Richard Kaiser: Welcome to today's webinar on unlocking opportunities in the new age for buyers agents. We're here at the CINC headquarters. I'm Richard Kaiser director of demand gen and sales ops here. I'm joined by 2 experts here in the industry. We have our very own CEO here at CINC Alvaro Erize, and then we also have the CEO and founder of Workman Success Systems real estate coach, Verl Workman. So as people are coming in, one, please let us know where you guys are coming from. We got Verl out in Salt Lake, as we said earlier, we're here in Atlanta.
We also going to have, Jennifer, Taylor, and April are going to promote people to panelists as well. So we'd like to make this collaborative, as we're going through this. So we'll give people, [00:01:00] another minute or so to get settled in and then we'll go ahead and kick this off.
Verl Workman: Richard we got Canada here. We've got Birmingham, Kansas, Florida.
Alvaro Erize: I was going to say, when you say that we're from here from Atlanta, I'm not. So if anyone is, wondering about my accent, it's not from Atlanta. It's much farther south. And it's from Argentina for those that don't know me.
Verl Workman: There's a good group of folks that are on the call. If you get asked to be promoted to a panelist, I want you to click yes and turn your video on. Here's what I learned, like Brian's done it. When you have your video turned on, what happens is it forces you to stay focused. And it makes it more engaging for the presenters because we're actually talking to smiling faces And so and thanks for coming on video if you get promoted to come on the video, just do it You see you blocked an hour to spend with us. It's going to be well worth your time. Let's turn some video on we're going to crank this off and It's going to be a great time we spend together talking about some pretty important things today.
Richard Kaiser: And one thing is, as Verl's getting this started, we would encourage you, questions you have, [00:02:00] comments. A lot of the purpose of this is to get feedback from other people, what you guys are hearing, what you guys think. What you might disagree with some of the what Verl and Alvaro think. We want to encourage that both in the chat and in the Q& A section. And we'll be peppering that into the conversation as we go.
Alvaro Erize: Yeah, fully agree. In fact, just before Verl starts there, I'd say my objective for this today is the following, which is we're going to give you our view, Verl and I might agree, not agree on how this changes or doesn't change the real estate world. And we're going to talk because it's important about our point of view of how it affects, what it means. But then, of course, we're going to go to what we think this means for you. In whatever direction the world is going, how does that change your day to day as a team leader, as a buyer agent, as a seller agent and of course, what tools you can use to do that, but please don't be shy if you don't agree with what we're saying. Put it in [00:03:00] and put it in the comments. We'll try to intercept that as it goes. The main goal here is for this to be an interactive discussion and not just a monologue of us pouring our points of view on you.
Verl Workman: Yeah, and I appreciate that. It seems like there's not a day that goes by that. There isn't something in the news to the industry that continues to put the value of real estate agents true value in question in the minds of the consumer. Everything from any NAR 3 or 4 presidents in the last 6 months to the class action lawsuit to downward pressure on commissions to the lack of inventory to the increasing of interest rates and the incredible demand that's out there.
What's happening is there's turmoil in the industry. Nobody can deny that. Is that fair to say we have a little bit of turmoil going on? Yesterday I counted at least 17 copycat class action lawsuits that are the same or similar to the one that was [00:04:00] the 1.8 billion liability judgment that was made to the agents. And so the court rooms are gonna get filled with people that are trying to win something for nothing. And it doesn't seem to matter that buyer agents agreements were signed and disclosures happened. We live in it in a time in life where people want something for nothing. And when they see that they might get a free ticket or they might be able to make a bunch of money they're jumping in, they're jumping on the bandwagon and saying, how can I participate in that rather than going to work? I think that the most, I don't know if you know this, but there's a lot of people that think that they're going to create their wealth by winning the lottery. And I think that these bandwagon class auction lawsuits are just one way of thinking, hey, that might be my lottery.
So our courts are getting filled. The headlines of this. So, I want you to think about what happens as a consumer. So as an agent or a broker, when you think if you, just stop for a minute, And stop thinking like a realtor and think like a buyer or seller. And this is what happens when you [00:05:00] read cnn or you go to fortune magazine or you look at fox I don't care who you follow or what side of the aisle you're on, this is the news that's out there. It says that the clock is ticking on real estate commissions americans are taxed 60 billion dollars Because of what they paid for buyer representation And the 1.8 billion dollar mega verdict all those things are out there and they're not going away. CBS News. It doesn't matter if it's New York Times or Housing Wire or Forbes Advisor. It seems like there's article after article, news story after news story, about what's happening in the industry.
And it's physically impossible for our consumers to not know what's going on. And as real estate agents, we have The option to do some different things. Alvaro and I were thinking about this and before we give you our opinions, we would love to run a quick poll and we would love to know what your thoughts are. What do you think is going to happen as a result of the class action lawsuit? So can we run that, Richard? Can we run a poll right here?[00:06:00] Let's just do it Alvaro. Let's, see what they think.
Alvaro Erize: And, while he puts it out there to explain these, options, right? So they're pretty self explanatory, but first one is nothing will change. It will be just as before. All of this is just some noise and we'll be up out in the same situation as we were before. Number 2 is it will still be where you have a buyer agent and a seller agent, but this will create some compression on the commission of the buyer agent and that will go down. And the 3rd is buyer agents are basically going to be replaced by more of a clerk position or a salary position. That is just a helper. And then number 4 is we turn into Argentina, right? We don't have buyer agents anymore. We just have the seller agent representing both sides of the deal.
Verl Workman: Yeah as that comes in, let's have a quick, do you get to see the results? Richard, is it coming in?
