population and correct me if I'm wrong today across the country just shy of a million five. Is that where we are today, give or take? You know, and again, I think, at the height we were at a million 750. And you know I go back to 05, we were at a million seven fifty. And you know I go back to oh, five. We were at a million four to ten, we're at nine hundred thousand. You know, we all know how that works. So I'm just really curious. You know I have a perspective on it, but I certainly will appreciate your perspective more than mine. You study it at a different pace than I do, so what's your thought on this concept of the agent population declining up to 50%? What are your thoughts I?

matthew:

think my first thought, which is probably a little different than what most people would expect, is that it would be a terrible shame, what a terrible shame, if five, six, 700,000 people decided to throw the towel in on their career, to take all the time, energy and investment that they've made up until that point. And it's not for me to say whether it was enough or too little. It wasn't for me to judge their effort as sufficient or insufficient. I remind everyone that our best agents in the business today started as some of our worst agents in the business. They had to learn. They got the same license you and I got. They started in the same place, which is never having sold a home before, and then they learned the process, they trained, they mentored, they practiced, they improved, they train, they mentored, they practiced, they improved, they continued to grow. So I just think it would be a shame if that number happened.

matthew:

I'm not ever in praise of unemployment. I'm not ever in praise of people who tried something and then, for some reason, they didn't make it. Now, that's my whole career. My whole career has been around making sure people make it, making sure people get over the line. Now is it possible that a lot of people will look at these changes and say that's not for me. You know, the new approach is not for me. It is possible and I'm hoping that that's more of a voluntary process where they realize in the congruence of their mind that that type of sales career just wasn't something for them and maybe that's possible. But again, it should never be celebrated, it should never be be hoped for, if you will.

matthew:

But I also want to caveat this I actually don't think those numbers are ever going to be reached in this business and maybe someone will play this podcast back someday and say you know, look at how your prediction didn't win. But let me tell you why. I'm not sure those numbers will ever be that high. Number one more than half of our industry practices under buyer agency client level service today. So the bottom line is like this isn't new to everyone. 20 plus states have been doing buyer client level obligations since day one, for I don't know, 25, 30 years, if you will, at least as long as I've been in this business. I mean it was new in the 90s, but since then we've definitely figured out how to do it. And so I look at this and I do not see it as one of those areas where a lot of people will leave, because I think a solid half of the business is already doing it that way anyways, and the other half is going to just either reach out to those people or ask them what classes they took, ask them what training they did, and they'll master it. That's the other reason why I don't think those numbers will be that high.

matthew:

Let's not forget we're the most adaptable entrepreneurial industry there is. I think we'll rise to the challenge. Now look, could 20,000, 50,000, could 100,000 people leave? The answer is yes, but I want to caveat that by saying that every two years, at least, 100,000 people leave this business anyways. Every five years, at least, a couple of 100,000 people who were here five years ago aren't here, but people enter the business as well. And that's the last thing I would just say, which is, I actually believe this will attract more people into the business.

matthew:

And here's why let's say, I'm a top salesperson for a stock brokerage, an insurance firm, an automobile industry, electronics firm, anything you want. Pick any top sales industry that you want. If I'm thinking about a growth sector, it's going to be real estate. There's no question about it. Real estate is going to continue to have price appreciation, high demand because of demographics and they're not making any more land. So we definitely are in a growth industry.

matthew:

And here's the funny thing.

matthew:

A lot of people who are in other industries might have looked at real estate and went yeah, it's too weird how they do it.

matthew:

You know, I don't want to drive buyers around without a contract for hours, days, months or years and pray that they'll pay me on contingency for hours, days, months or years and pray that they'll pay me on contingency. And so we might have actually been keeping talent out of the business by not practicing this way. And now you get a bunch of top salespeople in other industries who say I love real estate, I'm a little burned out on insurance or stocks or whatever else. I've been selling and I'd love to sell to my neighbors, my friends, my family, because we're a sphere of influence business. And so I actually think that while some people might decide to opt out, a lot of people may decide to opt in and we might find that the incoming talent in this business is going to be exciting, is going to be capable and is going to drive us to new levels of performance. So I'm kind of the opposite, of the pundits who are looking at the glass emptying. I think the glass is going to fill and overflow over the next few years.

gary:

Well, I love that viewpoint about the incoming new talent. Matthew, I have not heard that, so my 30 seconds is I think it's like a bell curve a traditional 20, 80, 20 bell curve. So I believe 20 percent of the population is going to soar. There's going to soar. I think there's a chance that 20 percent may just choose that, this new approach. I want to come back to those two words. By the way, you know we spend our. You know you talked about value proposition. In value proposition, we always talk about the new norm, whether that was the new norm in interest rates, whether that was the new norm after COVID. I want us to wrap our head around. Words matter. How about the new approach? Like I love, like the new approach to me is a positive opportunity. The new norm we're going to reflect back to whatever that meant at the time.

gary:

we reflect back on it. So I want everyone to think about the new approach, because I do think this is going to be a new approach, and this new approach to Matthew's point may have a propensity to attract a talent level that maybe our industry hasn't seen. So I think that's very, very interesting and hugely insightful.

matthew:

You know, gary, one thing that I often challenge people to do when we're doing strategic thinking and strategic planning is I try to ask them to fast forward two years in their mind and to look back on where they stand today and ask themselves could you look back and say thank goodness that happened Not? Oh my gosh, that happened, right Like. I'm going to give you an example. Here's a very personal example. On March 19th of 2020, I went to bed worried about the pandemic, worried about the virus. I went to bed and had no idea really what was going to happen the next day, but I went to bed with 45 plus booked seminars on my calendar. And on March 20th I woke up and I had zero booked calendars on excuse me, book seminars on my calendar. Why? Because everything shut down. The whole universe shut down, and whether that was right or wrong is not the relevant point here. I went overnight from about to have one of the best years in the business to having no business whatsoever, just zero. And you don't just like get a seminar overnight. It takes months to book one planning events contracts. So everything that I had booked for 2020 really occurred in 2019. So it wasn't like I was going to fill that calendar whatsoever. So I certainly could have thought to myself this is the worst of times. But here's something interesting that happened. I'll tell you a true story.

matthew:

In September of that year, I had a check-in with my accountant and my accountant said to me he said, you know, I went over your books, I went over your numbers. He said and you're having a banner year. You're having a banner year Like I don't know how you're doing it, man, but boy, you're really. I'm, you're making me proud, man, you're really doing great. And I I actually that this is a no word of a lie I burst out into tears. Burst out into tears, I said to my accountant. I said, man, you're making me cry here, you're making me realize that what looked like the worst of times on March 2020, turned into the signal to do something I had never tried before.

matthew:

I got to tell you something. I was doing like one webinar every once in a while. On March 19, I was doing like maybe, a webinar for a training class once a week, nothing really big, but from March 20th to September of 2020, I actually did more than 200 webinars. I went from zero to three cameras in my studio, multiple microphones, online accounts, rewriting all my programs and helping people I didn't even know existed Clients calling me out of the blue saying can you jump on a Zoom call and help us in some way keep the wheels on.

matthew:

And I was so incredibly busy and growing that, when I look back, I say to myself what looked like the worst moment in time became the starting bell of an entirely new level of growth. I could never have anticipated why, because, well, it was going along just fine. I could have just got in the plane and done my gigs and never really done a lot of webinars. Now webinars are part of my ongoing growth platform. Yeah, I still do speaking events all over the world, but I've added something to it, not lost something because of that moment.

matthew:

And the same is true for us right now. When we look back on the new procedures, we might someday say, thank goodness that happened. I'm so much better, I'm in such a healthier place in terms of my time management, my client relationships and, quite frankly, my income, because those things happen that I wish they had happened sooner. I mean, how ironic will that be. And I actually think that'll be the ultimate revenge on the plaintiffs in this lawsuit, and those attorneys will look back and go ha ha, you thought you had us. We did nothing but grow as a result of your prompting, and so, in a way, it would be kind of sweet revenge.

gary:

You know it's interesting. One of the questions I had posed to Matthew is, as you can tell, you know a incredibly consistent positive attitude, regardless of what comes his way. So one of my questions was like how on earth do you continue? And so you know, I just, I want to just ask everyone to do a little bit of homework that piggybacks off of what Matthew just said, and that is, think back in your life to something that two years ago or five years ago, or 10 years ago or whenever, that in that moment it happened, you thought the world was coming to an end. Every single one of us has had multiple experiences, whether it be professional, personal, relational, where you woke up and said no way is this happening to me. And then to Matthew's point two years later, I wrote it down Thank goodness this happened to me because I was able to grow and expand and enhance the things that I was doing because of this moment in time.

gary:

