May 15, 2025 • 38 mins
Suzanne and Paul dive into the controversial battle between major brokerages like Compass and Multiple Listing Services over exclusive listings and who controls property marketing.
• The MLS system establishes rules about when listings can be marketed and shared with other agents
• Compass is challenging these rules, arguing sellers should have more control over marketing their properties
• Pocket listings can benefit sellers who value privacy but may create unfair advantages for agents seeking to double-end deals
• Innovate Realty has grown its market share despite a 40% nationwide decrease in real estate transactions
• Potential tariffs on Chinese goods threaten to dramatically increase prices for appliances and fixtures in renovations
• Manufacturing may shift from China to India, where labor rates are significantly lower
• Successful brokerages focus on creating value for clients rather than primarily recruiting agents
• Market trends show luxury properties attracting multiple cash offers in Southern California
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Suzanne Seini:
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Paul Hanson:
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Stephen Couig:
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
And that will not accrue the days on market Right.
Speaker 2 (00:04):
I feel, we didn't anticipate as much of a market
shift as we saw.
Speaker 1 (00:10):
And everybody in America wants to wear them.
We don't want to make them.
Speaker 2 (00:12):
Yeah, you know, and so I'm like we just had this
conversation.
You're the numbers guy, I'm thepeople girl.
Speaker 1 (00:23):
Welcome back to your favorite podcast on the planet
all things real estate, the realt-talk podcast.
Yes, to my left, I have got thequeen of the closing table,
suzanne yeah, and I'm happy toreport oh no I uh, I told you
last night that.
Speaker 2 (00:42):
I was going to come up with the nickname today.
So originally, like the PaulWall thing kept coming up so I
was like Paul building walls,but then that felt a little
close to being like verypolitical and maybe you know we
might upset some people with aname like that.
(01:03):
But I settled on and this youknow.
I mean, I'm not, we're justtalking.
I'm not very descriptive, notsuper creative, but Paul fix it
all, Hanson I feel that thatgoes for so many things.
So you know you're fixinghouses.
Speaker 1 (01:24):
All right.
Speaker 2 (01:24):
Fixing problems all day long.
So yeah know, you're fixinghouses, all right, you're fixing
problems all day long.
So, I'll fix it all.
Speaker 1 (01:29):
Holy cow I like it New nickname.
I like it.
It kind of resonates Last night.
So every night I read mydaughter's books before they go
to bed.
And my daughter, my olderdaughter, is super into Peppa
Pig right now.
Yeah, and we read this PeppaPig book about Daddy Pig Can Fix
it.
And it's like the computer'sbroken, daddy Pig will fix it.
(01:53):
And my daughter now wants toread it.
Yeah, but she says instead ofDaddy Pig, daddy Paul Pig
sometimes, so Daddy Paul Pig canfix it.
So it kind of makes sense.
Yeah, perfect.
Speaker 2 (02:09):
It's coming full circle.
Speaker 1 (02:11):
I like it.
We've got some sentimental uhpieces to it, yeah, okay, okay,
I like it.
Speaker 2 (02:13):
I feel so much better .
This is off my plate, so Idon't know.
Speaker 1 (02:16):
I don't know if it's as good as like queen of the
closing table or agent f butI'll, I can roll with it.
Yeah, I mean, I mean, you knowsorry, it's okay, we're going to
get business cards printed.
Speaker 2 (02:25):
Yeah, okay, perfect.
Speaker 1 (02:27):
Yeah, sold, so what, uh, what's new?
Speaker 2 (02:32):
Oh, you know, um the world of real estate, there are
always some new, new uh updateshappening, new updates with the
market, new updates with theindustry.
I feel like you know, we've gota little bit of a battle going
on currently between I think wetouched on this in one of our
(02:52):
other episodes but, not too indepth, but you know between some
of the brokerages biggerbrokerages and the MLSs.
Speaker 1 (03:02):
I was going to ask you.
So there's like drama right nowwith.
I mean we can say you know thebut, but so the CEO, I think, of
compass is got some uniqueperspectives on what's happening
with the MLS?
What's your take on all thatand what?
What is that?
How is that unpacking?
Speaker 2 (03:20):
Yeah, so basically the MLSs have specific rules as
far as marketing propertiesoutside of when they're entered
into the MLS.
Speaker 1 (03:32):
Yeah.
Speaker 2 (03:33):
So some MLSs give you coming soon access where you
can put listings in there beforesome don't Like it's kind of
you're kind of at MLS mercy asfar as what these rules are.
And some of the otherbrokerages are saying, well, you
know, we want to market them,whether it's within our
brokerage.
Like why are you deciding whena seller should can sell or when
(03:57):
a property can be marketed?
So yeah, there's a little bitof drama between Compass has
come out and said that you know,private or exclusive doesn't
necessarily mean private.
So basically what they'resaying is an agent can they'll
(04:17):
have a book in any of theiroffices at any time that anyone
can walk in and look at theseoff-market properties.
But I think you know that saidlike that's just not realistic,
that's not a realistic way ofyou know getting properties out
there, getting listings outthere.
Speaker 1 (04:35):
So I feel like we should double click on this
quite a bit, because we have,you know, listeners that are
agents, we have listeners thatare sellers.
So the MLS, you know,essentially controls what agents
can do by market Right.
Right, so the coming soon thing, right in our market we can
take a property and designate it, or syndicate through all those
(04:59):
sources and say that thisproperty is going to be sold
soon and we have 21 days, max 21days, and that will not accrue
the days on market.
Speaker 2 (05:09):
Right.
Speaker 1 (05:10):
And so what I mean?
I think I know the answer frommy vantage point.
But why do that Like?
What advantages does ahomeowner have to say, hey,
we're going to sell thisproperty soon.
You know, the whole world getsto see it.
Speaker 2 (05:22):
Yeah.
Speaker 1 (05:23):
What is that major advantage and what's the
downside?
Speaker 2 (05:25):
Yeah, there's a couple advantages.
I think one even from a pricingstandpoint, when you put a
property out there at a certainprice, you can really test the
market a little bit and gaugewhere that property.
You know, if it what theturnout is going to be on that
property.
So if a seller does need to.
You know, sell very quickly.
(05:47):
Um, you know they have a reallygood idea of what that's going
to look like when they actuallyhit the market.
Most of the time for coming soon, it's the property is still
being worked on so it can'tnecessarily be sold, or there's
something that's still beingdone to why it can't be sold yet
.
You know, like maybe there's ahusband and wife thing happening
(06:09):
, like a divorce situation, likethere's always a situation
where you know you would maybewant to market that ahead of
time, still get some eyes to it,but it's not necessarily ready,
ready to hit the market,necessarily ready, ready to hit
the market.
So, um, but you know, as far asum disadvantages go, I don't
(06:33):
there's not a ton ofdisadvantages, like there's no
reason that you wouldn't wantpeople to see your home.
Um, you know, I guess the theonly thing is maybe the MLSs are
trying to really control thingsbeing sold off market.
Speaker 1 (06:44):
Right, that's what I was going to ask.
So so if I'm coming soon on aproperty today, or I have an
exclusive listing that's notcoming soon, that other agents
can't see, does that create anunfair advantage to a certain
pool of agents that can then goand consummate a transaction
before the public has access toit?
Speaker 2 (07:04):
I mean that's true and I think you know to a degree
there could be a disservice tothe seller as well, because
maybe they didn't hit the marketand that's a whole pool of
buyers that didn't see theirlisting, where they could have
demanded, maybe a higher price.
So I think you know, in myopinion, I feel, as long as it's
(07:27):
done the right way and you arerepresenting your client the
right way, I understand why theMLS like has these rules in
place, but I think that there'sa right way to do it and, you
know, as long as everyone doeshave access to it, you are going
to make sure that your, yourclient, has the proper eyes and
that you're representing yourclient to the best of your
(07:48):
ability, and that's really whatit comes down to.
Speaker 1 (07:51):
Yeah, so there's, I mean, and there's, you know,
different areas of the singlefamily real estate world, right,
and and one of the one of theareas that I want to spend a
little time talking about is theluxury space.
So, and I I talk to people thatwant to spend a little time
talking about is the luxuryspace.
So, and I talk to people thatwant to have a pocket listing.
They want to have somethingthat is not seen by the general
public, and that's usuallybecause their seller wants to
(08:14):
keep the transaction kind ofquiet, or maybe they don't
believe that it's going to fetchthat specific number if it hits
the market.
But from your vantage point,like what is truly, as a seller,
the advantage of giving anagent access to sell your
property before it goes to themarket.
