#709: How to Thrive in a Market Where 15% of Deals Are Falling Apart

Episode Transcript
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(00:00):
Seven figure success starts whenyou start thinking like a CEO.
Welcome to the John Kitchens Coach podcastexperience as your host, John Kitchens.
Get ready to think bigger andtransform your business into
a path to lasting freedom.
What is up Honey Badger Nation man.

(00:22):
Thank you guys.
Tuning into anotherepisode of One Big Fire.
We've got, uh, special guest Mr.John Harp in the house with us today.
What's up, brother?
Uh, not too much.
How you doing?
Doing good, man.
Doing good.
I want to, uh, definitely pick your brainon a couple of things, just kind of hot
topics, but, uh, before we, uh, we reallydive in, I wanna remind everybody, you

(00:43):
know, as we're recording this, the endof end of July, so we still have a, a
couple more days left to, to head over tohoney badger nation.com and, uh, nominate.
Honey Badger of the month.
We had rose on last month, uh, tokind of, uh, you know, just share her
story a little bit by being a honeybadger, our first honey badger of the
month, um, since we kicked this off.

(01:04):
And so the nomination is there.
Go nominate who you think,uh, really represents.
Being a honey badger is all about, that'sjust going through some, some challenging,
tough times and, and you know, nomatter what, always finding a way.
Uh, also reminder, uh, man, we'vegot agent to CEO live in the land CLE

(01:25):
coming up September 24th and 25th.
I know Al said we're about 35to 40% of tickets sold out.
Um, almost all of theVIP tickets are gone.
So you can go to agent.
CEOC e.com.
Or you can go to, uh, honey badgernation.com, get your tickets.

(01:45):
Uh, like I said, there's onlystill a handful of VIP tickets
left, and then everything else isjust gonna be general admission.
Uh, the room is the room, right?
It only holds a hundredpeople, so when that is, uh,
tickets are gone, they're gone.
And so really looking forward to that.
And also.
Going to, uh, support just, uh, anincredible cause with, uh, Al's 10th,

(02:09):
10th year and, uh, be rock the spectrumas we've got, uh, a pretty, pretty cool,
um, you know, venue and experience set up.
Uh, if you guys have been to, toNashville, I've ever experienced
tootsies there on, uh, on Broadway.
Um, we're bringing thatsame type of feel to, uh.

(02:30):
To the event this year.
So heck of a, uh, heck of a great call.
It's gonna be a heck of a, an experience.
And yeah, get your tickets.
Go to uh, honey badger nation.com.
All right, Mr. Hart.
So I had an opportunity to hangwith, uh, Mr. Blake Sloan a

(02:50):
little bit over the weekend and.
He was kind of, kind of filling me in onsome things, and I know recruiting's a big
thing and, and just continuing to alwaysbe recruiting, always looking for talent.
And he had, uh, shared something that thelast 75 calls that he's had with agents
and he's doing a lot of the, the, not theinitial filtering, but you know, some,

(03:14):
some one-on-one conversations as he's justalways, you know, keeping a pulse and,
and, uh, you know, feet on the ground tokind of really what's, what's happening.
He, he said, listen, man.
He goes, out of those se last 75 callsthat I've had with agents, how many of
them, um, have or, or have an actualbuyer's presentation to be able to present

(03:36):
to, to buyers they're working with.
I was like, I, I don't know.
I. 1, 5, 6 that me goes zero.
Zero agents have no training, they justdon't know what to do or what to say.
And to me, that's the biggest,the biggest swing right now.
Um, you look at, you know,like, like with you guys.

(03:59):
Um, you know, where, where you're in,in that, you know, continuous growth.
We have a lot of great momentum.
We've got things working, butthere are agents that are a
little bit behind you, right?
That are, that are, have the team orstruggling or to, to get the team going
that you know, ones and threes right?
You make it to a million in revenue,but then what got you to a million?
It's probably not gonna getyou to 3 million in revenue.

(04:20):
And it, and it really tends to fall with.
The right kind of people.
Having the right agents,the right people around.
And I was talking with Pete herein, in, uh, Matt and DJ's office
this morning, and he is like, it'sjust, it's just shifted right.
People that they thought were gonna begreat, then all of a sudden, you know,
they just, they don't have the right.
You know, grit, fortitude, orwhatever it is to show up every day,

(04:42):
learn the skills, the capabilitiesrequired to be able to navigate this
headwind in this particular market.
So, I mean, you guys are, you guysare rocking number one team at
exp in the state of Ohio and, andreally have built, built, you know.
Your entire career off the buy-side bybuy-side, lead gen. Now obviously a shift.
We were talking just laughing.
Ryan's actually in there givinglisting presentation training,

(05:03):
which is, which is really cool.
But coming from that, from that buyerperspective, because I, I, I wanna revisit
a couple, a couple stories with some,some interesting data and some things
that are happening in the market, butjust from your perspective with, with
the agents and, and you know, in, in thetrenches with them day in and day out.
I mean, what are you seeing, youknow, who's, who's stepping up,

(05:23):
who's pushing through right now?
Like, what's, what's, what'sworking for for the agents that
are actually working the system?
Yeah, I mean, it's a great question andI think, um, I was just thinking, you
know, when you mentioned backstage, thetopic, and you know, you just texted me 10
minutes ago of like, Hey, can you jump on?
I, I think, and this goes to thatquestion that you're about to ask, right?

(05:44):
You have to become the expert.
Right.
Like you have to be able to answerquestions like that or be able to
rock and roll right away aroundthat topic of what, however you
want to build your business, right?
I don't care if it's sellers, FSBOs,expired open houses like you, you need to
know it in and out and, and so John, whatwe're talking to our agents about a lot

(06:05):
right now is the details, is making surethat the buyer is following your process.
I think we have to rememberas agents, it's our business.
I remind our agentsthat it's our business.
We run it our way.
And each one of thoseprocesses is a filter.