Richard Kaiser: We're at like 50 percent say nothing will change. Buyer's agent [00:07:00] commission will go down and then we're getting a C and D or are getting a single digit numbers. We got about 2 3rds of the people have responded. I'll kill it and I'll share.
Verl Workman: Okay, so 50 percent say nothing will change. That's crazy. Okay, that's interesting. 36 think buyer's agent is going to go down. 5 percent say it's going to be, and we're going to go to single agent model 8%. That's not too far off from what we discussed, Alvaro. What do you think is really going to happen as a result of this class action lawsuit to the buyer's agent?
Alvaro Erize: So I have to say I'm surprised by the result of the poll. I don't know about you, Verl, but I was coming here ready for a fight because I am a very strong believer of number one, nothing will change.
That's why I'm surprised because everything I've been hearing in the market from experience from everyone. That's a talking head in this industry, but also from experienced real estate agents, they were more on the 2 or even the [00:08:00] 3 position. And I'm going to explain why, but I firmly believe it's going to be 1 with maybe a little bit of 2, but but, I strongly believe everything is changing so that everything stays the same.
Verl Workman: So I'm not exactly feeling the same way you are about that one. So let me tell you what I think. I think that I think it's physically, I think that, agents who know how to sell their value are going to be just fine. And then there's the other 85 or 90 percent of realtors. That think selling a house is about showing houses and they don't really understand the dynamics of being a great agent or how to show their sell their value.
And I think they're going to see massive downward pressure on their commission because they don't know how to sell their value. In the absence of value. Commission's always going to be the objection and also going to be the negotiation point.
And we're already starting to see in a lot of the MLSs now 1 percent buyer agency commission. 0%. We saw the first, we saw the first commission in Houston. [00:09:00] The zero percent buyer agency commission. So I think there will continue to be downward pressure for sure. It's going to put, I believe it's going to put us in a situation where we have to elevate us as an industry. I think the days of, fog and mirror, you can be a realtor are going to go away and you're going to have to be a true professional in order to stay in this business.
Yes, I think things are going to change. I think that the commission is going to go down. There's going to be a lot of downward pressure on it, but agents are pretty smart, Alvaro, and we're pretty good at figuring out how to get paid for what we do.
Alvaro Erize: But that's precisely it, which is, I agree with you with a professionalization that this is going to drive the buyer agent. It's just, I don't agree that will drive commissions down. One will say but then the bad agents will accept the negotiation and go down. But just like Brook Garner was saying over there, they're going to be driven out of business because the truth, and this is especially true in the U.S. is that, and you just said it right. Price only matters in the absence of value. [00:10:00] And Americans are pretty smart. And they've had the option to discount commission for a very long time. All these lawsuits that are claiming people didn't know, we know that there are BS, right? The truth is we have one very strong example. Of course it's on the seller side, but Redfin has been advertising 1 percent seller commission for years. And it has been doing it in with massive amount of marketing spend, right? It's been everywhere. And do you know how much Redfin is of the of, the transactions of the U.S.? 0. 78%. Yeah. If you have the ability to sell the same product as someone else for a third of the price, Which they've had for all this time. They were not the only ones, but they were leading it, right? They've been able to sell the same product for a third of the price for all this time. And they only captured 0. 78 percent of the market. [00:11:00]
And today, we are going to be seeing the same thing. Are there going to be agents that are going to be reducing their commission? For sure. And very quickly, people will start going again to the agents that don't discount for commission. Because in the US, whether it's true or not, it is perceived that when you discount your price, it's because you're a cheap product and you're going to, and you're going to give a cheap service.
And a good, a different example of that is FSBOs, right? FSBOs, which have been around all this time are only used by 3 percent and city, 7 percent overall, but 3 percent in cities. And people know that they can skip that commission, but they don't because they are scared of everything that comes with it.
Verl Workman: Yeah, I think people are there's a lot of things people would do rather than negotiate.
Alvaro Erize: That is absolutely true. Verl, there's something, coming from a different country. The US doesn't like conflict. [00:12:00] Friction is something that people don't like it. And 1 of the main differences between... I find it funny when people compare, as I look at other countries where there's only 1 agent. 1 of the horrible things of buying a home in a different country where there's only the seller agent is you have to go and deal with the 20 different seller agents of the houses that you're looking at. Here you deal with 1 agent, and then you even get into a fight with that 1 agent. I'm sure a lot of people here in this goal. I've had tough conversations with the people they represent, but you're having a conflict with 1 person. The idea of having that friction with 20 different people is very daunting. And if we think of what was the biggest boogeyman of the last 20 years that everyone said was going to obliterate commissions, what would you say it was?
Anyone on the audience, give me the biggest one word that you can put in your chat right now, which is the thing that was going to make commissions go down? There it is. Brooke Gardner.
Richard Kaiser: Margaret says Zillow.
Alvaro Erize: [00:13:00] Yes. And Brooke said it too. So Zillow came up in 2006 and one very real change happened, which is people started searching for homes themselves instead of having the realtor search for them. And that is a very real bunch of work that got moved from the realtor to the consumer. And everyone thought now that the realtor is not doing this bunch of work, they're going to have to collect less less commission. In 2005, according to reaology, the average commission per side was 2. 5 percent and in 2020, it was 2. 47%.
Verl Workman: All right, Alvaro. So hang on. So you talk about Zillow not changing everything. All these transactions are being done by Zillow Flex take 40 percent off the top. And so while it may not be a downward pressure from the consumer commission, what the agent collects as a net fee is 40 percent less. That's massive. You're getting agents hooked on the [00:14:00] crack and then certain things and then they're going to come in.