Speaker 2 (08:31):
Yeah, I think you touched on it initially, as far
as maybe someone doesn't reallywant open houses, maybe they
don't want photos of theirentire house on the MLS we have
had, especially in the luxuryspace, where people are private,
they don't want theirinformation out there, and so
they'll specifically say yes,you can sell my property, I want
(08:53):
this number for it, but find methe buyer.
If you find me the buyer, ofcourse.
Speaker 1 (08:58):
I'll move.
Speaker 2 (08:59):
Yeah, at the right number.
Speaker 1 (09:03):
So how does the MLS control that, like you,
basically consummate atransaction before it gets to
market and then you bring it tomarket in escrow or what is the
MLS's take on that?
Speaker 2 (09:13):
Yeah, then you would actually just load it into the
MLS for MLS entry, but that'spretty much it, and I think.
But if you look at thatsituation, you did what your
client wanted.
There was no issue.
There's no issues there right.
Like that is what your clientactually requested.
And I think that that's whatmakes this really difficult is
(09:35):
that some clients do go thatroute.
So I think again, there's aright way.
It's not like both sides aren'twrong, you know.
It's just what is the right wayto do it.
And are you taking care of yourclient and following their best
wishes?
And knowing, because you know,a lot of times clients have
(09:56):
their wishes, but if you as theagent know, hey, that's not
really what's best for you, aslong as you're advising them
accordingly and representingthem in the best of your ability
, I think that's all we canreally do.
Speaker 1 (10:08):
Yeah, I guess the the one other like kind of loaded
question there, and I think Idon't know the percentage, but
what I've heard is that a vastmajority of pocket listings or
listings that sell before theyhit the MLS, are double ended.
So there's dual agency, um, sothere's a huge advantage for an
agent to get that because theyhave access to something nobody
else has, right.
And then you know, if theseller you know negotiates with
(10:30):
that agent says, hey, I'mwilling to pay up to 4% to sell
this property.
Right, if it is a luxuryproperty like a $10 million or
north, you know value, I meanwe're talking huge dollars,
right, you, I mean we're talkinghuge dollars, right.
And so the MLS is probablytheir perspective is we got to
give an equal opportunity toevery agent to go and consummate
that transaction.
(10:50):
But if you're that agent thathas that opportunity, you're
like no, I don't want anybodyelse to see it.
And so the CEO at Compass iskind of.
His argument is that, you know,if the seller's asking us to
keep this exclusive for a periodof time, that's the same thing.
And the MLS is saying, no,that's not true.
Speaker 2 (11:09):
Yeah, Interesting.
Yeah, Like I said, I think youknow both sides have a strong
argument and it is.
You know, one side is maybethinking about fairness for all
agents over the other, but Iwouldn't say that Compass isn't
thinking about their sellers.
You know again, if it's yourseller's wish and you educate
(11:32):
them on the process, and theysay, no, I don't want to list my
home, I want to sell myproperty off market, you know
who are we to say no, you're notallowed to do that.
Speaker 1 (11:42):
It's probably a lot of just like.
Are we to say no, you're notallowed to do that.
It's probably a lot of justlike.
You know I'm not trying toattack them to a certain degree,
but it probably to me it feelslike that's, you know, somewhat
opportunistic, because themarket as a whole, values aren't
down right, but but fewer homesare being sold.
And so if you are running abrokerage and you know at a
(12:04):
national level there's gonna befive million homes sold this
year, not eight right.
It creates an advantage for youto not go take those properties
to market because you are goingto control your ability to
double or double end the deal.
So is that why they're doing it?
Speaker 2 (12:23):
you think I know that's a spicy take it could be
between that, between even likethis has been a huge press
release too, so I think we'retalking about it right now.
We're talking about Compass.
We usually don't talk aboutCompass and everyone's talking
about Compass, so I think theychose a side and I think that is
(12:45):
really smart of them.
Speaker 1 (12:47):
Because now Press is press right.
Speaker 2 (12:48):
Right, and I think a lot of agents want to.
As you mentioned, they areincentivized by double lending
deals and so a lot of agents arelike oh wow, compass is
fighting for us, you know,against the MLS.
So I think it's a smart movefor them to kind of plant the
flag and put that out there.
(13:10):
I just think you know you dohave to look at it from a big
picture standpoint and you knowwhat does that actually do to
your sellers?
Is it the right thing to do?
And again, I think it's complexand it's going to be for each
seller.
I think that situation is veryunique.
Speaker 1 (13:31):
That's probably the hardest part with this whole
issue is that every real estatetransaction is different, so
every seller and buyer havedifferent needs and desires and
every house is different andevery house in each micro market
is different.
So if you were to tell meOrlando, florida, like I've got
an exclusive listing, it's likeokay.
(13:51):
I mean there's a year ofinventory there, Like that's
probably not going to provideany real value If you were to
say you know Solana beach in inSan Diego County, which is by
definition, I think the smallestamount of inventory nationally.
Um, you know, that would drivea lot of value.
So, um, yeah, it's kind of ait's a difficult issue for the
(14:12):
MLS to really control.
I would think, Right, yeah,Right.
Speaker 2 (14:15):
Yeah, it's uh, I mean we'll see.
We'll see what happens.
Maybe nothing happens.
I think you know some of thelarger like tech company, like
Zillow, for example, has saidwe're following MLS rules, like
we're not you know where, andusually I think in the past
Zillow has kind of pushed back abit and been known for that.
(14:36):
But they're like you know, wewant they've always kind of been
like we want what's fair forall, all buyers and sellers, and
I think you know again, I thinkthat there's a right way to do
it.
Yeah, and I think Compass isclose to maybe doing it the
right way.
I mean, they are saying allagents have access to this.
Speaker 1 (14:56):
It's just come on, like it's not real, walk into
their office.
Speaker 2 (14:59):
It's not realistic.
Like it needs to be publishedelsewhere.
Speaker 1 (15:03):
Yeah.
So, if you're okay, I want tokind of change gears here.
I have some questions for you.
Speaker 2 (15:10):
Uh-oh, I'm scared.
Speaker 1 (15:11):
Prepared some questions, so for our listeners,
if you haven't listened inother episodes.
Suzanne is the founder and CEOof Innovate Realty and a few
other businesses.
But Innovate Realty is anindependent brokerage in
Southern California, launched, Iguess, two years ago.
Speaker 2 (15:33):
It's May 8th.
Speaker 1 (15:35):
Wait a minute.
Tomorrow it'll be exactly twoyears when we got our license of
volume and currently sitting atabout 75 or $80 million worth
(15:59):
of listed volume in SouthernCalifornia.
So you're the, you know, you'rethe chief there.
Like, you're calling the shots,you're growing everything,
you're managing it all you know.
Looking back two years ago,what did you?
What would you have thought wasgoing to be a successful Q1 in
25?
And what's different from whatyou're seeing now?
(16:19):
And and you know how are you,how do you feel about those
numbers?
Speaker 2 (16:23):
Yeah, you know, I think that it, when we were
first chatting in 2023, I thinkthat we I don't want to say
naive is not the word, but Ifeel we didn't anticipate as
much of a market shift as we saw.
So I think we felt, over thepast two years, a significant
(16:47):
difference from the two yearsprior.
So, even as we were kind ofmaking our projections and
setting our goals, I think thatwe were looking quite a bit at
that historical data and not tosay that that wasn't right to do
, I think that we built systemsand the brokerage based off of
(17:09):
that.
You know, but I think what'sreally important there is, even
though we did have a marketshift, we built something that
we know when the market changes.
If we survive in these, youknow when the market is a little
more difficult and we'regetting by, we know that as soon
(17:32):
as the market does take a turn,we're in a really great spot.
And so I think we realized thatfairly quickly that we hit a
market shift, and so I think itjust set us up for the market
that we're ready for, you know,and for, I guess, I would say
for any type of market.
(17:55):
And now here we are in 2025,actually, you know, picking up a
ton of momentum.
Finally, I would say, gettingthe brand out there a little
more, which um has been.
I mean it.
It takes time right, like it'swho's innovate realty.
Speaker 1 (18:11):
So we're really honing in on these local markets
, that's the company that justsells a little more than compass
.
Yeah, exactly these localmarkets, that's the company that
just sells a little more thanCompass.
Yeah, exactly For all thelisteners Sells more than most
in the area.
Yeah, in the area.
Speaker 2 (18:23):
But you know, I think I think to my I don't want to
say to my detriment a little bit, but I'm a little.
I'm not very braggy, I'm notSure.
That's why I asked the question.
You're too humble?
Yeah, exactly You're setting meup.
But yeah, and so it's funny.
I mean we had a big event thispast weekend where we launched a
(18:44):
nine million dollar listing.
It's a you know kind of groundup construction.
Everything's brand new inCorona Del Mar and what's
interesting is, you know, someof the top top agents were, you
know, attended that event, and Imean our agents were that were
there, uh, done more real estatethan any of those people.
