KGCI: Real Estate on Air - Selling $33M Estates with Dusty Baker.

Episode Date: May 7, 2024

So the big question is this. How do real estate agents like us get started in selling luxury real estate? How do we go from selling typical starter homes to selling multi-million dollar properties? What does it take to become successful in the luxury real estate industry? That is the question. And this podcast will give you the answer. My name is Juan Carlos Baranetti. and welcome to the luxury agent podcast.

What is going on, everyone? Welcome back to another segment of the luxury agent podcast. I am your host, Juan Carl's Barretti, and today, wow, do we have a treat for you? We have the one and only Dusty Baker with Sotheby's International. It seems like we've been dealing with a lot of these Sotheby's guys, but turns out that they are rock stars over there on the West Coast. Dusty and his team actually sold 100,000.

and $10 million worth of the real estate last year. And they actually hold one of the records out of Montecito, California, for one of the highest priced listings ever sold last year at $33 million. So we are dealing with an absolute expert when it comes to dealing luxury property. And we're going to be diving deep into what it takes to get into this industry. So let's jump straight into it. Dusty, what's going on? Hey, Carlos. Thanks so much for having me. This should be fun. I appreciate it. Absolutely. Thanks for taking the time. I want to know, like, how did you get started? And I've been doing this for about 12 years. Describe that journey to us. You know, I got really lucky, actually, when people asked me, hey, how do I get into real estate? I mean, I kind of, you know, it's not easy. It's actually very, very difficult. But I was young when I got in. And I started actually as an intern. And then I was an assistant. And then I was a partner on a team. And then I broke off and came an agent on my own about five years ago and have grown into kind of a mini team, which is. It was where we stand now, but I really got to dip my toes in the water and get a lot of experience through, you know, folks who mentored me and the people that I interned for and then wasn't assistant for as well, because, you know, this is a big deal. I don't take real estate lightly. We're dealing with people's largest assets. So I like the fact, but by the time I had my first

listing, I'll put it that way. I had about 100 million in sales in my, you know, resume that I was working on with this other team. So I felt very comfortable and I felt like by the time I had my first listing, which is obviously a long time ago, I actually was able to represent them in an incredible fashion, not just kind of figuring it out as I go. No, I love that. So you're actually one of the first guests that actually took the time to join the business from an internship perspective. And I'm assuming I had a ton of benefits. How long did you do that before you went off on your own and started selling property? So I was an intern. So I got into real estate while I was in college, actually. So I was an intern for about six months unpaid. And then I was an assistant for about a

year and a half and then I got licensed and became a partner and then started selling. So about that much time. Feneral. My old business partner and I joke that it was kind of like a master's in real estate. You know, you get your master's in business takes two years. It was about two years of kind of a master's in real estate. And I think it's a really good way to go. I know that not everybody has that opportunity. I know a lot of people just can't afford to do that. You know, if you have a fan, like when people talk to me in their 44 getting into real estate, they have five kids. I'm like, yeah, I don't know. Like you have to make money right away. if you're younger and have the ability to take on an unpaid internship or an assistant role

where you're not getting paid very much, it is helpful. You should get trained that way. And I was very, very fortunate and blessed to have that opportunity. No, I couldn't agree with you more. I tell a lot of people, if you're looking to get started in real estate, you should have at least have six to 12 months reserves if you're considering going full time. My first year in the business, I worked 40, 50, 60 hour weeks and I only sold one house. And it wasn't until that personal circle until those referrals started coming in year two, where you could really make it a career and even a business. So that's all some stuff. Tell us, starting out, what was the hardest part about going out there and generating your own clients? Because you seem to be in a pretty high price range.

