KGCI: Real Estate on Air - Starting Truth in Real Estate

Episode Date: January 23, 2025

I've been a real estate broker since 1999. And I joined Kevin as a realtor in 2012, and I've been a licensed certified public accountant since 1993. I have worked in the residential real estate brokerage industry for the past 20 years, so I've seen a lot of situations in all sorts of real estate markets. Together, we've seen a lot in the past seven years, and we intend to share with you so you can have better information and make smarter decisions about your home. I started as a brand new agent in Shaker Heights, Ohio, eventually moving to Tampa Bay, Florida, and over the years, I've held leadership positions with Keller

Williams Realty and Caldwell Banker residential real estate, improving offices and growing them to high levels of productivity and profitability, and overseeing thousands of real estate transactions. Lisa and I developed our own brokerage concept and our real lean franchise brand is now offered in all 50 states. So you could say that I have experienced the real estate business from just about every position possible. This man knows real estate. Thank you. And we want to share our combined knowledge and experience to help you with decisions you are facing regarding your home. You know what is really incredible. I was managing an office in Sarasota at the time that you were practicing as a certified public accountant in neighboring Bradenton, and we met at a networking event at a bank, and this was the start of our journey together. Yes, being a CPA in public practice, I did a lot of networking, and this was by far the most productive networking event ever.

I had always been interested in real estate after watching my grandmother buy and sell properties my entire lifetime. I met Kevin, who was working in real estate, and he was so bright and so educated and experienced, a real expert in the very industry that was so intriguing to me. After being a CPA for 20-some-odd-tax seasons, I wanted to make a change. I look at real estate through the eyes of a CPA, and it really does help our customers and our business. So I joined Kevin at Caldwell Banker, and after a short period of time, I asked Kevin how long I had to be a real estate agent before I could open up my own brokerage. He said, you need two years of experience and you have to pass a broker exam. I said to him, okay, or you're a broker so you can come with me and we can start our own real estate brokerage right now.

Well, you're a real leader and you had a vision for how you thought a real estate. office could be created to really benefit the consumers. At that time, we were planning to go on a cruise to Alaska with one of our favorite ministers, and during that cruise, we were really prayerful and reflective about the contribution that we could make to the real estate industry. And the impact we could have on our consumers, which we've already made. So we came back from Alaska and we opened our own real estate company and Treasure Island right on the beach. We knew we were going to make an impact, but interestingly, we didn't have a crystal clear vision of it just yet. We knew that our company would have a uniquely better culture and a

completely different business model, and we would find our way by listening to our customers and finding ways to give them precisely what they said they wanted. Well, we found our way pretty quickly, even with your first listing. We did. My very first listing was a church property in Bradenton. And that was a referral from one of your former colleagues at the CPA firm. Right. So the church was divesting of a property that they no longer needed. The church leaders had an appraisal performed, which I really thought was not a good appraisal. They used other church buildings in other parts of the state of Florida as opposed to looking at the value of the acreage and the building in this geographic area. And it didn't really reflect the actual market value of the property I was asked to sell.

Since this was technically a commercial property, the commission on commercial transactions is usually higher, like 10% than if this were a residential property. Even then, I decided to charge a lower commission to the church charging just 7% to handle the transaction, and that would be offering 3.5% to a buyer's agent. I listed the property at the appraised value, and we had quite a lot of activity and showings. This was a unique property with an altar and pews. And it was a church. It had a cathedral ceiling. Right. Very limited functionality in its present condition. It was small. The only offers we received were so low that the church board wouldn't even consider. Then a young couple that had just

started an in-home ministry called me directly and wanted to look at the church. They asked if it would be okay for them to deal with me directly and not use a buyer's agent. I told them that there would not be an issue dealing with me directly and that I could write up an offer for them and present their offer to the church board. They looked at the property and determined that it could work for their plans. They wrote a letter to the church board about their intentions for the property and their small and growing church and made the offer, which was on the lower end of the range of what I had told the church the property might be worth, a good bit lower than what the church was asking for the property, really. I presented the offer to the church board, and the board

told me that they would discuss it and get back to me. The board was very touched by the letter, and yet they felt like the offer was too loud. and they gave the buyers a counteroffer, and that was their bottom line number. Being the number cruncher that I am, I determined what the church would net after all their expenses, including my 7% commission and all the other fees taken from the purchase price. Since I was not sharing the 7% with a buyer's agent, I had some wiggle room to try to bridge the gap.

