KGCI: Real Estate on Air - Are You Consulting or Selling?

Episode Date: June 17, 2024

Welcome to the Real Estate Fight Club, a podcast for agents where you'll witness a battle of opinions about topics affecting your real estate business. There are many ways for agents to achieve success. The secret is to find which approach will work for you. Now, always in your corner. Here are your hosts, Jen Mertland and Monica Weekly. Welcome to another episode of Real Estate Fight Club. What's up, Jay Mert? What's up, Monica?

I am pumped. I don't know if we're going to fight, but if there's an opportunity, I'm excited to do that with you. I will look for an opportunity to fight you. And I might fight Tom. I don't know. We'll see. We want him to come back. Me and Tom are on the same team here, Monica.

Sorry. All right. Guys, we have another incredible, incredible guest here today. I'm going to introduce him in one second. But today, the three of us are going to argue, duke it out, fight it out, throat punch. kick, whatever about this question. And guys, I want you to listen up, this is huge. This is huge. Are you consulting or are you just selling? Are you showing up like consultant? Are you showing up like an amateur seller? This is where the rubber meets the road as far as I'm concerned,

as far as top agents who make a difference in their clients business, who have a lot of business, who have repeat clients. Like I think this is the common thread. amongst the top 10% doing 90% of our business in this industry. What do you think, Jen? Yeah, I agree. And that's what Tom's going to talk to us about today, because Tom Caparillo is not only a real tour. He's also an investor.

He's a broker owner in Boston, Massachusetts, has his own podcast, has a giant Facebook page, which we'll talk more about. But he believes there's more than one way to sell a house. So Tom, talk to us about that. What do you mean? Welcome to Real Estate Biclo. And welcome. Thank you for having me on. Yes. Yeah, I mean, it all started for me. So I started as an agent. I started by basically every time I got a seller appointment, I would walk into their living room and I would say, hey, I'm the best realtor out there. You know, let me list your home. And that's what most agents do. And it wasn't until I went on a seller appointment. It was a two family right outside of Boston, really nice area. I knocked on the door. ready to get this listing in a really hot area.

And the seller opened the door. You know, she looked at me, asked me a bunch of questions. And I had to almost like talk about fight club. I had to like fight my way in. That's good for her. That's good. Well, I had no idea why. So I'm talking my way in.

You know, we had an appointment. You're ready to sell your house. So I walk in and I start looking around. And it was really crowding in there. I mean, there was stuff all over the house. whatever. And I was pretty young. I was like 25 and I never even knew what this was before. I think it was before the show hoarders came out. And I never really knew what a hoarder was. I didn't know what it meant or anything like that. And I mean, and even if I did, I was focused on getting that listing.

And so she let me look around a little bit, not the full house and finally sat down in her living room table. And I told her all the great things I could do, all the eyes that could get on her house. and it was like the more I talked about people seeing her house, again, not knowing this, but the more I talked about it, I could see her getting like a little bit uncomfortable. Oh, yeah. Okay. Yeah. So she finally said to me, this all sounds good, but I just want somebody to buy my house without coming in. Yeah. And again, not knowing anything, I'm like panicking because this would be a high price listing in a hot area where if I did get 100 people to go through the house,

which it would have, that would have benefited me the most. And I thought that that was what she wanted. So I kept pushing on the fact that like, we need to get a bunch of people in the house and, oh, by the way, you should probably get these boxes out and do this and do that. And I'd stop you here for one second because I don't want to gloss over the point you just made. You will two, two really great points. One, the highest price is not always the seller's motivation.

It's not always the number one. And that's what she told you that, but they don't usually tell you that, right? Like you have to ask questions. And you were just telling her like, this is what I can do because you were of the assumption and the perspective that that was her goal. And again, getting into like fighting, this is a fight I have with a lot of agents. And a lot of agents, when I talk about investing, they think that we're doing something immoral, something unethical, and that buying somebody's house for less than what they could get

on the MLS is wrong. but they don't understand, or at least they're not open-minded enough, to have an appointment like this where I went out there, and I only had the perspective that you have to list your house, you have to get your house ready for sale, which is the perspective that a lot of agents have. And it wasn't until she told me, like, if you can't find me somebody that's willing to buy this house without coming in,

we're not working together. Right. So it was at that moment that I got that quick education to say, I get to figure out how to get an investor to try to buy this house. And long story short, I ended up partnering with somebody on this deal that was an investor. I made great money on the deal. But most importantly, we got to sell her what she wanted, which is that we got her house sold without a bunch of people coming through.

