WEBVTT
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From the entrepreneur's desk to the industry front lines and into real world operations.
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I'm Aaron Cardell, joined by Kyle Hunter and Jake Hamilton.
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And we're here to take the pulse of real estate technology in just 20 minutes.
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Hello, everyone, and welcome back to Prop Tech Pulse.
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Today I'm very excited to have uh Craig McClellan with us today.
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Um Craig has done a lot of things in the industry.
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Uh I think I met Craig, I don't know, eight, eight years ago, some at different industry events.
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Um it's been you know kind of fun seeing that.
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I think Craig, you were at uh Better Homes and Gardens at the time.
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Uh but you've really done a lot in the industry, and there's a lot of changes going on right now, uh consolidations, you know, all kinds of different rules coming out.
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And so um uh a couple weeks ago we were at uh at a conference, and you really gave a good talk on your perception, perception of like kind of what's going on.
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So I think it's great for this audience to kind of get uh a little bit of background.
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Uh so yeah, before we get started, if you just maybe touch on uh how you got here and what you've done in your past, and then we'll uh get into some of the topics.
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Cool.
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No, absolutely.
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I love it.
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And I appreciate you uh inviting me on and have a little bit of fun and have a discussion, hopefully uh educate some people or give them some insight that they may not have or perspective they had to have prior to it.
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But um, that was the Jared James conference in Orlando, right?
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Like I think was I drunk when I got on stage.
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Like I think there may have been some drinking.
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Like, I don't I don't know, but I saw I I mean I have the perfect talk track from when I was on stage, but um yeah, a little background on me.
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So I've been in the industry about 25 years.
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I had a small independent that I built and exited in 07, uh, joined Better Homes and Gardens Metro Brokers in 2008, helped scale that company and build it.
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We had about anywhere from 2800 to 3,000 agents in the Atlanta market with about 28 offices, whole own mortgage title insurance, all that good stuff.
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While I was there, had the opportunity of participating and leading uh the pivot of zip reality off the public market, where they ended up exiting to um Reality, and we were the powered by Zip model that we were changing the dynamics of the model, and then took that money and actually invested in a company called OpCity uh in the space and helped scale OpCity, exited to Realtor.com, was heavily involved in um.loop, uh, had an exit called eTorch, and now I have about 15 companies that prop tech and fintech companies that I have some ownership capacity and a small unstructured angel that I have in Atlanta.
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Um when I left Better Homes and Gardens in 22, uh went to a company called Bayview, largest, largest privately held MSR uh in the world, and um got to participate in the secondary market and build a national brokerage company.
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Um so got to see the dynamics of like what's going on in the secondary market, why did why is brokerage so important to them?
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How does it play into like the facets of how these things work uh and really opened my eyes from not just the real estate space or the prop tech space and like just all the different things going on?
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Currently I'm CSO over at a great startup called Raise, um that's doing some really cool stuff in the industry, and uh kind of my full-time uh focus right now is I'm CSO over at Home Story, which is uh a deep uh relationship with uh mortgage partners and with banks uh and their lead source and their clientele.
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And I just recently opened a uh well, bought into a firm, uh Local Reality, that's a local independent uh in Atlanta.
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My niece is actually running the day-to-day operations, but I'm the president of the firm.
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So that's kind of like the did I miss anything?
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I covered all, got everything?
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No, I think that's great.
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No, and I um, you know, obviously you've done a lot um and you've seen it a lot from a lot of different areas.
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And I think what was valuable, there's been a couple major uh consolidations and and changes to the market.
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So um first um I'd like to touch on the um Mr.
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Cooper, Mr.
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Cooper, Rocket Redfit.
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I mean, that I I think a lot of people that are maybe not as close as you are, and you having that experience both with being a veteran on the gardens, you know, building out a mortgage, building out understanding that side of it, but then also they view come with a different perspective and really a lot more understanding of some of the the reasoning behind it and how it can potentially impact, you know, the the residential side of the business, which is um, you know, kind of the side that we primarily playing on.
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Yeah.
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So um I'll give you some stats just for the fun of it.
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Like we'll kind of like build up, build a little bit of a picture.
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But uh the Rocket, Redfin, and Mr.
