Why Brandon Mulrenin says teams must shift to listings after the NAR settlement

Brandon Mulrenin00:03

Here’s the thing. I believe that listings will become the number one lead generation moving forward outside of anything else because why? Because once you own the inventory in a world where buyer agency is at risk, the consumers will flock to the product. And so if you have the product and all of the consumers are coming to you, and they all have houses to sell too, that’s how you find yourself getting into more listings.

Loida Velasquez00:47

Headlines explode and your feeds on social media have probably been flooded with agent reactions. The National Association of Realtors $418 million settlement has definitely been a very hot topic, but what does this mean for the future of real estate? I know that there’s been a lot of questions, concerns, confusion, and there’s also been a lot of misinformation out there.

01:12So for today’s episode of Vulcan7 Coaches and Mentors, I have two very special guests that are gonna join me in on the conversation, and we’re gonna be breaking all of this down. So first, I have Vulcan7 CEO Ren Jones.

Ren Jones01:28

Hi, Loida. Good to see you.

Loida Velasquez01:30

Yes, and then we have another familiar face that you guys know very well, Brandon Mulrenin.

01:35So welcome.

Brandon Mulrenin01:36

Hey, guys. Thanks for having me.

01:42The key thing is you have to focus on having a listing-focused business. You gotta continue to focus on building a listing inventory. That’s the goal. That’s the name of the game. That will continue to be the name of the game, and if you’re going to work with buyers, leaders inside this industry have a big responsibility to step up as well so that our agents can go out there and serve the clients in a way where their value is not being questioned.

02:10There are already documents, you can find this right on NAR’s website, the buyer agent concession addendum already exists. So you guys can all download this already that you’ll make part of your offer contract that outlines exactly how you ask for your compensation, and that’s all. All the agents that are just freaking out about, “We’re not gonna get…”

02:31That’s not true. That’s not true. It’s just how you get paid will be different, not if you’ll get paid.

Ren Jones02:37

You’re on the pulse of this. You’re in this every day with people and helping agents go from good to great. Do you see a continued growth in teams as a result of some of this?

Brandon Mulrenin02:49

Hmm. All right, so yeah, I’m glad that you brought that up.

02:51I think that teams are gonna be disrupted the most in this equation. And then the reason, this is a great segue into this next piece, is that most teams, not all teams, most teams are set up in a way that their lead generation is primarily through internet buyer lead generation.

03:16That is how most of their lead generation works. Not all teams. Some teams are listing focused, but most teams are set up with buyer internet lead generation. Well, what’s the problem with that, you ask? Well, here’s the issue. The issue is that you can already see this reflect in some of these portals’ stock prices plummeting right now, and that is this: if the way in which these portals are monetizing and generating revenue is through buyer agent commission, and those referral fees from buyer agent commissions, and the buyer agent commission being threatened, I guess you could say-

Ren Jones03:52

Most vulnerable, yes.

Brandon Mulrenin03:52

Most vulnerable, right, is do these portals and do these buyer lead companies change their monetization structure? In that if these teams can no longer secure buyer leads the way in which they do today because the monetization and from where they get it from has completely changed, then those teams are gonna have to change the way in which they get their business.

04:18In other words, going back to skills, they’re gonna have to shift from a buyer lead-centric model to a listing agent-focused model. Because then-

Ren Jones04:27

And then all their buyers are homeless. They sold their house.

Brandon Mulrenin04:31

That’s right. Yeah, that’s right. And so the way in which the portals, I think, will evolve is gonna be massive.

04:38Which then brings up another point I think not that many people are talking about, which is then, okay, well, what is the value then that the MLS and these boards actually provide realtors? Think about this. Why does a listing agent like Loida list a property with inside the MLS? Why? Well, it’s so that she can market that property to all 10,000 agents in South Florida to bring a buyer because she’s offering to pay compensation.

05:03That’s the way it’s always been done. Well, in a world where that goes away, where Loida can no longer do that based on these new rules, then what’s the purpose of the MLS? What purpose does it serve? Because watch this. Yes, it syndicates all over these places, but what if those syndication sites say, “Listen, we can’t make money anymore off buyer leads because our monetization is different, and we’re gonna charge now as a listing platform,” and so MLS no longer syndicates, MLS no longer has an offer of compensation.