I there's going to... people think that we have all these big competitors. I think Zillow is, they, listen to the consumer, giving the consumer what they want. Mike Metzner is right on the money here. They gave data to the consumer because that's what the consumer wanted. Realtors thought it was their secret to be able to keep the competitive market analysis and the MLS.
And that's what their value was. And Zillow said, no, it's not. It's public records. Let's aggregate it. Let's give it to the consumer. Let's create leads as a result. And now they're doing Zillow Realtors, they're doing Zillow Mortgage, they're doing buy side transactions. It's just a matter of time before they're just going to say, be with our Zillow brokerage, or you don't get Zillow leads.
Alvaro Erize: But it makes no difference to you. You can use them or not. People use Zillow Flex if they honestly if they don't want to have the work of having to follow up with leads themselves. And yes, if you outsource your work to someone else, they're going to keep part of the money. tHat's the biggest thing.
Zillow has been for a long time. It didn't decrease commissions in itself because the fact [00:15:00] was that people still believe that buyer agents and seller agents were very vital, right? And that whoever was searching for the home was not where the value is. Value is in the negotiation in the advice in the quarterbacking of the deal.
And so all of that didn't compress commissions. Now, what has been a recent trend, and you're right. I agree with you. There is, there's been a trend in the industry of successful teams sometimes outsourcing their main job to someone else. So yes, if you don't want to follow up with leads and you want Zillow to do the follow up for you, then of course they're going to take a part of your commission. But yeah, they're doing the work. Now, true successful teams know that they need to insource that work because they are better than Zillow at doing it. And then they can keep that margin for themselves. But I don't think that it has to do with with the dynamic of how much value the agent does, and the value that is perceived by the consumer of what the agent does.
For me, what pisses me off on all these newspaper [00:16:00] articles that pop up that you showed is immediately it's the making fun of the realtor and how much the realtor doesn't really add value and just takes a bunch. But what's ironic is no one that has actually bought a house really thinks that right? No one wants to I don't even know when I bought my house that I needed an inspector, and once I got the inspector, I had no idea what it meant. If the inspector, he gave me 520 things that were wrong. Does that mean I need to ask someone to fix them? I had no idea. I don't know what I don't know.
And so 1 another thing that for me is very telling is. The fact that FSBOs sell for less than the non FSBOs is because usually the people that do for sale by themselves are with lower income homes, right? Like the people, the rich people that are selling 4 million homes, they're paying their commission, right? And I don't think it's because they're misinformed.
Verl Workman: So I'm going to table this one for discussion another time. But so I want you to think about this Alvaro, because this would be fun to debate with you. [00:17:00] Is where's the real value of an agent? I think a lot of people think it's showing homes. I think it's in client acquisition. And so the better you are at client acquisition, everything else can be delegated or paid out at a much lower rate. And so it's the ability to get clients. And Zillow's proven that we're willing to pay 40 percent of our commission to have somebody else do that for us. And I think that's going to continue to go up and the amount the agent gets paid to do agent duties is going to go way down and it's going to be salaried and it's going to be all the same. So that'll be fun to debate that.
Alvaro Erize: Can you repeat that last part, Verl?
Verl Workman: I think that you're going to see more and more of the services that are provided by a commissioned agent be provided in a salaried agent model. We're focused as we talk about, as we are coaching our teams right now, we are heavily focused on building listing focused teams. We're doing everything we've always done with buyer's agents. Buyer's agents are great, but we're pushing really hard on controlling and owning the inventory because if you own the inventory, you're going to be golden in this marketplace. And if you're only [00:18:00] focused on buyers, that's where you get, that's where you get stuck.
Let's run the second poll and let's find out how many of the how many of the buyers that you're working with have buyer agency agreements. I'm curious as to what the percentage on this one. So Richard, if you want to run the next poll, let's do it.
Alvaro Erize: And so I'm going to take the contrarian position there too, because I actually don't think...
Verl Workman: that surprises me.
Alvaro Erize: In the 1st one I was actually in accordance with most of everyone here, which I think is awesome because there's so many realtors in this industry that are immediately accepting this false narrative and, assuming that they don't provide value when they do.
So Verl, on that point, here's, my, my, my honest thought on this, which is you still will have two sides on every transaction in the U. S. On the other side of this, right? There's still going to be a buyer and a seller. And why would we think that now the seller is more important? The only reason we could think that is [00:19:00] if we think that the buyer needs no representation, or if we think that the tasks needed to represent a buyer Are less difficult, less critical, or less complex.
I don't really think that's true. I think, and through all this time, there's been a lot of people that have tried. The fact model of Redfin is replacing commissioned agents by salaried employees. And 6 months ago, when Redfin crashed, every banker came out saying, oh, now we realized that the commission agent is more valuable than the salary agent. And that does not change for this.
Now, I love where we're going with this discussion. I do think because I actually think this is the opposite. I think you are going to have, you're going to have to defend your value as a buyer agent, which means that a buyer agreement is more important, which means even more that the buyer agent is going to now be as important as a seller agent and not less important. So I don't see it [00:20:00] being replaced by a salaried worker. I see less buyer agents. Making more transactions because it will now become a job within the real estate industry of a similar level of importance and training requirements as a seller agent.
Verl Workman: So I'll give you the simple rebuttal to that. And that is that the activities that are true representation of buyer don't include opening doors and showing houses. Where the buyer agent earns their money is once it goes under contract and then making sure that the buyers made the right decision. And so the majority of the time spent working with buyers driving around and showing houses is a time suck. And I would rather spend any of my life doing anything else than driving buyers around even though I love buyers. And then I think that's going to be a salaried position and then once it gets under contract, the negotiation and representation and the thing of that contract becomes at a higher level. So it's going to be...