(06:26):
And the whole point of the, each stepin that process is to eliminate people.
Mm-hmm.
We do not need to work with everyone.
Right.
We need to work with the peoplethat want to work with us.
And in order to identify who those peopleare, then they need to listen to us.
We, they need to jump through our hoops.
They need to go through our process.
And so, um.

(06:48):
That's been a lot of our conversations.
I know our agents aren't doing thelevel of buyer presentations that
they should be doing because ourtransactions are falling apart.
Or I'm hearing some conversationsaround, you know, my clients, you
know, all over the place, right?
How many of us have a buyer thatis just, we can't wrangle them in,
they're just all over the place.

(07:09):
They can't identifyanything that they like.
Right?
Um, and, and I, to me thatis just, I know that we're
skipping steps into that process.
Um, I, the other thing that we'retalking on quite a bit about is,
you know, especially buyer side is.
We're not there to just open thedoor and have small talk as we
walk through a house at a showing.
Mm-hmm.

(07:31):
Our job, I believe our job is toidentify things and get out in
front of things before we ever getto an inspection and an appraisal.
And obviously there's a levelof experience and all of those
things that come with it.
And if you don't have an exper, haveexperience with looking at homes or
understanding the ins and outs of a house.
Trust me, I was there.
I was 22 years old whenI got into this business.

(07:53):
I didn't know anythingabout furnaces and AC units.
I never had to deal with thatand my whole life, right?
But that's why I had a mentor and Ijoined a team and I leveraged, um,
team opportunities to go and learn.
I sat at o uh, inspections forthe three hours to, to learn
and ask the inspector questions.
And so that's another thing we'rewe're hitting on is like, as

(08:13):
you walk through that shelling.
The goal is not to get them in contract.
The goal is to get them tothe closing table, right?
And if there's things that we can talkabout upfront that may come up in an
inspection, that may come up in anappraisal, well let's have those upfront
before we even write the offer, right?
Let's address those now because thefallout rate, and that's one of the

(08:34):
things we're gonna start getting backto tracking we haven't tracked in a
while, is what is our fallout rate?
How many deals do we haveto get into contracts?
In order to get X number of closings and,you know, hopefully you're not at a 50%
clip because that's not a good thing.
Right.
But, but those are theconversations I'm having.
Process

(08:56):
and showings.
Yeah.
And really, and really nailing those two.
And the third thing I brought up justtoday, um, because I've noticed it with
a couple of, of my agents in the lastweek or two, is presentation of yourself.
How are you showing up?
Are you prepared?
Are you dressed nice?

(09:16):
Yeah, right.
You know, we could get away with someof those things in the last five years,
but as inventory increases and buyershave more choices and buyers become more
looky-loos and sellers are interviewingmore people, it matters whether or
not you dressed with dress pants and abutton up shirt or tie, or you showed
up in jeans in a, in a casual t-shirt.

(09:39):
Now.
There's also a point, andI told my agents this.
I dress how I wanna dress becauseI don't care if I get the deal.
I'm in a position where I, I can,I can make some of those decisions.
I want the people to workwith me based off of me.
But when I was meeting the business and Iwas wanting the business, I made sure that
I was dressed to that professional levelto make sure that wasn't the one thing.

(10:04):
That was the knock against me whenthey're interviewing multiple people.
Yeah.
Yeah.
You're spot on.
Right.
And I think it, I think it, um,aligns to also, you know, kind of the
clientele but also your brand, right?
Mm-hmm.
Like really, truly, truly who you are.
And I mean, if you are, you know, theguy that, that, that loves rocking the
suits and that just fits you and yourpersonality and your brand, which is just
your reputation, then, then go with it.

(10:26):
Right.
Being authentically you, but it's likeyou said, you know, a default back
to, you know, Jordan Belfort's, right?
You know, enthusiasticas hell, sharp as attack.
And, you know, a, an authority figure,a force to be reckoned with, right?
'cause you know, you know your stuff.
And I think it's so important, youknow, with, with organic social to be

(10:48):
able to really put that message outthere that you, you do know your stuff.
You are, you know, enthusiastic as.
As as heck, you are sharp as tack, right?
You, you know your stuff,you're an authority figure.
It's been able to articulate that out.
There's a couple things that, that youhad just said that I wanted to, uh,
point out because you, you hit on thetwo things that I wanted to, to touch on.
Um, and it, it's home sell.

(11:10):
Cancellations hit a record high for June.
So this was reported throughbam, which, uh, now bam.com.
So through, through bam.
And it's a, it's a great resource.
It's one of our, one of ourfavorite, um, resources that we, we
love to tap into, to, to stay kindof plugged in on certain things.
That, and Inman being anotherone, but what they were reporting
is that nearly 15% of pendinghome sales fell apart last month.

(11:34):
It's the highest June fallout rate onrecord, and it's another clear sign
that buyers are, are gaining leverage.
And the study of the data on record,uh, only goes back to 2017, but
what it shows is that cancellationsusually dip in the spring, not climb.
So that's what we're reallystarting to see, and what they
point out is buyers are walkingaway because they have more options.