05:38The MLSs and these boards are gonna have a very, very difficult time providing their value to realtors like us. Because what does a realtor do?

Ren Jones05:45

So it’ll be more like Italy where you don’t have

05:49an MLS.

Brandon Mulrenin05:49

So that’s exactly right. I think multiple different business opportunities start to appear left and right.

06:01You are already seeing people work on different ways in which to market a listing. Because part of the settlement, and those of you that are studying this know this, the rule is you can’t offer compensation on the MLS. Off the MLS, you can absolutely have an offer of buyer agent compensation. So what does that mean?

06:23Well, that means that-

Ren Jones06:24

I know, that is the craziest piece. It’s the craziest piece. Because all of a sudden the MLS loses some of its relevancy

06:30in communicating with agents. That’s the one that throws me the most. I’m like-

Brandon Mulrenin06:37

That’s right. So that’s my point. And so now you have all these different listing companies coming up to say, “Market it here, market it here. You can do whatever you want here.” And you’re gonna have large brokerages I think have their own listing marketing platforms because

06:52like a Real or like a Keller Williams or whatever, they can offer compensation on their website as long as it’s on the MLS. And so now you’re gonna have a lot more off market deals. That might be the new way of transacting real estate as well, where the agents say, “Well, we’re not even gonna use the MLS.”

07:09MLS becomes irrelevant. We don’t need the MLS. There’s a national listing portal where you’re not abiding by these rules that NAR’s put in place for you. That could be another potential thing that happens.

Ren Jones07:22

Yeah. I’m curious about, on some of the standards of practice, like you can’t call an active listing about the listing.

07:22You call it about buying, but not about the list- But you could call and say, “You’ve been with this company for 116 days. Are you happy with them? And would you consider talking to us?”

Brandon Mulrenin07:23

That’s exactly right. So-

Ren Jones07:23

It’s coming. It’s coming.

Brandon Mulrenin07:23

It’s coming. We coach agents in Australia.

Ren Jones07:23

We are ready to provide contact information for actives.

Brandon Mulrenin07:23

Well, yeah. I mean, so we coach agents in Australia, and that is exactly one of our number one lead generation pillars, is you can prospect active listings. So you can just look at the listings that have been on the market for the longest, right? They’re being underserved, and that becomes your primary lead source.

Ren Jones07:25

It’s coming, folks. It might be, but don’t worry about it. Just list properties and be a professional. Have a professional presentation with buyers.

Brandon Mulrenin07:25

Yeah. So anyways, I think I said a lot.

Ren Jones07:25

Yeah. This is good stuff.

Brandon Mulrenin07:25

I’m just trying to think. I mean, again, Loida, I would just go back to you. You’re being quiet in this, but what else do you think about this thing?

Loida Velasquez07:28

Yeah. I think it’s also important to just say that there’s a lot of questions that we still have that they’re still working through to get answers. So, for example, I was on a webinar yesterday for the California Association of Realtors, and they were kind of breaking this down, and a question that was brought up was regarding open houses.

08:43So how are those gonna work? Because you need a buyer’s broker agreement. So if someone comes in, who represents the buyer? And I mean, I don’t know the answers. I don’t know if you have any thoughts on that.

Brandon Mulrenin08:55

Yeah. So the way in which I think that open houses will work moving forward is that that will become a part of the listing services in which the new team structure will… Okay, so let me take a step back.

09:11I think the new team structure will be agents that work on teams that have massive listing inventories, and those agents are servicing the listings, and potentially what we see is an increased number of transactions with unrepresented buyers perhaps. Perhaps. Don’t get mad at me, I’m just saying, that could happen, where you have open houses, to your point, and what are you gonna do as the listing agent holding the open house?

09:40You’re gonna try to vet out every buyer agent contract and everybody that walks in, “Let me see your contract. Let me see your… Let me…” That’s gonna be very, very difficult to do. And so open houses I think will be a service in which listing agents focus on how to continue to market the property in a way that has lost its luster over the past couple of decades.

