Steve Tabrizi (00:00):
In the future depends solely on one element, the leadership team. If the leadership team listens to their roster, diagnose the issue of their roster, their problem, they will then define a system and a path for future growth. If they only come out of the gate and they said, "Oh, we got the brand, we got the technology, that's it. That's an easy recipe. Good luck." You know it doesn't happen that way.
Johnder Perez (00:29):
Great. Welcome to this episode of Real Estate Strategies with RE/MAX Hallmark. I am speaking with world renowned speakers, Steve Tabrizi. Steve, I mentioned I needed your autograph. I haven't got in it yet. So right after this recording, I'm going to go next door, get your autograph. Okay. In all seriousnes, Steve, you went to Europe. I mean, of course since you've been in the business for very long, chief operating officer of the world's largest RE/MAX brokerage. I'm pretty sure you've got a couple of things that you know about that others are now seeking your expertise on. And so your recent Europe trip was exactly that Czech Republic, Turkey. So why don't we have a conversation in terms of your speaking engagements there and what are some of the findings that you've had in terms of European real estate, how they do business versus how we do things here in North America.
(01:21):
Steve, where do you want to start with your trip?
Steve Tabrizi (01:23):
First of all, I'm not a word renowned speaker. Not yet. Y will be. You will be. Remember John Derr, we constantly talk about this. Stay humble. Remember how you started and don't ever allow it to get to your head that your success or your journey makes you different. Always be the student that you want to learn. You know what? Before I go to this convention, there was a Czech Republic Elite Broker Convention and there was one in Turkey. My assumption was exactly maybe how you probably think now about your question, that the European model, they operate totally different than us. Yes, from the perspective of the maybe organized real estate industry, MLS, the board that we have, the sophisticated board and rules we have, yes, they operate totally differently. But my trip and my talk were mostly around Asian productivity and broker owner leadership. So there were two separate segment.
(02:39):
And frankly, what I discovered, what we are suffering in North America to some degree is the same issue in Europe. The practice of the real estate business, the practice of agent, they become productive. The practice of the franchise model of broker owner or team leader, even in Europe is pretty much the same. This is the business of the skillset. This the business of the human interactions. And Europe is very similar, less in Canada but very similar to the US. The agent productivity is not as high as the Canadian market and very similar to the broker owner and the brand, even the brand market share is not very similar to Canadian market. But I was very impressed with RE/MAX and I have to give that credit to... I'm sharing this not because we are a RE/MAX franchisee, but I have to give really credit to Walter Schneider and late Frank Polzer, how they really with their vision, they really expanded RE/MAX at a global market.
(03:56):
Pretty much everywhere in Europe as a brand, they have the similar philosophy of the Canadian strategy that they had here for almost over 45 years, 50 years till 2021 when they sold the Canadian region back to the head office. So their dominator, their biggest market share, agent counts, agent productivity, agents count and agent productivity. It wasn't only about agent count. And that was impressive. That's what I found impressive over there.
Johnder Perez (04:26):
Yeah. And you mentioned to me too that in as much as the operations you would think are grass is always greener on the other side. So you always think in that manner, but you mentioned something interesting to me, which is how some of the corporate headquarter operators do a lot for their franchisees and therefore it ends up being the dependency factor. So some of them do the recruiting and do all the marketing and do all of that. At the same time, I mean, this is a bit of a different direction. The European real estate, they don't have organized MLS systems as we do and some of the technology might not be the same. What are some of your comments on that? And also where do you see the transition or transformation opportunities that will happen in European real estate compared to let's say North America?
Steve Tabrizi (05:18):
So I came up with the one line, which I think really describe what issues that we have in North America and Europe. We have a very dysfragmented industry with many brokerages, many brands. And sadly, some people, they end up opening a brokerage because for a variety of the personal reason that they thought maybe it's a great idea they think because by just recruiting agent, they can have a successful business. So my one liner is this, good brokers built offices, great brokers built system, and the best system built the best agent. So it's truly you start with where you park your license or where you register to practice your business. The definition of the good broker and a great broker are totally different. Great broker or good broker. A great broker is not about one individual, one person. Good broker is about one individual or multiple of the individual could be partner.
(06:26):
But a great broker, it's about that system and the people that they built around that system, the leadership that they team around that system. One thing I also, I guess you and I, we are talking about it with our leadership team. There is a definition in our industry called broker managers. We decided recently to change that title to business development leader.
(06:57):
I feel strongly that the broker manager in our industry, they are basically are the guardian of the information. They're guardian of the relationship, but the relationship does not develop business for you. What we need to do in our industry is develop broker manager that they become a business developer leader. And how do you become a business developer leader? It's a series of the skillset that really takes time and years to develop and to be taught.