I determined that if I reduced my commission to just 3%, And if the sellers would come down just a little bit on their bottom line number, and if the buyers could just come up by that same amount, we could bridge that gap and make the sale happen. Well, it worked, we did, and got it all put together. So after this experience on my first seller transaction, I asked Kevin if we should just do this all the time. because to me, it was a no-brainer. Can we do this? Why is no one doing this? Could we make this concept, the foundation of our innovative new offering to consumers? It was definitely different, and the buyers and sellers sure appreciated it. And because I didn't have to split my commission with a broker, I felt like I made plenty of money for my efforts. Well, I struggled with this possible change. I came from many years

dealing with how real estate agents look at their commissions. And over the years, no company had really successfully changed the commission model offered to home sellers. I knew the expenses that agents had, how agents split their commissions with their brokerages, how those brokerages worked, the expenses they had, how they achieved profitability. It was a real paradigm shift for me to even consider. Interestingly, I didn't have all that baggage to consider. I hadn't been doing this too long. It just seemed like a better way to me. The typical real estate agent charges 6% or more, and often they add on additional fees. We decided to offer a completely new commission model to home sellers. We would charge a 4% fee for full service, splitting that fee and offering 2%

to the buyer's agent if they brought the buyer. If there was no buyer's agent involved, we would lower our fee to 3% all the time. To date, since we started this, we have saved sellers over a million dollars in fees had they paid 6% or more. That's money these sellers didn't have to pay to get their homes sold.

That is just the type of impact that we wanted to make in the real estate industry. So that's a bit of the backstory to real lean, our real estate company, which is now growing nationally as a real estate franchise brand. But honestly, this podcast is not really about our company. It's about you. And the decisions you face when you are considering a real estate transaction or opportunity. And we want to help you make great decisions by being better informed.

Lisa, you mentioned your grandmother was a real inspiration to you. and she really enjoyed investing in real estate over the course of her lifetime. Yes, she bought and sold a lot and made a lot of money in real estate over the years. I remember in 2008 when the real estate values were low and there was not a lot of confidence in real estate as an investment. She would say, if I was not 82 years old, I would be buying like crazy right now. And she was right. People that bought in 2008 and 2009 are now reaping the rewards of their real estate investments, which have significantly gone up.

Well, your grandmother grew up in my hometown of Akron, Ohio. She lived in Akron. She grew up there and worked at Goodyear during World War II. Her father wanted her to buy a specific house with her good year earnings, and she said, why would I want to do that? So she didn't buy the house, but the house sold to someone else. And after a short while, that person sold it for more money. Enough money that she took note. Her father said, see, that's why I wanted you to buy that house. That's how your money can work for you while investing in real estate.

And she never forgot that experience. She moved to Florida in 1959, and she worked to Florida. at Publix. The much-adored grocery store chain headquartered here in Florida. Everybody loves Publix. But her husband didn't want her to use the money that she made at Publix to support the household. He insisted that she invest her paycheck. So she started buying real estate and from then on she spent her life increasing her wealth by buying and selling homes and rental properties. She often joked that she moved every five years, which was unheard of in the 60s and 70s. She bought low and sold high, and she watched for the cyclical nature of the market.

She made money on every property. She loved it. Lisa and I want to help you make the very most of your real estate opportunities, and that's why we've launched this podcast. people that we've met, they love to hear our stories and our experiences, and they've told us over and over again that we should have our own show, that we should share these experiences with more people, because we've been able to help people one-on-one when we're working with them to sell a home or to buy a home. And it's so important that people know the truth in real estate so they can

make better decisions. Many people don't know how the real estate industry, works at all, so we're here to help you understand and to benefit from our knowledge and experience. There are so many different aspects of residential real estate, and we will share with you the truth in each and every area through this podcast. Whether you're a first-time home buyer, a move-up buyer with a home to sell, someone buying a vacation or a second home, someone who is downsizing or someone who is investing in rental properties, there are so many myths and misunderstandings about the real estate sales process and we want to guide you through the journey most effectively. And everything having to do with what we're talking about directly affects your net worth.

Well, as a CPA, you saw people's tax returns and you saw how impactful real estate could be for an individual's wealth. Your home is your single, most valuable asset. The way you buy it, care for it, improve it, and sell it has a huge impact financially. In the podcast episodes that follow, Lisa and I will be discussing actual case studies, real life experiences, and the challenges that our buyers and sellers are facing in today's market. We will discuss so many different topics from dealing with multiple offers. Which we love. to pricing your home effectively to get it sold quickly for top dollar.