You know this adversity. You know my father, matthew, as you know, in the business for a long time. You know he always used to say you know, adversity will give us everything we need to know about someone. Like when it's good, everybody's good, like you want the real colors of somebody. Watch them navigate adversity, watch them navigate crisis and chaos and watch them grow. That's when you know that that's the person that you want on your team.

matthew:

You know, two things come to mind when you say that. I'll start with the last thing you just said, which is we often misinterpret what adversity is. We often misinterpret difficult times. So I learned from my mentor many, many years ago that resistance is diagnostic. Resistance is revealing. Let me give you an example.

matthew:

When you get a fever, you could say, oh, this is terrible, this is awful. And maybe it is terrible and awful, but you have a fever for a reason. The fever is saying something's not right in your body. You have a virus, you have a bacteria, you cut your finger and it's infected, and we're using the fever to keep you from getting worse. Like, the fever is diagnostic. It's teaching you something. But it can only teach you if you pause and not overreact. See, the real goal here is we don't want to overreact to the situation Now. At the same time, we've got to be willing and open to make some change. But that's the second thing I want to mention here.

matthew:

I'm so grateful that I've spent my career in the real estate industry for one simple reason by definition, we work at the corner of life, and change that's where we work. I mean, every single one of our clients reaches out to us because their life is about to change. I can assure you, no one calls a realtor because interest rates rose or fell. No one woke up this morning and said, oh my gosh, honey, rates moved an eighth of a point. Call our realtor right away. Okay, that's not why they called us. No one wants to buy or sell because they'll get two sinks in the master bathroom. No one cares about the price of bricks or wood. What they are responding to is something's happening in their lives. They are at the corner of life and change. They're about to become married or unmarried, they're about to have children or the children go off to school. They're about to get a promotion or retire. They're at the corner of life and change. And we are blessed to be their guides at the corner of life and change.

matthew:

And when we realize that's what we do for a living, then when change happens to us, we should basically say of course it happens to us. We're the most capable people of navigating this. Thank goodness it happened to us. And I just point out that not every industry is as open to change as we are. We can just read the newspaper and we can hear a lot of industries that wish that they were still doing things the way they did them in 1970, 1950 or 1850, if you will. So think about the fact that, by our own choice, we are in an industry that works in change. We are change professionals by our very nature. Not a single one of your listeners, Gary, has ever had a deal that went perfectly by the book, but they always get the deal over the finish line because they navigate those changes.

matthew:

So when I, that's what brings me optimism.

matthew:

What brings me optimism every day is not just that I believe we have a lot of aptitude in this business, it's that we have the best attitude in this business, and so I'm glad that we're skilled professionals with every resource and system and tool and dollar that we can imagine at our fingertips.

matthew:

But if you don't wake up every morning and go I've got this, I've got this, it's going to be weird. Something might happen, might surprise me, might not surprise me after a while, but I've got this. Then that allows me, if I could do a little play on words not to worry about the new normal, because every day is what I like to call the you normal. It's the normal in which you've got this. You know how to navigate whatever they can throw at you. So I really this is what keeps me excited about this business and what keeps me optimistic every single day is that I don't know. After 33 years, I don't know anything that's actually stopped this business yet, and what's happening right now is doesn't even have a chance to stop this business. I think, if anything, it's going to light a catalyze, light the fires of an even greater golden age for our business.

gary:

Well, you and I are in sync on that. I think. When you look at the demographics, you look at where the population is. You look at where the millennials are. You look at we talk all the time about the 1990 birth rate. Those people are turning 35 years old. Formation, family formation, the know we all know. The baby boomers. You know we need the silver tsunami to hit us sooner than later, but at the end of the day, all of those things make sense. And then this new gen who didn't know there were interest rates at two and a half percent four years ago, because they were 14 years old? And so I do think there's this huge, unique opportunity. You know a couple as we began our conversation.

gary:

Matthew, I love the 77, 90% in terms of the buyer, sellers using. When I read your information, the things that you share, what other numbers you know? I always say to people numbers are interesting, but if you do something with them they become impactful. You know how do I leverage the number to have a better communication with a buyer, a better communication with the seller? Are there some other numbers that you have come across that you think are really important for our listeners to wrap their arms around and say I'm going to start using this in my talk track to help educate.

matthew:

It's a great question. Let me just share with you a few that I think are critical for us to know, and I'm going to share them on a big picture level, but I would encourage every one of our listeners to make sure they know what the local version of these are. But let's just start with the most important one, which is we're on track for just shy of 5 million sales this year. In our nation. A little over 4.2 million existing homes will sell and a little over 800,000 new homes will sell. That's 5 million sales and again, you and I, as the veterans of this industry here, know that that's just normal, that's just an ordinary year. We've been selling four and a half to five and a half million homes every year since the 1980s. Now, have there been some years where we sold more? You bet, have there been some years where we sold less? Absolutely. We all remember the financial downturn and we remember the hypermarket of 21 into 22. We remember those years, but those are outliers and an ordinary, normal market is 5 million homes. So we're on track for a normal year. Now why do I want to emphasize that? When I talk to customers and clients, it's because they have a perception that we're in an abnormal year, and that's because we accidentally talk about scarcity. We talk about inventory shortages as opposed to talking about inventory velocity, which is bringing on the market. We're going to sell it fast. Our days on market are still the lowest in 20 something years in this business, so I really think that that number is the starting point for us.

matthew:

The second data point I want to bring out is a combination of sort of what you just said around demographics. Broadly speaking, the demographics are in our favor for everything, not just this year, but for the next 10 years. The average seller right now is 60 years old in the United States. Now, granted, local markets are going to be different in certain ways, but the average seller is a baby boomer and the average buyer, therefore, is also a baby boomer. So the turnover that you've been hinted at is already happening here. They're moving, and they're not only selling but they're buying. By the way, they're selling homes, half of which don't even have mortgages on them. The other half have unbelievable levels of equity, which means they have piles of money to buy down their next interest rate using a buy down program, so that the interest rate is not a big hurdle for them when they move again.

matthew:

But it's important to realize that these baby boomers have a very important set of needs and expectations, all of which revolve around real estate professionals, because these are individual consumers and family consumers who absolutely value professional expertise. None of them are trying to do surgery on their own. They won't go to court and represent themselves and they're certainly not going to try and redo their bathroom on their own. They hire a plumber and a renovation firm. So that's important for us. They also have no children under age 18 at home. 70% of everyone who bought and sold last year do not have young kids, which means what they're looking for is evolving and is changing, and here's another number that I think is important to keep in mind. They're also taking longer to transact.

matthew:

A lot of people have been sort of frustrated that the level of inventory has been so low for so long, but that's really driven by not just home builders which, yes, home builders could probably have built more. It's driven by the fact that the average tenure in a home is 10 years. And to get to the average tenure, by the way, 48% of people in the survey told us that they were going to stay in their home for 16 or more years. So just to get to an average of 10, you had a bunch staying for 10, 12, 15, 16 years and a bunch staying for three, five and eight years. But bottom line is people are living in their homes a little longer. That's going to slow the sales pace a little more, but the good news is that the baby boomers are in the market. 10,000 of them are retiring every single day, and many of them are selling their homes to move in with family or to move around the country or you know, in other reasons that they're moving their homes. It's bringing inventory into the market and, ultimately, the demographic shift of boomers either moving in with family or, ultimately, the generation moving on, will solve the inventory shortage for us. There'll be plenty of homes, because the boomer population is about the same size as the millennial population, and so the homes will eventually turn over. Just, the timing is not happening at the pace that we thought about.

matthew:

And the last thing I just want to point out, the last data point that I've been reminding everybody of is simply this Buyer interest is through the roof. Current buyer surveys tell us that their interest in purchasing real estate is even greater than 2019 levels. These are pre-pandemic levels, when we were thrilled at the market. So that's going to not only continue to drive sales, but it will drive price appreciation for us, which is good, by the way, for buyers. Buyers should be happy about price appreciation.

matthew:

You wanna purchase an asset that rises the day after you purchase it. So even though it feels like, oh, I have to pay more, that's okay. It will be worth even more tomorrow and next week and next month and next year. So they're purchasing into a rising asset class. Those key numbers, the fact that there'll be five million sales driven largely by baby boomers who will bring inventory and purchase again, have the financial capital to do a deal in a six and a half percent interest rate environment, if you will and'll probably stay in the home a little longer than we thought, but that's no big deal. We're all career professionals. Make a sale today, make another sale in 9.5 years. It's just as good as any other sale. All those numbers add up to a tremendously good formula for our business and for every professional who is in this business formula for our business and for every professional who is in this business.

gary:

So this morning, matthew, I was with two of our offices Lake Norman and Davidson and one of the things I said was, more than ever, what we have to do is spend significant, intentional time with boomers face to face, having the conversation you just had. This massive equity is really one of the keys to unlocking the market to your point, and what I shared with them is, in the absence of one on one quality time, asking great questions, determining motivation, they're going to believe a headline that has nothing to do with real estate, certainly in the Carolinas. You know you made a mention earlier about 20 states doing buyer agency. You know we are very blessed here in North and South Carolina. Our states are really really good and have been doing it really well, predominantly I'll call it the right way by getting things signed at the right time. So our navigation necessary is a tweak compared to the 30 states that are trying to figure out what is buyer agency, buyer representation.

gary:

You used another phrase that I want our listeners to hang on to Baby boomers value expertise, listen carefully. I shared this other comment one of our agents made, matthew, recently was customer service. We talk about it all the time. It's the key. How about we create an experience versus customer service? So, as we think about these communications, my job is to create an experience for Matthew and his wife in their real estate journey, and what I need to make sure is that they not only do they value my expertise, but I must demonstrate that I have that expertise. So super, super fast, I'm going to ask you a question. This is a data point that I share, and so I need you to test, I need you to double check me. This is a reconciliation. It was shared with me that 82% of the consuming public today will absolutely pay for value. Do you believe that?

matthew:

I'm surprised it's not higher. I believe that there's no transaction that occurs that does not involve the acceptance of value. No transaction. From bubble gum to Bitcoin and everywhere in between, no one's going to pay for something that they don't find valuable Now. It may be that value changes over time. It may be that we've brought to the market a presumed value and the market's going to teach us right. So this is one of those areas where 25 years ago, it was of value to help buyers find a home because information was difficult to come by. But these days, they have no problem finding a home. They have a problem getting their offer accepted on the home. They have a problem negotiating and getting the deal to close on that home. So what happens over time is that value will shift, but 82%. Honestly, gary, I would be willing to believe that the number is 100%, because there's nothing you will buy if you don't value it.

matthew:

Let me tell you a funny story. The other day, an agent said to me that she was trying to make the point that one of these online iBuyer programs didn't know what it was talking about. Oh, they don't know what they're talking about. I have a million dollar listing, she said, and they sent me an offer for only six hundred and eighty seven thousand dollars, and I said to her do you have any other offers? She said no, and I said then your house is worth six hundred and eighty seven thousand dollars? And she said no, it's not, it's worth a million dollars. I said listen, the value is determined by the buyer. If no one shows up with any money, your house has no value whatsoever. She said well, if someone shows up with five dollars, is it worth five dollars? I said if they're the only person who shows up with five dollars, unfortunately it's only worth five dollars. Now, that doesn't mean you have to sell it, but every transaction ever has to be completed through the proposition of value and the acceptance of value, and so I believe that every one of the clients that we work with will pay for value.

matthew:

And here's the funny part. We just have to remember that not every person we meet is a client. So we may meet with someone who is trying to buy homes, but they may not be a client, they may not be someone we can help, because they do not wish to purchase our value proposition. And that's okay. We can wish them well, we can give them a, you know, a helpful PDF with some tips in it, and we can even refer them to someone else if necessary. But not every person we meet will be a paying client. But every paying client only pays us because they understand and deeply desire our value. It's also why they refer us. It's also why this is a sphere of influence business, because they would never recommend us to friends, family, neighbors, colleagues if they didn't value us. They don't refer us because they paid us. They don't say, oh, you know what? Gary was awesome, I paid him a lot of money, so let me refer him.

matthew:

No, they say Gary was awesome for all these wonderful reasons, and I want to make sure that my mom, my sister, my neighbor, my colleague at work don't have any risk of working with someone not as awesome as Gary. So we are absolutely an industry that's built on value, absolutely. That's built on acceptance of value, and I would just say that it's OK. We only need five million sales a year. There's three hundred and forty five million Americans. I think we can find five million people willing to say I love what you have to offer and I want to pay you full price for it. I think we can do that, because it's not like we have to sell 50 million cars or we have to sell 100 million smartphones or we have to sell a lot. We just need 5 million of them. And you know what. We've been doing it for 30 years. We're going to do it next year and the year from then and the year from then years.

gary:

We're going to do it next year and the year from then and the year from then. So a couple of things Value shifts over time. And be incredibly curious with your client so that you absolutely know their definition of value, so you can customize the delivery to meet their need. And then I love the other thing Not everyone is a client and Matthew, in the very beginning, talked about the things that might stop as a result of the new approach, which would be some of those things that, as you describe them to me and to our listeners like that's archaic, like I'm going to meet somebody I don't know at a house and not have talked to them for one minute.

gary:

I'll share one story. Then we're going to we're going to wrap a bow around an amazing hour. I was talking to one of our most recent rookies of the year three years ago 16.9 million, matthew. He did and he said one of the things he's shifted we talk about listing the buyer and we're going to change the words in our company. The invaluable proposition and what he said is he said I bring the buyers now into my office and we sit for 90 minutes and I educate them. Not it's interesting, not on the list of 110 things. I think that's another huge takeaway today, because you and I have seen many people repost that as if that's their definition. Am I right? It's crazy.

gary:

If you're questioning my value, I'm just going to Versus the other. So anyway, but he shifted everything about his value, knowing that he needed to make and take that time before he began dating and we talk about that all the time right Before I began dating.

matthew:

Yes, I would just say that sometimes we jump the gun in this business. I think we do it for good reasons. We're so excited about what we want to offer customers. But here's another quick thought. We build relationships and then we jump to the customers. But here's another quick thought. We build relationships and then we jump to the value proposition right away. But we skip a point.

matthew:

We skip that before there can be a value proposition, there has to be a value inquisition. You have to inquire. You have to say what matters to you, what are your pain points, what are your goals, what are your needs, what don't you need? If this looked terrific, what would it? How would it go for you? If this was the best experience you ever have, how would you describe it?

matthew:

The value inquisition is often what we should do in the office. Come by my office, sit with me, see the power of my colleagues and my branding and my technology and my, my physical location. What a wonderful thing that we have offices and that we can bring people in there. And then let me use this time to know if I can even help you. Listen, every other industry spends more time on value inquisition before value proposition, because they realize that there are many clients they just can't help. People call me all the time, gary. They say, matt, we want you to come do a seminar on blah blah blah. And I say, oh, I am so grateful that you thought of me, I am so grateful for the opportunity. But I don't talk about that topic. That's not what I'm good at. And so let me ask you what you're after. And if we can get to a point where I can say I can add value, then you should hire me. But if not, I will just have to thank you for thinking of me and hope that in the future we will reconnect. So let's just keep in mind that that process I love what that agent was describing to you using that time not only to get to know each other a little bit better but to get to know what matters to them.

matthew:

And here's the best part. I bet that agent, I guarantee it. That agent probably only has to mention two or three things that would satisfy those values for that consumer to say oh, I totally want to sign a contract with you. I absolutely cannot leave this office without having you as my trusted advisor, as my partner in this process. I can't wait to pay your commission because it's evidence that we're going on a co-mission together to get something important done Right. So think about that. The word mission is in commission, but I can't know if I can add value to someone else's mission unless I ask. So people pay the co-mission because we're going together on a mission to get something important done for them. I just I love that story of that agent. I think he's got it right and I think that that's someone that should be basically emulated by as many people as we can, as we can get to understand that process.

gary:

I think what's interesting. It kind of speaks a little bit to the point you made about your belief that the talent of new agents could really be exceptional. This particular agent only been in it three years, so he doesn't know anything that you and I know.

matthew:

Yes, he doesn't remember any of our stories.

gary:

He doesn't remember any of our stories from today.

matthew:

He just doesn't, and you?

gary:

know his story is really quite remarkable. As a matter of fact, he was the very first podcast I ever did, three years ago, after he was Rookie of the Year, so I'll send that to you. So, reality Podcast, gary Scott, matthew Ferrara an amazing hour, but I know you are a student. Amazing hour, but I know you are a student and I know that, in order for all of us to continue to sharpen the saw, I need Matthew Farrar, I need three book recommendations that you think our listeners. Boy, just put it on the summer reading list.

matthew:

Absolutely so. Number one for listeners who are working on their own internal talk track. I would read my favorite, one of my favorite books the quantum leap strategy by Dr Price Pritchett. This is a tiny book that will help you become what Dr Pritchett calls you squared twice as much as yourself. It's a fabulous book and if you're using this summer as an opportunity to grow, read the Quantum Leap Strategy.

matthew:

The second book I would recommend, a fun read by a new author I think he's doing really good work called Productivity is for Robots and the author's name is Corey McComb and it's just a fun story of someone who was productivity-ing themselves to death and instead realized that real growth comes from focusing on those two or three areas that I make the most difference in, not just production, if you will. So good book. And last but not least and I think it's related to our conversation around value is a great book been around for a while. I just finished rereading it by Chip Heath, called the Power of Moments, where he says in most experiences they are largely forgettable but occasionally remarkable. And I believe that is true of our invaluable proposition. When we're with a lot of our clients, a lot of it is forgettable, but one or two moments are so remarkable that we will create clients for life and we'll never really have to worry about whether they're going to contractually obligate themselves to us, because they'll be deeply connected to us all along.

gary:

I just read a quote from Mark Wahlberg. Super simple, matthew Every minute matters. Love it, I just matters. Love it, I just love that. Yeah, like you would have thought we would have heard that a hundred times. Like every minute matters, which is what you just said. It's about special. What Special moments that's right present in those special moments when we're talking to our clients about this incredible, complex transaction that they're about to make at the corner of life and change. I have had a great day today, so I'm assuming that you listen to podcasts as you gather information. Give us three podcasts Now caveat, excluding reality. We do not allow our guests to say that this is one of their favorite. So three podcasts other than the one you and I are on right now that you highly recommend.

matthew:

Okay, let's see. One of them is by Cal Newport, the guy who wrote the book called Deep Work. He has a podcast called Deep Questions and I think it's a really good podcast. If you will, that will enable you to maybe rethink your approach to just your day and your work, etc. I'm going to do a podcast that's outside of our industry, but I just like the conversations. I think they're fresh and refreshing.

matthew:

It's kind of a social commentary podcast called Honestly by Barry Weiss. She's a former New York Times and Wall Street Journal author and she's created a pretty cool podcast. It's just so authentic and open and she's willing to have conversations that she doesn't agree with, but she does so in such a pleasant and engaging and intelligent manner that I just think is a great podcast to think about. And you know, as far as the third podcast is concerned, there are a lot of different things that I would recommend and I'm going to recommend one, and I fully know that I'm going to recommend a podcast here that is in the landscape of real estate. But you know I'm going to recommend a podcast here that is in the landscape of real estate. But you know, I'm a firm believer in a rising tide lifts all boats, and this is not a leading RE family podcast, but I still think it's worth listening to.

matthew:

It's called what Moves Her and it's a podcast by two friends of mine, sherry Chris and Lindsay Lestansky just two amazing women in the real estate industry who have picked up the mantle of an initiative by their organization to not only talk to great women leading our business, but just other. You know other professionals who bring some fresh perspectives. It's one of those person interviews, not just an industry interview. And well, you know other professionals who bring some fresh perspectives. It's one of those person interviews, not just a industry interview. And while, you know, I was recently on it and I enjoyed it as much as I enjoyed today and I think that it's it's one of those areas your listeners might add a little more to their, to their relationships.

gary:

Awesome. Well, we certainly had real estate today. We also had, you know, a view from the person, matthew Ferrara. And you know, I, just I think that the new approach, you know, value expertise. And again, I'm going to it's funny, matthew, and you will appreciate this I have never listened to one of these podcasts.

gary:

I joke with Matthew, I joke with my kids. I am not going to drive down the street listening to myself, I'm just not going to do it. And again, remember, I've got the good fortune of doing it live, and so I and you notice I take a lot of notes, but you know, this one has been particularly special, I think you know, just I've admired you for so many years and the impact and influence you've had on our industry. Just, I've admired you for so many years and the impact and influence you've had on our industry. We're going to wrap a bow around one of the great reality podcasts by asking Matthew one final question, one piece of advice for every listener, to elevate them, to motivate them, to inspire them For the balance of 2024, what is your one piece of advice?

matthew:

It's the mantra that I was taught and the mantra that I believe every single day, which is simply this success starts by believing you're worth it. Once you believe that you're worth it, there's nothing that's going to get in the way of your success. You will attract the people you need to help you and you will have an unlimited source of achievement drive to get there. So I remind you every day look in the mirror and say I am worth it. Success starts by believing you're worth it.

gary:

A big thank you to Matthew Farrar. A big thank you to our listeners. Matthew, you're a good man. Great to be with you today. We'll see everyone. Well, we won't see everyone. We will hear everyone on our next reality podcast, Matthew. Thank you so much.

matthew:

My great pleasure. Thank you so much.

People on this episode

Contributor

Gary Scott

Host