Johnder Perez (07:29):
Well, I think that philosophy stems from leadership. So you brought up Walter Snyder and the late Frank Posler as that example and how they built RE/MAX Integra to the point where, I mean, for those of you who are in RE/MAX, you know what they built in terms of over time in Ontario and in regions within Canada and the US to become market dominators. And now they brought that philosophy, the work ethic, the mindset. And as Steve said, you won't be able to accomplish that without a business development mindset versus your caretaking. You're just taking care of things. And for those of you who are regular viewers or listeners of the show, listen to our last week episode where we talked about the World Cup and how the games and how the champions play. So when you look at all that, Steve, I mean, you mentioned to me average prices of homes in Turkey.
(08:25):
And you also, having been an expert in real estate for well over three decades, close to four decades now, you've seen the evolution of organized real estate happen in Europe. So the RE/MAX as a brand extension, real RE/MAX, that merger that's happening, that's now going to put REO on the market for places where RE/MAX has a presence. How do you see that making an impact in the real estate industry, number one as a whole, number two for organized real estate evolving in Europe specifically?
Steve Tabrizi (08:59):
Well, obviously I think I am very optimistic. We talk about it before. I wrote a couple of article about it at the REM Magazine too. I do believe that the cloud-based companies after 10 years of the battle with what they refer to franchise model, legacy brand or a franchise model, whatever label you want to attach to it, the cloud-based companies or also some of the legacies companies, they realize on one thing that we are heavily focused at RE/MAX Hallmark, agent productivity. And agent productivity, it has one outcome. It's called data. And what is the data in our industry? People don't realize our industry without the listing does not exist. When you created listing, you created traffic on your website. When you created traffic on your website, you create a buyer. When you created buyers on your website, you create leads. So everything is around that listing.
(09:59):
So who produced the listings? Who controls the listing? Who monetize the listing? Basically create the market share. Once you create the market share, you are the dominator in the market. So a real smart move was basically they realized that you got a global presence, which is RE/MAX. You got a massive market share. And more than anything else, the two and a half to three and a half times, depending where you are in North America or even Europe or global market, more productive agents. So now the question becomes this. Social media is filled with this technology going to save the agent. Yes and no. Technology is going to make the productive agent job more productive. Productive agent, their job becomes their outcome becomes more productive. Is it going to save them the technology tomorrow morning we wake up because we have a platform and the platform going to make us all successful agent?
(11:04):
Forget it. No. And John there, you are a techie guy. You know what's the biggest now question and challenge it is? If two years ago somebody would've said to you and I, I have this awesome platform, you and I will say, absolutely look at it. There's no competition to it. Look at it as an example, FUP, follow-up boss is one of the best CRM in the system. But now with the advancement of the AI, you know it better than me. Every morning we're waking up, there is a new platform. There's a new tools that making our life, our business life, our personal life a lot easier. So keeping up with also the trend and the growth of the AI is going to be a challenge. So I go back again to the leadership, great brokers. The success of the real RE/MAX in the future depends solely on one element, the leadership team.
(12:00):
If the leadership team listens to their roster, diagnose the issue of their roster, their problem, their broker, owner, their franchisees, their agent, they will then define a system and a path for future growth. If they only come out the gate and they said, "Oh, we got the brand, we got the technology, that's it. That's an easy recipe. Good luck." You know it, it doesn't happen that way.
Johnder Perez (12:26):
Well, there you go. So the recipe is composed of among other things, the data, the expertise, the knowledge. And so Steve, we talked about this in the past. The moat or the things that a company or a brand uses to defend itself and its competitive leadership in the market has changed because it's no longer technology. As you said, it may not be done well, but somebody sitting in their basement could say, "Let me take a couple of snapshots of follow a boss and create it. " There's also open source CRM, and by no means is this just related to CRMs. This is literally anything, whether it's making websites, making deal processor apps and all that sort of stuff. So Steve, seeing how successful, and again, not to be biased because we happen to represent RE/MAX, but forget about the brand. Seeing how successful brands dominate markets versus how others do and knowing the recipes of success, whether at the brand level, brokerage level, or agent level, what do you find as the new moat or competitive advantage if it's not technology anymore?
(13:24):
What will allow a competitor to succeed and thrive in this environment?