(11:59):
They're feeling the financial strainand they're nervous about the economy.
So what does that meanfor, for agents, right?
It goes back to my point what,what Blake was sharing that agents
that have never even had theformal training for the most part.
And so the key takeaways that, that, uh,the BAM article was, was talking about

(12:20):
is that the fallout rate is rising.
So I remember, you know, when we weremore in a, in, in that balance type.
Type of market, um, that wewould really be looking at.
You know, we, we would factor thatwe was always gonna have a 30 to 40%
push into, you know, the next monthwhen we were kind of calculating

(12:42):
from a forecasting standpoint.
And so it feels like it's gettingkind of back to that point, right?
That.
You know, you have to, you have tofactor in some kind of contingency
in your cashflow projectionswithin, within the business.
And then, so that falloutrate is, is, is rising.
Buyers are, are moreempowered than ever, right?
They're walking away for better homes,better deals, and greater peace of mind.

(13:06):
And on the flip side goes back to,you know, the seller training is that.
Sellers need more guidance.
Um mm-hmm.
And, but they, you know,they're more willing to kind of
negotiate, but they still don'tunderstand what buyers want today.
And so I think that's soimportant to, to understand as

(13:27):
these deals are falling apart.
Why they're falling apart, but whybuyers are canceling and walking away
and, and, and it's, it's a lot, right?
But, you know, you think about.
If you think about some, you know,buyer's, buyer's remorse, they really,
truly get in and like, oh my goodness.
Right?
As you know, HOA dues.
Are, are, are skyrocketinghomeowners, insurance is skyrocketing,

(13:48):
um, property taxes, right?
As those adjustments are beingmade, as, as the prices have
gone up and they're making sales,those adjustments are happening.
So just the actual monthly commitment,the cost of home ownership, and
that's one of the things on, on thebuyer presentation you have to touch
on is future home ownership costs.
Yeah.
Right.
Really what it means to own this property.

(14:11):
Yeah, I mean, it's spot on andyou know, a lot of my agents are
licensed five years or less, and sothey only know COVID type market.
Yeah.
And one of the things that we're talkingto them about a lot about now is, um,
as inventory increases, more peopleare going to just start looking, right?

(14:32):
They're just, they're just browsing.
They're just hitting buttons.
They're, they're not serious.
And so it's how do youweed through all of that?
In order to get those,those serious people.
Yeah.
And it goes back to your pointof, of deals falling through.
And that's why it's so important tomake sure that we, we have the agents
follow the process because then theysee you as the authority figure.
Mm-hmm.

(14:52):
They're gonna trust you.
Right.
And you're already guiding them ofwhat to expect once we actually get
to the point of looking at homes.
Yeah.
Yeah.
And, and, and ties into the other report.
There was another band article that kindof goes with this one to where they were
talking, you know, Zillow reported fiveyear inventory high in record price cut.
Yeah.
Yeah.

(15:13):
And so as you exactly whatyou were alluding to, exactly
what you were talking about.
So inventory reaches at five year high.
In June, 1.36 millionhomes were listed for sale.
It's 2.3% increase from May, and 17.2%jump compared to June of last year.
It's the highest number of active listingssince November of 2019, and so it's still

(15:36):
about, what they're saying is, is 21%below pre pandemic averages for June, so.
You know, could return to the pre 2020levels by the end of the end of the year.
But as we're starting to see, see alot of the cuts, um, showing up in
the same, uh, more, more so SunbeltMountain West markets saw the fastest,

(15:56):
uh, price growth during the pandemic.
So those are the ones that you're,you're kind of seeing, um, that
are kind of, kind of cooling, andthat's what they're reporting here.
Um, in this article.
It's a neutral market, not a cool one.
So just kind of understand kindof where, where we're at now.
My, my gut might be a littlebit more of the market.
Just the, the data just hasn'tcaught up to, to really what's

(16:19):
happening in the market.
And so for you, what, what are you doing?
What are you educating, um, you know,y'all's agents and everything on, uh,
from what the data is telling, and thenhow to articulate that data back to
back to, you know, buyers and, and moreimportantly, even back to, to sellers.
Yeah.
I think, you know.
Right now in, in colo I'm in Columbus,Ohio, so Columbus is a little bit

(16:41):
different, um, as opposed to kindof the coasts and, and you know,
what's happening across the country.
We're feeling it, but it's,it's not quite here quite yet.
But what's interesting in our marketis days on market is increasing,
inventory is increasing, and, andhome values are still increasing.

(17:02):
And so that just goes to show the demand.
And so I, I say that because wheninventory typically increases, some
of the things that we're gonna have toovercome as a buyer's agent or person
working with buyers is, oh, I'm goingto wait for pricing to come down.
Oh, I'm going to, you know,the economy is this inflation?
Is that right?
You know, those are all thethings that now start factoring

(17:25):
into a buyer's decision, right?
That home has to be perfect.
In theory, right?
For them to, to be able to go all the wayfrom start to finish with you, because
all of these other small things are nowbecoming big things in their mind, whether
it's true or not, like I said in Columbus,increased inventory, increased days on
market, but pricing's still going up.
That's usually not how that works, right?

(17:47):
And, and so.
It's really defining it and,and understanding those pockets.
Real estate's always hyperlocal.
This neighborhood over here is gonnabe different than this neighborhood
over here, even though they'reacross the street from one another.
Yeah, and you better understand thosethings in this type of market, right?
That's the data that youreally have to understand.
Yeah, I get the whole national rightand, and even, let's just break it

(18:11):
down, national Ohio, and then even,let's just say Columbus, but even within
Columbus, you better understand thedifferences in zip code school districts.
And then even within that,you better understand the
difference between neighborhoods.
So good.
And I think that's, you know,that's something that you guys
always taught me, taught us,right, was it's always hyperlocal.
And that's what I try to tell our agentsis you, you have to become that expert.