And I got to know her a little bit better as the time went on. And she basically just said, as simple as this, I grew up in this house. I don't want my neighbors to know what the inside of my house look like. And that was my number one priority. Wow, that's awesome. Gosh, that's such a great story to sort of perspective. Yeah, to help us all think before you walk into a house, clear your mind. Like, eliminate your agenda and just find out what the problem is. She had a problem. And I guess, Tom, if you would have said to her, you know, what's your number one concern

or what's your number one question around getting your house sold, that might have come out a lot quicker. No doubt. And even now when I walk in, so now that I've done, close to 1,500 transactions like that. I now know when I walk into a property, whether it's the condition or hoarding or there's a death in the family or they've got something that says red light going off, like money isn't the most important thing to me. I'm more aware of that now,

whereas back in that time of my life, I had no idea. I just had no clue. And so I wasn't consulting at that point. I was selling my one product that I had, had and it was a one-size-to-sell thing. And no matter what they said to me, I was still trying to sell that product. Yeah. What are some of the questions that as agents are hearing this and they're realizing they probably lost some deals because they were so narrowly focused on the one thing that,

the one way they can sell a house? What are some of the questions that we can ask these sellers to figure out what their primary concern is or and tell us other ways we can sell a house too? Yeah, absolutely. I mean, now when I go into a property and I go into any selling situation, I'm mainly asking questions. I mean, 80% of what I'm doing is asking questions, listening to the answers. And then maybe once I diagnose the problem, I then give what I believe is the best solution. And the best way to think about it is like when you go into a doctor for any problem, right? We want that doctor within 10 seconds. They just give us a diagnosis.

But they don't. They never do. and in a lot of cases, they ask questions that we feel are not relevant at all. Yes. Right. But they're trained. They know that to actually diagnose you properly, I'm going to ask 100 questions. And maybe 80 of those questions aren't relevant, but maybe one of those questions that you thought was irrelevant is actually a key thing to ask.

So when it comes to somebody selling their house, I like to ask them, you know, a few different things. Number one, I want to ask them like where they're going next and what their time frame. time frame is a big thing, especially when comparing like selling to an investor versus selling traditionally. And recently, with the market being a little bit slower than it was, a year ago today, you could basically go into someone's living room and say, hey, I can get you your house sold in 45 days. Now that time frame may be a little bit different. So I want to know their time frame, and I also want to know how important that time frame is to them. It's one thing to one. want to sell your house in 45 days, but if it sells in 90 days, it's okay. It's another thing for you

to tell me, hey, I want my house to be sold in 45 days. And if I go to 50 days, my house is getting auction. So we need to definitely know the time frame. The second thing that I want to know is like whether or not they want to sell traditionally what meaning like, do they want people through their property? And are they willing to do some stuff to the house that's going to get them dollar. And in some cases, what's the budget for that too? Like what? For sure. And it depends on what's going on in the house. Like if they have knob and tube wiring, it needs to be updated per code. Okay, well, that needs to be done to sell to a traditional buyer. But then there are just like the simple things like cleaning the property or maybe painting a room. So it depends on the

condition of the house also. But I want to ultimately know. And there's so many different ways I can ask one question, which is basically like, what's the most important thing to you when it comes to selling the property? And it usually comes down to either they want to net the most amount of money for their house or they have another thing, whether it's a time thing, or they don't want a lot of people through their house or whatever that leads me to believe that they may want just an easier sale versus, hey, I'm willing to go through more hassle to get the most amount of money. Even the most amount of money, it's like, there's still two camps of that. So even if you want the most amount of money, it's like, do you want the most amount of money in

its current condition? Or like you said, am I willing to go through some of the hassle to get? And what's your capacity to manage that, right? Like, do you have the time to handle what it's going to take to get this to top, top level selling? No doubt. And I will say, like, just to be clear about this, nine out of ten times we find that selling the traditional way makes the most sense. To defeat what they want. It's only 10% of the time that it does make sense to sell to an investor. But that 10% of the time, a lot of times that agent will have lost that deal. So what happens a lot of times is that they go out, and this happens on almost all of our appointments. Let's say we do a mailer that says, hey, we want to buy your house for cash.

and the person receives it. Typically, what they do is they call us out first as the investor. And then if they want the cash offer, they sell it to us. Now, their best friend might be an agent. But because their agent has never said to them, their best friend has never said to them, I have multiple options, they're not even getting that appointment.