Steve Tabrizi (13:31):
Many brands, they became successful. Obviously RE/MAX became successful because of the vision and the tenacity of the leadership that it started. But let's be honest, through the course of the journey of this brand, particularly in the last 10 years, the leadership could have done a lot better. That's why we are in discussion within internally that you are part of it. How can we evolve really the broker manager, the old title to the business development leader? So the moat is how can we really create leaders that they understand how to develop the business? I love AI. I'm an AI junkie, but I have come to realization after two and a half years that the AI is actually has been launched. The first launch was ChatGPT that now I need to train people that they work with me on a daily basis to help me with the AI because the AI also is not one AI.
(14:40):
I use consistently three AI, Chat, Cloud, Gamma, you name it, bunch of them, Gemini. But now you need to train your people to use the AI so your job becomes more efficient, your time becomes more efficient, you become more productive. So it's the same thing with this new evolution of the merger that is happening Compass Bank anywhere Real and RE/MAX are merging or you want to call it Acquire, whatever label you want to attach to it. If the leadership is not clear how this business is function and what the agents, who is your number one client in this industry to create that data, to create that data is an agent. If you don't have a productive agent, you can have 10,000 agent in your brokerage. It means nothing why the data is becoming very crucial in the future. All this company, it could be another podcast, I firmly believe that they shouldn't been ever in the stock market in public arena because the deviation of the stock for RE/MAX, Real, Compass, EXP, all of them, it never had a massive up or down because we are not truly a technology company.
(15:50):
We are human-based engagement company and other success or failure heavily dependent on the number of the transaction which is related to the economy. So what you need to really develop productive agent. The more productive agent you have, the more transaction you have, more use of your actual tools or technology which is basically owned by you, then your stock market perform better. So you cannot be disreprimanded, but you got to start from the core. How could you make your agent more productive? And that's our philosophy at RE/MAX Hallmark.
Johnder Perez (16:29):
Right. And that's pretty much the competitive advantage as well. And RE/MAX has always had that philosophy of building business, training top producing agents. RE/MAX Hallmark's model is building your business is our business. And so having that mentality and that mindset of being able to get a real estate agent, develop their business, helping them produce more, and that's a competitive advantage in itself. So Steve, you've been working as a real estate expert. I mean, I know you're very humble, but at the same time, let's say you've been in this business a very long time. You've been mentored by very knowledgeable partners as well, Ken and Deborah, and you've also had interactions with a lot of real estate professionals over your years and the course of business. And you're now doing speaking engagements, providing advice, consultations. Can you, before we wrap up this episode, give a little bit of what are you currently working on?
(17:25):
How anybody who's listening to this, because we've got an international audience, if somebody's running a real estate brokerage, running a brand, running a franchise, running a region, how can you engage them in terms of the knowledge that you've acquired over your years of building a top producing real estate business? And one of RE/MAX's biggest brokerages worldwide.
Steve Tabrizi (17:47):
We are working on multiple lane right now. We are working on a very completely restructured, redefined 16 module, which you are working with me on it to how to increase the productivity of the agents. That's one of the program we are working. We're working also on a five module program, how to make our leader to become a business development leader. We want them to purely focus only on one element, one of the three pillar of the RE/MAX Hallmark in the business of the building your business. So we want to take that one to the next level. And the third pillar that you are working on it more than me only gets some glimpse of it, which I love, is the exclusive AI tools that we have developed over the last three years in addition to our Hallmark Digital Studio Hallmark Hub that really has become a very interactive.
(18:55):
You cannot find a platform in the technology sector that suddenly you have close to about 70%, 70% engagement rate out of our agent. Average in the industry has been 20 to 25%. Why we are heavily focused on that platform, John Deere? Because we go back to the productivity of the agent. How can we make the life of our agents easy? Their job is very simple definition for an agent. Their job is to engage, to communicate, to prospect, to negotiate and to provide an exceptional customer service. Everything else we got to provide for them. And that's where the Hallmark hub and other tech tools that we have, the tech series of the tools that we have with AI that is going to help them a lot. I'm so excited that our test with the our AI engagement, Poke, Engage and Humanize is working so well and I can't wait for the launch of them in September.
Johnder Perez (20:02):
That's amazing. And we've got a lot of great projects and one of the philosophies we have as well is that we share the knowledge that we have. So if you are interested in learning what makes RE/MAX Hallmark successful, if you're curious about getting a conversation with us, whether you're a real estate agent looking to join a brokerage, you're a broker, owner, operator who's looking to improve your business, or if you'd just like to speak with Steve, myself or any member of our leadership team, we share what we know and that's how we continue to grow with our business. Thank you everybody for listening and watching. Make sure you like, subscribe, comment, rate us. Share this with your fellow colleagues and spread the word of everything that we're sharing here at Real Estate Strategies with RE/MAX Hallmark. See you in the next episode.