To situations that could come up during a home inspection and what to do. We're going to talk about buying properties, selling properties, improving properties, investments. Like the beach rentals, the vacation rental market, Airbnb, VRBO that we see up and down the beaches here in the St. Petersburg area. How to look at that opportunity wisely? We have spreadsheets and checklists that we're. we'll share with you if you're looking at investment property opportunities. Let's talk for a quick minute about the differences between these types of real estate situations and what we'll be discussing on future podcast episodes. Because we encounter this all the time

as full-time real estate professionals, people making decisions based on what they mistakenly believe to be the truth regarding real estate transactions. So, for example, a common misconception is that sellers want the most that they can get for their house while buyers only want to pay the least. Like this is two sides of a single coin. The reality of it is, yes, home sellers want top dollar for their home, but they also want it on their time frame, they want assurance that the transaction will actually close, they want to have a smooth situation when it comes to home inspections, and buyers are not necessarily narrowly focused on paying the least that they can pay. In many cases, they're more focused on getting the exact right house that they want.

And so we'll be discussing that nuance and many others like that. Another one, for example, the notion that sellers need to build in wiggle room when they price their home. or basing your asking price on what your neighbor is currently asking, though your neighbor's home remains on the market lingering for months. The reality of that situation is you need to base your price for your home on what has actually sold recently in your geographic area, and you also need to base it on what is currently pending in your neighborhood, which gives you a great sense of what people are willing to pay,

for a home like yours. And you also need to bear in mind that buyers have enormous options. They are not stuck buying your house. They can look anywhere. They can compare your home to many other homes in many different communities. And you might be surprised when you realize that your neighbor's overpriced listing isn't really helpful at all as a guidepost for what you should ask for your home. Another concept that we encounter from time to time is buyers who say that they don't want to get involved in multiple offers. Now, we list a lot of homes. We sold 80 homes in 2018, and we deal a lot with working with the sellers, and a lot of times our properties are priced right. They attract enormous interest immediately, and we often encounter multiple offers in the

the first week or two of our property going on the market, often within the first four to seven days, we have multiple offers. And it's amazing to me, and some totally missed opportunity, when we hear from another agent working with buyers that their buyer doesn't want to get involved in multiple offers. That, let me get this straight, your buyer was very interested in this house until they realized that other people are also interested in this house. house. Now they are no longer interested in this house? That just doesn't make any sense. So what they're, in essence, saying is, I'm nervous about dealing with multiple offers, but what their actions are saying is, don't let me buy a home that everybody else likes to. Just sell me the junk that nobody

else wants. Let me wait for the overpriced garbage that has been lingering on the market for months. that way I don't have to compete with somebody else to buy a piece of junk. The reality of it is multiple offers are a fantastic testimony that, first, the home is priced right. Secondly, it's a very attractive home. Other people like that home as well. And as well, when you go to sell, because eventually if you're a buyer now, you're going to be a seller at some point, when you go to sell that same home, you have a home that is very attractive to many buyers. Why would you want to back away from that? Lisa, I'd love to share the Wall Street Journal story.

Great. Thank you. So Lisa has been interviewed by the Wall Street Journal twice and printed in their mansions section, which is printed on Fridays, and it's all about real estate. recently we were driving the car and a call came in from a reporter with the Wall Street Journal. The reporter asked for Lisa and Lisa took the call and the reporter shared with Lisa that she was on deadline writing a story on multi-generational homes and wanted clarification about something a financial advisor had told her. Lisa was able to explain some real estate related tax code and was able to provide some additional background information

for the article. Lisa asked the journalist how she happened to call her for this article. And the journalist explained that she asked her editor what she should do to clarify the information that she had received from the financial advisor. The editor, it happens, was the journalist who had interviewed Lisa for an article in November of 2016. and that editor told the reporter that when she has a tax and real estate related question, she'd call Lisa Cahill and that that journalist should do the same.

Thank you. What an honor that was. It was just so surprising. Well, you know, quite amazing when you consider the vast resources available to journalists at the Wall Street Journal. I mean, that's the Daily Diary of the American Dream. and they could talk to anybody, you know, just about anybody will stop what they're doing and talk to a journalist from the Wall Street Journal. And they call you. So what an amazing compliment. That's incredible. So that article was in the May 31st, 2019 issue of the Wall Street Journal, and the article was entitled All Together Now. And it was an article on multi-generational households, which we actually deal with a lot.

We do. We're seeing that more and more. People who are buying a home, they've got their parents living with them, but they still have their young children living with them. That's correct. In future podcasts, we can expand on that notion, and there are some ways to handle that that will help in tax situations and also help with how you title properties and what you should do with all. all that so look forward to those those will be coming up along with everything else we have a lot that we can share with you