Alvaro Erize: you're splitting the buyer agent job in [00:21:00] 2, and you're saying there's a part that is going to become more of a salaried extension of the bigger buyer agent, and that could be true. So, I can agree with that with you, except for me, the biggest job of the agent by far is establishing trust with the client. And so I don't know if you can outsource that to someone and still keep that trusted relationship with your buyer. That's something that again, not as a realtor myself, and you have more experience as a coach. I think that it may be right or wrong. My gut feeling is it's difficult to outsource that task that involves spending so much time with your clients without losing that ability to establish that big trust, which is the main reason they're paying you their commission is that trust.
Verl Workman: I think that's great in principle, but not even 50 percent of the agents on this call have enough trust to get a buyer agreement signed.
Alvaro Erize: Ah that's okay. So let's go to the poll. You're right.
Verl Workman: So what happens is when you don't do a buyer agreement, when you don't do a buyer agency [00:22:00] agreement, what you're saying is that I don't believe in the value that I provide enough to expect to get paid for my services. And so I do wish marketing and I drive people around giving away my services for free, hoping that they see value in my service. So when it comes to time to have a commission discussion, they don't push back.
That's a scary way to live. And if you want to bring an increase of professionalism in the real estate industry, this, poll right here is fascinating. Like I'm going to I'm like, I want a screenshot of this to talk about it at Inman next week. Because I think that what we say as an industry is we want to increase the professionalism, but then the way we behave is not consistent with our words. When's the last time you sat down and met with your... what if you went to a dental office and you say, okay, I need a root canal, and if I'm happy with the service you brought, I'm going to pay you for it. Is there any chance that works that way? You don't even get to meet with the dentist. What you get to do is you get in and they say, let me have your insurance card. And then they say, and then they check it to make sure it's going to clear and they say, Oh, [00:23:00] there's a deficit of 1, 500. Who's going to pay that? And you say, can I make payments? And they say, yes. Okay. Now you can see the dentist.
In real estate, there's this perception that agents aren't worth the value that what they provide. And that's because so many of us aren't and we don't ask for it. And when you give away your services for free, what then is the value of your service?
Alvaro Erize: I fully agree with you here. I think this is. This is when we say, even when I say that, I think nothing will change from a commission point of view, I still believe that a lot of things will change from a process point of view. And, as you say, now, we've brought all this fear into the market into the real estate agents, and you will have all the real estate agents that cannot really compete in this new market because they cannot defend their value.
And as you're saying. If you're not willing and able to sit down and say to someone, Hey, let's put in paper that you're working with me. Then all the naysayers were right. You didn't have that value if [00:24:00] you cannot defend it. So defending that value will become so much more important.
Verl Workman: Yeah, I think Lauren hits it on the nose when she says that the consumer watches these HGTV shows about selling sunset and houses in the Bahamas. And they work with these realtors that don't demonstrate the property. They don't ask probing questions. They aren't looking out and it's almost like this glamorous... they portrayed realtors to be less valuable than they really are. I think the value of an agent is worth way more than what we charge. It's just that we don't do very good job of articulating that value. And so it's not about whether or not there's value. I agree a hundred percent that agents are worth every dime and that no buyer should go unrepresented, and truly represented. Someone who's professional. But I don't think you can be good at anything if you do it five times a year. The average agent doesn't do enough business to be able to, stay in business.
And so how do you get good at it? What happens is when there's this kind of massive confusion in the [00:25:00] marketplace. You've got the news pounding down, class action lawsuit, agents overpaid, billions of dollars given to agents that didn't earn it, all that, negative news. What happens with the consumer is they get confused. And these emotions that they have, the emotions they have are real. When people have fear or they have confusion, I use this emotional intelligence. We talk about that for a minute, but when you have a fear or you have anger and you look at the emotional intelligence wheel, fear turns into terror, terrified and insecure and inadequate and worried and anxious. And what happens is when they feel any of those negative emotions, it causes them to pull back. And that's why you're seeing a slowdown in the marketplace, even though there's a pent up demand of buyers that want to buy homes and limited inventory. And we're still seeing decreases in markets and it's because of the emotional experience that people are getting. They're just flat out confused.
You've got inflation going up. You've got rates that are fluctuating up and down. You've got these class action lawsuits. You got the, [00:26:00] you got four presidents of NAR in the last six months. For all kinds of ethical issues going in and out of the business. I mean our industry is under attack and all it does is create sadness and disappointment and Regretfulness in this industry and people feel hurt.
And so what do we do as agents on the buy side and the sell side to change those negative emotions to positive emotions? And how do we elevate, how do we elevate the perception of the realtor in the eyes of the consumer? I mean that, Alvaro, if I have a mission, if you said, what is your mission? My mission is to bring a higher level of professionalism into the industry and to raise the bar. And when someone says, I'm a realtor, people go, dang, that's awesome. How long have you been serving? Like I want people to think of us as the servants that we are in a marketplace, helping people with their most expensive transaction.
We talked about this in the absence of value, price will always be [00:27:00] the objection. And that is never going to change. And so it doesn't really matter what you charge. Our commissions have always been negotiable, and we've always taught that. And I've always taught you should have different levels of listing presentations. At the seven percent, you get this level of service. At the eight percent, you get more percent. Nine percent, you get more value. So at each level, you get different services, and you get to choose what you want. And and I think that the agent will, they'll choose.