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Cooper acquisition is is obviously ecosystem play.
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Many people have talked about why it's an ecosystem play and how that works, but um, I'll give you like a couple things that are I I they stick out in my mind.
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And one of them is that um uh origination, which is what Rocket really was their target market, was they they they solved this problem that was origination.
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They were not the MSR mortgage servicing rights portfolio.
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That's what Mr.
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Cooper is, and they weren't north of funnel on that.
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They were kind of in the middle.
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So what they would do is they'd originate deals and they would bucketize those mortgages and they'd sell the mortgages.
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They weren't they weren't a servicer.
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So like baby was a servicer and learned a lot about like where the money's at and how that functions.
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But one thing with originations that is so unique is that even today, less than 15% of consumers start their journey with origination with a digital process, uh, which seems like it's not that big of a deal.
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But in real estate, 85% of consumers start their process with a digital process.
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So they start their journey of exploring um homes uh through a digital process.
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The reason why that's important is because the mortgage industry has been working for decades to try to figure out how to pivot consumers to a digital experience.
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So if you if you partner with uh with um Redfin, just think of it this way, you've got consumers starting the process digitally.
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And it's easier to roll them into origination digitally.
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Here's the other thing is the funnel has reorganized.
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Uh, and this is a lot of what you know, Zillow put all the data out public in 2000 uh or 2006 and you know changed the dynamics of the consumer.
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There was a big push that happened in 19 through 22, and that was a lot of millennials came to the market.
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We had 78 million millennials came to the market.
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Actually, nobody talked about that because there was this thing that happened called COVID.
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Um, but all of them bought houses.
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Well, this is what happened in 24.
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In 24 is that um the people that were buying houses, 70% of them had a house to sell.
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So they were all move-ups.
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But what happened was when you have 70% of your buyers down funnel that are actually have a house to sell, 85% of them were actually using the same agent to list as they did to buy with, which means you had an influential party up funnel that was affecting your ability to penetrate at the buy level.
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Does that make sense?
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So if I'm an originator, here's two problems.
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One is my consumers are none of them are digital.
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Even with everything that Lone Depot and Rocket and everybody have done, it's a small fraction that are digitally starting their experience, which kind of blows your mind.
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The other thing is the fact that my consumers are developing a relationship with the real estate agents at the listing table, not at the buying table.
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So by the time they get to the buying table, there's an influential relationship that already exists.
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So how do I get to the listing table?
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How do I get there?
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So those two things were very important, saying, all right, we need to figure out how to get integrated into the real estate part of the transaction in a very immersive and very intelligent and very intentional way.
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Um, and that was like Rocket goes, all right, well, we need to do that.
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Now, your question was about Mr.
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Cooper, not about Redfin.
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Now, the reason why it's important is because I got to increase my capture at the origination stage, and I have to lower my CAC, my customer acquisition cost, because I have to have a natural way of being interacting with the consumer top of funnel.
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And here's the reason why is because once I originate them, the goal is I put them into this MSR mortgage servicing rights portfolio, and that's really where I make my money.
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Fun stat is it is um the the mortgage industry in the United States of America, the mortgage debt, not the equity in a house.
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So if your house is paid off, this doesn't count.
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But if you have$100,000 worth of mortgaged portion of your home, this counts in it.
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That represents$13 trillion across the US market.
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Okay.
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Now that represents 70% of the entire debt, personally held debt in the US.
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Now, if you think that that is a big piece, the$13 trillion, it's only a fraction across the globe.
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Like globally, that's$289 trillion worth of value.
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So these MSRs, they're servicing two or they have a potential to service$13 trillion worth of money to service.
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That is not the value of the secondary market.
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That's just the value of what they're servicing.
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So you think of all the things they build around it to service it and haul the revenue streams off it, right?
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The real estate industry entirely is like a six to seven trillion dollar market.
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Okay, like that.
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So so for me to find a piece of a$13 trillion market to buy a$6 trillion market makes a lot of sense.
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So for me to buy a redfin, to participate the consumer up funnel, to originate their loan, to push them into my MSR to service them.
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And if I can service them for five to seven years, right, like this is where my model lies.
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This is where the revenue lies.
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Does that make sense?
