The Jason Theory

S5 E5 - How Zillows deception is leading to its downfall and the decoupling of our industry

• Jason Stratton • Season 5 • Episode 5

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We break down how Zillow built its power, how online real estate portals turn listings into paid leads, and why some markets may soon see fewer Zillow listings. We also get brutally honest about today’s bidding wars, buyer agreements, escalation clauses, and the practical moves that help buyers and sellers avoid getting burned. 

• Zillow’s origin story and how the portal model evolves 
• How listing data becomes lead generation and why that feels deceptive 
• Why “Want a tour” clicks often connect you to a random agent 
• Buyer broker agreements as a clearer start to representation 
• Listing pullbacks, direct feeds, and where consumers can still find homes 
• Compass private exclusives, MLS rules, and the bigger market power risk 
• Why pricing “tests” on the private market can hurt sellers 
• What to tell buyers when comps stop predicting sale price 
• Escalation clause pitfalls, buyer remorse, and uncapped chaos 
• Staging, minor repairs, and “vibe” as a real pricing lever 
• Appraisal games agents try to sneak into contracts and how to protect the deal 

Jason Stratton - KlopasStratton.com - The Jason Theory 



Rent Math And Market Timing

SPEAKER_02

Do they ever say to you, where do you think the market's going? It will we get we will will we get that price dip so we can buy?

SPEAKER_00

I don't know. What do you tell them? I say I'll I say every year I think I think it can't sustain. And it has every single year sustained and gone up.

SPEAKER_02

So it's what do you say to them?

SPEAKER_05

Well, you talk about the uh the the cost at $7,000 a month and rent's not really $7,000.

SPEAKER_02

No, it's like 11. Yes, because of you know tax savings, yeah and all that nonsense.

SPEAKER_05

We don't need to take a deep dive into that. Yeah. But even my guy that just lost out on this place offering 50 grand more, I said, listen, if you're gonna rent for another year at, you know, you and your roommate at $2,000 each per month, I said, that's gonna be $50,000 that's gone anyway. So even if you were to overpay like for year one, you're already losing that $50,000 next year. So like, don't even get your head wrapped up on how much you feel like you're overpaying because you're gonna spander that money anyways.

SPEAKER_04

That's the renters.

SPEAKER_02

What's the five P's? Do you remember it?

SPEAKER_01

Proper preparation rents poor performance.

SPEAKER_02

There you go. It doesn't matter how much money we get, if we don't close, it's no money, right? So no close is no money. I'm everything that I am because of my dad's death. And I wouldn't be as successful without his death.

Zillow 101 And What Changes Next

SPEAKER_02

Hello, hello, hello. Welcome to the Jason Theory. We're gonna keep it real today on our podcast as we always do. Season five, episode five. I had a whole list of things we were gonna cover, but we're gonna kind of circumvent that stuff. And we're gonna really talk about stuff that probably, if you're not in the industry, it doesn't make much sense to you, but it does affect you. And I really want to just explain, you know, what Zillow is, what they do, how they got started, and maybe I mean, not everyone listens to the fights in Zillow and what's going on and antitrust, but basically why you start probably within a couple weeks, we'll start not really start to see listings in Zillow, and at the same time, why that is. So let's Ken, let's talk about how Zillow came to be. And why don't you start us off but by what Zillow does, other than being a place to find real estate.

SPEAKER_05

Well, I I just remember when I first started in real estate, they would say, hey, you know, the internet was just sort of starting to get kicking for real estate. Seems sort of weird to say, but yeah, I mean for people 20 years ago, there wasn't a lot of web presence for in real estate.

SPEAKER_02

So you didn't so you're a little bit older than me, so I know you didn't have email or internet in college. I didn't either. Wait, I didn't, yes. No, no, because in college, Netscape just started. Yes. And there was no email until my second senior year, 1996.

SPEAKER_05

I think honestly, email probably happened in '95 for me.

SPEAKER_02

Yeah. I mean, it's it was like, and it was it was college email. Like it was like, yeah, I'm gonna mess up the words, but it was just it was all it wasn't like going to a different college. It at Pepperdine, it was just internal. Yes.

SPEAKER_05

But I remember my buddy showing me email for the first time. Yeah. Sort of wacky. Real wacky. So, anyways, long story short, back to that. There wasn't a lot of like internet real estate stuff happening. And I remember my old company, Rublov, they would say, Hey, we're gonna automatically make all your listings a showcase listing on realtor.com and truly on Zillow.

When Portals Sell Your Lead

SPEAKER_05

And then eventually, you know, there was a time where if somebody found you on Zillow and they clicked, you would get the lead back to you. And at some point along the way, they just sold zip codes and access to those leads. And the listing agent who did all the pictures, did all the floor plans, write all the descriptions. Forget that, they got the listing. Yeah, they got the listing. So photos. Yeah, they they basically poached all the information.

SPEAKER_02

Yeah, so basically, exactly. We had Berkshire. I'll never forget that when I was working with Berkshire because it was no, it wasn't even Berkshire, it was Conning and Stray at the time. Yeah. And then GMAC kind of bought them during the 08, but this was when it was Coning and Stray. You know, you paid Zillow. You're like, oh, this is the internet. This is this new company that's going to be, this is before Reeler.com, too. This is this new company that's going to be broadcasting all of our listings because we don't have websites, like none of that stuff. Yeah. I remember walking up to, I remember walking into he went to Rublov. I can't remember our old managing broker or the person in charge of I can't Michael Pearson. Yeah. I walk up to Michael Pearson, I said, Hey, listen, I want to start a website. What do you need that for? You don't need a website. Yeah. And I was like, what? Now I'm gonna do it.

SPEAKER_05

And Rublov, I guess at the time, and was one of the first companies on the internet to show their listings. But back in the day, if you remember, Rublov was like, we're we only sell high-end stuff. Yeah. That's what they were known for. They're one of the first companies to have all their stuff on the internet.

SPEAKER_02

So we're paying, we're paying Zillow to broadcast our listings because we don't have the infrastructure to do that. And then not only paying to have our listings, then Zillow smartly, because they this is how they made so much money, turned around and said, Hey, I got an idea. Now that we have your your data, why don't we turn around and sell your data to other agents so that they can get people? And that's how leads came. So when you are going on Zillow, oh, here we go. Let's wait for Marissa to come. Sit down. We're talking about Zillow.

unknown

Zillow.

SPEAKER_02

Grab a headset. You know Ken, right?

SPEAKER_00

Is he kidding me?

SPEAKER_02

Or or now you you're getting very close.

SPEAKER_05

Listen, before there was all this Zillow stuff, Marissa sold one of my list things off of Facebook, bro. You did? Yeah. She said, I have a buyer for this. Delivered. Oh my lord. I remember it.

SPEAKER_00

I do too.

SPEAKER_02

I'm not one of these agents that's about the deals that they've done along the way. All right. So we're talking about how Zillow started. Then Zillow turns around and starts selling the leads. Now, I will tell you, when you when you click on Zillow, I never forget the guy. When we were doing a ton of Zillow, the guy came to our office and was like, hey, you know, he wanted to coach us. And the whole coaching was illegal. Like every just I want, like, this is what the coach is. Illegal how? Because he would be like, hey, I know these people, we know these aren't your listings, but this is they would tell us, here's your script. He's like, don't tell people that you're not the listing agent. You know how it is. He was like, you know how it is. Just get there. And just get there. And because Chicago and I said, this doesn't work because we we have agents that show the listings. Well, he's like, Well, the rest of America, that's not how it works. It's all lockboxes. So once you're there, you've got the person, then sell them on yourself. So the whole thing was to be completely non-transparent, to get them there, and then to try to convert them into your, into your into your clients. And so, and you guys have seen that, right? How many times have you, Marissa?

SPEAKER_04

How many times with Redfin? Yeah.

SPEAKER_02

Yeah, with Redfin. When you go there, they meet up and like, oh, I don't even know who this person is. Like, who are you? And I'm like, well, I'm the agent for the property. And we're like, well, what are you doing here? And then it's extremely uncomfortable. Yeah.