(18:33):
You have to become that local expert.
You have to know it in and out.
You have to spend time in the MLS everysingle day, maybe twice a day, looking at
new inventory, back on market inventory,expired inventory, canceled inventory
price, reduced inventory, becausethat's where you need to be living.
Right?
Mm-hmm.
That's where you're gonna learn,or that's where you're gonna

(18:53):
be able to gain the trust.
Of the people that you'resitting across the table with.
Yeah, a hundred percent.
What's up?
Because what's up man?
I love it.
So we were just hitting on a coupleof, uh, a couple of the articles coming
out from BAM over the last few days.
Um, reporting on home cancellations,hit a record high for June and, and
Zillow reports five year inventory highand, and, and record price cuts and,

(19:17):
and really kind of where we're seeing.
I was, uh, you know, talking with Sloanover the weekend and he was just kind
of gave me an interesting statisticaround the recruiting side of things.
And he said, you know, over thelast 75 calls booked for him to
talk to agents about recruiting.
He said, do you know how many of themhave a buyer presentation to be able
to articulate their value to buyers?

(19:39):
Probably less than 5%.
Zero, he said Zero of the agents.
I was like, holy smokes.
Yeah.
Right.
And so, you know, knowing, you know,how important having a, a, a proven
system to articulate your value andhow important it is, especially in
markets of change, and it's kindof what Zillow was talking about.
It's, it's a, it's a neutralmarket, not a, not a cooling market.

(20:02):
So it, it's, it's interesting.
I would love your take.
I, um, especially on, you know, sellersbeing a little more realistic as the
buyers are, are, are kind of startingto sit back and be a little more choosy
and in what they're, what they'relooking at and what they're doing.
PBD the other day.
Um, one of, one of, one of the showslast week, and they were, they were

(20:23):
talking on this because, um, Tom hadbrought up, you know, really kind of
thinking about what's going on, right?
And, and that HOA dues are up.
Insurance is homeowners, insuranceis up, property taxes are going
up, and especially as the salesand everything's collecting.
So as we, as we.
Have coached and trained on thebuy side where, where you hit on

(20:45):
future home ownership cost, right?
Because what one of the reasonsthat that buyers are, are canceling
is, is that buyer remorse, right?
They really start to, tosoak in, oh, holy smoke.
That's what thatpayment's really gonna be.
But he, PPD made an interesting thingabout there with, with sellers, and I
was talking to the Lattas this morningand their team about this, and he,

(21:06):
he made a slight distinction becausewe, we, we, we talk about sellers
and we focus on motivated sellers.
And he said, listen, there's a differencebetween motivated and desperate.
He said, probably right now in themarket, there's probably what you're
looking for is more desperation.
Obviously.
Don't ask that question,you know, check the box.
Are you motivated or are you desperate?

(21:27):
Right.
But it's more of just asking thequestions to be, and it goes back
to to law one on CHSA, right.
Law of expertise.
Mm-hmm.
What's plan B?
What if the home doesn't sell?
Right.
Unpack that a little bit, because Ithink in just asking that question
and listening, you can, you canuncover real motivation, but you
can also find some desperation.
And I think that's really kind of where,where things are moving right now.

(21:50):
Yeah.
And I, I think, you know, I, I get, I, Iliterally get to do this every day, like
multiple times a day in different markets.
And, and what you said Johnminute ago is so spot on.
Like every market, like, youknow, we say, well, you know.
Real estate is real estate.
Every market's the same.
It's not though.
I mean it truly is.
Every market's different, andwhat I'm seeing with how we're

(22:10):
working with Chad ZPT is.
You can now run and take, let'stake this price of home in this city
and location and, and Chad z bd.
Tell me who are the most likelybuyers for this home right now.
And it, and it'll tell, give you thisdetailed profile of the, the most likely
people and there's local area peoplemoving 'cause they've always wanted to

(22:32):
get their kids in that school district.
Um, from these cities or they're moving,they got a job, they're moving here from
outta state, from these three states.
And these are their biggest hopes, fears,desires, like when you get, like we all
kind of have a surface level understandingof our marketplace in this regard.
'cause you don't have that data really.
Very easily to get to, orat least you didn't used to.

(22:52):
And, and so like once you, once, youknow, like who has to, people that
are moving right now are usually thepeople that have to move, not the
people that just might wanna move.
Right?
Like that's what, that's basically whatyou're saying when you say desperate.
It's like, I gotta do, make this move.
And, you know, we, you know,they, and, and you know, to
the point you're making is.
Okay.
You know, let's say, you know, if, ifwe know that 50% of the homes that come

(23:12):
on the market fail to sell whateverthe number is in that price bracket in
your marketplace, in that neighborhood,that's all local market specific.
Um, but there's a certain percentage thatsell and a certain percentage that don't.
And you gotta make 'em aware thatthat's a reality that could happen.
What happens if it don't sell?
And they haven't gone to a place wherethat, that's likely the scenario.
They haven't thought that far of like,okay, what happens if, and, you know,

(23:34):
they just think it's gonna sell, hopefullyit's gonna sell, it's gonna sell.
They're not thinkingabout worst case scenario.
But when you get the answerto that question, it's like,
well, no, it has to sell.
Like, I, I, I, I remembermultiple sellers that had not gone
there mentally and not had theconversation with, with each other.
And they're like, well, you,well honey, it, well, what?
You know you're gonna be gone by then.
So like, if it hadn't sold by July, youknow, you know, you remember what happened

(23:57):
to Uncle Ralph's house when he rented it?
We're not renting it.
Like they're having that conversationright there in front of me mm-hmm.
As to like, okay, this is, this has tohappen, or it doesn't happen to happen.
Right.
Like, you get a sense forthat in the conversation.
And so, like, you know, at that point I'veal I always transitioned to listen guys.
I'm gonna give you the advice youneed to hear, not what you want to
hear, to make sure that that doesn'tbecome the scenario that we're in.