10:03I believe that open houses come back with a vengeance and be a really pertinent thing that we do as a listing agent to market and to service our sellers. Now, the question is, well, how do you manage that experience, I think, Loida, is what you’re getting at, of all these people walking in, who represents who, and who’s under contract, who’s not under a contract?

10:25How is that gonna work? It’s gonna be like the Wild Wild West, I think is what you’re asking, right?

Loida Velasquez10:29

Yeah. Yeah, exactly.

Brandon Mulrenin10:29

Yeah. And so yet to be determined, again.

Ren Jones10:33

But you feel there’ll be more of them, though? I mean-

Brandon Mulrenin10:35

I do.

Ren Jones10:35

I think you’re right.

Brandon Mulrenin10:36

I do. Because in a world, this is the thing, right? So everyone’s speculating, right?

10:43We make these kind of videos, we post them on YouTube, and there’s thousands of agents. “Well, I think this. I think you’re…” I get it. I get it. No one has a crystal ball. I mean, we’re all speculating, right? So what is yet to be determined, everyone’s so quick to think that things are black and white when they’re not.

11:00They’re gray. They say, “Well, there’s no way a buyer is gonna pay a buyer agent commission out of their pocket. There’s no way.” Well, we don’t know. We’ve never lived in that world before. “There’s no way a seller’s gonna offer to pay a buyer agent commission.” Wait a minute, they are every single day right now.

11:14What are you talking about?

11:15Yeah. That’s exactly how it happens six million times a year. What do you mean? That’s exactly what’s going on right now. So my point is that it could happen where a lot more buyers go to listing agents and listing agents offering a buyer concierge offering to the buyer to help them through the transaction that don’t have buyer representation.

11:41That could happen. And so what do I mean by that? Is that someone like a Loida or me lists properties for 4.5 or 5% commission, and the reason we do that is so that we can service the buyers that come our way. And so we’re not talking about dual agency. I’m not talking about dual agency. I’m talking about buyers that are unrepresented.

12:04But there is revenue that is part of the listing that would help that listing team service buyers that don’t have representation.

Ren Jones12:12

That’d be sub-agency, but there would be compensation there.

Brandon Mulrenin12:16

Yeah, there’d be compensation there. Exactly.

12:20So that’s another potential. But again, no one has a crystal ball.

Ren Jones12:24

Do you think the fear is much greater than the reality of where this is all gonna land? Do you think it’s… ‘Cause nobody’s gonna show property for free. Nobody.

Brandon Mulrenin12:31

No.

Ren Jones12:32

So it’s all gonna work out, isn’t it?

Brandon Mulrenin12:34

Yeah. I mean, yes, I think that at the end of the day, this probably ends up being a big nothing burger.

12:41Where it’s just… Again, I don’t know what’s gonna happen, but based on the two ways I outline this, either A, listing agents list properties at 3% and tell sellers, “99.99% of the time, this offer’s gonna come with a 2.5 or 3% commission.” Okay, I can do the math. That’s still 6% commission.

12:57The seller still pays it all. I could see that world happening. Nothing changes. Or listing agents just continue to list properties at 6%. They don’t offer anything in the MLS, but the new standard is buyers just go directly to listing agents for compensation and the agents negotiate it out.

13:19But the seller’s still paying 5, 6%. I think one of those two things is the most viable outcome of this, and at the end of the day, nothing really changes.

Ren Jones13:28

Well, this really helps a lot, because a lot of people are trying to wrap their head around this, and I think this helps them a lot.

Brandon Mulrenin13:33

Yeah. Yeah.

13:34‘Cause people post things to me all the time. I’m like, “Wow, that’s a good question.” Like, why not? Why wouldn’t you just continue to list properties at 5 or 6%? So someone asked me that, I’m like, “It’s a good question. Why wouldn’t you?” Because when somebody’s asking me that, they’re speaking under the pretense or the context of this settlement that they assume the consumer studies every day, and they’re not.

13:58They’re gonna look to you for your guidance and expertise as to what should we do here. And for the last 50 years, we’ve been listing properties at 5 and 6%, helping people buy and sell homes pretty successfully. Why not just do the exact same thing? Who cares if you can’t put 3% in some field, in some technology thing in your computer?