(19:05):
But they have a little bit moreof a name and the brand behind
them.
So, I think, um, I think it.
One thing that I can improve onis, um being a little more
vocal about our successes.
It's not the easiest for me todo, but in this industry it's
important.
You have to get the word outthere, and so I think we're at a
(19:27):
point where we are gettingthere and people are starting to
know who we are.
Speaker 1 (19:33):
Yeah, yeah, I mean I kind of double clicked on the
math a little bit and you knowthere's different markets in
Southern California, san Diego,orange County, la has a couple
of different markets in it andif you look at that volume
that's closing out by market andyou look at the total number of
transactions, our share of thattotal addressable market is
(19:56):
either stable or growing.
So as a per unit or volumebasis, the brokerage is growing
in each one of those markets,which is really impressive,
especially with the greatermarket that we're seeing.
I mean, the number of realestate agents hasn't really
licensed agents it's not goingdown, in fact it's still coming
(20:18):
up.
Agents hasn't really licensedagents it's not going down, in
fact it's still coming up.
But the total number of dealsbeing sold at a national level
is down by over 40%, and so forInnovate to continue to grow in
that kind of a climate, I thinkit's a testament to the team and
the process and your leadership.
But I guess the deeper questionis like what does the future
look like?
(20:38):
I know you're super humble, soit's hard for you to stand on
the soapbox and be like look atus, you know, but but what do
you see the future looking like?
And I mean, you touched on alittle bit about, you know,
setting a foundation, be readyfor the market to shift, um, but
that's not really what'shappening, because that was
already done and we're growingalready.
So we're growing through thetough market and you know, I
(21:00):
shouldn't say tough market, butwe're going through the market
that we're in and ready tocapitalize when it you know,
when it picks up.
So what do you think thatfuture looks like for Innovate
or agents at Innovate?
Speaker 2 (21:10):
Yeah, I think you know you're working at Innovate.
You're working with people thatunderstand the challenges in
the market and are working tosolve for those challenges.
So you know the clearcooperation like that's a great
example.
Is this really a huge challengethat everyone needs to be
focusing on, or we need to betalking that much about, like
(21:33):
you know, is that really goingto move the needle for the
problems that we see in theindustry right now, one being a
really great example of.
a consumer wants a move-in readyhome and in order to give them
that move-in ready home, a lotof times a seller has to either
(21:54):
live through some construction,pay a bunch of money out of
pocket.
Sometimes they do thatconstruction wrong because
they're thinking what they wouldwant if they were to move and
they waste a bunch of money onfixing things in their house
that maybe they didn't need todo so, whereas, you know, at
Innovate we're thinking thatthrough and thinking, hey, how
(22:15):
can we save sellers money, howcan we make that process easier
for them, help them by payingfor it upfront, telling them
exactly what they need to do tosell their home for more money
faster.
So, focusing on things that areactually going to help
stimulate the market and helpconsumers through these
(22:35):
challenges that they'reexperiencing.
I think that's what you knowyou're getting with innovate, um
, whereas you know a lot ofbrokerages out there.
I mean, I've been talking to alot of agents recently about you
know they're feeling there's afeeling of, maybe displacement
or you know where should I goand what should I do as all of
these changes come about.
Um, and feeling support fromyour brokerage.
(22:57):
And you know, there's theoption of going to these like I
hate to say pyramid scheme typebrokerages, but I don't want to
make anyone mad, but I mean.
To me that's what it is.
It's like the agent isincentivized to bring on other
agents, which is really greatfor that brokerage if they're
just making money off of all ofthese agents.
(23:19):
Yeah, cool, got it, but thatdoes.
What does that have to do withyou being a really great real
estate agent and coming up withtools and resources for the
actual client?
Speaker 1 (23:32):
Right.
Speaker 2 (23:32):
You know I am all about agents like making money
and they should be rewarded ifthey refer someone.
I fully, fully believe in that.
But I don't think that shouldever be the focus of the
brokerage, because now they'refocusing a little too much on
one side and not on the client.
(23:53):
I think what's really uniqueabout Innovate is we have that
healthy balance of both, wherewe came into this initially and
said, ok, we, we have twoclients, our agents, and then
our client clients, our buyersand sellers, and how do we solve
for both problems or anyproblems that will come up for
(24:15):
both parties in the market?
And that was the focus of thebrokerage and I think that's
what really sets us apart as ahome for agents and buyers and
sellers.
Speaker 1 (24:29):
Yeah, that's what I was going to try to reference.
I mean, from my vantage point,I don't get to work on all of
the different processes ordifferent issues at the
brokerage, but what I see is anoperation or a foundation that
is taking off.
You bring up the pyramid thingright.
There's brokers out there thatare saying hey, go recruit 100
(24:51):
agents.
What I hear us saying atInnovate is go generate leads
for sellers.
If there's a challenge or anissue to consummate and get that
(25:14):
deal done, let us help youoperationalize that so you can
continue to go and continue toget new leads for sellers and
buyers.
So we're pushing agents totransact and get better at
transacting to grow theirbusiness and book of business.
transact and get better attransacting to grow their
business and book of business,and then we're also
incentivizing them if they doattract people to come in, then
that's a side benefit, butessentially we're training and
developing agents to becomevalue add to a seller or buyer,
not full-time recruiters.
(25:34):
But the byproduct of being areally good agent that creates
value for your buyer or selleris that other agents want to
work with you.
Speaker 2 (25:41):
Right.
Speaker 1 (25:41):
Because that means there's other agents out there
that are not doing deals becausewe're growing the market share
Right.
So it's a.
I mean we're giving away all ofour secrets.
Speaker 2 (25:50):
I know, I know Execution's key.
Yeah, yeah, exactly.
But you know, I think that'sthe biggest difference and I
think for agents that are outthere really wondering like hey
is Compass, my home Is Real, myhome Is eXp it's one of those
things where and we've talkedabout it before when we founded
Innovate, we sat down, we lookedat all of these brokerages, we
(26:13):
looked at all of their offerings, which, you know, does give us
that unique advantage that weare only two years old, because
we were able to see really whereother places were missing the
mark not to say we're perfect,because nobody is, but we can
identify where those challengesare and how we can solve for
(26:33):
those with the team that we have.
Speaker 1 (26:35):
Yeah, it's awesome.
I feel like we've got a lot ofgreat momentum across all fronts
.
I don't understand why.
I mean I was at that event andkind of rubbed shoulders with
agents.
I don't understand why some ofthe top producing agents in our
local markets are not atInnovate.
It makes no sense to me.
And I get phone calls.
(26:57):
I mean I'm not running thebrokerage on a day-to-day basis
but I get phone calls asking touse specific products that we
offer to our sellers from agentsand I'm like yeah, come to the
brokerage.
Speaker 2 (27:07):
Yeah, exactly, you know, be easy.
What are you doing?
Yeah, yeah, you know, I thinkit's.
I mean, and I'll just say we'rein California, we're in
Southern California, where namescould carry a little more
weight than maybe they should.
You know, there is that, and Ithink we but I think we're
(27:37):
building that by doing goodbusiness and good work with our
agents.
So, you know, it's really justa matter of time, I think,
before agents realize what it isthat we have.
I mean we just put it all outthere today.
So now they know.
Speaker 1 (27:56):
Yeah Well, so Q2 is set up to be like, way you know,
more transactions than Q1.
Q1 was up year over year, andso what do you think the rest of
25 looks like for the brokerage?
Speaker 2 (28:08):
Are you asking me specific numbers?
Speaker 1 (28:10):
No, no, no, no, no.
I mean.
Speaker 2 (28:12):
I'm like we, we just had this conversation.
You're the numbers guy.
Speaker 1 (28:16):
Yeah.
Speaker 2 (28:17):
I'm the people girl.
Speaker 1 (28:19):
Yeah.
Speaker 2 (28:19):
Um, yeah, no, I mean I think I think we're feeling
the momentum, so we're onlyseeing things get better.
I think, um having a successfulQ1, um, in the, the current
market, we're in where you're Imean, as you said earlier, we're
down 40% year over year and forus still to be able to execute
(28:43):
the way we did, you know, andthat's in Q1.
So we know that we're going totake that momentum and take it
to the next level for the restof the year.
I see that a lot of people arereally holding on to take that
momentum and take it to the nextlevel for the rest of the year.
I see that a lot of people arereally holding on to hope that
interest rates are going down,yep, and I mean that that will
(29:03):
sway the market a bit.
So if interest rates do go downwhich you know I'm not
necessarily seeing that anytimesoon but if they do, um, I mean,
that's only going to help us.
But we're already on track tohave our best year yet.
