Real estate agents can make a lot of money and have a lot of freedom, but getting started can be very tough. Many agents do not sell a house or make any money for months after they get their license. It can take some agents years to learn the best way to generate business, and some agents never figure it out. On today’s podcast, I speak with Aaron Hendon, who is one of the top real estate agents in Seattle. He tells us what it took for him to become successful, how long it took, what he does to find leads, and also gives some tips for investors and other buyers who are looking to buy properties.
How did Aaron get started in the real estate business?
Aaron had many jobs before becoming a real estate agent. He owned a bakery at one time but usually was in the sales business. His last job before becoming an agent was as a salesman for a credit repair business. He thought real estate agents would be a good source of leads for credit repair. Aaron called up agents offering his services to them, and many agents suggested he get in the real estate business himself. He was calling 100 people per day and decided he could make much more money using those skills as a real estate agent than he could cold calling people for credit repair services. Aaron took the real estate licensing courses and passed the test in 2012.
How did Aaron find a broker to work with?
Aaron did not look for the best office to work with; he looked for the best agents to work with. He had a friend who had been an agent for years who was very successful. She did not have a team, but he told her he was getting his license and joining her team anyway. Aaron was able to learn from a very experienced agent right from the get go. It still took him a few months to get his first deal, and he only closed on 3 houses his first year. However, he sold 14 houses his second year and got to a point where he was selling 40 houses per year.
How does Aaron get his business, and what do most successful agents do?
Aaron tells us that most of his business is from referrals and past clients. That is the best part about being an agent when you set your business up right: business comes to you. He also has open houses and makes sure he treats his clients very well. Aaron gives some great insight on his podcast about how he gets clients to choose him over other agents.
One of Aaron’s favorite ways to stay in touch with clients is Facebook. He uses both a personal page and business page to stay in touch with people and to remind them that he is an agent. He does not push his business over and over again, but 20% of his posts are real estate related, and 80% are personal or other posts. On Facebook, you do not want to come off as only trying to sell people, or no one will care what you are posting.
How can buyers or sellers find a great real estate agent?
Aaron admits there is a big difference between good and bad agents. Getting licensed in most states is fairly easy. Investors and owner-occupied buyers and sellers need to be careful who they use as their agent. He has a few pointers for those looking to find a great agent:
- Interview multiple agents; do not pick the first one you talk to.
- Ask for statistics from the agents. What is their list price to sales price ratio; how many houses have they sold this year; what was their sales volume?
- How much does their average listing sell for?
- How much lower than list price does their average buyer pay?
Not every agent may be able to answer these questions, but they can help weed out the bad ones who have no idea what they are doing.
How can you reach Aaron Hendon
Aaron works with Christine and Company Keller Williams in the Seattle area. He was nice enough to give out his cell phone, which is 206-280-3312. He is also coming out with a new book to help home buyers: Moving Beyond Your Blind Spots -What you don’t see before you buy and sell a home. You can find his free book Don’t get Fooled Again here.
[0:00:13.9] MF: Welcome to the InvestFourMore Real Estate Podcast. My name is Mark Ferguson and I am your host. I am a house flipper. I flip 10 to 15 houses a year, I own 13 rental properties, with a goal to buy 100 by 2023. I’m also a real estate agent. I’ve been licensed since ’01, I run a team of nine and we sell close to 200 houses a year.
So on this show, we like to interview house flippers, landlords and the best real estate agents in the business. So stay tuned for some great shows, if you want more information on my rentals, on the numbers, how I buy properties, check out investfourmore.com.
[0:00:58.9] MF: Hey everyone, it’s Mark Ferguson with InvestFourMore. Welcome to another podcast on the InvestFourMore real estate podcast. Today, I have a very cool guest, Aaron Hendon who is a realtor with Christine and Company in Keller Williams. He was voted rising star in Seattle by Seattle Magazine – an extremely successful agent, realtor.
Really excited to talk to him and figure out how he got into the business. How he’s become successful and tips he has for other agents, homeowners, all kinds of great stuff coming up on this show.
Aaron, how are you doing? And thank you for being on the show.
[0:01:32.6] AH: Thanks so much Mark, I’m doing great this morning. Beautiful day.
[0:01:35.0] MF: Great, well I know you’re in a crazy market in Seattle and we’ll talk a little bit about that but before we get into the markets and what’s going on, how did you get started in real estate? What drew you to the business and how did it all happen?
[0:01:50.0] AH: Easy answer, it’s all about the Benjamin’s. That’s what drew me to this. I’ve been in various sales positions, I started my own bakery, I ran a bakery for years in Albuquerque and so I’ve done a lot of different things. Very entrepreneurial. At one point, I got laid off from sales job, from a tech company just after the down turn and started selling credit repair services. I was smiling and dialing.
They gave me a list of smile ‘n dial and I thought, “Who do I know that could provide me with leads?” I thought, “Well, realtors might be able to provide me with clients, you know, leads for credit repair people.” I started calling all the realtors I knew, telling them what I was doing, tell them about this company. You know, one of the things, the activity was, I would do a hundred dials a day and this was not with a speed dialer, this was just hand dialing.