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Like that is the that's the that's the picture.
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Well, and then you know, it doesn't hurt with Red and having a top four portal.
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Um, you know, having a great they got a great portal.
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Their consumers are digital, they've already got the workflow, they they've got a unique um W-2 market of agents.
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They had 2,200 W-2 agents, and then they had about 10,000 partner agents, and they were able to refine their model and say, hey, now we've got I think they have 24, 2600 um W-2 agents.
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And the reason why that's really important too is this thing, this this, I think it's a five-level letter word RESPA in our industry that we have to be very careful about.
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When you uh when you're a W-2, then Real Estate Settlement Services Act, right?
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So like CFPB is enforcement capabilities for RESPA.
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And if you have a W-2 agent and you have a W-2 loan officer, they fall under fair trade.
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And fair trade says that they can cross-sell products, right?
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And so it creates a different dynamic.
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Doesn't mean they're completely um uh removed from any of the RESPA rules they have to abide by, but they're removed from about 80%.
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So you and I have baseball teams, okay?
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And and we're gonna we're gonna we're gonna play against each other.
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And um you have we have a set of rules, and those are the RESPA rules, right?
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But you've got we have all nine-year-olds on the team, but I put a 25-year-old on the team, just one, just one 25-year-old on team.
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It changes the dynamics of the game, and that's kind of how I look at this is like, yeah, they didn't get out of all of the respir rules, but they've got a couple 19-year-olds on their team, so you better watch out.
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Like it's gonna play different, like ball is gonna play different, right?
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Well, and I think it's a great analogy because I think you know, a lot of getting again in our industry, um, you know, agents, gosh, how long did it take for them to make the changes in the Bioburger agreement or even understand it, or even simple things like that, but then you guys start getting outside of their understanding, you know, there's a big impact and there's a big play of getting that kind of consumer and that long-term consumer.
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And I think if we just kind of juxtapose that with the compass anywhere acquisition, I think similar goals, but coming at it from a different direction, you know, almost from that real estate side.
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And, you know, I feel like there's a battle, but I'd love to, you know, have your thoughts on on what that reason and and and how that plays in.
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They they they all play together.
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Um, and this is how they play together.
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This is the way that I think they play together.
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And like my opinion is just an opinion, so like guard in the garbage.
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I don't speak for any companies.
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Um but it so if you look at what Rocket did, Rocket is profiled on the public market, and the public market gives them a stamp of approval or a price, and they say, all right, well, your price today, because of what you're doing with your business model, the opportunity that's in front of you with the trajectory and the direction you're headed, is$70,$80,$90 a share price.
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Okay.
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Well, the higher that share price goes, the more liquidity the company has to do more things.
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So they want to keep on increasing that.
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So Rocket says, hey, we're gonna go over here and we're gonna buy this brokerage company or buy this MSR and we're gonna we're gonna create this ecosystem.
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Well, all of a sudden they have more value, but this is what happens is they move their profile.
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So the profile went a little bit to the left when they did this because now people look at them and they say they're not an origination company just because now they own the dynamic of real estate, they own the dynamic of the MSR.
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So the profile has moved to an ecosystem.
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Does that make sense?
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Well, there's a company, a well-known company that was profiling behind them, and it was Zillow.
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Zillow was very close to their profile.
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If you look to the earnings calls, they they profile themselves very close to looking like a rocket because they want their shareholders to go, hey, they look more like a rocket than an anywhere.
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They look more like a like a rocket, so they're kind of leaning this direction, right?
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Well, when Rocket just kind of took off, so now Zillow's sitting here, right?
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Well, there's another company that is looking at their profile also.
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So you look at like a compass, compass says, hey, if we actually buy anywhere and we own a large portion of the data, we become more of a data company.
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Who's a data company?
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Well, Zillow's a data company.
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So if I can take my$8 shares and I can move a little bit closer to a Zillow share price, which is$79, let's just say I double my share price, I've got a lot of money that I and liquidity.
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So if I need to pay off, let's say a debt carry, I can pay off my debt carry, right?
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If I pick up Apollo's debt, right?
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There's there's a lot of things you can do in the public market when you adjust your profile.
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Um, and that's what that's what this is about.