Speaker 1 (29:20):
Yeah, and a lot of growth in terms of agent count
Right.
So, um you know, which is theby-product of doing good
business?
Yeah, so that's exciting.
Speaker 2 (29:28):
Yeah, okay, well, spotlight was on Innovate today.
Yeah.
Speaker 1 (29:33):
All right.
Speaker 2 (29:34):
Anything else to report?
Speaker 1 (29:37):
I don't think so.
I mean we, you know the suiteof companies, our platform, you
know everything seems to begrowing nicely.
I mean you know Bye Bye House,the company I run on a daily
basis, is growing in terms oftotal volume.
So you know we are seeing a lotof competition, you know, from
(29:57):
investors to buy new inventory,which is interesting.
We're seeing the same thingthat you've kind of reported on,
you know, taking new product tomarket.
We're seeing a lot of cashoffers on larger ticket price
houses.
So you know LA Orange Countytwo to $3 million properties are
selling very quickly right nowand if we get three offers, like
(30:20):
the last transaction we justclosed, two were cash and one
was a conforming loan- or youknow a traditional
non-conforming loan, so that'skind of an interesting data
point that we're seeing.
We still actually have not seena lot of buyers that lost their
house in the fires in.
Southern California, and Ithink that's a fundamental of
just insurance not all the waybeing paid out yet.
Speaker 2 (30:41):
Yeah, that plus.
I mean people when they weredisplaced.
They had to rent something orgo somewhere, so might be locked
in for a little while while allof that was worked out.
Speaker 1 (30:51):
So we, we, we expect to see some pickup there.
But, yeah, I mean, buy, buy,buy houses got, you know, a lot
of great momentum.
I mean, I think we have eightor nine properties on market now
to sell and like 10 or 11 inescrow to buy.
And you know, we bought twoyesterday and one tomorrow and,
um, you know so, there's a lotof great inventory that we're
seeing.
Um, you know so, and you know,the biggest fear that we have
(31:14):
right now is what's going tohappen with tariffs.
I mean, the vast majority ofappliances, lighting fixtures,
you know, finished fixtures, arecoming from China and um, I
won't, I won't say names, butI've, you've met him.
I have a friend that has a, um,a consumer facing product
business and, uh, he orders atremendous amount of raw
(31:36):
material or supplies and thenmanufacturers here stateside,
but, um, you know, had submittedan order for two and a half, 3
million bucks of material, uh'sin the ocean coming in and the
tariff hits and it's like, well,you know, that's now a seven
million dollar order.
Yeah, you know.
So I'm getting very worriedabout just finished product.
Speaker 2 (31:55):
Yeah.
Speaker 1 (31:56):
But you know, I go back to the.
You know, generally, when thiskind of stuff happens, there's
also an opportunity.
Speaker 2 (32:03):
Right.
Speaker 1 (32:04):
You know.
So there was a big industrialrevolution in China, and that
occurred because labor rateswere a fifth of what American
labor rates were.
So manufacturing the actualitem and getting it shipped here
was, you know, there was just aton of room, um.
But we're seeing that samething happen right now with
India.
So India is is growing rapidly,the infrastructure is, and
(32:28):
their labor rates are a fifth ofwhat China is today, and so we
think that a lot of our finishedquality fixtures and appliances
are going to start to come outof India over the next five
years or so, and we're activelyobviously in conversations now
to ensure that, if tariffs arepainful and create longer lead
times for product, um, that wehave access to it.
(32:49):
But I think you know, thebroader perspective on that is
that if you're a homeowner andyou're going to sell, you may
also have those same issues.
So if you have that oldrefrigerator or you know old
appliance package or your lightsare they were installed in the
50s original you're probablygoing to have two options which
is sell to an investor that hasa capacity to go and acquire
(33:13):
some of that inventory, whichobviously means a lower number
or invest a lot of money Rightand probably a lot of time to go
and find those things, yeah,source them and, like what we
talked about before, where it'slike are you making the right
decisions?
Speaker 2 (33:29):
Are you, you know?
Speaker 1 (33:31):
Yeah, we see, we see homeowners make those mistakes
all the time at the brokerage.
Like they say, hey, I went andspent 50 grand sprucing this all
up and we're like, oh shoot,you shouldn't have done that, um
, but I, I think you know thatis a.
You know this is again a veryselfish plug, but it's like if
you're a seller or a buyer ofreal estate in Southern
California, I don't know why youwouldn't be in contact with an
agent at Innovate, because thatagent has access to product or
(33:57):
you know services.
I guess that will make iteasier and cheaper to transact.
Speaker 2 (34:02):
Right.
Speaker 1 (34:04):
And so, if you're listening, you're a seller or a
buyer, please call us.
But yeah, that's really theonly other thing that we're very
concerned about at the momentjust making sure that we have
all those things lined up.
Speaker 2 (34:16):
So does that defeat the purpose of the tariffs?
If they're just movingeverything to India, I don't
know man.
Speaker 1 (34:24):
We.
You know, I think you know II'm not a global economist.
I love to read and I study alot of this stuff.
And so I want to preface anddisclose like my opinion is my
opinion.
Speaker 2 (34:35):
I don't know.
Speaker 1 (34:35):
Like I'm.
I'm not as smart as everybodyelse out there, but, um, you
know, I think look, you knowsome of the stuff that the the
that the current administrationis doing.
I think long-term actuallymakes a ton of sense, but the
way that they've announced itand the speed in which they're
taking action is creatingripples in the market.
(34:56):
That is pretty scary yeah.
Speaker 2 (35:00):
And I'd say avoidable with the proper rollout 100%.
Speaker 1 (35:04):
But to go back to what you're saying is, there's
these global powers or thesetrade relationships, and China
has what it has.
I don't know if we've talkedabout it in the podcast, but
they're aging rapidly.
So when you look atdemographics by age, the United
(35:27):
States is actually a prettyhealthy pyramid.
Older people are fewer andyounger generations are broader,
so the population is prettyhealthy.
Basically means that we havepeople to come in and continue
working and taking those jobs.
China is kind of like almostthe opposite.
It's not completely reversed,but there was a 20 year period
where people were having no kidsor one kid max, and so, um, the
(35:50):
labor rates are starting toincrease.
There's been a tremendous amountof investment to build that
industrial, you know, complex,essentially like to go and be
able to produce stuff, um, butif nobody can work in it, then
then they're dying.
They're dying and it happens tobe obviously China has some of
our debt and so, you know, Ithink there's like gamesmanship
(36:10):
there to a certain degree, youknow where, where India's kind
of you know different position,right, you know.
So I do think that long termthat stuff could make a ton of
sense, and I think I've saidthis previously.
But?
But you know, millennials arethe largest demographic United
States.
(36:30):
You know American millennialsare the largest demographic of
consumers on the planet, and soglobal economics, like
one-on-one, would say that hewho consumes controls the market
.
And so, and we consume moreshit than anybody in the whole
world, and by like a long ways,like three, 400%, nobody else
(36:51):
consumes what millennialsconsume, and so I think our
administration, or futureadministrations, have to
understand that and the way theycommunicate and take action you
know is going to be criticalbecause, um, you know, like I
watched a little thing, like afriend of mine sent me a standup
bit from Dave Chappelle and Ilove Dave Chappelle.
Speaker 2 (37:13):
Have you?
Have you seen that little DaveChappelle yeah?
Speaker 1 (37:16):
So he goes on this bit and he's like look, I don't
want to make Nikes, like I wantto wear Nikes.
He's like and everybody inAmerica wants to wear them, we
don't want to make them, and itwas kind of funny and obviously
there's more to it and whatnot,but I think it's right on point.
So I don't know.
I mean, I'm definitely worriedabout it.
When we interview people thatare either not going to college
(37:38):
or coming right out of college,they don't want to do the tough
jobs.
Speaker 2 (37:41):
I know they don't yeah.
Speaker 1 (37:43):
And so those jobs got to go somewhere.
Yeah, so slapping 145 percenttariff on a country that's
supplying that wants to do thejobs and a lot of it Right.
I don't know if that's, I don'tknow if that's going to play
out long term, and you know alsoit's gamesmanship Right, like
in any negotiation, if you wantto end up at 50, you can't start
(38:06):
there, right.
So maybe that's going to changebut, I, don't know, we'll see.
All right, but for now we'restill putting appliances in
houses and selling houses.
Speaker 2 (38:15):
So we're good, perfect, okay.
Well, I think we covered it.
Speaker 1 (38:20):
Yes.
Speaker 2 (38:21):
I think that's a wrap .
Speaker 1 (38:22):
Yeah, great episode.
Yes, I think I think that's awrap.
Yeah, great episode.
Uh, if you haven't done so,please subscribe.