Right. So it's kind of like a two-part thing. By having both options, you're going to serve your client better. But on top of it, you're also not going to lose transactions that you would have lost to somebody like me for no reason. Yeah. Well, and this is really the way that it's going to, right?

Like real estate as a whole, as real estate agents, we are going to have to know more with all the commission compression going on, all the Department of Justice, suing NARs, all this stuff. Like as agents, we have to know more and having options that are best for the client situation. is more important than only the one thing you know how to do. Right. And if you add in kind of like other companies that are getting involved in this, I buying companies, I mean, Zillow, I think partnered with Open Door and you had Redfin doing this

and whether or not those models end up working for those companies, I don't know, but it doesn't matter. It doesn't matter whether they end up working. And even if people just know that Zillow has that option to potentially get a cash offer, now it's educating the population that that's a potential. So if Zillow or Redfin are promoting this and other companies that are so large like this, that's just going to make the demand to at least hear the cash off or hire.

So if you don't have that ability, then that person again, I mean, what are we all trying to prevent? We're all trying to prevent our clients from going Zillow or Redfin before us. We don't want our sphere of influence. and filling out forms. Like, we don't want them, you don't want them responding to my mail or my TV ad. You don't want them going on Red Finder Zillow, but they're going on those things

because they don't think that you have the capacity or the ability to do these things. So, hey, I'm going to go on this website because I don't think you can do this type of transaction. Because you haven't asked me the right questions to even have the conversation that would demonstrate to me that you have some other solutions. 100%.

And even, it's like, even this conversation is a good, way. If you're a prospector, like me and Tom are, not you, Monica. I prospect. Just not psychotically to people I don't know. But even just sharing with your sphere of influence or with keep cold calls, it's like there is more than one way to sell a house. That automatically peaks their interest. And it's like, oh, you know something that 99% of agents don't know. You're saying something different. Well, I think on top of it, and I always say this thing, I've had experience with this and my brokerage and just seen it even outside of my brokerage, which is if you're calling somebody

and you're saying, hey, do you want to know the value of your home? Okay. That's just one example of kind of a more traditional realtor script. Okay. That's one product that you can talk about. The other one is, hey, would you consider having me make an offer on your home? If you're the average seller. Like which one of those two are you more interested in hearing? Do you want to hear the offer? The offer, right? Yeah, duh, 100% of the time. If you're really wanting to sell. And so I'm not necessarily saying you have to do this, but I'm just saying strategically, if you want to get into more living rooms, having a cash offer is going to get you into more living room. It's going to get you more listings than you would have normally gotten. And that's what we found

kind of as a byproduct of everything that we do. Like we took, I have a brokerage, but my team itself, like we took 300 listings last year just because we're offering out the cash offer. Now, I don't do that to get listings. I want to actually buy their homes, but we find, again, that 90% of those people, yeah, I might want them to take my cash offer, but it doesn't make sense for them. So we take a lot of listings just because we're trying to get cash deals for ourselves. I love that. Jen, let's take a break in. And when we come back, I'd like to hear from Tom about some of the, how does the average agent partner up with an investor so they can have that conversation? Because the average agent can't say, would you like me to make an offer on your house without

having some sort of backed up to that, correct? So you're reading my mind, Monica. Look at us. In sync, not fighting at all. No, gosh. Boring. Let's get back to the consultative battle inside of the ring. Remembering that questions are the single most powerful tool in your toolkit. And I guess I talk to agents all the time. Tom, you can probably relate to this. And Jen, I know you relate to this. agents are learning the business and they're like, okay, I got this listing appointment, presentation. I need a listing presentation. I need to know what to say. What do I say? And it's like, don't worry about what to say. Go in with 100 questions and then solve their problem, right? It's kind of that simple, I think. It's your brain. Yeah. But Tom, help us understand

how the average agent can, you know, position themselves like you're able to, when you, yeah, you're able to actually buy that house at this point in your career. Yeah. So, well, let's just take the approach that the agent doesn't have the capacity or doesn't even want to do this transaction for whatever reason. So what a lot of agents don't understand is how valuable these transactions are to investors. They're so valuable that I have a program like within my own company that if you bring me a deal, just by bringing me a deal and I flip it, I'll split the profits with you 50-50.

