KGCI: Real Estate on Air - REMAX CEO-Adam Contos Talks About This Market

Episode Date: July 23, 2024

Welcome to the show, like a boss. I'm really, really excited to have our guest today, Adam Contos. He and I go way back and he didn't know it. But Adam, welcome to the show today. Thank you for being here today. Thanks, Randy. It's great to see you. Great to see you.

And I know we connected a couple weeks ago and I immediately was drawn to you and your story. And I'd love to have you on the podcast. So thanks for doing that with us. We really appreciate it. And, you know, what we love about this, and I put in here, former CEO of Remax, serial entrepreneur and business advocate straight from your Instagram. Couldn't have said it better, honestly. And when we chatted, Adam, we talked about a couple topics that I think would be really,

really good for the audience today. And for the most part, there's a lot of moving parts going on in the industry right now. But I want to highlight you for a minute, if that's okay. And I'd like you to brag. I'm asking you, I'm begging you to brag on yourself a little bit. I know you to be a humble human being. But, you know, I want to take you through some of that and the listeners through some of the experiences that you've been through.

And we met back in, I believe it was 2004. And I was with Cobainter for very short, few months. And I went to Remax. Love that brand and got to meet you and Dave Linegar and some of the others through that remax journey. And that was 20 years ago. Man. Years ago.

And so you've been in the business for. a while. But if you could, why don't you take the listeners through a little journey of what your background is as far as it relates to real estate and then you became the CEO of Remax, one of the behemoths in the real estate space. And we'd love to share that and get that from you. Sure. So I mean, my, you know, Remax is my second career. My first career I was in law enforcement. I was, I worked undercover a couple of years selling narcotics every day. So I looked the part and everything like that. Oh, yeah. Yeah, I was a great drug dealer. In fact, Randy, this plays into real estate because that's where I learned sales. And I actually taught a class called NARC marketing.

And how do you go out and think about this as a real estate agent? How do you go out and meet people that you don't know, earn their trust and confidence, and then do a life-changing deal with them? Wow. And that's really what work in narcotics was. So I actually, I went to the DEA narcotics investigator school and I learned sales that way, they would just drop us on a street corner and say, go find somebody and meet them. And we would go do that and try and buy drugs. But I grew up in law enforcement. Yeah. Yeah, it was a good time. But the, I grew up in law enforcement. I ended up in law enforcement. I ended up becoming a SWAT team commander, which has a lot of strategy, you know, the chess board type environment, which really is what business is about also. It's a

chess board. I started a couple of business. is I started an online business in the late 90s when the internet was a baby. And it was a little difficult to sell things during that time. But it was a lot of fun. It was a great learning experience for me. And then I started a consulting business doing security and safety consulting. I was a counterterrorism instructor and Homeland Security instructor. So I actually created a real estate agent safety program called Safer, Safety Awarement for every room.

S-A-F-E-R. I remember that. Yeah. Yeah. And that was your baby. You created that? Yeah, that was mine. I built that 100%. Wow. And worked with Remax and some of the other brands and Women's Council Realtors and NAR and things like that on it. It was a lot of fun. Actually had realtors come up to me and say, you save my life, which was really cool to hear that. So yeah, I mean, it touches you right in the heart.

I didn't give you a good. Yeah, totally. I didn't know that somebody was standing there that wouldn't be standing there if they hadn't taken my class and employed the different techniques that I taught them. But so started working at Remax after that. Dave Linegar became my mentor. So I was, you know, blessed to have a bad mentor. Yeah, exactly. You know, if you're going to pick somebody in the industry to be your mentor, it might as well be that guy. So he became my mentor.

I started at Remax. I started as a business consultant working directly with brokerages and agents and worked my way up in the business, took over different territories, took over different territories, took franchising, marketing, HR, IT, got into the C-suite, and the board of directors looked at me eventually because we're a public company and said, hey, you're a college dropout. You don't have a college degree and we're a public company. I said, okay. And Dave goes, yeah, I don't have a college degree either. And they said, yeah, but you started the company, so you get an exception on that one. So I went and I got my MBA from University of Denver, Daniel's College of Business. So that's actually a strange thing.

I'm a professor there now. I teach that same course. So I went and did that and got into the C-suite chief operating officer, co-CEO and CEO of Remax. And about 20 months ago, I left Remax. I retired from there on my terms to go partner with Dave to buy some businesses and continue to work with different entrepreneurs around the world. in real estate as well as other franchising type environments.

So that's where I'm at today. It's amazing. So how did that transition work for you in the franchise? Because remax is a franchise model, so there's a lot of skill set that you had in the franchising envelope. What excites you about franchise opportunities now? Because I know there's an opportunity there. And what's that look like from a 30,000 foot elevation view?

So right now the franchise companies, we're working with are all food related. So we've got a couple of sandwich companies. One's called Port of Subs. It's 135, 140 units in seven Western states. We're actually taking that nationwide right now. And then the other one is Daddy's Chicken Shack, which is a fried chicken sandwich concept. And we have about 13 territories that are being developed around the U.S. right now. And it's growing pretty well as well. And it was interesting because I never thought I'd get into food. I didn't know anything about it. What's the transition there? Are you a cook, you love it, or is it more of a business community, you know, light bulb?