It helps out a lot.
Uh, we also want your feedback,so we have different segments.
Uh, today we did not have aguest.
We have some really greatguests coming up uh, but provide
feedback to us and let us knowwhat you would like to hear from
us.
Uh, but we appreciate you uhlistening, subscribing, uh,
(38:43):
watching on YouTube.
You know we can't make thishappen without you guys doing
that.
So that's it, that's a wrap.
Speaker 2 (38:53):
See you next time.
And that will not accrue the days on market Right.
Speaker 2 (00:04):
I feel, we didn't anticipate as much of a market
shift as we saw.
Speaker 1 (00:10):
And everybody in America wants to wear them.
We don't want to make them.
Speaker 2 (00:12):
Yeah, you know, and so I'm like we just had this
conversation.
You're the numbers guy, I'm thepeople girl.
Speaker 1 (00:23):
Welcome back to your favorite podcast on the planet
all things real estate, the realt-talk podcast.
Yes, to my left, I have got thequeen of the closing table,
suzanne yeah, and I'm happy toreport oh no I uh, I told you
last night that.
Speaker 2 (00:42):
I was going to come up with the nickname today.
So originally, like the PaulWall thing kept coming up so I
was like Paul building walls,but then that felt a little
close to being like verypolitical and maybe you know we
might upset some people with aname like that.
(01:03):
But I settled on and this youknow.
I mean, I'm not, we're justtalking.
I'm not very descriptive, notsuper creative, but Paul fix it
all, Hanson I feel that thatgoes for so many things.
So you know you're fixinghouses.
Speaker 1 (01:24):
All right.
Speaker 2 (01:24):
Fixing problems all day long.
So yeah know, you're fixinghouses, all right, you're fixing
problems all day long.
So, I'll fix it all.
Speaker 1 (01:29):
Holy cow I like it New nickname.
I like it.
It kind of resonates Last night.
So every night I read mydaughter's books before they go
to bed.
And my daughter, my olderdaughter, is super into Peppa
Pig right now.
Yeah, and we read this PeppaPig book about Daddy Pig Can Fix
it.
And it's like the computer'sbroken, daddy Pig will fix it.
(01:53):
And my daughter now wants toread it.
Yeah, but she says instead ofDaddy Pig, daddy Paul Pig
sometimes, so Daddy Paul Pig canfix it.
So it kind of makes sense.
Yeah, perfect.
Speaker 2 (02:09):
It's coming full circle.
Speaker 1 (02:11):
I like it.
We've got some sentimental uhpieces to it, yeah, okay, okay,
I like it.
Speaker 2 (02:13):
I feel so much better .
This is off my plate, so Idon't know.
Speaker 1 (02:16):
I don't know if it's as good as like queen of the
closing table or agent f butI'll, I can roll with it.
Yeah, I mean, I mean, you knowsorry, it's okay, we're going to
get business cards printed.
Speaker 2 (02:25):
Yeah, okay, perfect.
Speaker 1 (02:27):
Yeah, sold, so what, uh, what's new?
Speaker 2 (02:32):
Oh, you know, um the world of real estate, there are
always some new, new uh updateshappening, new updates with the
market, new updates with theindustry.
I feel like you know, we've gota little bit of a battle going
on currently between I think wetouched on this in one of our
(02:52):
other episodes but, not too indepth, but you know between some
of the brokerages biggerbrokerages and the MLSs.
Speaker 1 (03:02):
I was going to ask you.
So there's like drama right nowwith.
I mean we can say you know thebut, but so the CEO, I think, of
compass is got some uniqueperspectives on what's happening
with the MLS?
What's your take on all thatand what?
What is that?
How is that unpacking?
Speaker 2 (03:20):
Yeah, so basically the MLSs have specific rules as
far as marketing propertiesoutside of when they're entered
into the MLS.
Speaker 1 (03:32):
Yeah.
Speaker 2 (03:33):
So some MLSs give you coming soon access where you
can put listings in there beforesome don't Like it's kind of
you're kind of at MLS mercy asfar as what these rules are.
And some of the otherbrokerages are saying, well, you
know, we want to market them,whether it's within our
brokerage.
Like why are you deciding whena seller should can sell or when
(03:57):
a property can be marketed?
So yeah, there's a little bitof drama between Compass has
come out and said that you know,private or exclusive doesn't
necessarily mean private.
So basically what they'resaying is an agent can they'll
(04:17):
have a book in any of theiroffices at any time that anyone
can walk in and look at theseoff-market properties.
But I think you know that saidlike that's just not realistic,
that's not a realistic way ofyou know getting properties out
there, getting listings outthere.
Speaker 1 (04:35):
So I feel like we should double click on this
quite a bit, because we have,you know, listeners that are
agents, we have listeners thatare sellers.
So the MLS, you know,essentially controls what agents
can do by market Right.
Right, so the coming soon thing, right in our market we can
take a property and designate it, or syndicate through all those
(04:59):
sources and say that thisproperty is going to be sold
soon and we have 21 days, max 21days, and that will not accrue
the days on market.
Speaker 2 (05:09):
Right.
Speaker 1 (05:10):
And so what I mean?
I think I know the answer frommy vantage point.
But why do that Like?
What advantages does ahomeowner have to say, hey,
we're going to sell thisproperty soon.
You know, the whole world getsto see it.
Speaker 2 (05:22):
Yeah.
Speaker 1 (05:23):
What is that major advantage and what's the
downside?
Speaker 2 (05:25):
Yeah, there's a couple advantages.
I think one even from a pricingstandpoint, when you put a
property out there at a certainprice, you can really test the
market a little bit and gaugewhere that property.
You know, if it what theturnout is going to be on that
property.
So if a seller does need to.
You know, sell very quickly.
(05:47):
Um, you know they have a reallygood idea of what that's going
to look like when they actuallyhit the market.
Most of the time for coming soon, it's the property is still
being worked on so it can'tnecessarily be sold, or there's
something that's still beingdone to why it can't be sold yet
.
You know, like maybe there's ahusband and wife thing happening
(06:09):
, like a divorce situation, likethere's always a situation
where you know you would maybewant to market that ahead of
time, still get some eyes to it,but it's not necessarily ready,
ready to hit the market,necessarily ready, ready to hit
the market.
So, um, but you know, as far asum disadvantages go, I don't
(06:33):
there's not a ton ofdisadvantages, like there's no
reason that you wouldn't wantpeople to see your home.
Um, you know, I guess the theonly thing is maybe the MLSs are
trying to really control thingsbeing sold off market.
Speaker 1 (06:44):
Right, that's what I was going to ask.
So so if I'm coming soon on aproperty today, or I have an
exclusive listing that's notcoming soon, that other agents
can't see, does that create anunfair advantage to a certain
pool of agents that can then goand consummate a transaction
before the public has access toit?
Speaker 2 (07:04):
I mean that's true and I think you know to a degree
there could be a disservice tothe seller as well, because
maybe they didn't hit the marketand that's a whole pool of
buyers that didn't see theirlisting, where they could have
demanded, maybe a higher price.
So I think you know, in myopinion, I feel, as long as it's
(07:27):
done the right way and you arerepresenting your client the
right way, I understand why theMLS like has these rules in
place, but I think that there'sa right way to do it and, you
know, as long as everyone doeshave access to it, you are going
to make sure that your, yourclient, has the proper eyes and
that you're representing yourclient to the best of your
(07:48):
ability, and that's really whatit comes down to.
Speaker 1 (07:51):
Yeah, so there's, I mean, and there's, you know,
different areas of the singlefamily real estate world, right,
and and one of the one of theareas that I want to spend a
little time talking about is theluxury space.
So, and I I talk to people thatwant to spend a little time
talking about is the luxuryspace.
So, and I talk to people thatwant to have a pocket listing.
They want to have somethingthat is not seen by the general
public, and that's usuallybecause their seller wants to
(08:14):
keep the transaction kind ofquiet, or maybe they don't
believe that it's going to fetchthat specific number if it hits
the market.
But from your vantage point,like what is truly, as a seller,
the advantage of giving anagent access to sell your
property before it goes to themarket.
Speaker 2 (08:31):
Yeah, I think you touched on it initially, as far
as maybe someone doesn't reallywant open houses, maybe they
don't want photos of theirentire house on the MLS we have
had, especially in the luxuryspace, where people are private,
they don't want theirinformation out there, and so
they'll specifically say yes,you can sell my property, I want
(08:53):
this number for it, but find methe buyer.
If you find me the buyer, ofcourse.
Speaker 1 (08:58):
I'll move.
Speaker 2 (08:59):
Yeah, at the right number.
Speaker 1 (09:03):
So how does the MLS control that, like you,
basically consummate atransaction before it gets to
market and then you bring it tomarket in escrow or what is the
MLS's take on that?