Yeah. I mean, San Barbara Montecito is a really, really affluent area. I'm once again, very blessed. I grew up here. So I knew a lot of people. I also played sports. So I knew a lot of people from the sports worlds. So I at least was pretty well connected. But that being said, I think I was a little cocky going into it. I thought, hey, once the world finds out, Dusty Bay. has a license. My phone will not stop bringing. That was not the case. Let me put it, you know, lightly. So that was not rookie of the year by a long shot. I had, you know, some pretty terrible first few years. So it was tough. It's tough generating business. Truly. I mean, we have, you know, our general region has about 200,000 people. There's about 1,600 realtors.

So it's crazy saturated. I mean, listen, every market saturated. But it was very, very, very difficult generating business. Just is what it is. And it takes a long time. You know, Some people get at the gate really quickly and they get a couple of deals and they get, there's some luck involved, of course. We've all had it. But it's very difficult to get those first few deals. Once you get those, you can leverage those into more and more and more and more. Getting started was not easy.

I would not want to do it again. I'll put it that way. No, I could imagine. And then once you started getting listings, did you work your way into the luxury market or did you just start out selling two or three million dollars from day one? No, no. I clawed my way in. You know, there's an interesting example.

You can actually Google it. You can Google the physics of dominoes. The actual physics of the weight of dominoes is one domino can knock over another domino that's one and a half times it's mass. So there's a great video on YouTube where it shows this tiny little tax-sized domino. After about 13 dominoes, it knocked over some like 500 pound slab of limestone or something. Get you just da-da-da-da. So that's kind of how I see real estate. You can keep using a small success to leverage up to a slightly bigger one. You know, you're not going to sell a $500,000 condo and then try to impress a $10 million. estate seller. But you can easily say, hey, I did a great job with this $500,000 condo. And then you talked to a $750,000 condo and then a million, you know, million three house and et cetera. And from day one, even we had these, you know, tiny little not good area, one bedroom, crap condos for $300,000. And I thought, well, I'm going to do such a good job here that I can leverage that in other business. I refuse to have my name associated with anything that really wasn't perfect. So everything I've ever touched has had professional photography. floor plan video, you know, Matterport before anyone else was doing it. We did some lifestyle

videos before a lot of people were doing it. So, you know, some of it is a little ego driven. You know, if my name and face around something, I want it to look good. But also, if you do a terrible job with a small house, why should someone in a big house assume that you're going to do a good job there? That's really everything in life. If you're going to do a bad job with something down here, there's no realistic assumption that you'll do a great job up here. So everything I touch, I try and make it perfect. And really, it was a painfully, slow climb from smaller condos, smaller homes, just slightly bigger homes, slightly bigger homes. And then really, I think everyone who sells in the luxury realm, there's that time you might

get lucky. You get your foot in the door when maybe you shouldn't. And you just have to crush it. You have to get it. You have to sell it. You have to do an incredible job. You have to just empty your bank account marketing it. Then you have that. And then you have that to work with in the future. Like I said, I got that and I was able to start leveraging that into some bigger listings. No, it's actually a very common recurring theme where a lot of luxury agents talk about getting their big break, right? And once you get that big. It's a very real thing. Yeah, once you get the multimillion dollar listing, you can leverage that success to go out there and get others.

I know when it comes to the lower price properties, right, or typical starter homes throughout the country, pricing was the matters most. There's obviously a large amount of buyers and there's very minimum demand. I mean, very minimum supply. So what ends up happening is if you price the house right, hey, they could sell within days. is that the same on the luxury side or do you find that on the luxury side it obviously is going to take a lot longer? In a typical market, it takes a lot longer. So, you know, a $10 million house here would typically take one to two to three years to sell because Monosito is also a secondary market. We don't have the industry like in L.A. or San Francisco, New York.

So this is a second, third, fourth, fifth home. And no one needs that in their life. They want that in their life. They don't need it in their life. So typically the buyer demographic was difficult to get them to make that decision. Now they're selling a lot quicker than they used to because obviously everything is just gangbusters right now. But in previous years, you know, the lower price point, I will say just to go off your note, pricing is very, very important. But what I tell every seller, especially right now, this is a common phone call I have.