Well, a third of franchising, so there are 800,000 franchises in the U.S., 800,000 franchise units, franchise locations in the country, and 30%, roughly 32% of them are food related. So when you think about that, you know, if you throw a dart at the dartboard, you're going to hit a food franchise when you're talking about franchising. So we got into that knowing franchising. And franchising is a very specific model. It's not an industry. It's a business format.

And that we knew very well. I mean, I'm on the board of the International Franchise Association. And I speak franchising. I mean, it's franchise disclosure documents. It's understanding same store sales. And, you know, you get down into small business aspects of it. and it's what realtors are dealing with every day and running their own small business, that's what we do in franchising is we help people grow those things.

It doesn't matter what industry you're in. It could be hair cutting or making sandwiches or selling real estate. There's a foundation to how to run a business and how to make that profitable every day. And that's, you know, obviously what you coach is getting people to that point. But ultimately it comes down to understanding how business models work. I love that. What do you think is the greatest opportunity in the franchising world right now? I mean, obviously the food side of it is 30% of the business.

That's, you know, 240,000 plus units or whatever the number is. I think that there's COVID's changed a lot of things, in my opinion. COVID's changed a lot of belief systems, a lot of what they thought was normal. You know, we even in the real estate space, we went away from the offices, which, you know, led to almost a, evolution of the industry and then now we're going back to that. We're going back to basics in many regards. I think franchising for me is a leverage opportunity. That's the way I see it. Is that really your take on the franchise opportunity or is it scale through territory and growth? What does that look like? Well, the foundation of franchising is having a tested business

system. So it doesn't matter if that is, you know, being a real estate agent. And being a real estate agent is a tested business system. We know how that's done. And we know if you do these things, you get those things. That's how it works. Same thing with running a brokerage. That's why brokerages are so heavily involved in franchise because fundamentally, the framework of how to run a brokerage is not vastly different from one to another in the franchise

space. You know, a brokerage is a brokerage. And that's why agents can unplug and plug into another one so easily is because the framework is very similar. But when you look at frameworks. And you ask yourself, okay, where are the opportunities in franchising? You know, we have we have asset heavy franchises and we have asset light franchises. You know, asset heavy franchises are more something with brick and mortar. So you've got a in-person brokerage or in-person restaurant or something in-person hair salon. Asset light, a lot of times are more service-oriented. And you could see the crossover where real estate could fall under either of those. But realistically, there are a lot that are. very asset light and they call it like chuck in a truck type thing you might have a contractor plumbers and is exactly is that yeah yeah exactly 100% Randy but you also have other forms

of asset light franchises that might be like a massage therapist or home health care or um you know somebody does lashes or who knows what it is but ultimately what we're finding is um they're really two sectors that are growing massively right now in franchising that are really being pushed hard. And obviously, one of them is a small restaurants. You see those, you see small restaurants in a franchise brand popping up all over the place right now, especially as we're building mixed use facilities, you know, and where you've got both housing as well as retail and things of that nature. And new shopping centers. So when you see those or a remodeled shopping center, a lot of times you see franchise brands pop up. And a lot of them have to do with food or self-care.

So take a look at those two. Those are both food and self-care are both growing substantially right now. And in the self-care space, it's anywhere from, you know, diet drugs and different, you know, different types of this. You know, exactly. Yeah, or, you know, like hormone treatments or IV Mars. Weight loss. There's just a never-ending amount of that. You know, Adam, to me, COVID changed everything. COVID changed the mentality of how we work and how we look at our jobs. Also, how we look at our lives. There's a lot of people stepping back from the corporate structure going into being their own boss and their own entrepreneur. And I think we're seeing all these different trends changes. It's just my, you know, perception of this. But I think the malls are struggling because of, you know, the retail space is really a challenge space. So all of,

a sudden you have all these mom and pops and entrepreneurs and people that could start having these spaces and then layering into the franchise opportunity just makes complete sense, right? You find a model that works. I just immediately think of Mrs. Fields cookies and all these, you know, opportunities that were just probably born out of a passion for baking, a passion for this and then being able to scale that when they find a model that works. Yep, 100%. And what you find is a lot of people will get into those and they'll open one. And basically by opening one, they've bought a paycheck. So they've replaced their income somehow with a heavier investment. And they're like, how do I get rich doing this? We all want to know that. And when you think about

it, like even in the real estate space, you look at, okay, you're a real estate agent and you're doing well, how do you scale your business? Well, the answer is you build a team typically. So you get other people doing the work for you so that they're compensated fairly, but also, you're a real estate you're the one who's taking on the risk because you own the business itself. You own the overall umbrella entity there. So like for Mrs. Fields or our sub-sambwiches or whatever it might be, you say, okay, what happens if I open another one? And then I open another one.

And then I open another one. And what we find in franchising, as well as you find this in real estate also, you know, in franchising, it's, okay, I get another location built and I get the doors open and people are trained and it's at a run rate right now. I'm going and starting another one. So they start overlapping these growth entities, just like when in real estate, you know, as the market starts to come back, you're going to, you're going to know what your capacity is for how many buyers and sellers you can work with.

And then when you reach that capacity, you know, okay, I need to bring out a team member when I started getting close to that. So I can train them up. So they operate the way that I want them to operate, but I'm scaling my revenue in doing so. Because now they're responsible for going out and filling in that gap that, okay, I took a step back. to hire somebody. Now I need to get them to leap forward in order to create more revenue. And then you keep engaging in that cycle. And next thing you know, you've got a scaled business that's also probably diversified in the event of any changes in the marketplace.