SPEAKER_01

It is. Yeah.

SPEAKER_02

Good times. Yeah. So that's what they try to do. And then they sell it. So like I consumers need to know that when they go on to when they go on to Zillow and they hit, you know, see something, you're not getting the agent who knows the property. You're just getting a random agent who's usually part of a massive team who has no idea what they're doing, opening the door for you. So basically like an Uber. And then this person is a person that's in charge of navigating you through the largest purchase of your life. A person that you just clicked on, you have no idea who they are or what their qualifications are.

SPEAKER_05

And I think like consumers, do you think they've been smarter that when they click on this stuff now, they sort of know, or do you still think like most consumers are in the dark? They don't know.

SPEAKER_02

Because you look at how Redfin sets up their page, it's just like Zillows. Want a tour? Here are the times.

SPEAKER_00

And they don't know who they're meeting. Like when they show up, you could you always know, right? When you're when they come up and they're like, oh, I don't know.

SPEAKER_02

And they're like, well, I want 10 a.m. Well, that's not how it works. You don't know if 10 a.m. is available.

SPEAKER_05

Yeah, but don't you think after 20 years the consumers are a little smarter or no? Have you met the public? I have.

SPEAKER_00

I mean, I think some are, obviously, but I mean, probably the majority not.

SPEAKER_02

The ones that are smart are calling up an agent directly. The people that are calling on Zillow, I'm sorry if you do that. You're you're or they just don't care.

SPEAKER_00

They just want to get in and see the agent. Yeah.

Buyer Agreements And Consumer Clarity

SPEAKER_02

And then and then how are they doing that without a broker's agreement? How many people do you think are actually getting a lead on Zillow? How many Vesta agents are getting a signed buyer's agreement before they see it?

SPEAKER_00

Yeah, but like are you actually people when they come into your listing if they have a signed broker's agreement? So like who's checking them?

SPEAKER_02

It's not his check. I know, but I'm just saying, like, who I know, but how many people are signing that?

SPEAKER_00

Do you think from Zillow?

SPEAKER_02

Yeah. How many, how many, how many people that hit Alex or hit Vesta or hit XYZ are getting a signed brokerage agreement?

SPEAKER_00

I don't think any of them are.

SPEAKER_02

None. I'd like to know that.

SPEAKER_00

Who do you call?

SPEAKER_05

I think I think that's a good thing. What's the smirk for? Because I'm saying people's names. I think these BBAs are almost becoming like a property disclosure.

SPEAKER_02

It's just extra paperwork. Yeah, but it it's also very nice to know that, hey, this is what this person's doing. Yes, this is what. Don't you think like when you sit down, Marissa, when you sit down with a buyer and you give them a broker's agreement, isn't it a really nice way to start off the process?

SPEAKER_00

Yeah. I mean, I think sometimes people fear it could be off-putting, you know.

SPEAKER_05

I agree.

SPEAKER_00

I I think so. Like if you're meeting somebody that you have no idea who they are, like say you get a lead off of Instagram or something and you come right in with the broker's agreement. I think sometimes people think it can be off-putting. But I have experienced the exact opposite of it. It's because you're just laying out all your roles. And I love it because it's just like, okay, this is what we're doing. Yeah. Here are our roles and sign off on it, and then let's get going. So I like it, but I think initially it felt like it could be off-putting.

SPEAKER_05

I think circling back to this bigger Zillow conversation, though, it's going to be more imperative that you have an agent from the get-go. You can't just be running wild on the internet. So you should you should be starting that process because you know, you guys have said you're meeting complete strangers, you know, at times or realtors that they don't know, and people are now that if most of the listings are not going to be on some of these platforms, I mean it's going to be more work for us, but we're going to have to, you know, provide more options for buyers.

SPEAKER_00

But if they're on the MLS. Yes. So how is it more work for the other?

SPEAKER_02

And and think about this. For the consumer, is it better to go on to Zillow and meet somebody that's, in my opinion, framing themselves as the buyers, as the agent for the listing and not knowing anything about the listing and operating in the gray? Or is it better for someone to drive by a house and go, oh, I really like 2410 White Oak. Let me look that up. And all of a sudden it goes to another website, homes.com, Realtor.com, which all has the information of the listing agent, and you're actually getting the proper information. For the consumer, that's the right way.

SPEAKER_05

Yes, they can be on competitors' websites, like you said, homes.com. They just have to bypass that. And I think truly as well.

SPEAKER_02

Yeah. I mean, I put in one of my listings, I put in that listing, and Zillow wasn't there, but there was 20 other websites that had my listing. Yeah. So if a seller thinks their their information's not getting out there, like I said, it's not 2003.

The Push To Pull Listings

SPEAKER_02

Like everyone is getting this, like what Zillow provided is not needed anymore. They to me, they are a disc, like a music disc. I I don't need to go buy a music disc. I can stream. Like I don't need that anymore. And the fact that you're operating in a malicious way with content that's not yours is, you know, a problem. Like, like we were what I was saying before I went to it, like when I went up to Nancy Nagy when it was Koning and Stray, I said, you know, like what's going on with Zillow? She's like, well, you know, we all agree to it. Now we're stuck. Now I'll never forget it. She's like, no one has the balls. She used that word, no one has the balls to pull their listings. She goes, but if we all did it at the same time, they would collapse. Right? So we all did it last night. And this morning, Berkshire did a direct feed. Barron Warner did direct feed. Laracy has a direct feed. All these small EXP, Keller Williams, they all said we can't do it. They did direct feeds and they're going around Mred and dropping their stuff on Zillow because they don't have the stone.

SPEAKER_05

From the list side, but they're still gonna lose so much of the buy side exposure of compass, ad properties, everyone pulling out of Zillow. Yeah, I mean they're so why they have a direct feed for their listings to tell their cons their sellers that they're giving them the most exposure, technically.

SPEAKER_02

But are they? Is it better for the seller to be on Zillow and have someone uneducated representing your property to the consumer, or is it better for the seller for the buyer to reach out to the person who knows the property?

SPEAKER_00

Obviously, the person who knows the property.

SPEAKER_02

But that's what I'm saying. Like in if people just understand in the long run, it's better for the consumer if the person that I don't care if Zillow still operates, and Zillow can sell the leads. I don't really care about that either. But the person who is the listing agent should be front and center on the listing and not a footnote all the way down where you have to keep scrolling because I got a 17 and a half inch screen, I got a big screen. I still have to scroll, and it's on the bottom right, listing courtesy of Sophia Klopus of the Klopus Traton Group, and it's like this big. It's so deceptive, and they teach you to be deceptive, which is a which is a real problem. The problem is does Zillow fall apart and then does Compass take their place?

SPEAKER_00

That's the question.

SPEAKER_05

But there's still other portals out there that are trying to do the same thing, like homes.com.

SPEAKER_02

But homes.com, you you buy, but at homes.com, you don't buy your leads, you buy placement on homes.com because homes.com and real.com only have the listing agent's name on their on those listings.

SPEAKER_00

Yeah, but that's only like half the battle, right? Because I think the other part of the battle was that they're telling you how and what, like if you don't put it on there, then you get fined. And it's so it that's only

Compass Exclusives And Antitrust Worries

SPEAKER_00

one half. Yeah.

SPEAKER_02

So how it all so how it all started was Revkin wanted Compass exclusive.

SPEAKER_01

Uh-huh.

SPEAKER_02

That's because it's private equity, and that's a whole other we talked about that like a year ago. Why that so then Zillow said, well, if it's goes to private exclusive first and then goes to the MLS, we're not going to be on there. That violates the licensing agreement that Zillow has with MRED. The licensing agreement is that anything on the MLS has to be posted on Zillow.

SPEAKER_05

And according to that guy, uh Jared, what's his last name?

SPEAKER_00

Jared James or something.

SPEAKER_05

Jared James, they were really fighting over nine properties that weren't exposed. Yeah. Which is so dumb.

SPEAKER_01

Yeah.

SPEAKER_05

Yeah.