So we're at this really cool crossroads of where we are and who we want to be. And so I'd love to ask everybody. I think that, without giving my opinion, who do you want to be in this industry? You want to be continued to perceived as if you can fog a mirror, you can sell a house realtors? Or do you want to be do you want to change the perception of the value of an agent in the eyes of the consumer by elevating everything?
Alvaro, I don't know if you know this. I don't know if I told you this, but my wife's little sister moved in with us the same time. She just she decided to get out and get [00:28:00] on her own, which I didn't make any sense at all. And that was the same time I started real estate school. I got my license in 10 days. I did 90 hours in 10 days and was licensed as a realtor. She went to hair school and 2, 000 hours and 18 months later, she could cut my hair. Do you understand what's wrong with this?
Alvaro Erize: Yes. Yes. It's and it's always, but that has been used as a tool sometimes to degrade the agent, right? Because it's so easy to get in when the truth is, degrees and the state giving you permission to do something usually means nothing. And real estate agents compete with each other, and that's why they are so valuable. But I absolutely get what you're saying. It's a different world of requirements. And it's probably the lowest bar from a state requirements point of view.
Verl Workman: Yeah, so Layla has a question about outsourcing. I don't know if it doesn't look like a [00:29:00] question, Layla, as much as it is a statement. You say you can't outsource buyers or sellers agents. Yes, you can. That would be like saying you can't outsource, you can't be a doctor and outsource, all of the different things that you do. I want, my surgeon to be present for surgery. He doesn't need to be there for physical therapy and for the intake and for my x rays and all those other things. There are all kinds of pieces we can outsource in the transaction. We do it successfully every day. And I would even challenge that when you're a transaction processor and you do it a hundred times a year, you're just flat out better than an agent who does it all themselves seven times a year.
When you just work with listings and you're really good at just the listing part of the business, you get better at pricing properties, you get better at staging homes, you get better at negotiation, dealing with multiple offers, because you do it 70 or 80 times a year, you just get better at it. And when you're doing buyer's agency, whether you're a showing assistant or a buyer's agent, the more you do it, the better you get at it. So specialization. And segmentation is part of what's going to is part of what's elevating the industry. And the [00:30:00] consumer today is used to working with teams. And the individual agent that wants to do it all themselves, there's still going to be a place for them. But I think it's going to be a dwindling market share.
Alvaro Erize: And you're right, Verl. I think you can absolutely outsource. And so I think what everyone needs to decide is what are those parts where you build trust with the client that you do not want to outsource? And, for example, you outsource ISAs because, of course, you don't want to spend a ton of time doing mind numbing calls, right? But there are things where you build a trust that are not.
But one thing that I wanted, there was a question on, on, on the chat from Rebecca. Which I actually think is worth talking for a minute, which is we did not mention the possibility of separating the seller commission from the buyer.
And so today we all understand that the seller collects the 6 percent and then shares with the buyer. And there could be a world where we say, no okay, the buyer is going to negotiate their own commission on their side and the seller is going to negotiate their side of the commission.[00:31:00]
Again, I do believe that's a possible outcome out of all of this. I still don't think that will compress the commissions. And so 1 important point is is that the truth is neither of the sides are paying for the commission. The commission is a fee. It's a tax on the transaction. It's like, when you buy something at the store. You pay the sales tax, or does the seller pay the sales tax? You consider you paying the sales tax, right? But it's exactly like the buyer commission the seller is collecting the money and then it's giving some of that money to the government.
And if you change that, if you really believe that the economics are working today, when you change that and you separate it, the only real difference is that the argument for the values being is having to be done separately. So today the seller is arguing the value of the agents on behalf of both because that's the side of the commission that is getting negotiated. And now you're going to have it separate. If that happened, it will only reinforce what [00:32:00] Verl is doing, what Verl is saying, which is now that you're a buyer agent and you have to defend your side of the commission, you have to go and explain your value. Now, I understand some people saying but now that it is negotiable, then it will go down because they are going to put pressure on that.
Americans don't like to hack. They don't. And they're looking for value not for, price, usually. And so if the same reason that you've been able to negotiate commissions for the last 20 years on the seller side, but the commissions are exactly the same that they were 20 years ago. I don't think that the commission being separated will fundamentally change that. In my opinion, even if they get separated, it will not change the fundamental economics.
Verl Workman: So there's no argument on any of those points. And I think that you're right on the money list. I'm going to share a couple of resources that we put together for everybody to help you navigate through this class action advantage and talk about how to make an advantage.
The biggest thing I think Alvaro is I think [00:33:00] that in this world that we live in that it's creating massive opportunities because when there's confusion and there's fear, people pull back and that's when we come in and take market share. And so if you are serious about growing your business, now is the greatest opportunity to take market share than ever before in the history of real estate, because because people are afraid and when they're afraid, they pull back.
I'm going to say that it's important that we sell our systems more than we sell our commissions. So here's the value that I provide. Here's the things that we do to attract more people to your house. Here's the resources that are available. If you don't mind, take us through some of the CINC technology and systems that you have planned for 2024.
Alvaro Erize: And for me on this, what I'd say more than the CINC itself, if I talk generically of what is going to change, this thing that Verl is talking about having to sign a buyer contract, about having to establish that relationship and explain your value. The only real difference of that is that now you need to engage with buyers earlier. So again, with sellers, you try [00:34:00] to engage them early. You go to the listing table, you fight to defend your value. You get a contract and you're not going to get stolen that client midway, unless you don't do a great job. In the buyer side, you constantly have all these people coming saying, Oh, I for free show you houses and then maybe you lose that relationship, right? Now, if if you're going to be putting buyer contracts in place, and that's going to be the new MO, then getting in early is important. And so again, whether it's with CINC or with anyone else, I'd say you need to think of your, future and the future of your team on how are you going to get earlier in the funnel?