Speaker 2 (09:13):
Yeah, then you would actually just load it into the
MLS for MLS entry, but that'spretty much it, and I think.
But if you look at thatsituation, you did what your
client wanted.
There was no issue.
There's no issues there right.
Like that is what your clientactually requested.
And I think that that's whatmakes this really difficult is
(09:35):
that some clients do go thatroute.
So I think again, there's aright way.
It's not like both sides aren'twrong, you know.
It's just what is the right wayto do it.
And are you taking care of yourclient and following their best
wishes?
And knowing, because you know,a lot of times clients have
(09:56):
their wishes, but if you as theagent know, hey, that's not
really what's best for you, aslong as you're advising them
accordingly and representingthem in the best of your ability
, I think that's all we canreally do.
Speaker 1 (10:08):
Yeah, I guess the the one other like kind of loaded
question there, and I think Idon't know the percentage, but
what I've heard is that a vastmajority of pocket listings or
listings that sell before theyhit the MLS, are double ended.
So there's dual agency, um, sothere's a huge advantage for an
agent to get that because theyhave access to something nobody
else has, right.
And then you know, if theseller you know negotiates with
(10:30):
that agent says, hey, I'mwilling to pay up to 4% to sell
this property.
Right, if it is a luxuryproperty like a $10 million or
north, you know value, I meanwe're talking huge dollars,
right, you, I mean we're talkinghuge dollars, right.
And so the MLS is probablytheir perspective is we got to
give an equal opportunity toevery agent to go and consummate
that transaction.
(10:50):
But if you're that agent thathas that opportunity, you're
like no, I don't want anybodyelse to see it.
And so the CEO at Compass iskind of.
His argument is that, you know,if the seller's asking us to
keep this exclusive for a periodof time, that's the same thing.
And the MLS is saying, no,that's not true.
Speaker 2 (11:09):
Yeah, Interesting.
Yeah, Like I said, I think youknow both sides have a strong
argument and it is.
You know, one side is maybethinking about fairness for all
agents over the other, but Iwouldn't say that Compass isn't
thinking about their sellers.
You know again, if it's yourseller's wish and you educate
(11:32):
them on the process, and theysay, no, I don't want to list my
home, I want to sell myproperty off market, you know
who are we to say no, you're notallowed to do that.
Speaker 1 (11:42):
It's probably a lot of just like.
Are we to say no, you're notallowed to do that.
It's probably a lot of justlike.
You know I'm not trying toattack them to a certain degree,
but it probably to me it feelslike that's, you know, somewhat
opportunistic, because themarket as a whole, values aren't
down right, but but fewer homesare being sold.
And so if you are running abrokerage and you know at a
(12:04):
national level there's gonna befive million homes sold this
year, not eight right.
It creates an advantage for youto not go take those properties
to market because you are goingto control your ability to
double or double end the deal.
So is that why they're doing it?
Speaker 2 (12:23):
you think I know that's a spicy take it could be
between that, between even likethis has been a huge press
release too, so I think we'retalking about it right now.
We're talking about Compass.
We usually don't talk aboutCompass and everyone's talking
about Compass, so I think theychose a side and I think that is
(12:45):
really smart of them.
Speaker 1 (12:47):
Because now Press is press right.
Speaker 2 (12:48):
Right, and I think a lot of agents want to.
As you mentioned, they areincentivized by double lending
deals and so a lot of agents arelike oh wow, compass is
fighting for us, you know,against the MLS.
So I think it's a smart movefor them to kind of plant the
flag and put that out there.
(13:10):
I just think you know you dohave to look at it from a big
picture standpoint and you knowwhat does that actually do to
your sellers?
Is it the right thing to do?
And again, I think it's complexand it's going to be for each
seller.
I think that situation is veryunique.
Speaker 1 (13:31):
That's probably the hardest part with this whole
issue is that every real estatetransaction is different, so
every seller and buyer havedifferent needs and desires and
every house is different andevery house in each micro market
is different.
So if you were to tell meOrlando, florida, like I've got
an exclusive listing, it's likeokay.
(13:51):
I mean there's a year ofinventory there, Like that's
probably not going to provideany real value If you were to
say you know Solana beach in inSan Diego County, which is by
definition, I think the smallestamount of inventory nationally.
Um, you know, that would drivea lot of value.
So, um, yeah, it's kind of ait's a difficult issue for the
(14:12):
MLS to really control.
I would think, Right, yeah,Right.
Speaker 2 (14:15):
Yeah, it's uh, I mean we'll see.
We'll see what happens.
Maybe nothing happens.
I think you know some of thelarger like tech company, like
Zillow, for example, has saidwe're following MLS rules, like
we're not you know where, andusually I think in the past
Zillow has kind of pushed back abit and been known for that.
(14:36):
But they're like you know, wewant they've always kind of been
like we want what's fair forall, all buyers and sellers, and
I think you know again, I thinkthat there's a right way to do
it.
Yeah, and I think Compass isclose to maybe doing it the
right way.
I mean, they are saying allagents have access to this.
Speaker 1 (14:56):
It's just come on, like it's not real, walk into
their office.
Speaker 2 (14:59):
It's not realistic.
Like it needs to be publishedelsewhere.
Speaker 1 (15:03):
Yeah.
So, if you're okay, I want tokind of change gears here.
I have some questions for you.
Speaker 2 (15:10):
Uh-oh, I'm scared.
Speaker 1 (15:11):
Prepared some questions, so for our listeners,
if you haven't listened inother episodes.
Suzanne is the founder and CEOof Innovate Realty and a few
other businesses.
But Innovate Realty is anindependent brokerage in
Southern California, launched, Iguess, two years ago.
Speaker 2 (15:33):
It's May 8th.
Speaker 1 (15:35):
Wait a minute.
Tomorrow it'll be exactly twoyears when we got our license of
volume and currently sitting atabout 75 or $80 million worth
(15:59):
of listed volume in SouthernCalifornia.
So you're the, you know, you'rethe chief there.
Like, you're calling the shots,you're growing everything,
you're managing it all you know.
Looking back two years ago,what did you?
What would you have thought wasgoing to be a successful Q1 in
25?
And what's different from whatyou're seeing now?
(16:19):
And and you know how are you,how do you feel about those
numbers?
Speaker 2 (16:23):
Yeah, you know, I think that it, when we were
first chatting in 2023, I thinkthat we I don't want to say
naive is not the word, but Ifeel we didn't anticipate as
much of a market shift as we saw.
So I think we felt, over thepast two years, a significant
(16:47):
difference from the two yearsprior.
So, even as we were kind ofmaking our projections and
setting our goals, I think thatwe were looking quite a bit at
that historical data and not tosay that that wasn't right to do
, I think that we built systemsand the brokerage based off of
(17:09):
that.
You know, but I think what'sreally important there is, even
though we did have a marketshift, we built something that
we know when the market changes.
If we survive in these, youknow when the market is a little
more difficult and we'regetting by, we know that as soon
(17:32):
as the market does take a turn,we're in a really great spot.
And so I think we realized thatfairly quickly that we hit a
market shift, and so I think itjust set us up for the market
that we're ready for, you know,and for, I guess, I would say
for any type of market.
(17:55):
And now here we are in 2025,actually, you know, picking up a
ton of momentum.
Finally, I would say, gettingthe brand out there a little
more, which um has been.
I mean it.
It takes time right, like it'swho's innovate realty.
Speaker 1 (18:11):
So we're really honing in on these local markets
, that's the company that justsells a little more than compass
.
Yeah, exactly these localmarkets, that's the company that
just sells a little more thanCompass.
Yeah, exactly For all thelisteners Sells more than most
in the area.
Yeah, in the area.
Speaker 2 (18:23):
But you know, I think I think to my I don't want to
say to my detriment a little bit, but I'm a little.
I'm not very braggy, I'm notSure.
That's why I asked the question.
You're too humble?
Yeah, exactly You're setting meup.
But yeah, and so it's funny.
I mean we had a big event thispast weekend where we launched a
(18:44):
nine million dollar listing.
It's a you know kind of groundup construction.
Everything's brand new inCorona Del Mar and what's
interesting is, you know, someof the top top agents were, you
know, attended that event, and Imean our agents were that were
there, uh, done more real estatethan any of those people.
(19:05):
But they have a little bit moreof a name and the brand behind
them.
So, I think, um, I think it.
One thing that I can improve onis, um being a little more
vocal about our successes.
It's not the easiest for me todo, but in this industry it's
important.
You have to get the word outthere, and so I think we're at a
(19:27):
point where we are gettingthere and people are starting to
know who we are.