Yeah. And you're moving out of one quadrant into the next when you look into that entrepreneur leverage component of it. Right. That's got my favorite favorite couple words on the planet is leverage and, you know, finding ways to take your business and scale it. You know, I'm just a personal growth junkie when it comes to books on that. I'm reading how to buy back your time right now. And they talk about that specifically and finding out what your buyback rate is, right? That stuff just completely intrigues me. You're making a million dollars a year.

Your buyback $500 an hour, you know, mathematically, then leveraging anything that doesn't come near that. And all of a sudden when you, even when you talk to agents, they're making a hundred grand a year and you start doing the math, it's like, well, you know, you're still in the $50 an hour range. and you're doing eight and ten and $12 and sometimes even $5 an hour work now with the advent of BAs and all the abilities that we have out there. I love that space. The fact that you and Dave Lineager are focusing on franchising, it's just, to me, it's just an aha, right? To me, it's like I like watching smart people and what smart people are doing, and I definitely put you and Dave into that category.

And so I'm more intrigued with that than I am thinking that I wanted to have chicken shacks or something, right? Yeah, yeah, exactly. I mean, a lot of people look at it. They're like, I don't want to get into the food space. I go, how about into the food scale space? That's right. And they go, what does that look like?

I said, you're not buying a store. You're buying a territory. And, you know, if you think about 10 stores, that's where the leverage is. In fact, it's interesting, Randy. I had somebody from the real estate space who owned multiple franchises come to us and say, hey, you guys are selling territories. I want to buy some of those from you because I know what franchising does. and I know what you guys do in franchising.

So it's actually been catching on quite a bit. And I think 2024 is going to be a great year for, you know, regional franchise growth. So you'll see a lot more single stores popping up, but those are probably falling under a regional umbrella. I love that. I want to transition. But before I do, how can people get a hold of you in that particular space if they want to, just so I don't forget later? Well, we have a website here, Area 15Ventures.com.

So area 15 Ventures.com or you can find me on any of the social media networks at Adam Conto, CEO. You just type that into the Google bar and I'll pop up and you'll be able to contact me through any of my social media platforms. I love it. I love it. Well, let's transition a little bit to real estate. You and I met a long, long time ago when I was looking at a rematch remax franchise myself. Yep. And I remember that conversation. I wouldn't expect you to at all. But I remember being impacted by you and your passion for it and the way that you were really laying this out to understand the benefits of not only just a remax opportunity, but franchise opportunities and growth opportunities. And that's what always was valuable to me. It's on my marriage side, but the co-founder of Carl's juniors is my grandfather through marriage.

Wow. So Carl Carcher and Phil Smith founded that. If you look at all their hot dog carts around the world, in the pictures of every Carl's Juniors on the planet is a picture of them. and my aunt is in his arms. And so my very first job was at Carl's juniors. I got zero special treatment. Matter of fact,

I don't think I even knew it at that point. I just knew that I was going that direction as one of my first jobs when I was 16 or something. But from very early age, I've been an entrepreneur. I just didn't know any better. It doesn't excite me to think about an hourly wage. It just, you know, I'm just not wired that way. And I've said it a lot of times,

I'd rather have a hot dog stand. And I'm saying that from Carl's Jr. story now, but this is, you know, I'd rather have a hot dog stand in front of Home Depot that I could make the best hot dog stand, make the best food, and then get it to another Home Depot and get 300 food carts, then work at the post office for 400 grand a year. It's just me, right? It's, it's that entrepreneur buyer that burns in the belly. And when I look at your career, you've been extremely successful up through the CEO ranks of Remax and you're still teaching. You're still on your social media. You're still teaching. You're still adding value. Does that get out of your

blood? Is that just something that is, you know, going to be there until, uh, you leave the radio someday or what's that look like? That's a great question, Randy. And I mean, this is, I look at you and I'm like, Coach Randy, you know the answer to this, but you want to know my answer. Um, I do, you know, as well as I do leaders learn and learners lead. And what, what we're doing is we're fulfilling a special part of our heart by continuing to help other people learn what we've learned. Now, leaders are givers. And I got advice long ago from my mentor, Dave Lindiger, when I said, what is my goal in business? What should that look like in order to create great success? He says, you have to help other people. I said, well, how do you do that? He says, you have to be a sponge. I said, so I need to go out

and just soak things up. He goes, no. A sponge does more than just soak things up. When you see a sponge work, it soaks things up and then it gives things back. So you need to be out soaking things up so that you can give them back. And you need to intentionally do that every single day. And that's one of the habits of the very top leaders in this world. And one of the habits of the very top entrepreneurs in this world is they're willing to give without question. So what is giving without question? Unconditionally, that is love. That is love for the people that you serve. We have fear, which is taking in and keeping, and we have love, which is giving unconditionally.

Which happens to be lack in abundance as well. Yes. Yes. In go. Exactly. Exactly. I mean, they all run parallel on those two tracks. There you go.

You know, it's that, you know, it's abundance and love or it's fear and it's taking, you know, it's minimalistic. and things like that. And it's during these tough times that we get to hold up a mirror and say, all right, where am I at? Because during the tough times, if you default to, I give up, I just want a nine to five job, I'm thrown in the towel, things like that. I don't know that you had that entrepreneur piece in your heart to begin with.