I will put up the money. I'll do the construction. We'll split at 50-50. Wow. That's how... A big finder's fee. That's nice. I'm going to move to Boston. Just do that. So that may sound... And it is generous. I'm not going to say it's not. But having said that, that shows and proves how rare a really good deal is in today's market that I'm even willing to do that. Right. I wouldn't have been willing to do that in 2012, 2013. when you could go on the MLS and find a deal. I'm willing to do it now because they're so rare.

So the point I'm trying to make here is like there's, there may not be a Tom Caffarella like specifically in your market, but there's going to be a lot of people that are going to be like me. Maybe they don't do a 50-50, but they're going to do something to, they're going to be really, really wanting to work with you. And it's not hard to find those players. There's always in every single market.

there's at least 10 or 15 people that are similar to me that are dying for deals like this. And finding them is not hard, right? You can ask around, you can literally put into Google, sell my house fast, and who's bidding on Google pay for click, you can show up to auctions and introduce yourself. But I promise you, if you have a deal, it's a flip deal, that you can make $50,000 on, you will not have a difficulty finding the person willing to do that deal. Now, I wouldn't just rely on what I'm just saying. I would try to seek out a couple of investors that you kind of maybe know or feel comfortable

with just so that you feel good when you're actually proposing this solution that you're going to be able to like do it. But like I said, it's almost like saying, well, would you have a hard time finding a real estate agent thing if you took a listing that they'd be willing to pay your referral fee? It's almost the same type of thing where it's like, yes, some. real estate agents, maybe they won't give you a referral fee if you give them a listing. Some won't. But almost every investor is going to be willing to do this. And one last strategy

kind of on that point is even if somebody won't split the deal with you 50-50, even if they won't give you any profit, you certainly can get that listing on the other side. Yeah. So I think that's a deal a lot of agents do with investors, right? I help you find the house. I get paid to do that and then you list with me. And that's the minimum. That's the bare. minimum. And again, and why is that a benefit to the agent? At the bare minimum is going to make you more money. Why? Number one, maybe that would have been a $300,000 listing sold as is, but it's going to be a $500,000 listing renovated. And then the second part to that is when you're going to an investor and you're like, I have this killer deal. You're going to make $50,000. Oh, I'm not negotiating on a rate

cut. Like I'm asking for 6%. And if you don't want the deal, like I'm going to. I'm going to the next person. And I promise you, like, if you have the average regular everyday investor, they're not going to be asking you about what the commission is because they're going to want to do that deal so badly. I think, too, you're really helping your client, right? You're listening to what they need. You're really helping them. You're fixing their problem to your point, Monica. And it's like, wow, now you've strengthened that relationship and you've created a new one with an investor in your market and they can teach you. I mean, Monica, you and I talk about this all the time. Like, as an agent, you should also be an investor. Like, what the hell are you doing? And they can

teach you different things. Like, how are they looking at this as a deal? How are they structuring things? Like, you can learn a lot. Yeah. So tell us about the sweet spot right now. And I'm guessing in Boston, it might not be the same as around the rest of the country. But maybe it is like with the market as it is right now. What's your sweet spot for a product that you're investing in? So if I'm talking about like a fix and flip, and this is me personally, so everybody has different preferences as to what they like to do. I personally like to find properties that are in decent neighborhoods, but are at the kind of the lower price point of that neighborhood or of that town. At the end of the day, like what I'm looking for, like you guys have matches,

right, in your MLS, like if you list a home, like, how many people are matched with this? Do you have that in your MLS? Or reverse prospecting, yeah. Yeah, so they call it different things in different towns, but for us, they call it matches, which means, like, how many people are on the MLS looking for that type of property? I want to have a ton of matches. So what that means for me, like in the greater Boston area, I would say $600,000 is probably like a run-of-the-mill average house.

You do have. Must be nice, Tom. Yeah. Moving to Boston again. Yeah. And you do have things on both sides, but I want to renovate a home and putting on the market, ideally in the 4 to 500 range so that, again, it's attracting the most amount of people. I don't personally like doing luxury for a lot of different reasons.

I also like to do projects with the market kind of nobody knows what's going on right now. Nobody. And not that everybody ever does, but I feel like now there's more uncertainty than ever. Right. Definitely. There is, right? And so I want to do a project that's going to be really quick. Like, I want to do a project where I can renovate it for 30 days. And still be in the same market when you turn around to sell it. That is exactly what I said, because I look at it like this.

And I know you've both been in real estate for a good enough period of time. The real estate market doesn't crash in a month. It doesn't crash in two months. It just takes more time. So I like to be able to buy and sell something in the same market. That's what I tell people. That's what I tell people who even like invest in our company when they ask like, well, what's the risk of investing with you?