Speaker 1 (19:33):
Yeah, yeah, I mean I kind of double clicked on the
math a little bit and you knowthere's different markets in
Southern California, san Diego,orange County, la has a couple
of different markets in it andif you look at that volume
that's closing out by market andyou look at the total number of
transactions, our share of thattotal addressable market is
(19:56):
either stable or growing.
So as a per unit or volumebasis, the brokerage is growing
in each one of those markets,which is really impressive,
especially with the greatermarket that we're seeing.
I mean, the number of realestate agents hasn't really
licensed agents it's not goingdown, in fact it's still coming
(20:18):
up.
Agents hasn't really licensedagents it's not going down, in
fact it's still coming up.
But the total number of dealsbeing sold at a national level
is down by over 40%, and so forInnovate to continue to grow in
that kind of a climate, I thinkit's a testament to the team and
the process and your leadership.
But I guess the deeper questionis like what does the future
look like?
(20:38):
I know you're super humble, soit's hard for you to stand on
the soapbox and be like look atus, you know, but but what do
you see the future looking like?
And I mean, you touched on alittle bit about, you know,
setting a foundation, be readyfor the market to shift, um, but
that's not really what'shappening, because that was
already done and we're growingalready.
So we're growing through thetough market and you know, I
(21:00):
shouldn't say tough market, butwe're going through the market
that we're in and ready tocapitalize when it you know,
when it picks up.
So what do you think thatfuture looks like for Innovate
or agents at Innovate?
Speaker 2 (21:10):
Yeah, I think you know you're working at Innovate.
You're working with people thatunderstand the challenges in
the market and are working tosolve for those challenges.
So you know the clearcooperation like that's a great
example.
Is this really a huge challengethat everyone needs to be
focusing on, or we need to betalking that much about, like
(21:33):
you know, is that really goingto move the needle for the
problems that we see in theindustry right now, one being a
really great example of.
a consumer wants a move-in readyhome and in order to give them
that move-in ready home, a lotof times a seller has to either
(21:54):
live through some construction,pay a bunch of money out of
pocket.
Sometimes they do thatconstruction wrong because
they're thinking what they wouldwant if they were to move and
they waste a bunch of money onfixing things in their house
that maybe they didn't need todo so, whereas, you know, at
Innovate we're thinking thatthrough and thinking, hey, how
(22:15):
can we save sellers money, howcan we make that process easier
for them, help them by payingfor it upfront, telling them
exactly what they need to do tosell their home for more money
faster.
So, focusing on things that areactually going to help
stimulate the market and helpconsumers through these
(22:35):
challenges that they'reexperiencing.
I think that's what you knowyou're getting with innovate, um
, whereas you know a lot ofbrokerages out there.
I mean, I've been talking to alot of agents recently about you
know they're feeling there's afeeling of, maybe displacement
or you know where should I goand what should I do as all of
these changes come about.
Um, and feeling support fromyour brokerage.
(22:57):
And you know, there's theoption of going to these like I
hate to say pyramid scheme typebrokerages, but I don't want to
make anyone mad, but I mean.
To me that's what it is.
It's like the agent isincentivized to bring on other
agents, which is really greatfor that brokerage if they're
just making money off of all ofthese agents.
(23:19):
Yeah, cool, got it, but thatdoes.
What does that have to do withyou being a really great real
estate agent and coming up withtools and resources for the
actual client?
Speaker 1 (23:32):
Right.
Speaker 2 (23:32):
You know I am all about agents like making money
and they should be rewarded ifthey refer someone.
I fully, fully believe in that.
But I don't think that shouldever be the focus of the
brokerage, because now they'refocusing a little too much on
one side and not on the client.
(23:53):
I think what's really uniqueabout Innovate is we have that
healthy balance of both, wherewe came into this initially and
said, ok, we, we have twoclients, our agents, and then
our client clients, our buyersand sellers, and how do we solve
for both problems or anyproblems that will come up for
(24:15):
both parties in the market?
And that was the focus of thebrokerage and I think that's
what really sets us apart as ahome for agents and buyers and
sellers.
Speaker 1 (24:29):
Yeah, that's what I was going to try to reference.
I mean, from my vantage point,I don't get to work on all of
the different processes ordifferent issues at the
brokerage, but what I see is anoperation or a foundation that
is taking off.
You bring up the pyramid thingright.
There's brokers out there thatare saying hey, go recruit 100
(24:51):
agents.
What I hear us saying atInnovate is go generate leads
for sellers.
If there's a challenge or anissue to consummate and get that
(25:14):
deal done, let us help youoperationalize that so you can
continue to go and continue toget new leads for sellers and
buyers.
So we're pushing agents totransact and get better at
transacting to grow theirbusiness and book of business.
transact and get better attransacting to grow their
business and book of business,and then we're also
incentivizing them if they doattract people to come in, then
that's a side benefit, butessentially we're training and
developing agents to becomevalue add to a seller or buyer,
not full-time recruiters.
(25:34):
But the byproduct of being areally good agent that creates
value for your buyer or selleris that other agents want to
work with you.
Speaker 2 (25:41):
Right.
Speaker 1 (25:41):
Because that means there's other agents out there
that are not doing deals becausewe're growing the market share
Right.
So it's a.
I mean we're giving away all ofour secrets.
Speaker 2 (25:50):
I know, I know Execution's key.
Yeah, yeah, exactly.
But you know, I think that'sthe biggest difference and I
think for agents that are outthere really wondering like hey
is Compass, my home Is Real, myhome Is eXp it's one of those
things where and we've talkedabout it before when we founded
Innovate, we sat down, we lookedat all of these brokerages, we
(26:13):
looked at all of their offerings, which, you know, does give us
that unique advantage that weare only two years old, because
we were able to see really whereother places were missing the
mark not to say we're perfect,because nobody is, but we can
identify where those challengesare and how we can solve for
(26:33):
those with the team that we have.
Speaker 1 (26:35):
Yeah, it's awesome.
I feel like we've got a lot ofgreat momentum across all fronts
.
I don't understand why.
I mean I was at that event andkind of rubbed shoulders with
agents.
I don't understand why some ofthe top producing agents in our
local markets are not atInnovate.
It makes no sense to me.
And I get phone calls.
(26:57):
I mean I'm not running thebrokerage on a day-to-day basis
but I get phone calls asking touse specific products that we
offer to our sellers from agentsand I'm like yeah, come to the
brokerage.
Speaker 2 (27:07):
Yeah, exactly, you know, be easy.
What are you doing?
Yeah, yeah, you know, I thinkit's.
I mean, and I'll just say we'rein California, we're in
Southern California, where namescould carry a little more
weight than maybe they should.
You know, there is that, and Ithink we but I think we're
(27:37):
building that by doing goodbusiness and good work with our
agents.
So, you know, it's really justa matter of time, I think,
before agents realize what it isthat we have.
I mean we just put it all outthere today.
So now they know.
Speaker 1 (27:56):
Yeah Well, so Q2 is set up to be like, way you know,
more transactions than Q1.
Q1 was up year over year, andso what do you think the rest of
25 looks like for the brokerage?
Speaker 2 (28:08):
Are you asking me specific numbers?
Speaker 1 (28:10):
No, no, no, no, no.
I mean.
Speaker 2 (28:12):
I'm like we, we just had this conversation.
You're the numbers guy.
Speaker 1 (28:16):
Yeah.
Speaker 2 (28:17):
I'm the people girl.
Speaker 1 (28:19):
Yeah.
Speaker 2 (28:19):
Um, yeah, no, I mean I think I think we're feeling
the momentum, so we're onlyseeing things get better.
I think, um having a successfulQ1, um, in the, the current
market, we're in where you're Imean, as you said earlier, we're
down 40% year over year and forus still to be able to execute
(28:43):
the way we did, you know, andthat's in Q1.
So we know that we're going totake that momentum and take it
to the next level for the restof the year.
I see that a lot of people arereally holding on to take that
momentum and take it to the nextlevel for the rest of the year.
I see that a lot of people arereally holding on to hope that
interest rates are going down,yep, and I mean that that will
(29:03):
sway the market a bit.
So if interest rates do go downwhich you know I'm not
necessarily seeing that anytimesoon but if they do, um, I mean,
that's only going to help us.
But we're already on track tohave our best year yet.
Speaker 1 (29:20):
Yeah, and a lot of growth in terms of agent count
Right.
So, um you know, which is theby-product of doing good
business?
Yeah, so that's exciting.
Speaker 2 (29:28):
Yeah, okay, well, spotlight was on Innovate today.
Yeah.
Speaker 1 (29:33):
All right.
Speaker 2 (29:34):
Anything else to report?
Speaker 1 (29:37):
I don't think so.