You're dabbling at it, but are you all in? Because I can tell you one thing about being an entrepreneur and making payroll and going out and eating what you kill. and things of that nature, whatever cliches we want to put on this, ultimately, you've got to be willing to take it during the tough times and the good times. The tough times are when you figure out your survival skills, the good times are when you figure out your growth skills. So, and they do have overlap. Like right now, you know, everybody's like, this is really tough right now. I'm like, go out and grow right now, intentionally grow. Because then you're focused on growth instead of

surviving. And we have a different way of looking at that. So ultimately it comes down to how do I give as much value as possible to people right now as I ever have? And that's, you know, really one of the questions we're facing right now in the real estate space where people are going, oh, okay, what should a buyer's agent make? How should they be paid? And, you know, it's, it's on the top of everybody's mind. Am I going to be able to survive as a buyer's agent? You know, we're doing sub four million deals at a run rate right now as of like November or something like that. So how are we going to survive with a million and a half people doing for selling four million houses? Well, it's time to, time to dig deep, time to get creative, get really aggressive and get really good at your leadership and your influence out there in the marketplace in order to survive this.

And you only accomplish that by giving unconditionally instead of going and hiding everything you have because you're afraid, you know, how long am I going to make it at this point? It's go out and give and that's when you get. Amen. You know, Jim Rohn, helping up people get what they want and you'll get all you want. And that's literally on the back of my business card for the last decade. It's just something that was like, that is the battle cry. Right. And, you know, when we look, I don't remember the article. I don't want to name it incorrectly, but it was something I read just a couple days ago that 49% of every of the 1.5 million agents did one deal or less. Yeah. Half of those did zero. And so when we look at that, you know, we're bloated right now. Let's be honest. You and I were through the market of 2008, 9, 10, when we went from 1.5 million to 1 million approximately agents, we had a significant, you know, overturn in the industry.

We've bloated back up to 1.6, I think, at our highest. And now we're, you know, coming down on the numbers this year. But we're obviously having attrition in the industry and will continue to do so. I think that so many things have changed. I'm going to say the word, lawsuit, right? We're going to talk about that. I'd like to have a little conversation around that because I think it's changing the industry.

Sure. Not only is it rattling the cages of many, right? I think there's so much fear because it's unknown, uncertainty, all these things that breed and pull into that fear, you know? And that's kind of why I avoid the news. The news is made to keep you in a place of the past or the future, not in the present, right? And so when we look at that, I think that it would be valuable to talk about where you think the industry is going, what the future of this looks like. You literally were at the pinnacle of, you know, the top of the industry and then arguably one of the number one companies in the world and what Dave is created.

And, you know, I think there's any time this happens, again, it might be unwired differently and it might even be unblind. But I look at opportunity. When I see big, drastic, crazy things going on, I go opportunity. There's going to be opportunity for the ones that go after and are willing to do the work. And there's going to be the ostriches that put their heads in the sand and wait for the time to pass. You know, number one, remax, I think was the very first one to get in front of the lawsuits. And if you can't talk about something, I respect that. You know, if there's something that we shouldn't go into detail of.

But I remember personally, and again, it's a little vulnerable maybe. but in the beginning, I was like, no, we're setting precedence. And then after the fact, I'm like, okay, brilliant, you know, visionary, brilliant, that they were able that Dave or whoever was able to look in the front of that because there's a lot of companies would love to be in your place now with that going on, right? What can you talk about? What are you willing to talk about? What is something that people, you know, a significant amount of our listeners are agents

and lenders and title people? what's going on in the industry? Where are we going? Where are we coming from? And what do you see happening in this space? So in order to kind of dig into that, I think we need to understand kind of the history of the industry. So, you know, when you have a sub agency and how that used to operate way back in the day.

And if it's a hundred years, right? What's that? A hundred years or something that's been. Yeah. I mean, it's. It hasn't changed. Right. So there are two parts.

to kind of how this operates. And this is all my hypothesis based upon, first of all, you know, yes, I was named in one of the lawsuits as the CEO remax. I was deposed, things like that. And so I have a deep understanding of how that whole process works. But keep in mind also that I have literally been on the phone talking to person to person a lot of my past colleagues, a lot of the CEOs and key leaders in pretty much every real estate organization in North North America since then. So I mean, it's after I left Remax, but, you know, just catching up with all of my friends because, as you know, I stayed incredibly agnostic and friendly with the entire industry. I spoke at different industry events that were not Remax based, that were about helping

people, I don't care who you are. It was about helping you do more and better business because I want to see the real estate industry incredibly professional and very good for those people that qualify to be in it. So, you know, I'm stressing a few of those words because I feel it boils down to, yes, we are bloated. I completely agree with you, Randy. The industry has too many people in it. When you look at the number of transactions and a number of realtors, that does not jive in my mind when it comes to, hey, can these people run a professional business? The answer is no. You can't based on the number. So what do you need to do? You need to jump into that top 20 or even 10 percent of the industry. and there are ways that you can do that.