SPEAKER_02

But like for the casual listener, like but they are violating the rule.

SPEAKER_01

Right.

SPEAKER_02

So can they start it? So basically, he's like, well, if if you're not gonna abide by this rule, then forget you, right? So if you're not gonna do what you told us you're gonna do, you're not gonna get any of our listings. I don't disagree with anything that they're doing, and I think it's better for the consumer. It's just a dangerous anytime you start swinging with uh like uh Rockefeller, like uh 70%, 80% uh like market share, and you're using that to manipulate things, that's just when I start getting a little bit nervous and like, okay, what is the next plan? Right? Because you don't make money selling real estate. There's no money in brokerage. And and and the problem with that is directly correlated to Compass 2. Because Compass 10 years ago decided to start giving everybody 90 and 100% splits. So he dug his grave trying to build market share, right? So Compass completely turns the industry upside down, and any money that brokerages made from splits is done.

SPEAKER_05

Yeah.

SPEAKER_02

Right? Because if you want to maintain your talent, you now have to give everybody 90, 95 percent.

SPEAKER_05

And for a non like real estate listener, and you're just a consumer, like companies based on volume will give their agents certain splits. And I don't think like the general public always thinks that a realtor keeps all that all that commission. Oh yeah, when they're asking for my commission, I'm like, dude, I don't make that, I wish. Yeah, but the company takes a a piece of that.

SPEAKER_01

Yeah.

SPEAKER_02

Just like when you work at a factory and you're selling a plane. The you know, when the plane sells, the the people building the plane don't get the money. They get a salary, and that profit goes to the company. Right. So yeah, I you definitely. So he creates the company creates this problem of of just bearing any profit they can possibly make. And then it's like, how do we make money then? And I think that is what led to this. I don't like what led to it. I like what's happening, and then I'm afraid of what happens after.

SPEAKER_05

Well, and I think like You're right. They're they're basically trying to say you shouldn't do this, but we can't. Yeah, right. Yeah, right. It's sort of dirty. Yeah. Yeah. My new word's been gross. It's sort of gross. It's gross. Yeah.

SPEAKER_02

Yeah. So it's just like, you know, is it is it a wolf in sheep's clothes.

SPEAKER_05

But I guess if like they own all that data, which as you said, they've always wanted just to accumulate all the data, which is a good thing. And we said that things like a year ago. We go, we said, where's this headed? I go, it's headed to compass things. And I think it's okay that you promote all your own data. Yeah. But if your company doesn't own the data, you know. Long time ago there was like a company like I think in Minnesota that was gonna pull out of their local MLS because they they just wanted to keep everything sort of in-house versus sharing. You know, it and I think like in a weird way, like the market now, you know, they're basically saying, Zillow, you're taking all our stuff for free and making money off of it. We're just gonna take it all back and make money off our own stuff.

SPEAKER_02

Yeah, I yeah, I I just I think I I I agree with you, but does it do they do they get to a situation, do they get to a spot where Compass turns to Mred and says, we have 70% of the listings. If you don't do what we want you to do, we will pull all our listings from the Mred.

SPEAKER_00

I mean, I think there's potential for that, right? I mean, I don't I hope not.

SPEAKER_02

I'm looking at But that's not great news for the consumer.

SPEAKER_00

No.

SPEAKER_02

Does a does a private equity company care about the consumer? No.

SPEAKER_01

No.

SPEAKER_02

Thank you. But does a cup does a corporation care about the consumer? No.

SPEAKER_00

They care about the bottom line.

SPEAKER_02

Yeah, they care about the bottom line.

SPEAKER_00

Yeah.

SPEAKER_02

That's fine.

SPEAKER_00

So what's your production?

SPEAKER_02

I I mean, I think I think eventually you're going to have to log in to a compass product to get listings. I think they're gonna go and decouple everything. I think it's gonna be the Wild West. I think if you are, you know, a smaller brand, that's kind of why I wanted Sam here today to see how he feels about it. I think if you're, you know, if you're if you're Schaefer or you're a Laracy or even a Fulton Grace and you're a mid major, I I mean, listen, Matt can be in the top ten, but when you take his that's him as an agent. Take his agency. I mean I mean, I know he calls it, you know, I know he calls himself an agent, but that's his brokerage. Is right, right? You know, what happens when all of a sudden all that consumer stuff is on a private website?

SPEAKER_05

Agreed. And I think it'll be hard for all the duplicate, you know, like you could he he could basically or a company could take their whole operation and roll it under a bigger umbrella. Yeah, I mean and still be a tea team.

SPEAKER_02

Yeah. But I think that's something that those guys will have to do. Now, if they get forced to do that, this is what Standard Oil did back in the day with Rockefeller, and that's why they started the antitrust act, Sherman Antitrust, because basically he was what they were doing with the railroads and with oil was basically saying is squeezing everybody. Like I own the railroads, because he bought the railroads. He's like, I own the oil. Now I need to buy the railroads. Once I own the railroads, you can't my competitor can't put their oil on my railroads. And all of a sudden, it's like you have one guy that was 40% of the GDP or whatever it was, and and he and that's why they had to break that up. So I just I I just see that playing out. I don't know why, but I see that playing out that way. Why do you why do you think like I also spent four hours talking to Revkin privately, so I kind of remember it's my why do you think our market was the first market to do it?

SPEAKER_05

Is because we had the biggest MLS and it was the easiest?

SPEAKER_02

Yeah, New York, New York is a disaster. They have like you know, street easy. They're very decoupled. Yeah, they're already there, right? Yeah. Like I remember when I talked to Revkin 10 years ago, he's like, look at this platform we have, blah, blah, blah. I'm like, bro, we got that already. It's called the MLS.

SPEAKER_00

And our MLS supports our our aid or protects our agents more than any other.

SPEAKER_02

It's the perfect place to start because you've got everybody already on this platform. And if you can manipulate the platform because the amount of volume that you have on that platform and kind of nudge it in a direction you want, don't forget you're dealing with private equity and you're dealing with politicians. That's what started that company.

SPEAKER_05

I have a couple questions for both of you. Remember upstairs, I told you that I had a realtor friend that I was talking to that said if if the compass agent was ever in a multiple offer situation, that she would always give the compass agent the direction to how to win the deal because they would get paid more money, supposedly. Is that true?

SPEAKER_00

So it was a compass listing agent telling a compass compass buying agent. Is that yeah?

SPEAKER_05

Could you imagine like you were competing and I'm a compass agent and Jason's a compass agent, but you have the best terms, but I tell Jason come up another 60 grand and I'll make sure you get this because this then will be an in-house deal. And we're gonna get a little more scratch.

SPEAKER_01

Uh-huh.

SPEAKER_05

And I think I think we didn't really finish this thought, but what had happened is that then Compass keeps both sides of the transaction. So they also while they probably pay out a little bit more money, and I don't know if this is true, but they're more incentivized to keep all their stuff in house.

SPEAKER_02

Well, you get more market share, you get both sides of the 495 fee or whatever the fee was. Like, there is more, you know, double sided the agent splits. Yeah, yeah. So I mean, that's what I'm saying. Like, it, you know, like that's the only thing that concerns me when someone like I can't believe personally that that company got so big and no one and they have not triggered some sort of antitrust.

SPEAKER_00

I know.

SPEAKER_02

Like it's gonna come down on the pipeline. It's it's it's it has to. There'll be some that those stories will get out, and then all of a sudden there's gonna be a documentation of that or this or that.

SPEAKER_00

Yeah, but I also think like people are gonna be like, that's down to your personal morals, like you know what I mean. I don't think that's not like a company-wide, you know, ethics. Yeah, it's like it's not like a they're telling them to do that or anybody's telling them to do that, right?

SPEAKER_02

Well, this is the conversation that I had with you upstairs when you're like, Well, you just do your own thing, and I'm like, I can't do that. Like, I can't get in bed with a snake.

SPEAKER_05

Well, I get that.

SPEAKER_02

I was like, it's like it, like it gets at my soul.