They say, Dusty, it's such a hot market. You can put a sign in front and I can sell it in a weekend. And I say, you're absolutely right. You absolutely could. It's that hot up the market. How much are you going to sell it for, though? I mean, that's the question. Of course you can sell it, how much for?

you know, can my marketing, can my pre-listing prep get you that extra at five or 10 percent? That's kind of the same thing with the library round as well. It's different in the fact that it won't necessarily sell, especially in previous markets. You had to go out and find that buyer. For our market, you have to go out and find that buyer. You have to be a bit more aggressive in your marketing, a bit more, you know, specified in it. And then obviously with your marketing, how much can you sell it for? How prestigious can you make the property look?

That's excellent. I know a lot of top luxury agents, they go into these different main markets, or the feeder markets, where they start marketing to those bigger agents who have those clientele purchasing primary residents in their neighborhood. But as you mentioned, if they're going to be buying a secondary or even a third home, you have to go outside of your market to market. What type of strategy do you use? Do you do more social media? Is it online based? Do you market locally in newspapers? What's your strategy to get these property sold? So the really high-end ones, we have to go outside of our market. I think it's pretty easy, actually, to get. get saturation marketing locally. I mean, listen, I have, I'm not against local print ads. I have pages on Retainer and all of our major local print magazines, things like that. So I absolutely do

that, but it's pretty easy to get in contact on the MLS with local agents, local buyers, etc. We do digital and print locally. But getting outside where basically all of our high-end buyers come from out of Santa Barbara. It was primarily Los Angeles. So I did a ton of focusing in L.A. I'd be in L.A. at least once a month, setting up meetings with top agents, buyers, etc. So you have to have a major presence in LA that's quickly transitioning to northern California, Palo Alto, you know, San Francisco Pacific Heights. We're getting a ton of money from tech and finance up there. Obviously, it expands into Texas, you know, Illinois, New York, et cetera. So one of the ways that I do it is I keep in touch with other agents. I mean, we got connected through an agent friend that we have in Colorado.

So I'm constantly talking to top agents in other feeder markets because that's where our buyers come from. most important thing. That's the easiest way to get in touch with these high-end buyers is through their agent representatives. It's absolutely shocking how many clients that I mean share. You know, I work with with other agents in San Francisco, Chicago, New York, L.A., where their buddies mine and we say, oh, yeah, I work with this client as well because, you know, the ultra-wealthy, there's just only so many of them in the world. It's a much smaller world than people think. So we're not trying to market to a million people. We're trying to get in front of maybe 200,000 people in the entire world.

So the representatives are the easiest. That being said, we also do print campaigns in New York Times, Wall Street Journal, things like that. And we do really narrowly focused digital campaigns in these high-end zip codes as well. No, this is great stuff. And you're doing a lot of agent-to-agent marketing. You're putting yourself out there on these social media platforms. Let me ask you, in terms of the amount of deals that you actually co-broker versus finding the buyer directly. What would you say is the ratio? Is it more, there's a broker on every other

transaction? Is it one out of three? Like, just on all your experience in the last couple of years you doing this, how many people actually have a broker when they meet you versus coming on loan on representative? Oh, they usually have another agent. So I would say at least 90% has another agent. Oh, wow. Okay. That'll double end. Yeah, typically they'll have major representative. But when I say we go out and find that buyer, I don't necessarily mean find the buyer that I, and I represent them. I mean, maybe even finding that agent to talk to their buyer because it all comes down to the logistics. I mean, you know, I'm sure you're very well-connected guy. Think of a really high-end agent in Los Angeles. They're extraordinarily busy. They're not