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Like Rocket is adjusting their profile.
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They're creating an ecosystem, they're becoming more of an ecosystem and less of an originator, right?
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Zillow has to figure out like, are they gonna move that direction?
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Are they gonna move another direction?
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Like, what are they gonna do to adjust their profile?
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Because right now they have a profile of being Zillow, right?
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Like I'm being in this data play.
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Like Compass is like, hey, if we combine like these couple of entities and we have a mass market share, then can we adjust our profile because we have a different dynamic to our business, right?
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We added this new dynamic, which is this data set.
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Like now we can actually leverage data and we can we can use it for revenue, we can use it for these different things, different capabilities.
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If I could take 15% of all of my listings and and put them on a special portal that drives consumers, right?
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Like, is that a revenue stream?
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Right, if Villo had to pay to get to the listings, if like there's all these different dynamics that happen.
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Um, so like that's the way that's the way that I look at like the moves that are happening.
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I think they're fascinating.
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I think they're fun to watch.
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I think that we have a very resilient market.
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I don't think you know everybody's like, it's it's gonna go away.
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It's like, no, it's not.
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Workers are gonna be around forever, agents are gonna be around forever.
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They're gonna look different.
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The market share is gonna be different, their competitors will be different, how they interact with consumers will be different, but but like the industry is not by any means going away.
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I think that it has lots of opportunity because of these things going on.
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That's just no, it like it's uh I I don't want to um get into it because it just dropped and I don't know enough about it or whatnot, but you know, chat GPT and the ability to search for Zillow right built into chat GPT.
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That's going to be interesting on how things change the market.
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So you know, you know my opinion on it?
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What's that?
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Yes, because I got an opinion about everything.
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90% of my opinions are wrong.
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Um, I don't know that Zillow has the right to use an MLS feed under an IDX feed to create derivative works that are placed on someone else's domain.
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Like they don't control this.
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Is I mean, you know, there's a couple people that have already come out saying, like, this is kind of like the Microsoft deal with Bing.
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This is kind of like there's there's there's like, can you take an IDX feed of other brokers' listings and create a derivative work off it?
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And then in those MLX feeds, like you don't necessarily, so I don't know how that the response is gonna happen there, but I would assume there's gonna be a response to it because they don't own chat, like so anyways.
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I've seen a couple interesting takes on LinkedIn for sure, and uh so we'll we'll we'll see how that plays out.
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But um, but yeah.
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So I used to read I used to read comic books for humor in the past, and now there's LinkedIn.
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So it's just it's good.
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It's like it's like uh the the soap opera world of of you know the business industry.
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It's like people post without thinking sometimes.
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It's good, it's good stuff.
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I love it.
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Or after a couple of glasses of wine or something.
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That's that.
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That's it.
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I didn't want to say that, but yeah.
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Um let's you know, pivoting gears a little bit, you know, uh obviously you've been with uh a diverse group you know you know well versed in the real estate industry.
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You're now with you mentioned a company called local.
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Um and and so how do you think an independent company like yourself, um, you know, how does that compete when you see these types of consolidations and these types of moves by larger you know entities?
00:16:24.720 --> 00:16:31.039
Like what do you think is that secret to having these companies maintain and and continue to thrive in those?
00:16:32.240 --> 00:16:43.200
I think I am I'm very much a um a believer, and it's been proven over and over again, is if you provide true value, you'll always have a place in the space, right?
00:16:43.279 --> 00:16:52.720
In any space you're in, whether it's mortgage, whether it's real estate, whether it's what prop tech, what it doesn't matter what it is, if you provide a solution that is true value to your consumer, then you'll always have a space.
00:16:52.879 --> 00:16:59.200
So, like what is going on with real estate is like we got in this world of generalization and headshops where it's just like it's just a head count.
00:16:59.279 --> 00:17:05.359
We need a bunch of agents and they're very general and they've got okay tools and okay offering and okay, okay, okay, okay, okay.
00:17:05.440 --> 00:17:05.839
Right.
00:17:06.079 --> 00:17:13.839
And um, where I see it going, like, is if you want to thrive in this industry, anybody can be mediocre, but if you want to thrive in this industry, you're gonna have to specialize.