(24:21):
Is that okay?
And they say they, yeah, please do.
Right?
Like they want you totell you those things.
And so if I know that I'm dealing and,and that all comes from me understanding
before I got there, I asked them what dothey think the house is gonna sell for?
And I already know what thehouse is probably gonna sell for.
And if I think the gap is verybig, I'm gonna spend way more time.
Getting them to a place where theylisten to me on price as opposed to,

(24:44):
you know, try, I'm not gonna do, youknow, you, you, I mean, John, you
know it inside and out, both of you.
But, you know, the, you know, that'sthe training that we do to educate
people to a place that they're gonnalisten to our advice and not use hope
as a strategy and, and end up in aplace that they don't want to be in.
Right.
Um, and so I think, yeah, you justhave to be more of an expert, um, and

(25:04):
have more of a process for how youget people to listen to your advice.
So they don't end up in that place.
And that, and you know, it's likewhen, you know, when the market shifted
in oh seven, like, God, God forbid,anything like that ever happened again.
Like it changed so fast.
It was like, it was likemake your head spin.
Like overnight prices started dropping.
Like, we're not gonna experiencethat in this, in this, this,

(25:25):
this scenario that we're in.
And today and todayit's just not the same.
But the prices were comingdown so fast that next week.
If you didn't price reduce thenext week, it's a different price.
You should have lowered it to, andlike it was maddening to try, because
if you don't have the conversationof, listen, we're gonna evaluate.
We're not testing the marketing andthe things we do to sell homes that's

(25:47):
proven to sell thousands of homes.
What we are testing is the priceof your home in today's market.
So what?
What I'm my job is to do is to try tohelp you extract the most money we can
and sell it at the highest possible priceand put the most money in your pocket.
If the market tells us somethingdifferent, we're gonna get on a
call in 30 days and review what issold, what went pending, and what
and what else came on the market.

(26:08):
And we're gonna consider whetherwe're in the right place to be
one of the homes that's gonna sellthis month and not be one of the
homes that doesn't sell this month.
And so I'm you, youpreset up that process.
You don't do it reactively.
Um, and that, and that was somethingwe learned when I, we had, we ballooned
up to like 200 listings and uh, andthere wasn't a process for it, right?

(26:28):
Like, it was like, now we gottacall these people 'cause we didn't
have a scheduled call already.
So now we had to get ahead of this.
And, and that was, you know, hugelesson I learned in that timeframe.
So when everything is selling,you don't need a conversation
about why it hadn't sold.
So you've gotta, you know, you gottaput a process in place to make sure.
That no, you know, there, you know,that no stone is left unturned or you,
or you end up, uh, you end up with an,you know, a canceled or expired listing.

(26:51):
And that's, you know, I think that'swhat, you know, John was alluded to
earlier is, you know, you're seeingmore of that in, in, in the marketplace.
Or John, you, you mentioned,um, the statistic.
Um, but more cancels.
It's because they, they.
You know, they, they told 'emsomething probably using hope as a
strategy that it would sell, it didn'tsell, and they never called 'em and
said, Hey, we need to reevaluate.

(27:11):
And that's, you know, and then it endsup, you know, you know, coming off the
market and you got a person that, youknow, has a house that didn't sell.
And so, so, yeah.
You know, it's, it's interestingtimes, but I think this is
where truly being an expert.
Um, and giving the right advice.
Being an expert advisor is, is themost important because you really have
to do this homework that John you'retalking about, um, to, to make sure

(27:34):
you're advising clients the best wayyou can, given the situation they're in.
Yeah.
And you gotta do it both sides, right?
You gotta do it withbuyers and with sellers.
And I think, you know what's interestingas, as kind of, you were, you made me
think right home sell top, middle, bottomof the market as, as things are shifting.
What we think is top of the market mightreally be where it's the middle right now.
Right.

(27:54):
Is kind of where, you know, to bepositioned to where you don't get
behind, you know, the pricing, thepricing, you know, kind of adjustment.
So it's really interesting.
But, yeah.
Well, you know, there's, this iswhy, like, this is why like, you
know, when you were talking earlier,I was thinking like, man, I'm going
to the pending ratio first, right?
Like, I'm looking at what is the,what is the tattletale sign saying?
Are we going, is it gettingbetter or is it getting worse in

(28:15):
terms of in this price bracket?
And then when you got 25 homes and youknow, the absorption is eight, that means
a bunch of houses aren't gonna sell.
You've gotta be one of the best eight.
And the only way to do that is tobe priced, you know, be, be more
aggressively priced, to not beone of the ones that doesn't sell.
And so, you know, that is an always,ever changing number to look at and, and

(28:38):
trend that if you're paying attention to.
That you know, that, you know, ultimately,you know, and it's hard because, you
know, sometimes you're like, man, butthis one's better in this way or that way.
But, you know, doesn't guarantee it'sgonna be one of the houses that sell.
And so what do you, what do you do to,and that, you know, that plays back
to the motivation and timing and wherethey're at in the process as to whether
they should, maybe you should make thatadjustment or should we wait 30 days?