If you're doing great farming, I don't like farming, but if you're doing great farming, that's going to become a much more important tool for you. If you do inbound lead generation, early funnel inbound generation, like what CINC specializes at, this is going to become a very important thing for you. If you're mostly sphere of influence and database. You need, you're going to need to make sure you double down on those efforts because once someone else got in, they're going to get their buyer contract in and you're going to be out. [00:35:00]
So for me, if you go to the next slide. For me, if I think at CINC and what we're doing today, I'm doubling down on the buyer side of the leads and I'm doubling down on the early funnel side of the leads. And so for me, you need to be able to be hyperlocal to grab those early funnel leads. And then because they're going to become maybe more expensive, because if you have better agents on the buyer side, they're going to convert more and they're going to be willing to pay more for those leads. That's what's going to happen. And so you need to convert more too. If you are not up to par on your level of conversion, You're not going to be able to afford them. So for me, having through your site and through your systems, an effective way of doing early funnel work is going to become twice as important in the coming years.
Verl Workman: To me that's why CINC is such an important partner of workman. We coach high performing teams. That's all we do is teams. Ask me what we do. We do teams. We do it better than anybody else in the world. And when we strategically select our partners, we select partners that [00:36:00] provide massive value to getting the cost per lead down and creating an environment that allows them to capitalize on every opportunity and CINC's a critical partner for that reason. So thank you for sharing that. I just want everybody to know that this isn't an accidental relationship. That we, think a lot alike when it comes to how to serve our consumers, the relationships that matter and how to create these clients for life. And the tools and the processes and the things that are put together give us that unfair advantage.
I think that the more we have the ability to target local neighborhoods when we have a listing and then market around those listings and then knock on doors around those listings and invite people to come to see those houses, the more opportunities it creates, not just for buyers, but also for sellers. And oftentimes buyers are sellers. And if they're not, they will be in a few years. Everything we do feeds off each other. It's, I call it a revenue octopus and there's a multiple tentacles that are all feeding these revenue streams that come into our business.
Alvaro Erize: And in fact, what you said, buyers are sellers. That's not only true in the long [00:37:00] run. That's actually true in the short run. So something that really surprises for me we get clients asking us, hey, we want to do seller leads. We want to do buyer leads. I want to do this in particular. We have at least nine different products that we offer in lead generation.
But one of the things that I always reinforce on clients is it's usually better, with early funnel, it's better to go looking for buyer leads and then realizing that they're also seller leads then what you have to pay. Everyone goes and goes for the seller leads. So the cost per lead goes up while the buyer leads 50% and this is, an actual fact, it's 56 percent or something like that, but 50 percent of every buyer lead that comes into CINC has a home to sell. And one in five of those actually gives you the address at the beginning. So even when they're coming in, so you're already getting those seller leads with the buyers. And then there's four more for every fifth that have an address to give you. And it's the job of your system. CINC or which ever you're using and yourself to get to create that trust so that they [00:38:00] will give it. So having a valuable, knowledgeable website that will convince them to say, Hey, this is not just a buyer for me, a buyer agent, he's also going to be a seller agent is critically important. So in this new world, as Verl was saying, where you have to Show your value you were already providing. For me, that was already true. The difference is now you're going to have to be more explicit about it. And so the 3rd aspect of what we're going to show here is how your website, whichever it is, needs to speak to your knowledge and your expertise.
Richard Kaiser: This is good. Actually in the chat while you're going through this in the chat, one of the things people are talking about is it's not so much the data that Zillow has, but how to interpret what people are looking at. Somebody was even talking out there about knowing, okay, if you have pets, you need to know if there's fences in there. What are the specific areas known for and I think it's a nice segue into what you're about to go into here.
Alvaro Erize: Which is absolutely true. And even with what I'm going to say now that if you don't have, [00:39:00] that's what generates trust, right? People want three things from your from their agent. In my opinion. One, you want someone that is personable and trustworthy that is going to negotiate in your behalf. Then you want someone that is knowledgeable of the process of buying houses, which you're not an expert at, and it's going to drive you through that process. And three, you want someone that's knowledgeable and an expert of the area that you're looking in, right? Those for me, are the three main tenants of the value of the buyer agent. And now for me, you need to have a very solid answer on each of those that leads to when that question comes of what are you gonna do for me?
And so for example, I wanted to show, 'cause this is our newest website that we're releasing. You have the CINC website, and this is the CINC brand accelerator website that we're releasing this year. That basically what it's looking to do is to, with the help of artificial intelligence, is to show your local expertise to a level of depth that was never possible before. And for example, I'm here in [00:40:00] this site that we've created, which is here in Atlanta, and we've done 0 work of writing here. There's no copy that has been done by a human here, but I want to give you a sense of what this means, right?
So I'm, I live here in, in Atlanta, and if someone wants to look for different, my neighborhood is Sandy Springs. So I go into Sandy Springs and again, without someone, if you asked me three years ago, I would have told you, you need to spend a lot of time and effort from a lot of people actually flushing out your website so that it has a a true representation of your knowledge.