And a lot of that has to do with coaching and accountability and having a really good game plan that you can talk to Randy about, aside from this podcast. So, and, you know, and if Randy's not your coach, find one. There's got to be one out there, but we can't function as an individual without being held accountable,

and we can't hold ourselves as accountable as somebody else can hold us. Okay. Let's just face it, people. So let's, let's dig into the lawsuits here real quick. The lawsuits came about because there's been this transition in the industry over the years where, and I'll say this, we've kind of gotten into this phase of learned helplessness. Okay. Learned helplessness is a psychology principle where when something's been that way for so long, you're just used to it and tolerate it. And the industry

has evolved around the real estate agent who said, oh, okay, as long as I continue to make commissions and make a little more money and things like that, I'm fine with it. And we have National Association of Realtors, which when you look at the end. NAR. The NAR is a fabulous lobbying group who's done incredible things for housing, you know, for flood insurance, for the industry, for the real estate transaction itself in order to simplify and, you know, create some consistency in it and some legal boundaries around it. But also you kind of have to wonder, okay, we still have some parts to this that are a little

archaic. You know, MLS is, you know how long MLS has been around, Randy? they were named multiple listing service in like 1907. You could pick whether or not you got in the horse drawn carriage. I was going to say they were delivering sheets by horse drawn carriage. Yeah, exactly. I mean, that's when multiple listing service, the term was coined. So I would encourage everybody go out and learn about the industry.

Now, during that process, you know, you got into this agency piece and there were, you know, the only people who were realtors way back in like the 70s were brokers. There were like 30,000. And your sales agent couldn't be a realtor. And I'm not trying to get into the deep, deep history of this, but ultimately this thing evolved. But the way we paid ourselves didn't necessarily evolve. They tried to fit it into how they evolved, the titles and the names and agency

and things like that. And I think what's happening is we're seeing this junction where, you know, we've got people on the outside of the industry who are trying to adjust how things are happening on the inside of the industry. And really, a lot of that happens through class action lawsuits, unfortunately. And whether or not they end up prevailing overall, after appeals or whatever it might be, I think some change needs to happen. And I think we need to update ourselves because we're still operating under this principle of all these small groups sharing information where we live in a,

a blockchain world now for crying out loud, when things can be different and more updated and more secure. You know, you look at, you know, we're talking about the. supply chain of the country here 15% of the GDP, the supply chain for 15% of the GDP for the United States. And it takes an act of God to make changes in that. I mean, how long does it take to make an MLS rule? Like one to three years for Crown All right. I mean, let's talk about full of bureaucracy. And I'm sorry, but lack of internal policing. And I'm just calling it out because, you know, I can read the articles just like anybody else does. I'm not throwing stones at NAR, but let's hold up the mirror and be transparent with ourselves here.

You're phenomenal lobbying people. But do we, have we kind of not evolved as a membership organization or the only membership organization? The banking industry has like six or seven membership organizations. But you're tied to one. Yeah. Why? So, you know, what NAR has been able to account? accomplished for us over the years is really protected the industry. And, you know, I'm not on one side or

the other on this. I'm seeing writing on the wall, basically. I think it's a perfect storm for NAR that they've really got to re-identify themselves with who they are, what the value proposition is. And many of the agents that, you know, haven't been around even, even 10 years. So they don't understand what the importance of their, you know, lobbying power and their, and their protection is. But I think we've got a perfect storm. I think they've really got to rebrand themselves or they're going to find themselves fighting a battle for survival. And that's just me, my one vote. But when you have companies, you know, saying that they can move away from NAR now, which has never been an option, companies requiring you to move away from NAR, which is, you know, within some of the brands. And I think that,

in combination with all the other, you know, sexual harassment claims and different things, I just think it's a very challenging time for them to reboot. Yep. And again, I'm all for change, right? Entrepreneurs, we embrace change and change is good, even though it's painful and scary at times, right? Well, let me ask you this, Randy. Okay, what happens when we don't change? Yeah, we don't involve, we die. Exactly. That's right. I mean, you know, the Darwinism, it's not the strongest or the smartest that survive. It's the one most adept to change. That's true. The theory of evolution and things like that is all about adapting to the needs of the future. And if we're not willing to do that, then we have a little bit of a problem.

And sometimes, you know, we get comfortable in our own ways. And it's, what's the thing that agents hate the most change? You know, what's the other thing they hate the most accountability? You know, but, but ultimately it comes down. And that's why you're independent contractors, your entrepreneurs is you're like, I found a way, leave me alone. I'm going to, you know, don't move my cheese. I'm going to be good this way.

But ultimately, we've hit this, this point where change occurs so quickly in society now that we need to get ahead of that change. And I, you know, I hope the best for the professionals in the space. I hope those that are not engaged in the highest level of professionalism or doing this as something that shows, you know, let me ask you this. Do you want your heart surgeon to just be a part-timer? I mean, for crying out loud or your attorney who's going to keep you out of prison to be a part-time. They're like, oh, no, I'm working my other job right now. Let me get back to you when I have time. No. Do you want your largest investment to be handled by somebody who's not fully invested in that career? No. So I'm, I'm, I'm a firm believer that we have some bloat. We need to trim down this industry. It's, NAR, listen to me, it's not about headcount. It's about professionalism and how effective you are at helping the consumer find their home. That's what they want and that's what they need.