even picking up the phone for most people. So what does it take for them to pick up the phone when they see that I'm calling? What does it take for them to take that five minutes and say, okay, Dusty has this place in Montecito. Who could it work for? They think of maybe two or three buyers that they have. And they actually have to call those buyers. And they have to trust me as well, because these super high-end buyers, you can't just bug them every five minutes. You get to call it a few chips, you know, occasionally. And you can't waste that on just, hey, hey, you know, high-end buyer. This random guy, Montecito has some listing that you might like. No, it needs to be where they trust that when I say this is a quality, quality, you know, private estate, that it actually is private to their expectations and the quality of the finishes are to their expectations as well. So that when they call them, they say, you know, I might want to go see that. So that's what I mean in finding that buyer. Oftentimes, it's through their agents, sometimes it's through mutual friends, things like that. But I don't double in very often. No, that's really good. And let's say you're a brand new agent, you're just getting started in the luxury field. How would you get the attention of one of these top agents in L.A. or New York

City, for example, to actually take the time to meet with you. I mean, you won't. The best thing I heard from someone, I don't know if he wants to be quoting him, but let me just say he's one of the top, probably 10 agents of the nation. So he's doing very well. And he just said, listen, when you're early on, you don't have the information, you don't have the connection. So if you actually maybe get your foot in the door on a listing, grab a top agent in your office, co-list. It's better to get 50% of something than 100% of nothing. And you get to learn kind of their trade secrets and enlisting a house. So that's on the listing side.

If you already have that listing and you're trying to get in contact with a major buyer or a major agent, I mean, sometimes you have to call in favors to other friends. I mean, you call in another agent once again in your office. Maybe you say, I'll give you 10% if you help me secure a buyer. There's a story in Los Angeles of a major, major, major. sale. It was one of the first big spec sales. It was like $70 million. And that was years ago. That was like eight years ago before that was commonplace. And the story goes that the agent who had the buyer was calling the agent who had the listing saying, I'd really like to get in flat out could not get a

showing. Period. The listing agent just said, who's this Joe Schmo calling me? They had to call in another top agent to even get an appointment to get in. And that other agent got 50% of the deal just because they had more horsepower to make that phone call. I don't love that story because I think it's a disgrace that the listing agent didn't take that phone call. You never know. There are a lot of random agents who bring in, you know, really high-profile buyers. But it just exemplifies the fact that sometimes you just don't have the juice, you don't have the connections.

You've got to find a way to bring it in. And sometimes just bring another top agent to give some more horsepower. No, I know what's a corny saying, but listen, your network is your net worth in this case. And obviously, the more you go out, then the more relationships you have, the more pull you're going to have when it comes to work in these clients. Let's take the conversation in a different direction. I see you're very well aware in terms of what's happening in real estate with more tech companies breaking onto the scene and really more and more changes happening every single day. What are your thoughts on discount brokerages breaking into the luxury markets?

Because I know it's going to be commonplace here in your typical starter homes. But do you see discount brokerage disrupting luxury on that level? Not on a mass scale. You're always going to get some random discount broker who gets a top listing. But at the end of the day, this isn't new. You know, TurboTax has been around for a while. And a lot of, you know, simple jobs use it. And that's totally fun.

There's a great marketplace for TurboTax. None of my clients use TurboTax. I'll put it that way. You know, they have their CPAs. They have their attorneys. They have all their specialists. So people talk a lot about, you know, what kind of technology could disrupt the real estate market. And a lot of people think that the luxury realm is actually the most, it is the most volatile.

I'll put it that way. But they say it's the riskiest. I actually think it's the least risky. I think when you specialize, really fine-tunely in something and you do it very, very, very well, there's always a marketplace for it. If you can be commoditized, then, yeah, technology is going to kick you out. I mean, not to dogg on taxi drivers, but they can be commoditized. That's what Uber jumped in so easily and made it such a more enjoyable process. You know, all of us, you know, you take a cab and it's the driver's rude,