Look at this copy. If you live here in Sandy Springs, or you've been here, beyond really describing the neighborhood, it's saying, look, this city is known for its beautiful parks, including Morgan Falls Overlook Park, which is a beautiful park where I take my kids that overlooks the Chattahoochee, right? And it mentions the Sandy Springs Performing Arts Center, which is where they bring bands to play in the green in front of it. We go there every other [00:41:00] Thursday. It's actual stuff from our neighborhood. We could have never have fished this out before. When I am a consumer and I'm trying to understand whether you're a local expert, if I read this on Sandy Springs, I have no doubts. But Sandy Springs is 1 of 10 neighborhoods that you could fill out manually. Each of those neighborhoods has 50 subdivisions, right? And beauty of artificial intelligence is now I can go into any of these subdivisions and see if it has smart things to tell me about that.
And I go into Buckhead, which if you've been here, you probably know Buckhead. And it actually tells me look Buckhead, it's a very upscale neighborhood, right? Of course. But it talks about having Lenox square and Phipps Plaza, it tells you that you can go downtown to the botanical garden and Piedmont Park. That is a level of depth that you need to have in your website, right? And if you want to drill deeper, you can only do this if you have some [00:42:00] automated way of doing this, right? If I want to see a description of the different high schools. For example, if I'm here, I go in, and I can have actual description of the Ridgeview Charter Middle School. That serves 2 purposes. One, it absolutely places you as an expert, which now it is going to become more important. Again, whether you're doing this with us with AI, or whether you're hiring someone to fill out your 200 pages deep, the important thing is that the website is a representation of who you are and it needs to show that expertise. The second one, of course, is Google likes when you're giving really accurate information. They don't care if it's been generated by AI or by a person. They care whether it's useful or not. And if you have useful information, your website is going to start ranking. But even as a final example here, if I go to the value of those homes in Buckhead and I click on it, it's automatically creating me a market report, right? It's showing me the active properties. It's an interesting neighborhood. My house is not [00:43:00] 16 million. But someone here is very lucky. Then properties under contract, sold properties.
This is a long way of saying, let me stop sharing because I think this is, you get my point. But if I think of the main things that you need to focus in this coming world and how they change, they are, of course, the professionalization of your buyer agents is going to be important. The ability to explain the value, your local knowledge, your hyper local knowledge and expertise, both through your systems and your website, but also in your interactions will become critically important. And third, the game is going to become more difficult where you need to get earlier in the relationship. So again, whether you're doing it through farming, whether you're doing it by being a maniac on your database, or whether you're doing it through inbound lead generation. That early funnel, when Verl was talking about Zillow Flex and all. [00:44:00] Those models that depend on coming in a month or two weeks before they're actually going to buy something, they're going to hurt. Yes, it's nicer to get someone that is 2 weeks away from buying. But as we professionalize this, you're going to have to start working with them 2 months before. Having a good early entry point is going to become critically important. Those for me are the 3 things that need to change going forward.
Verl Workman: So what I see as you demonstrate through that. I had two thoughts. One is that I think I messaged you privately and said, okay, my coaches need to see this, and I really believe that because what AI is doing is that levels the playing field from a data perspective. And where Zillow always had this data that we were jealous of and that we wish we could get it aggregated. Now CINC is saying bullcrap, we have that data. We're going to even present it in a way that's easier than what Zillow is doing and make it available to you and your consumer. And I think it's a home run. So high five for using AI in a way that levels the playing field.
And so the one thing that AI can't do, and the one thing that sites can't do, is develop the relationship. And there was a lot of communication and conversation happening in the chat oh what we were both [00:45:00] talking about. Our most valuable asset is the relationships we have. CINC is the holder of those assets. And so the relationship is valuable. CINC is where we manage and nurture and keep in touch with and provide value to those relationships that keeps us at the front of those minds. So the moment that buyer seller makes a decision to move, boom, they think of us first. And so nothing we talk about and nothing we do ever diminishes the value of the relationship. But I want everybody to make sure that you understand that we get that. We understand it, we know it, and that's the purpose of the relationship management.
Let me share my screen with you again. Let's go back into a couple of thoughts real quick. Love that.
Alvaro Erize: Why coaching is so important, right? And why training the agents the right way is going to become that much more critical.
Verl Workman: It's a very thin line that separates average from the exceptional. What we've learned is we've gone from a, we've gone from, an action based marketplace. Where if you could just show up and you were in the right place to do an open houses, you could sell a certain number of houses. Today you have to have higher skills, a moderate [00:46:00] plan, the right focused action to be able to be successful. The average agent today has never been through a market that's challenging. And so they have limited action, they have moderate skills, they have an okay plan, but they have this big void that used to be filled by showing up and they don't know what to do with that. And so they fill the void with fake work. That's the pretending of being busy, but not actually doing anything that moves them closer to the transaction.
And we don't have an inventory problem. We have a prospecting problem. We have a hunting problem. We have a relationship problem. It's not that, it's not that there's not enough inventory. It's that you don't have any. And so I want you to think about where the real problem is and go fix it.
I showed this to you the other day when we were talking, but in 2019, it took 167 calls and conversations to get a closing. 2020 went down to 134. It got easier. 2021,127. 2022, all the way back to 165. And last year, it took almost double, 222 calls to have the same closing. You can't do the same amount of [00:47:00] effort in 2024 as you did in 2021 and hope to get a better result. You have to do a lot more and so you have to automate as much of your processes and systems as possible so you can spend your focused time doing the activities that give you the highest return on time.
Does that make sense? I'm telling you right now for those of you that are team leaders and brokers and owners running brands is that agents are looking for clear leadership. They're not looking for wishy washy people that say do your best. They're looking for here's what to do and how to do it. Now, go do it. Now, show me that you did it. And if you run into some problems, they'll work through those problems with you.