00:17:14.000 --> 00:17:17.200
You're gonna have to have a niche that you're like, this is my thing.
00:17:17.359 --> 00:17:22.880
Like I I list more houses on this lake than any, I know this lake better than anybody else.
00:17:22.960 --> 00:17:26.720
I this luxury category in this town, this is like this is my baby.
00:17:26.880 --> 00:17:28.240
Like I'm the guy for this.
00:17:28.319 --> 00:17:33.839
And like someone comes to you and says, Hey, will you sell a you know a middle market property down in suburbia, New York?
00:17:34.079 --> 00:17:35.759
Like, no, like that's not what I do.
00:17:35.839 --> 00:17:37.039
I'll refer it out to somebody else.
00:17:37.119 --> 00:17:43.039
So so the specializations will become very hyper-local, uh, and they're gonna and they're gonna be very defined.
00:17:43.119 --> 00:17:52.079
And I think that this is an opportunity for the agents to shine because as companies get bigger, they get more vanilla, and the agents, the agents shine is what happens.
00:17:52.160 --> 00:17:58.240
Like they have a unique proposition, they have a unique offering, they have a unique customer set, they have a unique like these things.
00:17:58.319 --> 00:18:06.480
So, like I I'm a huge believer, is like know your value, know how to articulate your value and deliver on your value.
00:18:06.640 --> 00:18:09.599
Like that if you can do that, nobody can replace you.
00:18:09.680 --> 00:18:11.359
Absolutely nobody can replace you.
00:18:11.759 --> 00:18:13.680
Yeah, no, I think it's a great point.
00:18:13.759 --> 00:18:31.680
I think you've always kind of lived by um having value as front and center, whether it's value that you as a brokerage broker is offering to your agents, or if you're an agent that you're offering to your consumers, or you know, if you even level up, it's what the franchise owner is offering to their franchisees.
00:18:31.920 --> 00:18:34.000
And it's you know, it's all about the dots.
00:18:34.160 --> 00:18:45.440
And right now we're in the middle of MLS, you know, what are they providing and what are they doing to you know stay relevant and and to really stay, you know, continue with a big chunk of of their meaning, you know, kind of pulled out.
00:18:45.599 --> 00:18:53.759
So if you if you have uh if you have a uh if you have two or three large mega brokers that are developed, like then that will be the question.
00:18:53.839 --> 00:18:58.400
Like that will be the real question that's gonna be answered like what is the what is NARS value?
00:18:58.640 --> 00:19:02.720
Not that I think NAR has value, but they're gonna have to have very defined value.
00:19:02.960 --> 00:19:04.559
What is the association's value?
00:19:04.720 --> 00:19:06.640
What is the MLS's value, right?
00:19:06.720 --> 00:19:13.599
Because if you have brokerage companies that start building private networks and they're they're holding data, like what does the MLS do?
00:19:13.920 --> 00:19:15.599
They can't share co-op commissions anymore.
00:19:15.680 --> 00:19:17.279
Like that's already been taken away, right?
00:19:17.359 --> 00:19:19.519
That's not part of the value offering they have.
00:19:19.599 --> 00:19:21.839
And then they're no longer the data repository.
00:19:21.920 --> 00:19:23.599
There's now like a subset of data.
00:19:23.839 --> 00:19:25.279
So it's like, what where do they live?
00:19:25.359 --> 00:19:31.119
So they they have to they have to figure out what their value is and they have to articulate their value and they have to deliver on their value, just like anybody else.
00:19:31.200 --> 00:19:37.519
Like that's that is, Kyle, that is the um that is the premise or the bedrock of a good company, right?
00:19:37.599 --> 00:19:44.720
Like an agents are a company, and brokerage companies are a company, and teams are a company, and Top Tech is a company, and like they're these are companies.
00:19:44.880 --> 00:19:46.319
So you have to know your value.
00:19:46.480 --> 00:19:47.759
You have to articulate your value.
00:19:47.839 --> 00:19:52.240
Otherwise, if your consumer doesn't understand what your value is, like that you're not gonna sell anything, right?
00:19:52.319 --> 00:19:53.599
And you have to deliver on it.