the car's disgusting. You're trying to wave it down like an animal. And then Uber's like, hey, have an app and a really nice guy in a decent car. And I think that's what you're going to see. If you're just a random agent's mass selling tract homes in an area where, you know, do you choose floor plan, A, B, or C, and you don't do anything special or proprietary to get top dollar or to differentiate yourself, of course technology is going to take you or a discount broker because you don't deserve extra money. But for the type of real estate that we're selling, especially in a specialized market like this, there's not an ounce of me that's concerned about discount brokers or technology coming in

because it's been tested in every other market. You know, there's a legal Zoom as well. I mean, there's a great place for all of these different companies. And frankly, there might be a good place for discount brokers for these homes that are just kind of churning and burning that you don't need any necessary, you know, specialty to work with. Also in areas, Santa Barbara's really unique. Our topography is such, I don't know if you've ever been here or you Google it. But, you know, there's a lot of hillsides, a lot of mountains.

that's why you get some beautiful ocean views. But that's very different. I mean, there are certain pockets that we have very specialized geologists who come and look at the soils, look at the drainage, et cetera. Even if it's a cheap home, you need that expertise, where if you're in, you know, Texas and it's flat and all the soil is exactly the same, maybe you just don't need it as much. So it really does, it depends if you actually need it or actually do not need it.

No, I couldn't agree more. The response is perfect if you're listening and you are an agent, whether you're currently selling luxury real estate or you want to break into that market. I really do believe the best insurance policy for an agent against these big tech disruptors is to be the top 1% of your market. It's to be experienced. It's to be knowledgeable. It's to go out above and beyond in terms of what those companies can't offer.

So just tons of insight there. Listen, we're going to get started wrapping up because the amount of gems that you've given us just in the short period has been incredible. Let's talk about that big sale you had. It was about $33 million last year. Is that correct? Yeah, yeah. Was that the biggest sale of your life?

It was. Yeah, that was the biggest sale ever had. It really a special property. It depends on how you actually value properties in terms of not dollar amount and how much you value the importance of it. It's a really, really important architect. It's a really important piece of land, really important even, you know, landscaping and, you know, mature growth on the property.

So it's arguably one of the most significant estates in Montecito. It's a major, major honor to be involved in the sale. And what's so amazing is that in a typical market, I was banking on at least two or three years of marketing this thing. You just have to, you know, statistically speaking. it's going to take a long time. We had an offer in two weeks and we had a backup offer higher than what we sold for. So really, really a unique scenario, obviously a bit COVID related as well. But also, this is a once in a lifetime opportunity. You know, who knows if this, you know, the guy who bought it

will ever sell it in his lifetime. So if you want one of these major trophy, you know, historic estates, this is the one to have. So that's a really special property. It was I think the sixth most expensive sale in the history of Montecito in all of Southern Beach International Realty Worldwide, I think it was the seventh most expensive sale last year. So it was fun to be a part of. It was a very, very special property. I'd driven by it my entire life. So it was fun to see. That's incredible, man. And then listen, the million dollar question, how did you get that listing? You know, you always get some connection and get your foot in the door to talk with a decision maker. And then you just have to, you know, execute. Obviously, I was competing against

all the other top agents in the market. And it worked out. I've got my foot in the door in some of the weirdest possible ways. But as long as you come out and you have that value proposition, sometimes it's a nice warm lead. Sometimes it's not. It's more of a cold situation. But if you get that foot in the door, just do the best that you can. And hopefully you get it because you just don't know when these opportunities come.

So when they do come, you have to be perfect. You have to get it. Love it, man. Preparation is key. So listen, once again, thank you for your time today. How can people reach out to if they want to get in contact with you or they just want to go ahead and network? Yeah, reach out anytime. I'm very, very easy. I reply to every email, every text, every phone call, every Instagram message. So just dusty baker real estate.com has all of that. You know, Instagram forward slash dusty J Baker. There's a famous baseball player with the Dusty Baker. So I had to add my J in there. Anyway, yeah, reach out anytime. Happy to chat.

Forever, man. Thank you so much. We'll talk soon, man. Looking forward to having you in the future. All right. Thanks, Ma Carlis. Pleasure.