To the one, every realtor I talked to said “Dude, with your skillset and if you’re going to do a hundred dials a day, you should be in real estate because you will kill it, you will make way more money, have a way better life and you know, anyone who does a hundred dials a day is going to make it.” It took about a year for me to hear it and make the leap at some point and not at some point, in September of five years ago, wherever that is, 2012?
Kind of messed up, right? Yes, I made the leap and never looked back, never regretted it, best decision, best business decision I ever made was becoming a realtor. Loved helping people at their stage in their life, the money’s great, the flexibility is great, beats entrepreneurial, it has so much to offer, both sides of the equation, you know, customer and realtor. It’s just fabulous, love it.
Really it’s self-expression for me.
[0:03:45.3] MF: Yeah, no, I agree. It’s funny that that’s the background you came from. One of the best agents on our team who actually, he recently left our team, but he did really well for us right off the bat. He worked in a call center before he joined our team, so that’s what he did too.
You know, he just called people all the time and it’s one of the best ways to make money in this business. I know there’s so many online lead generators and you know, email marketing. But it’s tough to replace phone calls in the real estate business.
So you started five years ago. How did you do your first year or first two years? How long did it take to really get in the groove and start making money?
[0:04:27.2] AH: Let’s see, I got my license in June and then I didn’t do anything with it until September. I had a sales position so between credit repair and real estate I took a sales management position. I could see the writing on the wall on that job, that it wasn’t going to go anywhere. So I studied for my license and I got licensed in June and then I got let go from that job or I quit, whichever spin you want to put on it but I left that job.
In September and in October, I talked to a very good friend, who was a very successful agent over at KW Seattle and said, “I want to be on your team.” And she said, “Well I don’t have a team” and I said, “Well, you do now.” That’s how I did, I jumped in with her and made her train me and we’ve been running this team together and expanding it. I think we have like 14 agents now. That was October.
I just put my head down and I did contact you know, they did the course, Keller Williams offer to call ball which was fabulous. You know, really sort of hard core prospecting kind of stuff. You know, I put my head down.
So, October, November, December, January, I got my first deal in February, probably did three deals between February and my first anniversary in June and then I did 14 deals that first year and been increasing ever since. Online produced I think 40 this year.
You know, it started, I hitched my wagons to someone who was great at it and I drafted behind her and I did the work while I was drafted behind her. I didn’t just sit there you know? I think that’s a super easy business for people to be successful, you know, you do not have to reinvent the wheel on this business. If you’re willing to work, you get business.
There’s just no two ways about it. People are out there buying and selling and your job is to get homeowners. That’s all you have to do is get in front of it. That’s how I get it, I just put my head down and I worked.
[0:06:21.9] MF: That’s great and I’m curious too, you know, three deals may not sound like a lot your first year, 14. But your average price in Seattle is pretty high. I imagine those are pretty high dollar deals?
[0:06:33.9] AH: Yeah, well you know, relative to the country for sure. Five years ago, it’s not funny but whatever. That medium price in King county, when I started was in the mid three’s and then the past five years, it’s now doubled, it’s now in the mid-seven’s. It’s been a very hot year, hot time, hot five years for appreciation in real estate values. Which doesn’t make it particularly easy for an agent. I mean, especially giving the source of the inquiries, the source of the jump, is a decrease in inventory.
It makes buying and finding people to sell that much harder. I mean, it’s more lucrative when you do find one but there’s way less of them and more people competing for them. You know, people – it’s a funny question, “How’s the market?” Which is really difficult. “How’s your business?” And you know, people think, the market’s doubling in value every five years and whatever and that’s really easy to be a realtor. That’s not true.
It is neither easy nor hard. The prices don’t make it easy or hard.
[0:07:39.1] MF: Right, I would agree with that.
[0:07:40.3] AH: More money in your pocket when you find one.
[0:07:43.6] MF: Yeah, I would agree with that too. I get a lot of questions from people saying hey, can you make a lot more money in a more expensive market? I think the answer to that is you can if you’re one of the top agents and really working it. But you also have a lot more competition and usually a lot fewer houses are selling at that price than you know, more affordable markets.
[0:08:02.7] AH: Yeah, exactly right, that’s right. You know, we’re just talking about this at one of our team meetings the other day. You know, we were talking about the value and downside of taking a – listing appointments for a house that we thought was going to be three million and it was a real conversation on my team about, ‘Well we probably don’t want to list a three million dollar house because it’s going to sit for three months and it’s going to take all kinds of expense to get listed and who knows?”
It’s a whole different animal than a $600,000 listing. Which is I don’t know where people are listening from, it’s not – Denver, you probably cut those numbers in half. But the point is you know, fast dime, slow dollar. To make a fast dime to save $500,000 listings, I’ll take everyone I can get. Because those things are going to sit on the market for five days and I’m going to get them sold and people are going to be happy and delighted and that three, four million dollar listing.