(28:59):
In most cases it's, you shouldmake the adjustment, but.
That's, you know, that'sa, it's a, it is difficult.
It's not, it's not a perfect science,but you certainly, if you're paying
a closer enough attention to thesethings, you can give better advice.
Yeah, a hundred percent.
John, I wanna shift a little bitbecause, uh, you know, I just.
Am of this belief, and we, we kind ofkicked this off a little bit, that if
you, you get kind, especially when you getinto that, that swamp area of a million

(29:23):
to 3 million in top line revenue, um,what got you there won't get you there.
Right.
And, you know, remember Clay taught usthe, you know, the ones and threes mm-hmm.
And so the team that got you toone, and if that's kind of where
you're stalling out and stuck at,they ain't gonna get you to three.
So I think the first lever that youcan pull on is just looking to make
sure you got the right people aroundyou to be able to navigate through

(29:44):
the headwind instead of the tailwind.
What are you seeing, John, with your,with your agents that have, that are, that
are coming in, um, and the ones that are,that are, that are pushing through right
now, that are starting to build momentumversus the ones that have just fallen off
the map right and really disappearing.
What are, what are, like,what are their habits?
What are, you know, what's theirmindset of the agents that are, that

(30:05):
are really built for today's market?
Part of it, I think is blind trust.
'cause again, our agentsare typically brand new.
That's usually, you know, who we'regoing after or licensed less than
three years have had some success.
You know, so trust, right?
So like we are very, I'mvery big on social proof.
Hey, you wanna see any one ofour agents that went from zero
to wherever you want to go?

(30:25):
Go talk to them on our team.
Here's social proof of that.
Here's how they did it.
Um, but, but I always thinkthis is the number one thing.
You better immerse yourself intothe business even if you are
working another career dual career.
The hours you have outside of thatcareer, you better be in real estate.
And the agents on our team that comein that have the success at the at

(30:47):
a higher level, quicker are the onesthat are in real estate daily, even
if they are just asking questions.
Right?
Even if they are shadowing other agentson our team, they're volunteering to
host open houses, they're volunteeringto help out with showings, right?
Doing those things because that isgoing to get them to become comfortable.

(31:09):
Confident in having the decisionsaround real estate with people.
Right?
And so like that for me, that'sthe I I tell every single
agent that joins my team.
We are a large team.
We do real estate every single day.
If you ask anyone on our teamevery single day, is there anything
I can shadow you with today?
You will do fine because you will justbe in the business doing the business,

(31:29):
even though it's not your business.
Your business will be comingbecause you're doing the
business, if that makes sense.
So I don't know about you guys, butlike for us, like immersing themselves
into the business, even on limitedtime daily, uh, is the biggest thing.
And then the second thing is social proof.
You can't tell me that it doesn't work.
I have too many examples.
So it's you that doesn'twanna work, right?

(31:51):
Um, and because I know our systems aredialed in, I know our processes are dialed
in, and so you just then have to trust.
That they're gonna work for you as well.
And, and that's where we justkind of back that up with the
social proof again, right?
Like, go ask any one of these agents.
If this lead source works,go ask one of these agents.
If this buyer presentation works, orthis listing presentation works, it's
working for them, it's gonna work for you.

(32:13):
Um, and so duplication and predictableresults is what we try to go after.
For anyone that joins our team.
We gotta be able to duplicate anythingthat we do, and then it better
bring us some predictable results.
Yeah.
No, I mean, it's so spot on, right?
It's, it is.
How, how do you get them to justtrust the process and that's the like,

(32:35):
the biggest thing and, and, um, youknow, laugh anytime you meet with the
professional, you know, sometimes we'rejust wired to question everything.
They're like, just shutup and follow the process.
Mm-hmm.
Yeah.
But I think that's where, but Ithink that's where like getting
them to shadow other agents onyour team as often as possible.
Um, it is big because, you know,I, I tell every agent, you know,

(32:58):
I, I trust that our agents aregoing to teach you the right way.
Uh, and maybe a slightvariation here or there.
Um, but you're gonna learnhow to do real estate.
Right.
And as long as you're in it everysingle day, where I see the struggle
as the agents that are here for a dayhere for two days and then gone for two
weeks, and then they come back for fivedays and then they're gone for a week.

(33:19):
And when I mean, gone,they're just not present.
Right?
They're just not around.
They're just not asking questions.
They're not on our trainings.
They're not on our, our team meetings.
Um,
but the agents that are in it daily.
Are the ones that go the fastest.
Yeah.
Staying immersed, right?
It's just environment.
What, so what, what are youseeing agents, you know, craving
and wanting the most right now?

(33:39):
Like if they, it is thewhole job to be done, right?
Like what, what, what dothey want help with the most?
Now?
Buyers pre-approved, readyto rock and roll now sellers.
Um, and again, some of it Ithink is our team dynamic.
A lot of our agents are, are lessthan five years in the business,
and so they're used to just that,you know, quick environment.

(34:00):
Um, but, but I think it's, I, I,I think it's understanding how to
get them there, how to get the leadthere, how to get them ready, how to
get them to actually listen to you.
Um.
I, I tell any buyer or seller thatI sit down with, my goal is to
go slow so then we can move fast.
Mm-hmm.
Right?
And so let's do the right stepsin the right order, so then

(34:22):
we then get the right results.
And, and, and so I, I try totell our agents that like.
I'm glad that you're excited that youjust got this, this lead from call night
and they're ready to rock and roll.
But if we don't do the right steps inthe right order, if we don't actually
slow down this process for them,so that way when the house does pop
up, they absolutely love, we can actquickly with, with education, right?

(34:45):
And, and being comfortable withwhat those decisions need to be.
Then we're doing the client a disservice.
We're doing the client a disservice inmy opinion, if we don't have them ready
to make quick and fast decisions onwhat they need to do in order to win.
Because there are houses that willstill sell multiple offers in my market,
and there's houses depending on theneighborhood that will go a hundred

(35:07):
thousand dollars above list price still.
And then there's houses thatwill sit for four months.
Um, and so I think, I thinkthat's the biggest thing is how
do you get more ready, willing,able buyers in today's market?
Um, and just building that pipeline,what are you seeing that's working
the best for you guys right now?