And we need to make sure we're doing it the right way. And I know there's a lot of people like, yeah, we got it. We'll do that anyway. But the reality is this is also about peer accountability folks. And if you're not willing to look both ways down the aisle and say step it up or step out, then I think, okay, it's time for some, you know, some cleaning to happen within the ranks. So, and every business goes through this, except for bureaucratic stacked businesses where they protect their past. Okay, it's great. I retired. I hope that,

you know, the next CEO, Remax is fabulous and takes this thing's way beyond where I was able to take it. But ultimately, leaders bring the next leaders to a point. and cut them loose to go and make the change necessary for the proper evolution of a business. Yeah, absolutely true. I love your insight and the way that you articulate it. I feel 100% the same. I think that we could probably stand to have 50% of the agents we have now, happily paid twice as much in NAR commission or NAR membership fees and things to supplement that.

I think that's probably the numbers where we're sustainable looking at the the annual, like you said, housing index and growth. What do you see the industry going, say, in five years? Like, what excites you about the future of the industry? And where do you think we are in five years? I know it's a crystal ball, but it's a crystal ball. And I think it's going to take a few years for the, any and all of the litigation. You know, I think we have like 18 lawsuits going right now.

But ultimately, you know, we don't know anything until at least the Burnett case comes to, we find out what the injunctive relief looks like. like and what the DOJ is going to do and things like that. And then we also see what the motions of the remaining defendants, you know, Keller Williams and HSA and they are due, as well as these other follow-on lawsuits. Some of them are massive. And a lot of those being sued right now, you know, that I would venture guess the plaintiffs attorneys and those other lawsuits outside of, you know, the Gibson, the moral,

the sitzer and all those others that have been in place for the past three, four years. Gibson was the new one, October 31st, I guess. That's the rest of the US around the Citre Burnett case. But ultimately, what we're going to see is a whole bunch of attorneys come in here and pull some cash out of the industry. And I think we're going to see it on the state, the local and the MLS level, as well as the mid-sized brokers. The smaller brokers can't afford to go in and write a check. You're making rent every month. You know, as the, are the mid-sized, it's, margins are squeezed in the space.

But I think what you're going to see is, as that stuff all kind of plays out, we're going to see some evolution in how the business works. Fundamentally, the framework is going to be relatively similar, but I think you're going to see, you know, the biggest change obviously occur on the by side and how the by-side compensation works. But realistically, five years from now, if I pulled out my crystal ball, I think we're going to see, you know, probably fewer. you know, higher levels of production per agent. Also an increase in professionalism. We've all been yelling, raise the bar, raise the bar for so many years. Well, NAR always looked at it as anybody can join NAR. You just got to get your license.

And I mean, why is that? The entry threshold is very low. Yeah, I think we need to raise the entry threshold requirements. Yeah, and somebody's going to send me hate mail on this going, you know, I'm happy. I'm a school teacher. I'm doing two deals a year. I'm happy to leave me alone. And I'm like, well, go work for somebody who's doing 200 deals a year and still do your two deals.

Tour and coach and support. Exactly. But I might be four or five deals in that same bandwidth of what they're doing. Right. Right. So I think it's going to be evolved. Is it still going to be here? Are we going to still need agents and brokers and things like that?

Absolutely 100%. But I would say, get better, folks, if you want to be in that remaining chunk. I love it. I think it's Jacko that comes up. with adversity and problems, and he goes, good. Every time you get all these challenges, say good and embrace it and know that you're part of the future of the change, right? What do you think the small indies? To me, they're the most susceptible.

The small indies that have maybe 10 to 40 agents, they don't have the protection of a franchise. They don't have the band with and partnerships of a larger support system. They're really on an island. And I think if it may not, and hopefully it doesn't, but if it really, reaches that granular of a level where you could have just somebody that's mad at you, sue your company over this and start trying to class action suit these things. I just think it could change the industry by itself, that one thing. Well, when you think about it, Randy, the, you know, there's there are 100,000 brokers in the U.S.

Okay. 100,000 brokerages for crying out loud. Now, I can't see everybody, but raise your hand if you think that's too many. I mean, I'm sure everybody, and keep one hand on the wheel if you're listening to this. while you're driving. But ultimately, it comes down to, I think they're going to be at an inflection point. Because when you look at what do the larger brands give, and I don't necessarily even mean a franchise brand, but what does a larger local group give, you know, a midsize, if you will, and they give you technology. They give you more knowledge and help with that, you know,

the insurance and the oversight and illegal advice and all of those other things. I think we're going to start to see some consolidation on the bottom end of the industry. And I think we're also going to see some people decide to say, you know what? This is getting too difficult and too expensive for me to be part of because you're right. All it takes is, and we're seeing this, or I think we're about to see this, we're going to have the local ambulance chasing, you know, attorney go, all right, I've got precedent here. I can go after these guys. I'm just going to round up, you know, a hundred of these these indies, they can't afford to fight me. All I have to do is file this once with everybody's name on it and then start deposing people.

And as soon as he starts stacking up, you know, let's say you settle for 10,000 or 50,000 each on them. And there's a hundred of them. That adds up. So I think we're going to start to see the litigation continue to trickle down. 24 is going to be the year of litigation in our spirit. Yeah, I do too. And it's unfortunate because I know people that have worked their whole lives for this.

I talked to a broker the other day, just talking about a listing. and 28 years in the business and she's frightened. She's literally like, I'm interviewing people. I don't know what to do next. This is going to, if this comes to my level, we're just, we've lost 28 years of, you know, a legacy brand in their families and so on. And so there's a lot of concern out there in this.