Has a potential to sit for three or four months and has definitely the potential of no one being happy at the end of it. It’s you know, everything’s relative, everything has to be examined, there are no correct answers. There’s no, “This is the only way.” That’s the best thing about real estate for me is that there is no, “This is the way” kind of thing.
[0:09:22.1] MF: Right. That’s a great point and information. It’s funny, I’m north of Denver, about an hour and our median price in 2012 was about 110 and so completely different market obviously. But now, our median price is 285,000.
[0:09:39.6] AH: There you go, you doubled.
[0:09:41.2] MF: Denver’s –
[0:09:42.1] AH: It’s doubling.
[0:09:42.2] MF: …Quite a bit higher than we are, they’re over 400,000 and the same thing there, they doubled, it’s just more than doubled. It’s crazy and yeah, like you said, so many people are like, “Oh must be a great time to be in real estate. The market’s hot, people are buying and it’s a completely different market than I’ve ever seen because there’s no houses to sell.” Like you said you know?
Really hard to make money if there’s no houses out there to sell. But, you can still do it.
[0:10:05.8] AH: Yup, yeah. I mean, again, it’s like anything you know? You put your head down and you work, you know? The work part – there’s so many options for what it looks like to work in real estate. You know, like there’s some things that it doesn’t look like, it doesn’t look like, “Well, I don’t have any with clients today so I’m going to watch cat videos until someone calls me.”
That’s not working. You can’t do it that way. But you could sit in an open house and you know, five days a week, you could do that. You could cold call people, you could door knock, you could become a networking kind of guy and you could start going down the street and talking to every business in your neighborhood. Shooting videos, interviews, every business owner in your neighborhood, interview them and post them on a local web page that you designed and created. Talk to them about who you know that’s going to buy or sell that I could help.
You can setup classes, learn how to teach first time home buyer’s classes, you could – there’s a million – there’s an infinite number of ways to work, you know? You got to be something, you can’t just sit and wait and watch. That’s not going to ever work.
[0:11:20.2] MF: Are you allowed to watch cat videos at an open house?
[0:11:23.6] AH: You know, at least you’re at an open house okay? At the very least, you’re there. Yeah, I joke about it right? The truth is, I’m really bad about it. I don’t watch cat videos but I do you know, scroll through Facebook and LinkedIn and Twitter and LinkedIn, before I get out of bed. You know, it’s 30 minutes that I’m not ever getting back.
You know, I don’t really need to do that but I do find myself doing that far too often. You know, it’s about having discipline, It’s an eat what you kill business you know? If you want to be successful, you know, those 30 minutes, you just can’t mess with those 30 minutes. It’s a real discipline. This is why people make it or don’t make it, you know?
[0:12:10.2] MF: Yup, that’s so true. I find myself on Facebook and what I try to do is I have a business page for our team and a business page for my blog. If I’m on Facebook, I do my best to be posting or trying to help my business with it. Not just you know, scrolling through everything and I do my best to ignore any political post and not get wrapped up in that.
If I start doing that, that’s like two hours of my time gone. Yeah, it’s funny too, because my wife was an agent, not anymore since we had our kids. But you know, when we first started, it was early 2000’s and we had cellphones but not smart phones. So you go to an open house and really, what you do is you sit there and you know, you can work on your business with a notebook or different things. But yeah, it’s so much easier today with technology to go to an open house, to work on other things, at least like you said, you’re there, you’re doing something.
But just in our office alone, so many agents don’t ever show up. Who knows if they’re working or not, who knows what they’re doing. But yeah, if you just put the hours in, you work, amazing things happen that’s ‘for sure.
[0:13:16.5] AH: Yeah.
[0:13:18.3] MF: You latched on to somebody when you first started and kind of forced them to join the team which I think is an amazing way to get started. I know a lot of people’s – you know, the big thing is, ‘How do I learn everything, how do I get started without having deals right away?” I think joining a team is an amazing way to do it and if you can’t find a team like you said, just find someone and create a team for them.
Did you know that person with Keller Williams or did you just look for people who were really successful?
[0:13:44.2] AH: No, I’ve known her for over 20 years. She’s a really good friend and I mean, for me to a large extent, it was a matter of personal integrity. To get with somebody because you know, even where you are, it’s a quarter of a million dollar deal you know? To buy yourself someone’s house.
In Colorado, you study for two weeks to be able to do that which gives you absolutely no insight into actually how to buy yourself someone’s house. It’s the least – we’re the least trained professional in the world. The guy that cuts your hair studying for 10 times the amount that you study to become a realtor. 10 times for a $20 haircut. They study for thousand hours, I looked this up. I actually had a VA go through each state and discover what it takes to get into cosmopolitan, cosmetology license, and a real estate license. In no state is it less than 10x to get cosmetology.
10x to get a $20 haircut than to get a real estate license. I couldn’t go to someone with integrity and say, “Hey, let me sell your house or let me help you buy my house. I just got my license.” It was just the worst possible scenario for that customer. I mean, it’s horrible that people do that. 70% of the consumers will use the first person that they meet.