(35:27):
Us?
Yeah, on the buy side,
internet leads, Zillow, um, youknow, we're looking at opportunities,
you know, that are, that, thatmimic what Zillow creates.
Um, you know, those, those websites,those opportunities where those.
Those buyers have already beenout looking, they're further

(35:49):
down the process, right?
They're, they, they've been browsingmaybe for 3, 4, 5 months already.
Um, and so that's, for us, that'sbeen, that's been the thing that's
been allowing us to go a lot quicker.
Yeah.
And I, and I think too, youguys took to heart, right?
One of the things that wewould always talk about is
understanding lifetime value, right?
Mm-hmm.

(36:09):
Lifetime value of that opportunity.
And when you look at like the, the flexand, you know, a little bit more paid at
closing type of opportunities, which arenot bad for a lot of agents right now.
Um, even, even, you know, justeven, you know, running, you
know, ads, Facebook leads.
Things of, of that nature.
There's, there's the customer acquisitioncost, and to what your point is, is, is

(36:30):
we're, we're acquiring that opportunity,but as a team lead, the value in that
for you guys, and we've talked aboutthis so much because you guys are
making razor thin mar margins on thefront end, but it's also getting your
agents into production and getting themmomentum and getting them wins, right?
Yeah.
To build, to build that confidence.
Can I show you a real life example?

(36:50):
Absolutely.
This is, this is our admin.
I don't know if you guys can readthat A little Zillow success story.
All right.
Just read that.
Read that for us.
I closed one Zillow lead two yearsago since the family of the Zillow
buyer have closed two other homesand just landed a buy sell combo.
Five transactions off of $126,000 buyer.

(37:13):
Five transactions in twoyears off of one lead.
That is a lower price point in our market.
That's the, that's, so that's,that's understanding this.
This goes, John, you know, where I'm goingwith this, that this is understanding
the lifetime value of making a ravingfan, uh, of what you do in this business.
It's not, you know, the, thefirst transaction represents.

(37:35):
3%, was it three or 4%of the lifetime value?
Mm-hmm.
Of that person.
When you close and get thatcheck, it represents three to 4%.
Of the lifetime value.
If you create a raving fan that refers youone person a year comes back every seven
years and buys another, you know, like thelifetime value of that, that one lead is
much greater than that first commission.

(37:56):
And I think most people don't understandthat 'cause they're thinking about
where do I get my next lead from isnot really creating a relationship
and understanding the lifetimevalue of, of that relationship.
Mm-hmm.
Yeah.
And, and you know, that is, that's theconversation that we have quite a bit.
Right is, Hey, you know, I underst and,and I think this is for, for anyone.

(38:18):
It doesn't have to beZillow, any investment that
you're willing to do, right?
I always tell our agents, if you'rehere for a career, you'll be fine.
Like, just don't look at the price point.
Like do the business, do great businessand your job's to get referrals.
And if you plan on doing this for,in the next 10, 15, 20, 25 years,
30 years, however old you are.
The rest will take care of itself.

(38:39):
And so Ryan and I, we kinda look at itas our job is just to collect the data.
Like we want as many leads and datapoints as possible because over the
next 10, 15, 20 years that we'regonna be doing this thing, that's
where we're really gonna crush.
That's where we're really gonna win.
Obviously we need to now business'cause we all have bills today
and all of those things, but, but.

(39:00):
It's, we're always future pacing, right?
We're always looking, you know, what isthat next five years gonna look like?
What's, and that's how you can grow.
We don't, yes, we have to factorin what the cost of acquisition
is and all of those thingsbecause we are running a business.
But I mean, that's a testt.
And back to social proof, right?
Like if any of our agents wannacomplain about a, a, a lead source

(39:21):
or anything like that, I saved that.
And I'm going to share that rightwith them and say, Hey, like, this
is what it's about right here.
Yeah.
Yeah.
It is.
And you know, thinking, thinking morelong term, uh, and, and it's hard, right?
We still have to have, you know,things for cash flow, but like,
make those raving fans, right?
The ones that are, you know,stop people in traffic.

(39:43):
They hear somebody talking aboutreal estate and, and that's
ultimately what we're trying to do.
So focusing on that.
Client experience that they're havingand, and really trying to have as much
value add throughout the, throughoutthe processes is a much better focus
than, than really anything else.
Right.
And so it's even, even, you know,bringing, bringing agents on board, right?

(40:06):
Like what you guys do.
You know, you focus on the experiencethat those agents are having with
them and getting them plugged intothe activities and, and making sure
that you've got systems around that.
Yeah.
I don't know your guys'thoughts on this, but, uh.
I don't teach anything in real estatewhen they first join, other than
our CRM and how to make phone calls.

(40:26):
I don't care about anything else.
And I think a lot of team leads worryor struggle with, they gotta understand
our brand and they gotta understandour marketing and they gotta understand
our contract and they gotta understandthis and they gotta under, I'm like,
look, we're, we're getting on thephones and we're having conversations.
'cause if I can't get you to have aclient, then there's no point of anything
else that we're gonna be trying to do.

(40:46):
Um, and so when you think about.
Onboarding agents to your teamor, or who your ideal agent is?
Like my number one job with our agentsis I have to get that new person a win.
I have to get that newperson a success story.
It doesn't have to be a client.
I just had one join last week.
She set up her first buyer presentationwithin her first week of doing calls.

(41:08):
Right?
Like that's a win.
If you could set onebuyer presentation a week.
Mm-hmm.
I mean, as a new agent.
You're probably gonna convert, what,50 to 60, 70% probably higher if
you're on a team, if you alreadyhave a proven process to repeat.
And, and that gets predictableresults, I think we'll take
those numbers all day long.