00:19:53.759 --> 00:19:59.759
Because if you don't deliver on it, eventually people are gonna realize like, yeah, I got sold a bill of goods that didn't deliver.
00:20:00.319 --> 00:20:01.680
And I'll never use them again.
00:20:02.319 --> 00:20:02.880
That's what happens.
00:20:02.960 --> 00:20:04.319
And eventually it comes back to bite you.
00:20:04.400 --> 00:20:06.559
It's like karma comes back and gets you.
00:20:06.720 --> 00:20:09.119
So like that's my, you know, that's my shtick.
00:20:09.519 --> 00:20:10.240
No, I hear you.
00:20:10.319 --> 00:20:13.680
And I, you know, a lot of the MLSs are doing some unique things.
00:20:13.839 --> 00:20:16.640
And there's a lot of everyone's having a pivot.
00:20:16.720 --> 00:20:27.119
And I think that they're um, you know, so there's some cool things coming out of the forcing mechanism of change and you know, all of the things that go along with that uh to provide stuff.
00:20:27.440 --> 00:20:37.440
Uh I think wrapping it up, you know, this is CrossTech Pulse, and you as a um someone who's been, um I think you were early on, dot loop and and some other systems.
00:20:37.599 --> 00:20:42.559
I know you you've used uh some of our back office tools in the past and growth metrics and things.
00:20:42.799 --> 00:20:47.920
Um, but you know, where do you see technology going in the future?
00:20:48.160 --> 00:20:59.599
And um, you know, both from a local level, but also just in the broker sphere, you know, especially with the AI noise that's happening, that there's some usage, but there's also other things going on.
00:20:59.680 --> 00:21:06.079
Uh yeah, and you as being a CSO of uh you know uh a technology company and some others, like where do you think that's going from?
00:21:06.720 --> 00:21:10.799
I think there's gonna be massive efficiencies that's gonna happen in companies due to AI.
00:21:10.880 --> 00:21:21.200
Like intelligent companies are using um AI to create great efficiencies on the back end, um, like behind the scenes, because it's uh a lot of the AI is not consumer-facing ready.
00:21:21.279 --> 00:21:22.799
It's not ready to interact with a consumer.
00:21:22.880 --> 00:21:25.119
Like, I I covet that relationship with the consumer.
00:21:25.279 --> 00:21:26.720
Like, I think it's very, very important.
00:21:27.039 --> 00:21:37.279
Um, so I'm like I'm a little more reserved as to like, oh, I want AI just calling everybody and doing all these things, like but the back end, like the efficiencies, the decisions with big data and stuff like that.
00:21:37.359 --> 00:21:44.559
So as we move into this big data world, like we're gonna have to figure out revenue streams for big data and stuff like that, and AI will play a significant role in that.
00:21:44.720 --> 00:21:51.200
Um, and I think I think that companies are gonna have to run smarter and they're gonna have to run more of a business than than just a relationship.
00:21:51.359 --> 00:21:54.559
Hey, I'm I'm just gonna get a bunch of agents together and it's gonna work out somehow.
00:21:54.960 --> 00:21:56.559
So, you know, I'm not gonna hire every agent.
00:21:56.640 --> 00:22:20.720
I'm gonna have agents that align with what I'm doing, and we're gonna we're gonna have this value set that is that's very clear, and we're gonna deliver on it as a team, and we're gonna leverage AI to actually, you know, figure out like where how can I leverage my people to put them in the most efficient, productive role and leverage AI to remove the the daily tasks and the data spreadsheet things that are going on.
00:22:21.039 --> 00:22:22.240
I've got a proposal for you.
00:22:22.319 --> 00:22:26.400
Like, I think that we should start a petition uh to bring DPN back.
00:22:26.559 --> 00:22:30.319
Like, I think that we should like we can take over the world with DPN.
00:22:30.400 --> 00:22:36.960
I mean, a DOS-driven system, you know, the green screens, like hey, you know what?
00:22:37.039 --> 00:22:38.079
There was a lot of data in there.
00:22:38.880 --> 00:22:40.400
There's a lot of data in there, man.
00:22:40.559 --> 00:22:42.480
Like good deal.
00:22:42.720 --> 00:22:44.319
Well, Craig, uh, it's been a pleasure.