14:21Who cares? It doesn’t change anything. It doesn’t change the fact I go meet with Ren Jones and say, “Listen, I charge 5.5% to sell your house, and here’s why. Blah, blah, blah, blah, blah, blah,” right? And I go out there and do my thing. And then I bring an offer to Ren. Ren’s happier than a pig in you know what, he accepts the offer.

14:40It’s got a buyer agent, her name’s Loida, and Loida and I negotiate it, and she’s gonna get 2.75% of my 5.5% commission, and that’s how it works.

14:48Right. It’s exactly what’s happening today.

Ren Jones14:48

And it’s the exact same way. And people are a little afraid when they’re listing their property, like, “Well, we could charge a little less, but then the exposure’s gonna be a little less

14:59and you might not get a lot of competing offers.”

Brandon Mulrenin15:03

Yeah. So-

Ren Jones15:03

And it’s all true. It’s all true.

Brandon Mulrenin15:06

Loida, I know you know what I’m talking about, but I can just hear the people in the comments right now. Like, what if, what if, what if, what if, what if?

15:11What if? I know. You could play a thousand different what ifs, you guys, and to the audience.

15:17There’s a million what ifs. I sure as hell don’t have all the answers, but I’m working on trying to be in front of this and be proactive so that you don’t get caught with your pants down in July.

Ren Jones15:30

So the agents you coach, right out of the gate, anything related to buyers, a powerful buyer presentation is what-

Brandon Mulrenin15:37

Yeah, 100%.

15:38That’s what I’m working on with every agent that I coach. You got a new guest with you, which is great. Yeah.

Ren Jones15:43

A golden retriever all of a sudden showed up.

Brandon Mulrenin15:45

That’s how it works. You gotta love dogs. So the biggest thing I’m working on with the agents that I coach is let’s take out the old buyer consultation presentation.

15:55Let’s dust that bad boy off, right? And let’s really get clear on, A, the value we provide, and B, how to articulate it. Clearly. Clearly. Where there’s no second-guessing of compensation that’s going to be paid, and no one has an issue with that. So that’s number one. That’s practical number one.

16:13Practical piece number two is, if you’re not already, shift all of your proactive lead generation to building a listing inventory. Immediately, as fast as you possibly can, learn the skills to have conversations with homeowners. Learn how to follow up with those homeowners so you can turn those into listing presentations.

16:33And then have a world-class compelling listing presentation that makes you the obvious choice where a seller agrees to sign a contract. That’s what we need to focus on.

Ren Jones16:42

Perfect. On teams again, ’cause I agree with your observation on that. Should some of the teams that you’re working with convert some of their buyer agents to listing agents and have them pursue listings all day?

Brandon Mulrenin16:56

Yeah. I mean, ideally, again, everyone is entitled to their opinion. It is my belief that all team leaders owe it to their team members on how to secure listings. From a leadership perspective, if your value proposition to your agents is your Visa or MasterCard, and you’re just buying them leads off the internet,

17:22I don’t think that’s real leadership.

17:24I mean, because at some point, they grow up, these agents grow up, and they can get their own MasterCard, and they can go give realtor.com their own credit card, right? So if that’s your only value proposition, I think you gotta question that. So what am I proposing?

17:35That real leadership shows up in the form of developing an agent’s skill set to go out there and secure listings, and I think that the savvy team leaders will do exactly that. Is that, yes, they will shift them to teach them how to have these conversations with homeowners, to go out there and secure listings, and these teams, the smart ones with 50, 100, 200 agents on them, will have massive listing inventories because here’s the other thing.

18:07I believe that listings will become the number one lead generation moving forward outside of anything else because why? Because once you own the inventory in a world where buyer agency is at risk, the consumers will flock to the product. And so if you have the product and all of the consumers are coming to you, and they all have houses to sell too, that’s how you find yourself getting into more listings.

Ren Jones18:30

So play that last 30 seconds over and over and over.