SPEAKER_05

Yeah, you're I I was just saying your brand could be transferable to any brokerage. Yes. Because you're not you're not gonna ever brand under that brokerage, or I was gonna brand under your brand.

SPEAKER_02

And that goes back to how long ago, what like two months ago when we were on the podcast, we said you have to, you literally have to have a website, you have to brand yourself because when this thing all falls apart, which it will, when everything decouples and everyone is out on their own, and there's not one place to grab this stuff, people are gonna go online and be like, you know, what what's going on? And does your, you know, like I have an issue with the fact that I typed in my address to my listing, and Jameson wasn't the first person that popped up. Well, that's all Corcoran was.

SPEAKER_05

That's all SEO stuff.

SPEAKER_02

But that but but hold up, I mean, like if we're gonna decouple this thing, that's where all the money should go. Yeah. Like, there's no reason that my that that that Jameson, like my website on Jameson shouldn't be the first. I do find it interesting that that my videos on YouTube were three and four. So that that is uh really because the search, the Google search is you know, Google owns YouTube. So the more YouTube stuff, that's where the videos help. My the third one was one of the videos I had a white oak, and then there was another video on the white oak, and then there was some Instagram shorts on white oak. I don't know, I just it just was like very interesting when I looked on it. I'm like, okay, so like that YouTube, the video, maybe my website wasn't up there, but if you're a consumer, I would probably hit the video before I hit anything.

Private Listings And Price Testing

SPEAKER_05

Matt, I want to remind you of that story you told me a week ago about the compass agent that went private and then went public. Oh god, we're gonna go to that.

SPEAKER_00

I wish we could just say names. Like, who are we talking about?

SPEAKER_02

Oh, we don't want to tell throw this guy's business out there, but so well, this whole thing started with compass private. This is what's led to this thing. So I I'm uh I'm hanging out with uh this mortgage broker I use a lot, Mike Black. And he's like, Did you hear the story about this kid that I know that's friends with Mike? We'll just call him Jordan. We'll call him Jordan. That's actually his name, but I won't use his last name. So I went to his house actually with clients. It didn't work for my clients. But he's like, I was like, Yeah, I went to Jordan's house. I thought it was him, I saw his photo, then I looked him up, but I'm like, you know, like you know, you know a face, but I you know it was like little wedding pictures, and I didn't want to be like creepy, but then I looked it up and it was his house. He put his house on compass exclusive for 950. He got 950, it fell apart before it went to inspection. He was just like, screw it, I'll just put it on the market. A million one thirty.

SPEAKER_05

Oof.

SPEAKER_01

Oof.

SPEAKER_05

So listing it privately, I heard him.

SPEAKER_00

Yeah.

SPEAKER_05

So we we talk about this all the time. Well, I'll never list anything privately.

SPEAKER_00

I don't, yeah.

SPEAKER_05

I will always just put it on for the mass market.

SPEAKER_02

No, I don't have photos ready for this place in Northbrook that I'm listing.

SPEAKER_00

Is it White Oak?

SPEAKER_02

No. Oh it's really cool. It's on it's it's east north Northbrook. It's like an acre and a half. It's a mid-century monitor. It was built in the 50s. It looks like the home from Ferris Bueller that had the Ferrari on it. Oh, yeah. It's 11-foot sheets of glass overlooking like this beautiful landscaping. He's him and his wife are empty nesters. He's like, this house takes me a month in March and April just to get ready. He's like, I can't do it anymore. And oh, for the landscape. Yeah. He's like, everything. He goes, it's a fifth, he goes, it's a 70-year-old house. He goes, I'm constantly fucking tinkering with this house. I guess like a sports car. Like you're always messing with it. Can we bring in a Ferrari and just blow it out the back? Blow it out the back. Yeah. And uh AI. Yeah. Yeah. And uh, oh, I had a I lost my train of thought. I'm like, oh, you're gonna you don't have photos yet. Yes. So I'm doing front, he's not, it's not ready, but he wants people, he wants to do like that preview. We're not gonna show, but that's my like the private market. I'm gonna put it on Friday with exterior photos, drone photos, and a couple really cool interior ones that show all the glass and the forest. And then in two weeks, we're gonna go public. But I would never sell it without going on the open market. Sure. I'll have it out there.

SPEAKER_05

It's like a save the date.

SPEAKER_02

Yeah. Yeah. Just because he's like, I want it out there. He's like, he's like, I think people are going to, you know, be on vacation or I'll be on the plane and searching homes and looking around and just see it. I'm like, yeah, whatever you want to do.

SPEAKER_00

I mean, sometimes that kind of annoys me though, because I'm like, why are you out there if I can't get in? Yes. Like it it irritates me. Yes.

SPEAKER_02

This is this is the Lee Market special.

SPEAKER_00

I I know. It drives me to Lee Market special.

SPEAKER_02

Yeah. First showings in five months when the lease is up. Because I have to put it in the private market so someone doesn't steal my list.

SPEAKER_00

But what about when you're testing prices? Like, because that was the big hubbub about the private market. It's like if I'm testing a higher price, then I want to be able to do that.

SPEAKER_02

Like I just had the I know. I'm gonna have put up a name that I just had a conversation with Jeff Lowe, and I lost out on back-to-back deals with Jeff Lowe. And Jeff's like, I'm trying to, he's like, I owe you, I'm trying to help you out. He's like, Jason, I said, listen, man, I was like at a million fifty. I go, man, I go, I gotta make this work. It was listed at $8.99.

SPEAKER_01

Ugh.

SPEAKER_02

I'm at a million fifty. And he Jeff texts me right away. I mean, he was being, he's been stand up about the last couple of deals, and he's like, Jason, I can't even tell you where my offers are. He's just like, isn't joking. He's like, we're over a million two five.

SPEAKER_00

I know. Like it gets a point where it's fine.

SPEAKER_02

Linda goes and goes, whatever you do, do not come up to that price.

SPEAKER_00

Right. I know. I mean, it's so hard to price things right now, too. Yeah. Yeah.

SPEAKER_02

I like the private to test.

SPEAKER_00

Yeah.

SPEAKER_02

But when there's three idiots they're gonna pay $300,000 over risk, why why bother? That's not a test. You're doing it a disservice. Anyone that takes an offer from the private market is doing their client a disservice. And they're and and you cannot tell me any different because we're out there.

SPEAKER_05

I don't even we've had this discussion the last

Surviving Bidding Wars Without Comps

SPEAKER_05

time we talked. It's hard to advise buyers right now how much to go over. Well, how do you how are you doing it?

SPEAKER_00

So I I mean, I'm like kind of sick about prices out there, you know, sometimes because they're they're going, like you said, two and three hundred thousand dollars over some a hundred. I mean, I I tell them like you have to put out a number that you're not gonna go to bed at night being like, I wish I would have done more. And then in I'm gonna put up a number that I feel like is gonna put me in the fight. But comps don't matter at this point.

SPEAKER_01

No.

SPEAKER_00

I mean, it's not even worth of course they're always worth looking at, but it doesn't matter. So it's like you have to go on at a number that you feel great at. And you're gonna be fine with it.

SPEAKER_02

And you can wake up in the morning and not vomit.

SPEAKER_00

Yeah, and like and don't move in two years. You know, I but I don't I could say that, but then I don't know. Like every year I'm like, this can't sustain. It it like it's not gonna sustain any longer. It's gonna come to an end. And like we've like five years in a row. So I, you know, I don't know. And you just have to be confident in the number that you're putting out and have lived.

SPEAKER_05

That's gotta work for you. Like I have fresh wounds from like those kind of scenarios. You know, uh, my clients dreamloft came out in bucked down, priced at a million one fifty, I tried to use our technique of just paying over list all cash, as is 25k initial earnest money. You can stay free till August 1st, like anything. And I tried, I think this thing came on Thursday. By Friday, I tried to take it off the market 100k over at 1150. They brushed me off, like, wow. Even the listing agent is like, Ken, I thought that was a very generous offer, but my clients want to have the open house. So the next day, he's like, I was like, how was the open house? He's like, Well, we have four offers in, we're expecting a couple more. And long and short of it, I told my client, I'm like, wow, if they if they already said no to a million two fifty, and she was cash, like she had extra funds, like you know, screenshot of like 3.3 million. She could have taken down the place. She also would have gutted the place at the very top of the market because she's you know, it doesn't like any of the fit.