If you’re sitting in an open house and you’re friendly and you seem confident, you can get business. I just couldn’t do it with integrity so I had to go find somebody who would make sure that I did the right thing by the client each time. That’s why I did it. I didn’t do it because of business, I did it for – because I couldn’t with integrity, talk to somebody about helping them buy or sell their home, given what I knew about buying or selling homes. Which is nothing.
[0:15:28.9] MF: Right, that’s great advice. I think, a really good way to look at it too. You know, it’s not just about making money but it helps to make money obviously, that’s a goal for everyone but if you take care of your clients and you know the business well, the money will come. You know, it’s a two way street, you can’t just make money without putting the work in.
[0:15:49.3] AH: That’s correct.
[0:15:50.8] MF: Great that you latched on a team, well joined a team, got into it with someone who can help you along the way. What for you has been the best way to get leads? Is there one single thing? Is it open houses or cold calling or just networking? What has been the best tool for you?
[0:16:10.5] AH: I get about 65% of my business from referral or past clients. I think the tool that I used the most, you said it was Facebook. I have a fairly regular strategy, regimented strategy with Facebook. I have a lot of personal friends and a large sphere, you know, two, three thousand people on Facebook. So that’s one thing. I do run into realtors that don’t have that and you know, you’ve got to find some other ways to do it than this.
But if you do know a lot of people or a good number of people and you are out there to build that kind of thing. I make sure that I’m active on Facebook every day. I have a little system I use with Feedly. Feedly is an article aggregator, you know, you put in topics that are an interest to you and it pulls from the web all these different articles and then I use Food Suite to schedule them.
Always scheduling articles that are of interest to me, you know, everything from the Sea Hawks to business marketing stuff, to housing information in Seattle, to the national housing trends. I post various items that are of interest or importance to me. I think of interest and importance to my crew, the people I know.
There’s always something of interest that people could respond to on my Facebook page and it’s not just “Come see me at this open house, look at this listing.” So little of that. I probably do 10 posts for every one post I do about real estate. Then I have a beautiful family that I enjoy immensely and I’m always posting.
I run into people, I had an open house yesterday, I had two different people come in that know me, that I don’t know me but know me, we’re friends on Facebook. And they’re like, “You have the most beautiful children” or whatever, which is actually true.
You know, they know me. They follow my kids’ life because I’m so active there. When it comes time, when they hear of someone who’s out to buy or sell real estate, they message me and through my friend Sarah, want information on buying in Seattle. They just message me and tell me that because they know. Because there’s enough information about my being a realtor on there.
There’s enough posts about it you know? Which is probably 80/20, maybe 20% of the posts are about real estate. There’s just enough to keep it there and just enough to keep them top of mind. That’s about 60% of my business from that.
Then you do, you know, I do everything else, you know? When you have an open house, you should – anytime you have a listing, you should be able to pickup another listing and a buyer or two pieces of business from every listing that you have.
So we run open houses and should be able to pick up the open house yesterday, got two leads, things like that. We did internet marketing, we have Commission Bank on the team which is a fabulous platform for campaigns and marketing to people and keeping things straight and organized. You know, they provide internet leads which are you know, internet leads, one in 10 will convert in the next 12 months.
We do networking parties and do a little bit of Expired, a little bit of Fix Bo’s, stuff like that.
[0:19:26.5] MF: Yeah, that’s great. I think one point that you made that was really good about Facebook. It’s kind of like the Gary Vaynerchuk, Jab Jab Jab Right Hook. That book? I don’t know if you’ve read it? But it’s all about social media.
[0:19:41.5] AH: 100% the model. It’s great, perfect, glad you said that.
[0:19:45.4] MF: Yup, you can’t post business, business, business. It’s got to be you know, interesting stuff and once in a while your business. With agents, you know, people ask me, “I don’t want to be selling myself all the time and asking for business all the time.” You don’t have to do that. Like you said, people just have to know you’re an agent and like you and trust you and really, that’s it.
You don’t have to sell yourself, it will naturally come. That’s great information there. I’m curious, it sounds like you just use your personal page, do you have a business page or just the personal page on Facebook?
[0:20:18.6] AH: No, we do have a personal. We do have a business page because you can’t run ads unless you do a business page. We had a business page but no one goes to it or maybe they do. We have reviews on it, we do have our clients give us reviews on it and it’s some place that people I suppose Google and stuff. Although you know, I’m very egocentric and if I don’t do something then I don’t think anybody else does that thing. I never use Facebook to look up a business.
I don’t go to Facebook to discover anything about a business. I go to LinkedIn, I go to Google but I don’t go to Facebook for that. But you know, I think the data proves that I’m in a minority there. We do have a business page but everything that I put on my business page goes on both.
Sorry, that’s not true. All the articles that I’m talking about that I find, personal and business, it’s important that the content that gets refreshed every day, at least every day, if not a couple times a day. Because the more you put on, the better chance you have of it being seen on someone’s page.