00:22:44.480 --> 00:22:45.039
Appreciate it.
00:22:45.119 --> 00:22:47.039
Um live from Atlanta Airport.
00:22:47.119 --> 00:22:48.319
Uh, thank you for joining today.
00:22:48.640 --> 00:22:49.440
I'm Phoenix right now.
00:22:49.519 --> 00:22:51.359
I'm headed to Atlanta, so this is Phoenix, man.
00:22:51.519 --> 00:22:52.160
There you go.
00:22:52.240 --> 00:22:52.640
All right.
00:22:52.799 --> 00:22:53.759
Well, thanks a lot.
00:22:54.319 --> 00:22:55.200
Take it easy, Craig.
00:22:55.440 --> 00:22:56.000
All right, brother.
00:22:56.079 --> 00:22:56.960
Have a good day.
00:22:57.200 --> 00:22:58.640
That's our pulse for today.
00:22:58.880 --> 00:23:03.279
Keep innovating, keep implementing, and keep moving real estate forward.
00:00:00.719 --> 00:00:05.919
From the entrepreneur's desk to the industry front lines and into real world operations.
00:00:06.160 --> 00:00:09.679
I'm Aaron Cardell, joined by Kyle Hunter and Jake Hamilton.
00:00:09.759 --> 00:00:13.279
And we're here to take the pulse of real estate technology in just 20 minutes.
00:00:13.599 --> 00:00:16.559
Hello, everyone, and welcome back to Prop Tech Pulse.
00:00:16.719 --> 00:00:20.239
Today I'm very excited to have uh Craig McClellan with us today.
00:00:20.399 --> 00:00:23.120
Um Craig has done a lot of things in the industry.
00:00:23.280 --> 00:00:28.480
Uh I think I met Craig, I don't know, eight, eight years ago, some at different industry events.
00:00:28.640 --> 00:00:31.199
Um it's been you know kind of fun seeing that.
00:00:31.280 --> 00:00:34.560
I think Craig, you were at uh Better Homes and Gardens at the time.
00:00:34.640 --> 00:00:44.640
Uh but you've really done a lot in the industry, and there's a lot of changes going on right now, uh consolidations, you know, all kinds of different rules coming out.
00:00:44.880 --> 00:00:54.399
And so um uh a couple weeks ago we were at uh at a conference, and you really gave a good talk on your perception, perception of like kind of what's going on.
00:00:54.560 --> 00:00:58.960
So I think it's great for this audience to kind of get uh a little bit of background.
00:00:59.200 --> 00:01:07.760
Uh so yeah, before we get started, if you just maybe touch on uh how you got here and what you've done in your past, and then we'll uh get into some of the topics.
00:01:08.079 --> 00:01:08.400
Cool.
00:01:08.560 --> 00:01:09.200
No, absolutely.
00:01:09.280 --> 00:01:09.599
I love it.
00:01:09.680 --> 00:01:18.640
And I appreciate you uh inviting me on and have a little bit of fun and have a discussion, hopefully uh educate some people or give them some insight that they may not have or perspective they had to have prior to it.
00:01:18.799 --> 00:01:21.280
But um, that was the Jared James conference in Orlando, right?
00:01:21.359 --> 00:01:23.040
Like I think was I drunk when I got on stage.
00:01:23.120 --> 00:01:24.560
Like I think there may have been some drinking.
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Like, I don't I don't know, but I saw I I mean I have the perfect talk track from when I was on stage, but um yeah, a little background on me.
00:01:31.840 --> 00:01:33.519
So I've been in the industry about 25 years.
00:01:33.680 --> 00:01:42.159
I had a small independent that I built and exited in 07, uh, joined Better Homes and Gardens Metro Brokers in 2008, helped scale that company and build it.
00:01:42.319 --> 00:01:49.280
We had about anywhere from 2800 to 3,000 agents in the Atlanta market with about 28 offices, whole own mortgage title insurance, all that good stuff.