And it is getting, I believe it's going to continue to get more granular. You know, when you talk about an agent that's been in the business one or two years, What advice would you give them? I mean, you are literally, you know, one of the top trainers and leaders of the industry for decades, two decades. What advice would you give somebody coming in the business one or two years? And what is it for them that's the big rocks, the stones that are going to be their foundational, you know, blueprint of their business. What's that look like? Well, there's two parts to this.

First of all, it's have a business plan and have a friend. and have a framework for how you operate your business. A lot of people wing it in this industry. I would venture to guess that the majority of people wing it in this industry. Agreed. And winging it is not a business plan, folks. You know, hope is not a strategy and it won't get you someplace good. So you got to have a framework for this.

And, you know, find somebody like Randy or, you know, go educate yourself if you desire not to go seek a coach or something like that. I mean, I've had seven business coaches over my time. A business coach is incredibly invaluable, all right? I wouldn't operate without a coach. I mean, I, you know, I've given coaching permission to many people in my life. And what does coaching permission mean? That means you give people permission to give you feedback that you will follow. Yeah.

Okay. It's not a suggestion. Just straight talk. Exactly. So framework your business is the first one. and don't just get into this, go, am I a real estate license? I'm going to go talk to a few people. No, when you're not talking to somebody, you should be working that plan.

And knowing that that plan should be on paper, in a folder, where somebody can walk up to you. If I walked up and said, show me your business plan, you should be able to go, here it is. And it has everything down to daily steps and activities that grow your business, period, and how you're functioning with your funding and, you know, how do you manage your expenses and your revenue and things like that? So that's step one, all right? This is not a business school class. You might need to go take one if you need to figure that stuff out.

But go to YouTube if you want to figure out what a good business plan for a real estate agent looks like. There's lots of people on there to listen to or frankly, listen to Randy. He's got it figured out. And here's the second piece, okay? The second piece is this business is not about transaction. It's about relationships. Thank you for saying that. Relationships create transactions.

But the activity of building those relationships is something that has to happen all the time to get to those transactions. So when you think about this, my second question, besides pulling out your business plan, would be pull out your customer list. You should be able to see your customer list from A to a Z, you know, call it a CRM if you want, go hit print and look at it and go through with a highlighter or a pencil or a pen or just on your computer screen or whatever, make a new column next to the names and put an indication if you've talked to that person in the last two weeks. Or if you... Which is zero for most people.

Exactly. Unless they're calling them or having an immediate need. Right. They're waiting for like, some greater being to drop this transaction in their lap. And they're like, yes, I got another listing or I got a listing appointment. They run around the office. I got a listing appointment. I got a listing appointment. I got a listing appointment.

And, you know, everybody else is like, I'm still waiting for, you know, the listing God to show up and drop one for me. Or I'm going to, you know, write a check to a portal or, you know, figure out some other way. It's about relationships. The first and second level relationships, first level relationship obviously is with the customer, a second level was with somebody who delivers you to the customer. And, you know, they're both incredibly important.

Work your network, but know who's in your network and keep that list clean and keep growing it. You know, we always talk about, you know, back in the day, the rule was take, you know, 10 business cards or 20 business cards and go out. And that must be handed to somebody individually where you get their name and phone number in return because most people didn't have emails then or whatever it was. And once you've done that with 10 or 20 people, then you can go do something else during your day, which typically was door knocking or whatever it might be. But ultimately, it came down to go build 10 to 20 relationships or begin 10 to 20 relationships a day. People are still buying and selling houses.

I mentioned, you know, we're below the core four. That's four million people that are selling a house. But ultimately, we're rebounding from that, folks. And it's January. So guess what? There's more than that out there now. 2024 is the rebound year for this because interest rates are going to start inching down. People are comfortable with where they're at right now.

Right. To this point where we're comfortable. They're comfortable with where they're at. Do they want them lower? Yes. But there's deals out there. So to get ahead of that other, you know, that 40 or 50 percent that Randy talked about, they're going to drop off out of the industry because they're not doing this today.

Get your butt out there and go build that list and get those transactions. Because here's the thing. the way the business runs for the most part is still the same as it ran a year ago that's right the changes haven't occurred yet in the industry so you need to get some business going instead of waiting for the changes to occur because it's easier to change when you have transactions in the hopper than it is without them because you're evolving you're not waiting so true so true so adam i i really really appreciate you and we're going to wrap up here and just a couple quick questions.

But one of the things I like to ask my guests, or what are you reading right now? And, you know, what are you consuming? What are you looking at? And that's kind of an important one to me. Oh, dude. I brought it. I literally have it on my desk.

It's one of my favorites right now. All right, folks. You know, last year, everybody was saying Atomic Habits by James Clear, which is great. That's a great book. Yeah, I've read that like five times. And I love it. I'll still go back to that, but I'm done, you know, James, I love you, man.

But I'm done saying Atomic Habits on podcast because this is my new fave right here. It's called Essentialism. It's by Greg McEwen. It's the discipline, discipline pursuit of less, okay? The discipline pursuit of less. And this thing is full of incredible quotes. I just finished this. This is my first book of the new year.

I love it. And I'll tell you, there's, there's the difference between the non-essentialist and the essentialist. And the non-essentialist, which is like somebody who tries to do everything, says all things to all people. And the essentialist is less but better. I mean, the, this. That epitomizes everything in the book.

It totally does. It's my morning routine read now. Yes. Yeah. I mean, I'll tell you, this, just go get it. I mean, for crying out loud people. Essentialism. you can get it on Amazon, you can get the audio, you can get the Kindle version.