That’s the deal with Facebook now, the algorithm is so little of what you post actually goes to someone’s page and the only things that really get post are things that people comment on. You got to find things that are of interest. Post them all the time.
[0:21:41.6] MF: Right, I would say too that because we’ve gone a lot of experimenting with that as far as getting comments like shares, just some kind of reaction from people and if you post a bunch of stuff that nobody cares about, I think that can hurt you.
Like you said, you have to be very careful that you’re not just posting 10 times a day that nobody likes because Facebook will actually send it to less people but if you’re sending stuff that people comment, you react on, then it’s like almost less is better if they’re reacting you know?
Or, if you can get them to react all the time, awesome, keep posting but you got to be careful about over posting junk.
[0:22:20.8] AH: Really of what I see a lot of realtors make this mistake, they really do just sort of post, “Here’s the open house, this house is for sale.” No one cares about your business, no one cares about the houses you’re listing, no one cares about real estate as much as you do and they’re not supposed to, frankly.
I mean, you know, it would be weird if they did. They care about what they care about. So get interesting, get interested in what they’re interested in. Like I said, I mean, I do a lot of posts about the Sea Hawks. I love them, I love following them, everyone in Seattle, There’s this big other deal in Seattle, Any team and any city I’ve ever seen in my life, I’ve never seen a city universally.
I mean, there’s people that are sort of like, “I don’t like football.” Just because they’re like, “I don’t watch Game of Thrones,” you know? Whatever, like that’s the badge of honor. It’s like nobody, literally nobody in the city, is not wrapped up in what’s happened to the Sea Hawks.
It’s a super easy way to stay interesting to people. That’s authentic, it really is authentic. It’s really what I’m interested in, I really am interested in them.
[0:23:28.4] MF: Yup, then you can comment back and know what you're talking about and people know it’s not just a post to get attention. You’re actually interested. Great strategy.
[0:23:37.3] AH: Yeah, you know, everyone has something. You talk about Gary Vanyerchuck, his thing is wine. Start a wine conversation. Start a happy hour conversations, start a conversation about the hikes, great hikes in your area, go on great hikes in your area. Do a little Facebook live or 10 cheap things to do in Boulder this weekend. Every Friday you post a little thing, a little video. If you talk about the top three things to do for free and the Bolder this weekend. Whatever. It doesn’t matter, have it be interesting.
[0:24:10.1] MF: Yep, exactly. Great, alright I want to hear about some of your advice for home sellers and helping people. But before we get to that one last question. I know I give you a little heads up on this, a lot of news lately about Zillow and then trying to take over the real estate business and push agents out. I personally am not too worried about it. I think technology, the business will always be changing, there will always be a need for agents.
We have to adapt to that technology and use it to our advantage. But what are your thoughts about Zillow? I think it’s more news outlets making the bigger deal than it is, but do you think Zillow is out there to try and take over agents or become a broker themselves?
[0:24:52.9] AH: Alright, well I don’t know what Zillow plans are so I’m not going to pretend to have any idea of what Zillow’s actual plans are. I think they’re in business to make money and if there’s money to be made there and people will let them do it then they will make money there and they will do that. I don’t think they have some master plan to eliminate real estate agents. They might and like I said, it’s not my job to figure out what their world domination plans are.
But they pretty much own the real estate space right now and if they wanted to, you see here’s the thing, I don’t think they can replace agents. I don’t think they can replace good agents. I think they can replace bad agents. I think there is enough bad agents that they can get a throw hold and really change the conversation. Because there are enough bad real estate agents and I do mean, I don’t mean dishonest, I mean just bad and I think there’s a lot of people –
And every good realtor listening to this call right now has been on the other side of the table from an agent where you have the thought, “I cannot believe this person is getting paid the same amount than I am.” Every good agent has had that thought, sitting across the table from some shmuck who you know is either giving away their client’s money or refusing to take money for that. I mean just having no idea what the word fiduciary means, you know?
Like that just has no clue to what their real job, which is to protect their client’s assets. I think there is enough of those people that who got their license and they’re just like, “Dope-ti-dope-ti-do and here I am, I’m going to set up the open house and I will pick up clients.” And have no real interest in learning how to do this any better and “I don’t really care and I just bend out to the next deal.” I think there’s enough people like that or they’re not going to stay up on technology or whatever.
So I think Zillow can definitely can replace them because they’re replaceable. The listing agents that put the sign on the yard, put on the MLS and never call their clients back. You know Mark, tell me how many clients have you picked up where their number one complaint about their past agent was their agent wouldn’t return their calls?
[0:26:58.2] MF: Yeah, there’s a ton of them and even –
[0:27:00.5] AH: Just like any, that’s crazy. That’s like, “You wouldn’t even pick?” I don’t even understand it. So those people are replaceable. They can be replaced and if that’s the way agents are going to behave, then they deserved to be replaced and we deserved to be replaced as an industry. But we have so low standards, such a low bar to entry. It’s two weeks to get to sell a million dollar house. Two weeks of study and somehow you now get to sell a million dollar house. Two weeks!