SPEAKER_02

She wants what she wants.

SPEAKER_05

Yep. And I'm like, we have to go to at least 1.3, but I'm like, everyone's probably gonna go to one three. So we figure we'll go to a million three twenty-five, and that should be enough to get it done. How many square feet? 2,000. Rooftop tech? Yeah. How high are the ceilings? 1750 will cut right on the 606. Oh, that's nice. It was nice. I figure a million three twenty-five was enough. We would escalate to a million three fifty just in case. And we were still blown out of the water by 40k. And it went for I I hear it's gonna go for almost a million three ninety, on 1.15. So that was a very fresh wound. And how do you explain to your clients, like, wow, great job. You gave it a good run, but we didn't get it.

SPEAKER_00

I mean, I mean it sucked, man.

SPEAKER_02

Have you guys had anybody bow out?

SPEAKER_00

Oh, don't. I I am I I hate escalation clauses so very much. I have had people bow out of things. I think people are putting crazy numbers out there to secure the property, and then they get like buyer's remorse, or they're not expecting it to go to the number that it went to, and their escalation number was.

SPEAKER_02

You had that double escalation.

SPEAKER_00

Yeah, but then on hermitage.

SPEAKER_02

Double escalation. Well, you can have two escalations fighting each other. Oh, yeah, yeah, yeah.

SPEAKER_00

And I mean, oh my God. And I've got a fall. And then there I had another escalation clause where the guy didn't put down on Hermitage, 925 Hermitage, they didn't put a cap on it. And it went, I can't even remember the numbers now, but it went high on the seller's agent. Okay. So they didn't, and I'm like, are you sure you don't want to like you should put a cap on it? And they're like, No, no, no, it's good. And I'm like, okay. And so it went to the price, and I called them and I said, Hey, listen, like, this is the price you're gonna be at. And they pulled out. And I'm like, what? Like, that's why you need to put a cap on it. And then the dual escalate, like this same escalating number was a stupid situation.

SPEAKER_02

And were they were they good agents? No. Okay, it's fine.

SPEAKER_00

Yeah, okay.

SPEAKER_02

If she's hamming it on, yeah, I'd be like, yes or no. No, that those are bad agents. You're smart on uh the women L's. Uh I'm in a room of women, and I've been married.

SPEAKER_05

Let me tell you one other story for these first-time buyer renters out there. I also showed a one-bedroom this week that got 13 offers. And the comps say 400 should be the top because these two comps had parking, this other one didn't. And trying to But how recent were those comps?

SPEAKER_00

Like, were they like two or three? Pretty recent.

SPEAKER_05

Pretty recent, but this thing was priced at $350 on Mildred. It was with this this guy, Bill Dwyer. I know him. Yeah, great guy. Works with Jeff.

SPEAKER_01

Yeah.

SPEAKER_05

And we go, I have to convince my client, like, I know this is like priced, I think it was priced a little under, but we went 50 over, as is he was like waived his mortgage contingency. And I said to him, I said, bro, this this market's frothy because in January I lost out on an 18 offer situation, also on Mildred. It's a bad streak for me. Anyways, two of them on the 27 on Mildred. Anyways, I I told him, I said, I I said, I he's like, I said, maybe you go to 405. He's like, I'm just not comfortable. I said, All right, we'll do four. And I finally, when we lost, and I've, you know, at 50 over, he said, Bill said you got 13 offers. I said, see, but I don't think like they will believe you until they live it. Yeah. And you could tell them how crazy the market is, and until they experience it. And I said, Man, I I feel so bad for you because again, there's one winner, 12 people still looking. So, like on just this one listing, there's yeah, the next one that pops up, those 12 people are gonna go there.

SPEAKER_02

Yeah, it's just gonna be like this. Did you find out, like, did you kind of get I always try to get like a range of where it's at, so then I know at the next one where I need to be because that's where the other people are at.

SPEAKER_05

Well, these he said the winners were cash cash and a little over the 400 mark we were at. Okay. And I asked him if we were in the top five of the 13. And he said yes, but it doesn't matter.

SPEAKER_02

You could have one lunatic, yeah, 100k over. Yeah. Uh are any of the people that you guys are looking with, are they just like, hey, you know what? We're just gonna take a breather, we can't handle this market anymore. Have you guys lost anybody that way?

SPEAKER_00

I they they're just sticking it out for a long time. I mean, it's like the if none of them are like, I have to move immediately. So that I mean helps out the situation. So I haven't lost any, but like I also have some that are just there not doing anything.

SPEAKER_05

Yeah, they they could be lost for a lease cycle. Yeah. You know, like I had one where the dad thought the place had been on the market, and then they wanted to offer 30. I think it was 515, they wanted to offer 485. And then, of course, the two units they were interested in, they both just randomly boom, boom, off the market, and they couldn't find anything else, so they had to resign a lease at $7,000 a month. Ugh. Two sisters.

SPEAKER_02

It's brutal. $7,000. That's a lot. Yeah. $7,000 a month. What are they? Where are they? Yeah. Genie Terrace. It's not cheap. No. Seven grand to live there? Yeah. That building's old though.

SPEAKER_05

I know, but that's just what it costs. Dude, rents are bonkers, man.

SPEAKER_02

Well, that's what's killing, that's what's killing the the the purchase market are these renters that don't give a shit what they pay.

SPEAKER_05

Sure. Right. All they care about is their monthly. Yeah, they they want also the sizzle of some of these nice buildings.

SPEAKER_00

I mean, they have a great amount of things.

SPEAKER_05

Eugene, Eugenie Terrace isn't the right building, but it's good, good location. Yeah, the location's fantastic. But you know, people will pay for those fancy amenities sometimes that they don't use.

SPEAKER_01

Yeah.

SPEAKER_02

What have you had any, like for people that are looking to sell, and obviously that we're talking about how the market's 200,000, 300,000 over, but is there anything that your sellers didn't do that you told them to do that you think really hurt

Staging Strategy That Adds Value

SPEAKER_02

their price from getting 100 or 150 over? Or have you guys have your sellers all been like, you know, we know the market is is amazing. We don't have to do anything.

SPEAKER_00

No, I I think for the most part, they're all in pretty good shape. And then it's like there's some things I could do, but I'll wait and see if it becomes it becomes an issue, and then I'll deal with it.

SPEAKER_03

But like what?

SPEAKER_00

Just like stupid things, like, oh, I might need some nothing major. It's like, oh, I need some a little tuck pointing here, or you know, but it like but visually, no, I mean, no, I am are your sellers staging? Yes, absolutely.

SPEAKER_05

Yeah. I am actually shooting a video today for a property that I own. And the gist of the video is gonna be would you spend forty six hundred dollars to stage this property for one showing? And the answer would be yes, because everything that I tell my clients, if it's something that I own, I will do do that. Yeah, I just feel like this place sold after one showing for 16k over list, and because the furniture and everything was in there, it you know, I think it helped paint the vision of what the space could be. If I left it vacant, it's so damn boring.

SPEAKER_00

Yeah, so it looks smaller.

SPEAKER_05

So I I would rather, even my personal money, I would rather spend it because I think that's what made the difference. And then fast forward, this doesn't really happen to me that often, but a guy down the block said, Hey, I saw you sold that house. He's like, I I said, Yeah, it was really quick. One day he wants me to list his house now. So that one was really good, but spending that money, it's a no-brainer to me. And then I've told you recently, it's just doing all this work at my own house to get it prepped for market because everything that I know is wrong with my house, I'm gonna fix it. But even my wife went to an open house this week that was not staged at 2323 Levit and it's sold. But she she's like, Oh, I can see now what you're saying that there's you just see all the imperfections of everything, and you can't get the feel for the rooms if it's not staged. And I said, Well, I would think that you would understand that, you know, from just the way I do all this. Yeah, your business. And she's like, Yeah, but when I see it, I I I can even really, you know, understand it more that it's so critical to just lay out these places with furniture so people can get a vibe on what it's gonna do.