I mean we, you know the suiteof companies, our platform, you
know everything seems to begrowing nicely.
I mean you know Bye Bye House,the company I run on a daily
basis, is growing in terms oftotal volume.
So you know we are seeing a lotof competition, you know, from
(29:57):
investors to buy new inventory,which is interesting.
We're seeing the same thingthat you've kind of reported on,
you know, taking new product tomarket.
We're seeing a lot of cashoffers on larger ticket price
houses.
So you know LA Orange Countytwo to $3 million properties are
selling very quickly right nowand if we get three offers, like
(30:20):
the last transaction we justclosed, two were cash and one
was a conforming loan- or youknow a traditional
non-conforming loan, so that'skind of an interesting data
point that we're seeing.
We still actually have not seena lot of buyers that lost their
house in the fires in.
Southern California, and Ithink that's a fundamental of
just insurance not all the waybeing paid out yet.
Speaker 2 (30:41):
Yeah, that plus.
I mean people when they weredisplaced.
They had to rent something orgo somewhere, so might be locked
in for a little while while allof that was worked out.
Speaker 1 (30:51):
So we, we, we expect to see some pickup there.
But, yeah, I mean, buy, buy,buy houses got, you know, a lot
of great momentum.
I mean, I think we have eightor nine properties on market now
to sell and like 10 or 11 inescrow to buy.
And you know, we bought twoyesterday and one tomorrow and,
um, you know so, there's a lotof great inventory that we're
seeing.
Um, you know so, and you know,the biggest fear that we have
(31:14):
right now is what's going tohappen with tariffs.
I mean, the vast majority ofappliances, lighting fixtures,
you know, finished fixtures, arecoming from China and um, I
won't, I won't say names, butI've, you've met him.
I have a friend that has a, um,a consumer facing product
business and, uh, he orders atremendous amount of raw
(31:36):
material or supplies and thenmanufacturers here stateside,
but, um, you know, had submittedan order for two and a half, 3
million bucks of material, uh'sin the ocean coming in and the
tariff hits and it's like, well,you know, that's now a seven
million dollar order.
Yeah, you know.
So I'm getting very worriedabout just finished product.
Speaker 2 (31:55):
Yeah.
Speaker 1 (31:56):
But you know, I go back to the.
You know, generally, when thiskind of stuff happens, there's
also an opportunity.
Speaker 2 (32:03):
Right.
Speaker 1 (32:04):
You know.
So there was a big industrialrevolution in China, and that
occurred because labor rateswere a fifth of what American
labor rates were.
So manufacturing the actualitem and getting it shipped here
was, you know, there was just aton of room, um.
But we're seeing that samething happen right now with
India.
So India is is growing rapidly,the infrastructure is, and
(32:28):
their labor rates are a fifth ofwhat China is today, and so we
think that a lot of our finishedquality fixtures and appliances
are going to start to come outof India over the next five
years or so, and we're activelyobviously in conversations now
to ensure that, if tariffs arepainful and create longer lead
times for product, um, that wehave access to it.
(32:49):
But I think you know, thebroader perspective on that is
that if you're a homeowner andyou're going to sell, you may
also have those same issues.
So if you have that oldrefrigerator or you know old
appliance package or your lightsare they were installed in the
50s original you're probablygoing to have two options which
is sell to an investor that hasa capacity to go and acquire
(33:13):
some of that inventory, whichobviously means a lower number
or invest a lot of money Rightand probably a lot of time to go
and find those things, yeah,source them and, like what we
talked about before, where it'slike are you making the right
decisions?
Speaker 2 (33:29):
Are you, you know?
Speaker 1 (33:31):
Yeah, we see, we see homeowners make those mistakes
all the time at the brokerage.
Like they say, hey, I went andspent 50 grand sprucing this all
up and we're like, oh shoot,you shouldn't have done that, um
, but I, I think you know thatis a.
You know this is again a veryselfish plug, but it's like if
you're a seller or a buyer ofreal estate in Southern
California, I don't know why youwouldn't be in contact with an
agent at Innovate, because thatagent has access to product or
(33:57):
you know services.
I guess that will make iteasier and cheaper to transact.
Speaker 2 (34:02):
Right.
Speaker 1 (34:04):
And so, if you're listening, you're a seller or a
buyer, please call us.
But yeah, that's really theonly other thing that we're very
concerned about at the momentjust making sure that we have
all those things lined up.
Speaker 2 (34:16):
So does that defeat the purpose of the tariffs?
If they're just movingeverything to India, I don't
know man.
Speaker 1 (34:24):
We.
You know, I think you know II'm not a global economist.
I love to read and I study alot of this stuff.
And so I want to preface anddisclose like my opinion is my
opinion.
Speaker 2 (34:35):
I don't know.
Speaker 1 (34:35):
Like I'm.
I'm not as smart as everybodyelse out there, but, um, you
know, I think look, you knowsome of the stuff that the the
that the current administrationis doing.
I think long-term actuallymakes a ton of sense, but the
way that they've announced itand the speed in which they're
taking action is creatingripples in the market.
(34:56):
That is pretty scary yeah.
Speaker 2 (35:00):
And I'd say avoidable with the proper rollout 100%.
Speaker 1 (35:04):
But to go back to what you're saying is, there's
these global powers or thesetrade relationships, and China
has what it has.
I don't know if we've talkedabout it in the podcast, but
they're aging rapidly.
So when you look atdemographics by age, the United
(35:27):
States is actually a prettyhealthy pyramid.
Older people are fewer andyounger generations are broader,
so the population is prettyhealthy.
Basically means that we havepeople to come in and continue
working and taking those jobs.
China is kind of like almostthe opposite.
It's not completely reversed,but there was a 20 year period
where people were having no kidsor one kid max, and so, um, the
(35:50):
labor rates are starting toincrease.
There's been a tremendous amountof investment to build that
industrial, you know, complex,essentially like to go and be
able to produce stuff, um, butif nobody can work in it, then
then they're dying.
They're dying and it happens tobe obviously China has some of
our debt and so, you know, Ithink there's like gamesmanship
(36:10):
there to a certain degree, youknow where, where India's kind
of you know different position,right, you know.
So I do think that long termthat stuff could make a ton of
sense, and I think I've saidthis previously.
But?
But you know, millennials arethe largest demographic United
States.
(36:30):
You know American millennialsare the largest demographic of
consumers on the planet, and soglobal economics, like
one-on-one, would say that hewho consumes controls the market
.
And so, and we consume moreshit than anybody in the whole
world, and by like a long ways,like three, 400%, nobody else
(36:51):
consumes what millennialsconsume, and so I think our
administration, or futureadministrations, have to
understand that and the way theycommunicate and take action you
know is going to be criticalbecause, um, you know, like I
watched a little thing, like afriend of mine sent me a standup
bit from Dave Chappelle and Ilove Dave Chappelle.
Speaker 2 (37:13):
Have you?
Have you seen that little DaveChappelle yeah?
Speaker 1 (37:16):
So he goes on this bit and he's like look, I don't
want to make Nikes, like I wantto wear Nikes.
He's like and everybody inAmerica wants to wear them, we
don't want to make them, and itwas kind of funny and obviously
there's more to it and whatnot,but I think it's right on point.
So I don't know.
I mean, I'm definitely worriedabout it.
When we interview people thatare either not going to college
(37:38):
or coming right out of college,they don't want to do the tough
jobs.
Speaker 2 (37:41):
I know they don't yeah.
Speaker 1 (37:43):
And so those jobs got to go somewhere.
Yeah, so slapping 145 percenttariff on a country that's
supplying that wants to do thejobs and a lot of it Right.
I don't know if that's, I don'tknow if that's going to play
out long term, and you know alsoit's gamesmanship Right, like
in any negotiation, if you wantto end up at 50, you can't start
(38:06):
there, right.
So maybe that's going to changebut, I, don't know, we'll see.
All right, but for now we'restill putting appliances in
houses and selling houses.
Speaker 2 (38:15):
So we're good, perfect, okay.
Well, I think we covered it.
Speaker 1 (38:20):
Yes.
Speaker 2 (38:21):
I think that's a wrap .
Speaker 1 (38:22):
Yeah, great episode.
Yes, I think I think that's awrap.
Yeah, great episode.
Uh, if you haven't done so,please subscribe.
It helps out a lot.
Uh, we also want your feedback,so we have different segments.
Uh, today we did not have aguest.
We have some really greatguests coming up uh, but provide
feedback to us and let us knowwhat you would like to hear from
us.
Uh, but we appreciate you uhlistening, subscribing, uh,
(38:43):
watching on YouTube.
You know we can't make thishappen without you guys doing
that.
So that's it, that's a wrap.
Speaker 2 (38:53):
See you next time.
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