It’s ridiculously low standards. There’s no apprenticeship program. You know to be a journeyman, there is this thing called the journeyman on nutrition. There is journeyman in the trade, to be a doctor you’d be an intern. To be lawyer, you’d be an intern. You’re a junior partner. There is actually a development path in real professions. We don’t treat real estate like a real profession. So we will be replaced by the box if that doesn’t change.
I have no doubt that that’s going to be the source of it though because we’re replaceable. We treat the job like we’re replaceable. But at the same time, there’s an opportunity to go, “You know what? I’m not replaceable.” I defend my clients if I must. I get more money, I know for a fact that I get 107%, in the last 12 months we got a 107% over asking price. I know for a fact I just did this conversation with someone yesterday.
The agent they were competing with got a 103%, we were competing with got a 103%. That was a registered agent that was going to save them one percent on the sale. Registered again, you might as well talk about them in the same bucket as Zillow. They think that they are one percent that they are going to save their clients, the customer, is worth it and they are going to pitch them. But they don’t promote that they sell houses for 4% less than a professional full service agent. Alright well which one is better? You want to make 4% more money on the sale or save 1%?
[0:29:04.6] MF: Right, it’s the same argument of sale by owners.
[0:29:09.1] AH: 100%, they are not saving anything. So again, if we’re not in the education business – I did this awesome seminar. I am doing this fabulous seminar with Seth Godin. Are you familiar with Seth Godin?
[0:29:20.4] MF: Yes.
[0:29:21.3] AH: Okay, so this awesome webinar, three months webinar and the changing concept is you don’t look at potential customers as potential customers anymore. You look at them as students and your job is to educate them about your service. I think that’s the most powerful place for us to stand. If you’re a realtor listening to this call and you want to prevent yourself from being replaceable, then start educating people.
Start dealing with people that they could be educated about the process. Educated about your service, educated about what it is to buy or sell a home, educated about what it is that – you know talk people out of buying houses. Become an advocate, become a defender, become someone who’s going to protect them. That is not replaceable by a bot.
[0:30:07.7] MF: Right, it’s funny you mention about all of that because I came up with a book this year about how to buy a house. Which was just, I try to include every single aspect of buying a house and as agents sometimes you meet with so many different people, you don’t know how much they know and sometimes people pretend to know more than they do. You can’t go over everything. So I wrote that book just to give to people.
And be like, “Hey, you know if you’re scared to ask questions or you don’t know something, look it up, figure it out and educate yourself.” But the more educated they can be, the better real estate can be as an investment for your personal home. It just has so many advantages over other investments but if people don’t take the time to learn about it, it can also be a very bad investment.
[0:30:52.0] AH: Yeah, that’s great. It’s funny, I have a book coming out very similar, buying or selling real estate, same conversation Mark, really great. We will have to exchange books and see what we each other missed.
[0:31:02.8] MF: Yep, for sure. I like what you said about Zillow with the bad agents too which helps me transcend into this next topic. You know we have a lot of investors, a lot of people looking to buy properties on my blog and who listen to the podcast. You know what can they look for in a good agent? What are some signs that maybe can help them know if they are working with someone who knows what they’re doing or like you said, doesn’t care and just wants a paycheck?
[0:31:28.6] AH: Yeah, I think a couple of things. One is you really could ask every agent that you are interviewing. First of all you’ve got to interview agents, okay? If you are an investor and you are not interviewing agents, then you’re insane. I don’t know what you were thinking but you wouldn’t just put your money in a mutual fund without seeing the track record of that mutual fund. You wouldn’t just buy investment properties without looking at the ROI, the capital agent, the rental history.
You just don’t go, “Alright it looks like a nice house. I think I will buy it” without checking out how often it’s been rented. What’s the occupancy rate? What’s the vacancy rate? People don’t do that except they hire a realtor like, “Oh you know what? I like this guy.” That’s insane. So what’s the option? The option is you actually interview them. You ask them, “What is your list sales price ratio for the last 12 months?” What? No one has ever asked me that question.
Actually it’s a 100% the reason why I wrote the book I wrote because no one has ever asked me that question, “What’s your sales price ratio?” Are you kidding? And then what’s normal in this area? What’s the average? So you can see and compare apples to apples and any agent who gives their last 12 months of sales to list price ratio. If they don’t know it on the top of their head, then you’ve got to think, “What have they been measuring? How do they know what they do?”
I promise you, every agent can tell you how many units and how much volume because that’s what they measure. Units and volume, that’s how they did it for them, that’s their success rate for themselves. What they don’t measure is how much better or worse are they on average in getting more money for their client or paying less. They are spending less when they’re buyers. They don’t measure that and that’s crazy.
So I think the number one thing to deal with if you’re an investor looking for a realtor, is deal with it like that’s a variable. You know all realtors are not the same and you can tell the difference between the two. You can tell the difference between a good realtor and a bad realtor. A good realtor would have a track record of selling homes for more than average and less days on market. That’s what good is, right? Good becomes better than average.