SPEAKER_00

Just for vacant listings either. Like I just had this listing in my cellar and her two kids are living there. And I had someone come in and fill in and like make everything neutral in all of our bedrooms and like, you know, make it look really, really nice. And so it it's not even just a vacant listing. It's you can spruce up your own space too and make it look better.

SPEAKER_02

Yeah, I think what you guys are talking about is like a house getting one four and then a ho the same house getting one five five. When you have all those people that just have this like like attachment to the house, or they feel the house, or they have the vibe of the house. Like I think it makes a huge difference. It does. When you walk into a house and the house you know is not the right space for your clients, but has the vibe. How do you say, hey, listen, pull back? I know they have really cool moody paint, good art. They got a record player, you know, there's vinyl, you're loving the vibe. Like everyone loves vinyl. Like you you want to get top dollar, just put a fucking record player in your house somewhere.

SPEAKER_05

Yeah, a retro setup.

SPEAKER_02

Just retro it, dude. Like just a re it doesn't have to work. And buy like 10 old discs. How do you like like I come out of that house and they're like, oh my God, I love it. I'm like, this space does not work for you. It's too overpriced, and you love the vibe. You love the look. Yep. Like, do you guys ever have do you guys ever go in and see that and be like, hey, pull back your thoughts?

SPEAKER_00

Well, I think it's about asking them questions, right? And having them come to the conclusion of it. It's like, what if like a lot? I have a lot of growing families and things like that. And it's like, are you are you gonna have enough space if you have another child? Are you gonna, you know? So I think it's kind of making them realize that maybe that space doesn't work for them. And then if they don't get it, it's just like doesn't work for you.

SPEAKER_02

Yeah, yeah. Then you're just like, yeah, I walk out of the house, I'm like, this is you know, the transaction costs alone you're gonna need to do in three years are gonna kill you.

SPEAKER_05

Remember what you told me a few weeks ago if you ever sold your house, you'd be out of there. It would stage, and that's how you would sell it. And that's how exactly I'm gonna sell my house.

SPEAKER_02

Because, you know, you have to make it look like But what do you do when you have a buyer that you know the house doesn't work for the buyer? And but the buyer loves the house because they're in other things.

SPEAKER_05

You have to point those things out. Sure. But then again, you know, inventory is so tight, so it just depends on people's situation, you know. Do you tell them just to sit back and relax and wait? It just depends on their situation. But yeah, sometimes you have to. Because people get smitten. Remember, we had this whole thing about like you could just buy something that's that's like not updated, but it's got a great floor plan, you can always fix it up, right? Yeah, but you can't buy something that's got a bad floor plan, you know. That you know, it's just like sometimes people just get so smitten by you know, fancy counters and that that's easy to update, but they just want what's like done or what's cute, or you know, what buyers.

SPEAKER_02

What buyers have you seen that you guys have that what type of buyer makes has been making the worst decisions? Is it renters who just don't want to pay rent anymore? I don't think they're people that have lost decisions, lost out so many times.

SPEAKER_05

They're just always forced. I think by the time they look, they're too tight against their lease ending.

SPEAKER_00

Their time frame, yeah.

SPEAKER_02

And then they make the bad decisions.

SPEAKER_05

Yeah, or they just have to rent again. Yeah.

SPEAKER_02

How many guys are you do you guys have a ton of renters you're working with that are trying to get out?

SPEAKER_00

No, I have people that want to move up from like, you know, a townhouse to a single family, a lot of like or condo to a single family. And that's the right.

SPEAKER_02

And they're okay with the rate, they're they're okay with the rate change. They just they just they have to do that.

SPEAKER_00

But it's like, you know, there's 10 people for every one single family house, and the price for the house, you're it it doesn't work for them. And they have they have the time and they have you know some space. Would they like more space?

SPEAKER_02

Yes, but they could stay where they are right now, and so it's like that's do they ever say to you, where do you think the market's going? It will we get we will will we get that price dip so we can buy?

SPEAKER_00

I mean I don't know. What do you tell them? But I'm sure they asked you. I say I'll I say every year I think I think it can't sustain, and it has every single year sustained and gone up.

SPEAKER_02

So it's what do you say to them? Hey, you know, hey, we really like I think it's like that's a call I get. I get calls from I have a lot of renter colleagues. Like, you know, we were gonna buy last year, we thought it'd go down. You know, we thought rates at six and a half percent would bury the market. And, you know, it's been a year now and things aren't going down, so I guess we just have to do it.

SPEAKER_05

Well, you talk about the uh the the cost at seven thousand dollars a month and rent's not really seven thousand.

SPEAKER_02

No, it's like eleven.

SPEAKER_05

Yes, because of you know tax savings, you know, and all that nonsense. We don't need to take a deep dive into that. Yeah. But even my guy that just lost out on this place offering 50 grand more, I said, listen, if you're gonna rent for another year at, you know, you and your roommate at $2,000 each per month, I said, that's gonna be $50,000 that's gone anyway. So even if you were to overpay like for year one, you're already losing that $50,000 next year. So like, don't even get your head wrapped up on how much you feel like you're overpaying because you're gonna squander that money anyways.

SPEAKER_04

That's the renters. This whole market is the renters.

SPEAKER_00

But I've overpaid for every property. I've I don't know if that I overpaid, but I paid overless price for every property I've bought. That you loan. I've been in a multiple offer for every property that I've bought. And I I think just sometimes that it it is what it is. Like I'm just gonna pay it. I'm gonna be happy, I like my neighborhood, I like where I am. And and that's I mean, and we weren't in the market that we're in now. That was like pre-pandemic, you know, and I there were 14 offers on our building.

SPEAKER_01

And that's 14 offers.

SPEAKER_00

And then I didn't we didn't get it. You listed for a dollar? A dollar. I wish. Yeah, we didn't get it. You live in our center? Yeah, and then their deal fell apart, and there were four offers, and we got it then.

SPEAKER_02

What was the difference between the offer that won originally and yours?

SPEAKER_00

I was I was mortgaged, it was cash. They were higher, but it was like some investment guy, and then they started being really wonky around when it came to inspection time or whatever. And it was a perfect building. It was like it didn't need a damn thing. That you know, there was nothing wrong with it really. And they just like went dark, and so they were like, let's go, like this deal's falling apart. And we were like, Great, we'll throw our hat in the ring again.

SPEAKER_05

So did you go up the second time? When you say throw your your name back in the ring, didn't they just come to you as the potential?

SPEAKER_00

No, and I was so pissed because one of my friends who put an offer in on the property, who was an agent, her buyer put in, wasn't gonna go in again. And she called me and she's like, Hey, do you hear it went back on? And I was like, What? No, and I called that guy and I was like, Is it did your deal fall apart? And he was like, Yeah.

SPEAKER_02

You didn't call anybody?

SPEAKER_00

No, I he didn't call me. I don't know.

SPEAKER_02

Who's the agent? It was up in the house.

SPEAKER_00

I'll tell you later.

SPEAKER_02

No, tell me who was.

SPEAKER_00

It's the one who has the storefront on Irving and Levitt. And and so I I put we Irving and Levitt or Roscoe and Levitt? No, Irving and Lovitt.

SPEAKER_02

Who the fuck said Irving and Levitt? I know.

SPEAKER_00

Come on over. Um, anyway, so we we went again, we put our offer in again, and and we got it.

SPEAKER_05

Financial planning guy on the corner.

SPEAKER_00

That's on Oakley.

SPEAKER_05

And then there's the old Schwarma place. So that I'm trying to think. People are gonna look it up. Who is it?

SPEAKER_00

I know it was the Wilcox company.

SPEAKER_02

Oh, okay. Yeah, that's what it's like.