I go, well, there's always risk, you know, investing with anybody or anything. But I like to minimize that risk by being in and out so quickly that we'd have to kind of make up scenarios that haven't happened before to how the real estate market could crash in like a 30-day period. Right. Oh, yeah. I love that. And what's striking me that you're actually talking about is supply and demand,

understanding supply and demand by looking at the matches or the reverse prospecting. You're just trying to get a glimpse into the demand. And you can see what the supply is. So that's that. That feels like math, Monica. It's not. It is like the foundation of all things in our business that a lot of agents, they don't look at.

They just look backwards at comps instead of looking at the dynamics of what's going on right now. I mean, comps are fine, but what you don't know about comps, especially like it sold, is you don't know whether there was one offer or 30 offers. And what I like to know, based on the matches, I know that when the matches go up, that just means more offers because that means that there's a bigger buyer pool. And that's why I don't like to do luxury, because if I'm selling it a million-dollar-plus price point, yes, the comp might show a million bucks, but it doesn't show that there was only one offer it. And what would it have sold for if that one buyer didn't buy it? Maybe the real number

might have been $9.50. Whereas when I have enough matches, I know, okay, I'm selling my house for $450,000. If that buyer did buy it, I probably had another $450, and then I had a $4.45, and then I had a $4.40. Love that. And I think, too, just as like a plug for EXP and our agents, we have like a non-a buyer program where you can guarantee multiple offers for your sellers by putting them through this offer program. So if you're at EXP and you don't know what Express offers is, definitely look at that because as Tom saying, it's a great solution. It really shows them, hey, this is what somebody would offer for your house. As a matter of fact, there's three offers for the house. Here's what the market is saying. Here's what we could sell it for if you're willing to do these

things or whatever. It just opens up the conversation for what do you really want here. seller. What do you want? Really? Exactly. Exactly. Well, Tom. Thank you. It's good. I think this is, it's definitely the future of real estate. I know there's a many agents out there that want to take on a more consultative approach with their sellers. They also want to be investors. What is a way that we can get more information on what questions to ask? If we want to invest, how do we start doing that? How can we get in touch with you? we get in your in your world? The best way, I make it really easy purposely, is I created a Facebook group called Agent Investor. And people can go just by typing in the URL, Agent Investor.com.

I do a live stream in the group every Tuesday at 11 a.m. It also stores in that group. When you go in that group, you'll see, I think there's close to 12,000 agents in the group now. We've been growing it for a little bit over a year. Wow. Yeah. And so what you'll see is there's a bunch of training in that group. And it's all completely free. We do have ways for people to work with us more directly, but most of the information we give, well, everything in that group that we give is completely free.

And then the other thing that I would recommend doing is listening to a couple episodes of the Asian Investor Podcast, which people can go to at www.orgianinvestorpodcast.com. I know you're listening to a podcast right now. to me, podcasts are the biggest no-brainer in terms of getting educated. And when I started in real estate podcasting wasn't a thing. Like, we used to have to go to a seminar and sit there for two days. Right.

Or CDs too long. CDs or like, find that quiet time in our house where we can read a book and then we read five pages and then somebody interrupts us. And you can just, I mean, this is the great thing about 2023 is. like you can get educated to and from appointments. You can get educated while you're walking your dog. You can get educated while you're doing your laundry. And so definitely I hope people check out my podcast,

but be a podcast listener in general. I love that. And I will be tuning into your podcast for sure. A lot of the number, what you've done over a thousand flips, right? And you have, you own your company, your group owns over three.

300 doors. Is that right? Yeah, over 300 doors. We've got a real estate brokerage for 350 agents, all based on the premise like every agent should be an investor. And we have the saying, sales will make you a living. Investing will make you wealthy. Yeah. Very cool. All right, Tom, thanks for your time. That's going to have to be the end of today's podcast. If you like what you saw or you've had a conversation with a friend agent and you think they might like this, send this to them for sure. Yes. And if you're an agent and you want to know how to partner with Monica and I so we can help you grow your business, feel free to give me a call or a text at 513-400-1691. Hey, Tom, thanks a lot. We really appreciate you being on. Thanks, Tom.

Thank you for having me on. Thanks for listening to this episode of the Real Estate Fight Club podcast. Make sure to hit the subscribe button so you get updates when new episodes are available. And we truly love feedback and would appreciate all likes, reviews, and suggestions for future topics.