And when you find someone who’s the best at that – sells money for the most and the least time – that’s the best agent in your market. So find that person or at least ask, right? That’s the number one thing I think people can do that they don’t do that if they did, they’d be way less likely to wind up regretting the transaction because they hired a shmuck.
[0:33:59.4] MF: That’s great information. I think for investors, I encourage them as well not to just rely on the agent to do everything for them. I think they need to learn the business themselves and a lot of people want to work with an agent who’s got investment experience, can tell them what a good deal is, what the cash flow is. I encourage the investors, you need to figure that stuff out yourself and find an agent who has time for you and knows the business really well as far as helping you find those properties. What is your take on working with investors or investors working with agents? Do they have to work with someone who specializes in investment properties?
[0:34:38.1] AH: Well, I don’t know, again it’s a track record and it’s also simpatico right? Or you just have to go simpatico with them. I certainly think investors have a particular set of demands, a certain set of needs. Like a level of attention to what they pay attention to. That if you found a realtor that’s worked with investors, has a quicker maybe more intuitive, maybe practice feel for what is important to investor that is not important to us. To a private purchase and so there maybe advantages.
In terms of speed and ease of a realtor that works mainly with or solely with investors. The problem I think you find is if you’re a realtor and you work mostly with investors, you are doing a lot of that investing yourself, so you’re cherry picking. You tell me you’re a realtor that also invests – it’s possible that all your cash is tied up and you can’t take this sweet deal. So if you came across a sweet deal, you are not going to give it to someone else to take. You would take it.
So I think an investor runs a risk of, if you find a realtor that only works with investors, that invest themselves, excuse me, that invests to themselves you run the risk of not getting the best deals. As opposed to if you found someone who doesn’t. I think investors – see the problem is, you and I are both in markets where there is so little value for an investor from the multiple listing service, it’s ridiculous. There’s almost nothing on the multiple listing service that an investor is going to be interested in.
Because there is so little inventory in general. So I don’t have a lot to say about it because over the last five years I haven’t been engaged in a market where there’s been that kind of stuff. So when I was just an investor and not a realtor, it was a very different market and realtors had a lot of different properties to choose from. A lot of different properties to show me that would fit my model but this is not the case now. Because every flipper and every yellow writer out there has already gotten everything that now comes to market.
And then when it comes to market, people want a premium and investors are not interested in the house that requires a premium to buy it. So I think it’s a little different market here and probably where you are too.
[0:37:09.3] MF: Yep, it’s similar here too and it’s a great point about working with investors or agents who are investors. Because like you said if an investor comes to me and asks me to find them a good deal, I will tell them, “I am not a good person to work with,” because I want to buy. I am buying properties, that’s my main thing right now. It’s not helping – so I’ll say, “Hey, you can work with someone on my team.” And we don’t share information. Always keep things separate.
So there’s no conflict of interest or there’s no hard feelings if you want to work with other agents because I don’t have the time. I don’t work with clients much anymore and I am not going to be a good person to work with. So I would not feel good about trying to help someone buy an investment property where I am trying to buy the same house, it doesn’t make sense.
[0:37:54.1] AH: Yes.
[0:37:54.7] MF: Right, great information. One thing we can touch on too is working with investors as an agent can be extremely frustrating too because there is a certain level of – you know, there are some investors who buy a bunch of houses and do really well. But then there’s a lot of people who are maybe just starting out and don’t know what they’re doing, don’t ever buy a house. What’s your take on working with investors as an agent?
[0:38:17.5] AH: Yeah, that is such a good point Mark. It really is the case and I think I always encourage – we get a lot of new agents on the team. People come to the team and they get started, they’re excited to get into real estate, so they get started on the team and then they find some investor that wants to show them a lot of houses. A lot of those investors are just starting out. They just took a class or they have the sheets and they have spreadsheets and the formulas and the models.
And they know what they are looking for, theoretically, they haven’t shopped yet so they are going to use a lot of the agent’s time. If you are a brand new agent, I think it’s fabulous. It’s a great way to learn. You’re going to learn how to comp, you’re going to learn how to do ARV’s, you’re going to learn how to do – you are going to show houses. You’re going to cut your teeth on very low hanging fruit. Just deal with this person that wants to see a large volume of houses.
It’s a way of accelerating the curve, right? At the same time like you said, they’re unlikely to buy any of those houses. Just because they are looking for a diamond, they are looking for a needle in the haystack, they are looking for just the right piece. So I personally stay away from investors, certainly new investors and like I said, in the Seattle market in particular I don’t have any faith that they are going to find something on the MLS and they know that from me.
I don’t hide that. I am very straight about that information. But I keep those relationships alive and I talk to them a couple of times a year so that when the shift happens, I have people to call. Things will shift because things always shift. So there really is an opportunity to keep those relationships alive but you do have to sort of build a wall around your time so you are not wasting time. But I don’t think there is ever a case where nurturing any relationship. Every relationship is worth nurturing, right?