We created we created a worksheet, a work document for I'm going to give this to everybody if you want it. It's called the class action advantage. And what it does is it's a story of an agent that has clients that are bringing up the classic action lawsuit. They wonder how it's going to affect commissions. It goes through and tells about how they deal with it. And then we have a fact sheet for what's gone on with the class action suit up till now. And it's [00:48:00] constantly being updated. And then we've created a role play where you actually have a script for role playing as a buyer's agent or a listing agent on how to talk to clients about what's going on in the marketplace so that you're able to show value instead of give away your price and it's very powerful. Would you, does anybody want a copy of this? Like we practice this and we role play it with our clients. We do it on a regular basis. If you'd you just got to say you want it. I'd love to share it with you if there's enough energy around that. Okay. Okay. I guess that's a yes, Alvaro.
Alvaro Erize: Yes, i'm seeing many of them.
Verl Workman: You know So the thing is that's why you need to be aligned. Alvaro, You mentioned coaching. And i'm not gonna spend any time on it other than if you don't have a coach, I think that you're at a big disadvantage because as a coaching company, we're constantly thinking about what's happening ahead of the marketplace. What we're focused right now on third and fourth quarter of 2024. And what are the things that we have to put in place right now to make sure that we're dominating in the fall? I believe there's going to be a [00:49:00] massive influx of buyers and sellers hit the marketplace and the agents, brokers, and teams that don't build the infrastructure, Systems and the people to be able to handle it, are gonna be scrambling, trying to keep up with those of us who planned in advance for the bounce that's about to occur. And so I hope you have someone that's helping you with that. So we're gonna give you all of these things.
You don't have to be afraid anymore in the marketplace. I just want you to know there's massive opportunity out there in this market. There's just great opportunity, and I think that fear is a result of lack of information. And we have information when you have great leaders like Alvaro that's willing to share with you what's going on in the marketplace, where he believes things are going and then put their money where their mouth is and put technology in place to arm you to the teeth to give you the unfair competitive advantage, roll up your sleeves and scream from the rooftops that you're different. You're not like every other agent out there that drives people around and likes houses. We are business people that are helping people make the most important financial decision of their lives, and we owe it to them to be better at the business. [00:50:00] We won't send you an email with their stuff, but you can go and click on the link or use the QR code to get the information that we provided.
Alvaro and I have talked about doing a few of these webinars. Has this been valuable for you today to have this open conversation about what's going on and how we're dealing with the with the marketplace? We would love to know from you what your most urgent business problem is. We're going to put a last poll up and then we're going to put together a series of webinars throughout the year where we come in and talk about the things that are most on your mind. And so if you'll share with us what's on your mind and what you'd like us to discuss and talk about, we would love that. We would love to provide content that is driven by our friends in the audience today. And so here's the poll. What's your most urgent business problem that you would like us to discuss? If you can answer it in 1 or 2 words, it's even better.
Alvaro Erize: And I think what you were saying 1 of the most interesting things that you had there at the Q and A. A lot of people in the, chat were asking how do I do that? How do I actually get someone to sign a buyer contract if this is the new [00:51:00] world? And I think that's, where I fail from what you've shown me and what I've seen. If they don't have already a team leader that is very experienced with that, like having a coach that will tell you, look, It's doable. You have to have the courage and these are the tools for it is critical.
Verl Workman: So, I've given you in the shift modules. There's some very clear what to do is it's on my screen right now. As you're filling out the form right here, 1 of the things that we believe, Alvaro mentioned this earlier, but it was quick, is that the buyer presentation is going to be very similar to a listing presentation and the buyer's agent needs to show up with a full blown presentation that takes them through the pages of here's what i do for you for the value that i provide and here's the different ways i could get paid i could get paid by the seller offering commission That shows up on the settlement statement. We could, we may have to increase the sales price of the home to cover my compensation, or you can come up with cash, it doesn't matter to me, but I get paid. And then for that, here's what you get from me. And then here's a list of the services I provide. Are you okay with that? Check one of these boxes and we'll make [00:52:00] sure that we move forward.
I think we have to be really careful that we don't steer people that we don't not show houses and don't pay the commission that we think we want. There's so many things that unethical agents do. I will tell you my philosophy and the way that I believe in everything in this business is this. That we serve regardless of opportunity, not because we're going to get paid. And if you have a servant's heart and you do the right things for your clients, the money will always take care of itself. And I've always believed that. If you serve first and sell last, you'll find that there's lots of opportunities out there. But we have to have the right kind of culture. Now it's no longer a culture of pretenders. It's time to raise the bar, and I'm excited to see as we work together to do that.
Let's see if I have a final closing slide here for us, Alvaro. Let me put this back up there. CINC also has they put a link inside the chat. For those of you that don't have CINC or that you want to look at upgrading your account to have the tools or resources that Alvaro talked about today, just set up a consult.
Alvaro Erize: And even if you, and I say this truly, even if you're not thinking of [00:53:00] buying, but like talking with one of our consultants and we'll show you the world of what it would mean. And even if you're doing that as general research, and you end up in a different platform, that's fine too. So don't feel bad taking up our time. Our people love to talk about both CRM, lead gen, and how that is necessary for a successful team in this world. So we're happy to do it. And then maybe you'll join us.
Verl Workman: As a final thought, Alvaro, I think it's time that we make the choice to switch our mindset from the crisis mode to opportunity mode and let's look at the opportunities that present themselves, and let's have a great 2024 together. I'm excited about it, and I believe that it's going to be a phenomenal year. Thank you, everybody.
Alvaro Erize: And thank you, Verl. It's been awesome to be here with you.
Verl Workman: You too, Alvaro. I appreciate you.