SPEAKER_00

Who does a lot of business in the neighborhood too? Or did, but yeah, so he didn't call or hadn't gotten to me yet, or whatever. And so then I called and I was like, hey. Because it was like the pri it was exactly where I wanted to be. And I just was like, all right, oh, we're gonna do more.

Escalations Appraisals And Deal Safeguards

SPEAKER_02

I'm gonna we'll we'll end on this. What are you guys doing differently now? And I know this is a broad question, but one thing you're doing differently now that you didn't do at the start of the year because of the market, other than like being people's shrinks.

SPEAKER_05

For me, I try to explain the craziness of the market, but like I said, until they experience it, they're never really gonna understand it. But I'm just having more candid thoughts on like I I hate to call them, but real life case studies of getting my ass handed to me in this market. Like it's really So you tell people right up front, hey, it's a war. It's a war. Yeah. You don't want to sugarcoat it for them.

SPEAKER_02

No, because you lose them.

SPEAKER_05

Like you're you're like, yeah, you're about to get in this fight out back, but I'm not gonna tell you up front so you get ambushed, you know. Like it's like, come on. Yeah, it's brutal.

SPEAKER_00

It is.

SPEAKER_05

You know what? If you're really good to your people, I mean you have to almost tell them that. Like you may lose some clients along the way or people that will just put their housing on pause.

SPEAKER_02

But if they put their housing on pause, they were gonna do it anyways as soon as they got their first $200,000 over-asking slap. Yeah. So you might as well just be up front with it and be like, hey, this is what's gonna happen. You're gonna lose six offers in a row. You're gonna think that there's nothing that ever is gonna happen. You're never gonna get a house. You're gonna cry. Yeah. You're gonna hate it. What are you doing?

SPEAKER_00

I mean, I'm taking some anti-anxiety medication.

SPEAKER_02

Um did you start your Excel sheet?

SPEAKER_00

I have, I have it, but I also have it in my book. I like my like book. I you're I am not an Excel person. I'm not either. I know you are. I just hate that thing.

SPEAKER_02

Just my that like just kind of tracks what you're doing, like your production, your like money coming in, money coming out. Oh, yeah, I have all that. Yeah.

SPEAKER_05

I geek out.

SPEAKER_02

Yeah.

SPEAKER_00

Yeah. Nerds. All right. So what do you think? What am I doing differently? I mean, I I think to Kent's point, I think just the transparency about it. Like we don't know a lot of the time. You know, I I hate walking into something being and saying to my clients, I don't know what it's gonna go for, and I don't know how how much to tell you to to do at this point. Like it's it's kind of like you have to be, I can advise you and show you the landscape, but like you have to make the the decision of where you're going to put your number at.

SPEAKER_02

Do people, I'm gonna, because you just saw that it just triggered something. Do people say to you more, what's the value? Or what do I have to bid to win? What do you hear more? I hear what if what do I have to bid to win? It's what I hear more.

SPEAKER_00

Yeah.

unknown

Yeah.

SPEAKER_05

But it's hard, like she's saying, to know what that number is.

SPEAKER_02

I just give like I almost like, yeah, but we do enough business where you kind of know where things trade.

SPEAKER_00

We do, but then I feel like you get some bro, but like this.

SPEAKER_02

No, but I go, I go like I give percentages. I'm like, well, if you go with this number, I'm gonna give you a one out of four. If you go with this number, it's a one out of ten. If you go with this number, you should get it.

SPEAKER_05

I feel in a bad wave, like for my girl, where she went in almost 200 over. If I would have told her from like Friday evening when she tried to take it off the market for a hundred over, you got to go in a quarter of a million over. She might have looked at me and said, You're fucking done, or you're fucking crazy. I'm firing you. Yeah. Because that just seems like you want the easy way out. Right, right, right. And I hate to say it, but we we've all said this. You have to learn the hard ways.

SPEAKER_02

Yeah, you can't, you can't like, and it was interesting you say that because I had a client and we bet on something. He gave a real strong bid. He was the second person. Then someone came in crazy time, right? It was a $8.99 place. We went in at a million one.

SPEAKER_05

Like, that's not crazy time yourself. That's $200, bro. So I found somebody crazier than my crazier than me.

SPEAKER_00

But did you get did you take it off the market before they did that weekend open house?

SPEAKER_02

Oh, they were like, they told me to book a pound sand. Yeah. Exactly. And then it ended up trading for a million two five. And it didn't appraise. You know what it appraised for? A million one. So they're making, and then, and then I found out it didn't appraise. I probably shouldn't have known that because I knew the I ended up knowing the broker that was doing the the deal. Uh like that doing the the loan. And he goes, hey man, he just told me on the side it didn't appraise. Reach out to the agent. I reached out to the agent, I go, hey, is everything going good with the with the the deal? This, you know, just like that. No response. So I'm like, okay, they're probably making up the difference and the the thing. But it was really interesting. The guy said the same thing to me. He's like, if you would have told me to go to a million two, he's like, I probably would have fired you. He's like, you know, it it I thought you were nuts for.

SPEAKER_00

Well, it seems insane.

SPEAKER_02

But I I would have never told him to go to million two. Yeah. Because it wasn't like it was not worth that.

SPEAKER_05

That's exactly my point. They would have been like, come on, Jason.

SPEAKER_02

Yeah, well, you you don't care about us. You just want the deal. And then it's like, and then he was like, I get it. Like from now on, I go, yeah, but I would never let you pay a million two. A million one is what it was worth. It it was a duplex up, it was really nice with a great.

SPEAKER_05

That's what I felt about this little fourth bedroom. I thought it was a real premium for something that had street parking, and it just still wasn't enough.

SPEAKER_00

But what are you seeing anymore? Because I remember you coming into the office and saying, like, this is what you have to do to take it off the market on the Friday before or Thursday before, and it's not working anymore, right?

SPEAKER_02

It's so 2025.

SPEAKER_00

So I mean, yeah.

SPEAKER_02

Or January, February. Yeah. We thought we were, we thought we had it. Like, we were like, we're we're fucking great. We're fucking the best. And then it's like the dude you're like, thank you.

SPEAKER_05

I I even like went with that 25k initial earnest money, like, I'll show them how fucking strong we are, and they're like, see you later.

SPEAKER_02

Yeah, I've been doing out of here. I did 10 to 15,000 non-refundable earnest money, like right up front, just for the ability to do the to do the appraisal. And I've been told. Oh, yeah.

SPEAKER_05

Speaking of appraisals, let's just touch base before we really leave, leave about these agents that try to sneak the appraisal in before they come out of AI. Oh my god. Okay, yeah. That's bad. I got I haven't had that happen to me.

SPEAKER_02

Oh, yeah. But that's a new technique. So I'm so I don't lose a deal. I'm being up front with that now. Because I don't want to get to to get canceled.

SPEAKER_00

Wait, so they're sneaking in in the last section of the case.

SPEAKER_02

I was selling 2561 Greenview. This bill ended up canceling anyways, and I fucking knew it. I was like, and the agent's very nice. The agent is a seasoned agent, but it was his lackey that was there.

SPEAKER_00

Oh, are we gonna ask who this is? Who is it?

SPEAKER_02

I don't know who the lackey is. The agent on the deal was making it.

SPEAKER_00

Yeah, I know.

SPEAKER_02

No, no, he always wears the cubs hat. He used to be at Berkshire, he's not a big deal. Yes.

SPEAKER_00

So he's on lackeys!

SPEAKER_02

No, I didn't say he was.

SPEAKER_00

I know.

SPEAKER_02

The person underneath him. It wasn't Brad.

SPEAKER_00

Right.

SPEAKER_02

Brad was the agent, quote unquote. I know. Okay. So I'm the the the open house is packed. This is why you need to be at your at your showings. And this is gise people up. Yeah. And this per that's a you that's a huge thing. And then they went downstairs and they're talking about putting the offer in, and I heard the agent say, Hey, you know, we can always put in this offer over asking.

SPEAKER_00

And there's Jason running down the stairs. No, I no, you can't. I'm listening.