I mean, go get it and read it. And if you don't want to go buy it, something that will make you want to buy it is go to chat GPT and say, give me the 10 key points in essentialism by Greg McEwen. And it will give you some key points on it. You don't even have to read the book to get the chat GPT key points. It might make something up, who knows. But the reality is after you read that, you're going to go, I'm in this book. I'm going to go get this.

So, that's so good. I'm writing that down. I'm going to do that. That's a great, great takeaway. Well, last question, Adam. And again, we really, really appreciate you being here. I know when we chat, I was really excited to connect with you. And, you know, you're a visionary. You're a leader in the industry. You're going to continue to be that way. So my last question, what impact do you want to have as you leave this world, this industry, and you move on? you know, what legacy, what impact do you want to have? Well, I think when you, you know, if you could sit up and look around the crowd at your funeral and ask that question, I think it's kind of fascinating to think about what you want

people to say. You know, I think the standard is, oh, he's a great guy or whatever, which we all give people the, you know, kind of the benefit of the doubt when they're gone. But ultimately, I think I would like for people to say, that guy helped me. And I mean, that's when you look at it, why do you do what you do? You should be doing what you do because it's helpful to others. And if we all gave in society, I think it would be a better place. It was funny.

My wife and I, the other evening, we went to Kudoba for dinner and, you know, just something quick, you know, something with protein in it, whatever it is. And we went when we pulled up, there was a bicycle sitting outside. It was like 12 degrees out, by the way. I live in Colorado. There was a bicycle sitting outside. I'm like, it's 12 degrees out. But it had like, you know, shopping bags hanging all over and stuff like that. There's definitely a homeless person's bike.

Yeah. And we went in and there was like two other tables that had people at. And back in the corner was one of them. And it was a guy sitting there and he didn't have any branded materials on his table, nothing from Kudoba. And Kelly and I were, we had dinner. I sat down. I make eye contact with or I at least check everybody out in the room.

Call me a cop still. But I check everybody out. He made eye contact against the wall, right? Yeah, yeah, I do. I totally. From the military. I got to see the door. Okay.

So I make eye contact with this guy and he kind of gave me the head nod. And I'm like, you could just tell he wears his feeling as on his sleeves, really nice guy. and he just went back to what he was doing, which was sitting there looking at his phone, he had his headphones in. And Kelly and I had our dinner, and then we left. And we were pulling out of the parking lot. We both look at each other and we're like, I feel sorry for that guy. You know, it's going to be four degrees tonight.

I feel bad for him. And he wasn't even eating dinner. He had this like a gatorade bottle or something in front of them. So I make a U-turn in the middle of the street and drive back in there and walked up to the counter. And the lady was mopping behind the cash register. Again, it was empty at this point. This guy was sitting over there. And I said, she knew that I was just in there. And, you know, I'm sure she's thinking, great, here comes to the complaint. So I walk in and I smile and I go, I see they had a little stack of gift cards sitting there. So I put one of those down. I said, why don't you give me 20 bucks on this?

And she goes, okay. And then I gave her a big fat tip for it. And Gary, the guy who helped us, I remember his name because he was super nice. He turned over and looked real quick. And I grabbed the card and I walk over and I walk up to this guy sitting in the corner. And I see over my shoulder, I see her pointing at me and talking to Gary. And she was kind of smiling a little bit. And they were nodding. And I look at this gentleman and I said, excuse me, sir.

And he goes, yes, sir. I said, is that your bicycle outside? He goes, why, yes, sir, it is. I said, okay, well, why don't you get yourself some dinner on me tonight? And I just handed him the $20 gift card. And his face lit up. And it cost me $25 with a tip. And I'm like, all right, this, I just, you know, you could feel your heart warming up by doing this.

My wife's practically interior standing there. I'm practically in tears standing there. And he reaches out and shakes his hand and says, thank you. God bless you. to both of us. Introduced himself. And I'm like, and you can tell he's getting a little antsy in his seat. So I'm like, all right, well, have a good evening.

Enjoy your dinner. He's like, thank you. I've never seen somebody walk to the order place at Cube Dova so quickly with a big smile on their face is this guy. And Gary jumped up and started helping him. It's so good. I mean, it was just pulling away. So good.

It felt so good. Go do something for somebody, folks. Go do something good for somebody. And it could be little. It could be little. I love that. I'm so glad we ended on that story, man. You are a fine human being. I appreciate knowing you and all the things you've been to me. And you know, you really were probably the catalyst of my direction in the real estate business. And 20 years ago, I just appreciate you with that.

You know, Adam, thank you for being here. I know you're a busy guy. And I just appreciate all you do and the things you do to contribute and give back. And that final story is a great, way to leave it. Go out there if you're listening to this. Go out there, listen to this podcast and go do something good. It could be something as simple as giving somebody a free lunch or buying them or giving them a coat. I love taking coats out of my backseat and handing it to people during the winter. It doesn't matter what the coat meant to me. It means everything to me and them at that moment. So, Adam, thank you for being here. I appreciate you very, very much. Thank you for all you do and all you do to contribute to the industry.

And again, last time, how can people get a hold of you if they want to reach you? You can find me on the social media networks, Adam Contos, CEO. Here's one. Go to Adamcontos.com, my website. You can find me every place there. See, everybody. Have a great day. Thanks.

You too. Bye for now.