I am going to throw you just a, whatever you call it, a taker, where they’re never going to – but even then, they know people. I’ve been referred to people by people that have never done a deal with me. If I just service and take care of them and provide them great information they refer other people to me even though they’ve never actually done a deal with me. So you know, I’m in business to help educate and take care of people. I’ll take care of anyone who comes but I don’t go out actively looking for investors through the waiting steps.
[0:40:49.9] MF: Great information. I completely agree with you. You know I’ve had agents on my team come to me pretty excited like, “Oh I’ve got this guy who wants to start flipping houses and he needs us to give him these deals and he’s super pumped and he’s like, ‘Do we have any houses we can send him?’” The first thing I always say is number one, “Do you have a pre-qual letter? Have they ever been qualified?” Two, “If they want to pay cash have you seen their bank statement?”
Because I think those two questions weed out about 80% of investors and it can save you so much time. Like you said, it doesn’t mean that you ignore them and don’t ever talk to them but it gives you an idea of helping them get started on the right path before you’re showing them 20 houses and then realize, “Oh wait they can’t even buy this property.”
[0:41:31.4] AH: Right, well you know I don’t take anyone in a car unless I see a pre-approval letter.
[0:41:35.2] MF: Right.
[0:41:35.7] AH: Or hard money or whatever. They have to. I am not taking anyone that’s just looking and no one on my team is. We’re not ever shopping with people that aren’t pre-approved. I do, I think it’s funny, in a book I do – it’s a little chapter. I’ve done a whole chapter about it. It’s something I mentioned in the book, is if you find somebody, if you as an investor and you are not pre-approved and you find someone who is willing to shop you around before they get you pre-approved, they blow as a realtor. They suck.
They have way too much time on their hands. They cannot possibly be a productive realtor. If they have enough time to take you around and you’re not pre-approved. I would use that as a flag that this person doesn’t have enough business.
[0:42:19.1] MF: Right, that’s a great point. Well I know Aaron we talked a lot about being an agent, being successful as an agent, a little bit about helping clients out, you’ve got this book coming out… Is there anything else, any topics you want to cover besides what we’ve talked about that might relate to the book or helping people?
[0:42:35.0] AH: No, Mark this has been fabulous. I really, when we got off the call I want to make sure we exchange information because I want to give you a copy of my book and I want to read your book. Yeah, my book is coming out. It’s called Moving Behind Your Blind Spots: What You Don’t See Before You Buy Or Sell Your Home. It’s just an opportunity for people to look to see what are the psychological, mechanical things that get in the way of you thoroughly investigating and knowing everything there is to know.
And there’s just a section on buying and a section on selling. Each of the steps is sort of a pathway to buying and selling a home in a rational manner. What keeps us from making rational decisions when we don’t make rational decisions. Which we don’t make rational decisions. I don’t think that should be a shock to anyone that we are irrational beings. Human beings are irrational. So that’s the book and if people are interested they can get my current book which they can get that for free.
At dontgetfooledagainbook.com, if they’re interested and they get on my mailing list and then when the new book comes out, I’m just arguing with my designer about covers now. But dontgetfooledagainbook.com and they can sign up and get a copy of how to interview real estate agents book, a short little E-book that they can pick up a copy of it but being on that mailing list will get them information about getting the bigger book when it comes out.
[0:44:05.7] MF: Great information and you said one more thing that really hit home with not making rational decisions. You show houses to so many people and it’s amazing how many people let emotional or paint colors or different things affect a house. It’s like something that would take a $1,000 to fix and then maybe it’s $20,000 less on another house but that house won’t work because the paint is wrong. There’s so many cases like that.
[0:44:33.7] AH: Yes, it’s true. There are people who are crazy.
[0:44:38.1] MF: And we all are, that’s just how our brains work with so many different things. Awesome, well Aaron, thank you so much for being on the show. Great information, you gave us the website. If people want to get a hold of you maybe they are looking for a house in Seattle, what’s the best way to reach you?
[0:44:52.9] AH: They can give me a call, 206-280-3312 and yes, that’s my personal cellphone number and you can call me anytime and really, I have this weird, I tell people you can call me anytime. If I am not available, I do this weird thing where I don’t answer so you don’t have to ever worry about bothering me because if I am not available I just don’t answer the phone and I’ll call you back within three hours. So yes, 206-280-3312, you’re welcome to call me anytime.
If you are looking for any kind of information and see if you’re an agent and you just want to talk real estate, I love talking real estate so I am happy to do that with you. Yeah, thanks Mark. This is really a good talk, I really appreciate the opportunity. It’s been delightful talking to you, I really look forward to getting to know you too.
[0:45:38.6] MF: Right, same here and thank you for being on the show and taking time out to speak with us. A lot of great information. I agree with just about everything you said as far as from my experience as an agent as well. So yeah, thank you again. I hope you have a great rest of the week and yeah, we’ll for sure be in touch.
[0:45:55.1] AH: Great, thank you Mark. Have a good day.