SPEAKER_02

And and he says, he says, Why would you do this inside the house? At least go to the street. Yeah. And he says, and we'll do the the appraisal during the uh inspection. And if it comes short, you know, blah, blah, blah, blah. Well, they came to the, they, they submitted a really big offer. And I didn't want to take it, but it was so much bigger than the rest of the offers. And I just called.

SPEAKER_05

Oh, this was that town home, I think.

SPEAKER_02

Yeah, I didn't call Brad because Brad wasn't the person really dealing with it, but I called the other guy up and I said, Hey, listen, I heard you say this. The lackey.

SPEAKER_00

The lackey.

SPEAKER_02

I don't know.

SPEAKER_00

That's so rude.

SPEAKER_02

The plebe. Is that better? The fill-in. The pledge.

SPEAKER_00

Just say the agent.

SPEAKER_02

The agent. The junior agent. The junior agent. The buyer agent.

SPEAKER_00

Okay.

SPEAKER_02

And uh so rude. Yeah. And uh he goes, and I said to him, I said, listen, this is what you said. I go, I just I just want you to know before we accept this, there'll be nobody in that house until I get the balance of earnest money and it clears. So I want you to go back and tell your clients that. They ended up canceling anyways. Ugh.

SPEAKER_00

Well, better than no up front.

SPEAKER_02

Who got it in the end?

SPEAKER_05

The backup.

SPEAKER_00

Another lackey.

SPEAKER_05

The backup who was Did you did you call them out of courtesy? Something like that. Yeah, of course. Yeah.

SPEAKER_02

Yeah. And I actually only called him because they were so nice. And who was it? I can't remember his name.

SPEAKER_05

Jesus, man.

SPEAKER_02

I can't.

SPEAKER_00

Well, you have a really good memory. You're so full of shit.

SPEAKER_02

No, I can't remember. I'm not good with names. I just told you I couldn't remember Brad Lippett's name. I'm not good with names. But he was really nice and they got it, but they the they were so happy that they got it that it was like the smoothest deal. Right? So and then the guy's like, what price do we need to go to? Then I called my clients up and I said, Hey, do you want me to force do you want me to tell them to go to the price you got? I said, They'll probably walk. What was the spread? Only 10.

SPEAKER_01

Oh.

SPEAKER_02

Yeah, not worth it. No, so they just did the deal like that. But I'll I I, you know, the fact that people are trying to do that stuff, but I like it.

SPEAKER_05

Oh, is this the guy, the chef? The chef was the seller?

unknown

No.

SPEAKER_05

At the barbecues in the courtyard?

SPEAKER_02

No, that's he lives there. He's not the seller. The guy that owns Boca. What's who's I don't like I don't even know his name. Yeah. And I've been told that it's like everyone knows this guy. I don't I don't know him. I don't know. He's the Boca guy.

SPEAKER_05

You pretend you're a foodie, but you're not.

SPEAKER_02

No, I'm not a foodie at all. Art of chicken. But that that is something people are doing. All right, let's let's kill it.

SPEAKER_05

Yeah, let's kill it.

SPEAKER_02

We'll be here for another hour. Yeah.

SPEAKER_00

On Iron Inspection.

SPEAKER_02

Where?

SPEAKER_00

6010 Dankin. Dakin.

SPEAKER_02

So that's the one that had double that two people put acceler. And the guy with the no cap got it?

SPEAKER_00

No, that was a different one.

SPEAKER_02

But they both capped at the same, right?

SPEAKER_00

They both capped at the same number. That's why they were competing.

SPEAKER_05

So they both kept going.

SPEAKER_00

How did I got yelled at?

SPEAKER_02

How did how did that yelled at why? Because you didn't manage the. How did the person get it with double escalations?

SPEAKER_00

Because the first person said that's not how it works. And then they had their managing broker call Sophia. I heard about that.

SPEAKER_02

But you didn't go with them. You weren't the other one. No, but I'm saying, but like before the phone calls.

SPEAKER_00

Oh, one had a little bit better terms, but then we got the other one to improve some of the terms that would have made that made my seller more comfortable.

SPEAKER_02

Okay.

SPEAKER_00

Mm-hmm.

SPEAKER_02

Like the person But it was the same price. The managing broker and the owner of an old company that was bought by Baron Warner couldn't comprehend the fact that if you have escalations, they escalate each other until they stop. It's not very difficult. I did call him. It's not a one escalation.

SPEAKER_00

No, no, it's not a one time, but that's how people understand it to be.

SPEAKER_02

Yeah, you would have to put that in there. But then Sophia did research, and there are states that have only one time or they have a box. Is this a one-time escalation? And you can check that box.

SPEAKER_00

But yeah, I called Jason and I said, listen, this is this is what I've got. And these are the numbers that I'm escalating to. What's my end number? And he's like, This is your end number. And I was like, Okay, that's how I thought I got to go.

SPEAKER_02

Yeah, escalations fought each other. That's happening. I don't like them.

SPEAKER_00

I hate them too. I really don't like them any longer after I gotten. I didn't get burned, but it made it really.

SPEAKER_05

I don't take them. Well, that's why this guy on uh the loft that we lost on the 606, he encouraged them. He did, yeah. I don't like them. You get more money. I get I get it, but not always because somebody hedge also.

SPEAKER_02

That could be a podcast in itself. You think they hedge with escalations? Sure. That's what I'm saying. Escalation calls get you less money. Yes. This person that offered on your place, they probably all would have offered their that top number.

SPEAKER_00

I know. Maybe. I mean, I don't know.

SPEAKER_02

But or or you have less cancels because the person didn't get a number that they that's the problem I'm seeing with them.

SPEAKER_00

I mean, is that people are putting these out thinking we'll never get there. And it does get there. And then they're like, oh my God, I wasn't expecting that to get there. And I'm like, okay, well, then you shouldn't be writing that.

SPEAKER_05

Yeah, I don't like that. I can't tell you how many times in the last few years we've talked about like, we can't believe it. We can't believe it. Because it's something we've never experienced.

SPEAKER_01

Yeah.

SPEAKER_02

Yeah, I've been doing this five years, right? The podcast. And every year, I'm like, this is it. The new norm. This is the new norm. This is the new norm. And it's never stopped. It's nuts. All right, we're gonna wrap it up.

Closing Thanks And Social Links

SPEAKER_02

Thank you so much for spending time with us talking about God knows what we just talked about. The Zillow and its takedown, escalation clauses, what's going on in the environment. I appreciate Marissa and Ken's time. Uh Marissa, give people your your Instagram and your website or whatever you want to give people if they want to reach out to you and tell you that they like your green sweater.

SPEAKER_00

I like my green. It's a sweatshirt.

SPEAKER_02

I do like sweatshirt, sorry. That's like the green jacket. Yeah, the green hornet.

SPEAKER_05

Oh, I wanted to comment on these two.

SPEAKER_02

My lightsaber.

SPEAKER_05

Star Wars.

SPEAKER_00

You can find me on Instagram at marissa lancy.com.

SPEAKER_05

I have a new website, and my first lead was the manager from Potbellies on Lincoln saying if I spent 200 bucks on catering, he would give me 10% off. It was the first lead on my new website. Are you serious? Yeah. I'm like, Jesus, are these guys that desperate for business? That's what I get. That's my real estate lead. Somebody went into your website for sub sandwiches. I got a screenshot it. Nice. It's so great. That's hilarious. Ken Youngworth is my Instagram and my my new website's KJ Chicago. KJ Chicago.

SPEAKER_00

I like it.

SPEAKER_02

I like that. It's easy. Yeah, it is easy. Thank you so much. This is the wrap on season five, episode five. It'll be out. What month is it? May?

SPEAKER_00

May.

SPEAKER_02

Jesus. It'll be out. This is Memorial Day weekend. Yeah, it is. I believe.

SPEAKER_00

Yeah.

SPEAKER_02

And shout out to my son who's graduating this weekend.

SPEAKER_00

Yay, we.

SPEAKER_02

And who's going to Tufts. Good job, Lee. All right. Bye.