Brandon Mulrenin18:34

Yeah. So that’s my thought on teams. I think they gotta shift from, “Hey, we’re gonna prospect two, three hours a day calling all these buyer leads” to, “Hey, we’re gonna shift to prospect two, three hours a day, and we’re gonna focus on expired listings and for sale by owners and circle prospecting

18:51and just listed and just sold calls and absentee owners and downsizers and free and clears and people filing for divorce and yada, yada, yada.” Homeowners, conversations with people who own homes are the conversations we’re gonna have for two, three hours per day.

Ren Jones19:08

It’s gonna be fun.

Brandon Mulrenin19:10

Yeah, it will be fun.

Ren Jones19:11

And you will be very busy. Well, you’ve always been very busy, but there’s new material that people need to learn right away. They need to get prepared for July, and they need to start now.

Brandon Mulrenin19:24

That’s right. What were you gonna say, Loida?

Loida Velasquez19:26

I was gonna say that I think that that is also going to weed out a lot of agents that are not ready or don’t want to perfect their skills or go after listings because they’re scared of picking up the phone or going after expireds or dealing with objections and objection handling and all of that.

Brandon Mulrenin19:43

I mean, here’s the other truth, right? And again, people get mad at me when I speak the truth, but I believe it’s my job to speak the truth. If I’m gonna sit up here and just BS you, then I’m wasting your time, right? So I think that most agents just can appreciate the transparency and the directness because I think that’s what we owe agents is the truth.

20:01And the truth is if you refuse to grow and get better, then you will not be in this business. So some believe that we’re gonna lose a million realtors. If you look at RTC’s study, right, that Steve Murray just came out with, he’s predicting a million agents get out of the business. Now, I think that’s a lot, right?

20:22But here’s how he came to that. Check this out, and then you start to say, “Wow, that actually makes sense.” If you look at the 1.5 million realtors right now, we all know that 50% sold one house or less. Okay, fine. That’s 750,000, yeah? So now you got 750,000 left. Of the 750,000, we know that the vast majority of them are only selling four or five houses per year.

20:46And so if you just say to yourself, “Okay, if we just lost two, three, 400,000 agents over the next two or three years,” that doesn’t seem absurd. And so you can quickly say, “Wow, 750 plus 300,000, that’s a million.” Makes sense. You end up with about 600,000 agents left. Now, I don’t think it’s gonna be that dramatic, but I think that a world of 800,000, 850,000 agents is probably pretty safe ballpark, that we lose a half million agents.

21:16I think that’s most likely what would happen over the next couple years. We’re already losing tens of thousands of agents per month at every MLS, in every board across the country. Tens of thousands per month we’re already losing before this settlement even got talked about. So now, in this new world, you’ll just see that increase.

21:38And so what does that mean? That means that we’re gonna be in a professional’s market, that if you wanna earn a high level of income in this business, you must focus on your skills. The days of falling into 20,000 commission checks ’cause you opened a door, those days are just gonna be gone.

21:53That’s all.

Ren Jones21:55

Yeah, exactly. And in a way, that isn’t so bad.

Brandon Mulrenin21:58

Yeah. People are gonna get mad at me, Loida, you know that, in the comments. They’re gonna be all mad. I’m just saying, this is the truth. It is. Just focus on skills.

Loida Velasquez22:04

Yeah. It is what it is. Yeah, if you don’t like it, then I don’t know, maybe this is not for you.

22:08Well, this has been a great conversation. Ren, Brandon, thank you so much for everything that you have shared. Hopefully this has brought a lot of clarity to agents that are watching this. And look, at the end of the day, just know that there are still questions that you have that no one has the answers to, but you have to remain calm, be a professional, and just work on your skills.

22:29If you work on your skills, you perfect them, you start building a listing-based business, then you have nothing to worry about. So any last thoughts that you guys wanted to mention?

Ren Jones22:39

Make sure to go to reverseselling.com to work on your skills.

Brandon Mulrenin22:44

Yeah. No, I think that was well articulated, Loida. I agree with you 100%.

Loida Velasquez22:47

Awesome. Well, with that being said, we’ll see you on the next one. Bye.

Ren Jones22:51

Thank you.