(41:28):
Yeah.
It's crazy, you know, listening, it was,I've reflected back a lot on the, the
conversation with, on, uh, with KyleWhistle back on the 4th of July and.
He, um, you know, kind of, kind of towardsthe end, he kind of, kind of laughed
and he goes, you know, I used to clown.
I used to clown.
On, on two things I used to clown onwhat to say and building relationships.

(41:52):
I used to clown on fairy.
I used to clown on Buffini and he goes,if you really wanna distill it down,
only thing that matters is what do yousay and how do you build a relationship?
And to, to your point, right?
Just learning what to say and being ableto, to have a, a database to be able
to nurture and build that relationship.
And to what Jay was talking abouta little bit earlier about with.

(42:14):
With, with, you know, AI chat,GPT, you know, the IES of the
world, and, and doing those things.
There's cheat codes out there inthe direction because as you're
being able to understand moreabout who your ideal client is and
understanding who that individual is,are they your ideal client and how
do you, you know, leverage the tech?
To, you know, get, getthem to the value faster.

(42:37):
So it's, it's pretty cool to see.
But fundamentally, it still comesdown to, what do you say and, and
how do you build a relationship.
Yeah.
So.
Pretty wild.
Well, brother, I appreciate you jumpingin here and, um, you know, just a reminder
for all of you guys out there, um, we dohave one of our favorite events, um, Mr.

(43:01):
STAs 10 year anniversaryfor Rock the Spectrum.
We've got one heck of anexperience set up for everybody.
If you guys have been to Nashville,have, uh, experienced, uh, the the
Tootsies experience with live musicon every floor, we're recreating that.
Um, for Rock the Spectrum and, uh,if you're wanting to get into, uh.

(43:25):
The best event on, on really howto build the foundation and build
a business agent to CEO Live inCleveland, September the 24th and 25th.
If you, uh, are coming in forthose two days, you will get
a ticket to rock the spectrum.
So, um, I know I think we're35 to 40% sold out already.
Believe almost all ofthe VIP tickets are gone.

(43:47):
We only have a hundred tickets.
This isn't some scarcity thing, we just.
The room only holds a hundred people,so, um, when they're gone, they're gone.
Um, it is the event, um, obviouslyI'm super biased, but there's, there's
really nothing out there to truly getthe fundamentals to build a business.
And we've got a, a smoking lineup.

(44:07):
We've got Tina call coming in.
Uh, we've got Mr. Blake Sloan coming in.
Jay Sta myself.
And, uh, we've got a few more, um, thingsup our sleeve as well for those two
days that lead into rock the spectrum.
So, uh, one heck of a great cause.
Um, all, all additional monies andthings, um, everything's going to, um.

(44:31):
The foundation for the event withRock the Spectrum so you guys
can get there and, and listen.
Um, we've got a few days left tonominate Honey Badger of the Month.
So also head over to honeybadger nation.com, vote for
the Honey Badger of the month.
We had Rose on last week, which was justawesome and an inspiring to hear her
story as we kicked off Honey Badger ofthe Month and she was our, our first.

(44:55):
So head on over.
Get that.
Uh.
Get those nominations, getyour tickets to agent, to CEO.
Look forward to seeingeverybody in Cleveland.
Yeah.
Fellows.
Any, any final words as we,uh, as we wrap up this month
and ready to head into August?
Do the work, be an expert?
I would, I would just say, um, if you guysdon't know kitchens and, and, and Jay, the

(45:22):
agent to CEO should be a can't miss event.
I'll sell it for you guys.
Uh, you know, it's, it's somethingthat, you know, we've been in, in your
guys' world since two th well, Ryan'sbeen in it since I, before I met him.
And so you guys have been in,impacted my business since 2011
when I got into the business.
And, um, and Reese was thefirst conference I went to

(45:43):
in 2000, October of 2011.
Um, and so the agent to CEO, ifyou guys don't know, you should,
that, that should be a can't miss.
Ticket this year.
Um, skip another conference thatyou're planning on going to and,
and get into that room, especially'cause it's only a hundred people.
Mm-hmm.
Um, because the biggest thing that agentsstruggle with is, is they don't know

(46:04):
how to get out of being and working ajob and actually running the business.
Right.
And we get into this industrybecause we want the time freedom, the
financial freedom and, and some ofthe flexibilities that come with it.
But yet we find ourselves just.
Dragon every single day workingwhen the clients want us to work.
And, you know, doing all of those things.
And if you really wanna learn how to scaleand grow and, you know, if two guys like

(46:29):
myself and Ryan can go from, you know, 50transactions to, we'll do I think close
to 500 this year, that's, we're on pacefor, um, this is the can't miss ticket.
You, you have to grab one.
Um, very impactful on our, onour trajectory and, and where
we've, where we've come from and,and where we're gonna go next.
Yeah, so good.
So I'm actually gonna go snag sometickets because I need to grab mine.

(46:51):
So tickets we'll be up there though.
We'll be up there though.
Heck yeah, man.
Looking forward to seeing you man.
Awesome guys.
Appreciate y'all anduh, let's keep after it.
Let's keep making it happen.
We'll see ya all.
See ya.
That's a wrap for today.
I hope you got somethingvaluable from this episode.
If you did, hit follow andvisit John kitchens.coach for
more ways we can work together.

(47:13):
See you on the next episode.

All Episodes

Episode Overview:

Key Topics Covered

The Buyer Presentation Black Hole

Understanding Fallout Rates & Buyer Behavior

Inventory, Pricing Pressure & Market Positioning

Agent Habits That Actually Move the Needle

Lifetime Value and Playing the Long Game

Recruiting, Retention & Culture-Building

Resources & Tools Mentioned

Episode Transcript

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