00:01:49.439 --> 00:02:20.960
While I was there, had the opportunity of participating and leading uh the pivot of zip reality off the public market, where they ended up exiting to um Reality, and we were the powered by Zip model that we were changing the dynamics of the model, and then took that money and actually invested in a company called OpCity uh in the space and helped scale OpCity, exited to Realtor.com, was heavily involved in um.loop, uh, had an exit called eTorch, and now I have about 15 companies that prop tech and fintech companies that I have some ownership capacity and a small unstructured angel that I have in Atlanta.
00:02:21.039 --> 00:02:32.960
Um when I left Better Homes and Gardens in 22, uh went to a company called Bayview, largest, largest privately held MSR uh in the world, and um got to participate in the secondary market and build a national brokerage company.
00:02:33.120 --> 00:02:38.319
Um so got to see the dynamics of like what's going on in the secondary market, why did why is brokerage so important to them?
00:02:38.400 --> 00:02:47.520
How does it play into like the facets of how these things work uh and really opened my eyes from not just the real estate space or the prop tech space and like just all the different things going on?
00:02:47.680 --> 00:03:08.639
Currently I'm CSO over at a great startup called Raise, um that's doing some really cool stuff in the industry, and uh kind of my full-time uh focus right now is I'm CSO over at Home Story, which is uh a deep uh relationship with uh mortgage partners and with banks uh and their lead source and their clientele.
00:03:08.800 --> 00:03:15.680
And I just recently opened a uh well, bought into a firm, uh Local Reality, that's a local independent uh in Atlanta.
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My niece is actually running the day-to-day operations, but I'm the president of the firm.
00:03:18.960 --> 00:03:21.439
So that's kind of like the did I miss anything?
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I covered all, got everything?
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No, I think that's great.
00:03:24.240 --> 00:03:30.080
No, and I um, you know, obviously you've done a lot um and you've seen it a lot from a lot of different areas.
00:03:30.159 --> 00:03:38.080
And I think what was valuable, there's been a couple major uh consolidations and and changes to the market.
00:03:38.319 --> 00:03:44.960
So um first um I'd like to touch on the um Mr.
00:03:45.039 --> 00:03:45.759
Cooper, Mr.
00:03:45.840 --> 00:03:47.360
Cooper, Rocket Redfit.
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I mean, that I I think a lot of people that are maybe not as close as you are, and you having that experience both with being a veteran on the gardens, you know, building out a mortgage, building out understanding that side of it, but then also they view come with a different perspective and really a lot more understanding of some of the the reasoning behind it and how it can potentially impact, you know, the the residential side of the business, which is um, you know, kind of the side that we primarily playing on.
00:04:15.360 --> 00:04:15.599
Yeah.
00:04:15.840 --> 00:04:18.560
So um I'll give you some stats just for the fun of it.
00:04:18.720 --> 00:04:21.120
Like we'll kind of like build up, build a little bit of a picture.
00:04:21.199 --> 00:04:24.079
But uh the Rocket, Redfin, and Mr.
00:04:24.240 --> 00:04:27.279
Cooper acquisition is is obviously ecosystem play.
00:04:27.360 --> 00:04:33.839
Many people have talked about why it's an ecosystem play and how that works, but um, I'll give you like a couple things that are I I they stick out in my mind.
00:04:33.920 --> 00:04:41.920
And one of them is that um uh origination, which is what Rocket really was their target market, was they they they solved this problem that was origination.
00:04:42.000 --> 00:04:44.319
They were not the MSR mortgage servicing rights portfolio.
00:04:44.399 --> 00:04:44.879
That's what Mr.
00:04:44.959 --> 00:04:47.120
Cooper is, and they weren't north of funnel on that.
00:04:47.199 --> 00:04:47.920
They were kind of in the middle.
00:04:48.000 --> 00:04:52.639
So what they would do is they'd originate deals and they would bucketize those mortgages and they'd sell the mortgages.
00:04:52.720 --> 00:04:53.920
They weren't they weren't a servicer.
00:04:54.079 --> 00:04:58.319
So like baby was a servicer and learned a lot about like where the money's at and how that functions.
00:04:58.399 --> 00:05:10.079
But one thing with originations that is so unique is that even today, less than 15% of consumers start their journey with origination with a digital process, uh, which seems like it's not that big of a deal.
00:05:10.240 --> 00:05:14.319
But in real estate, 85% of consumers start their process with a digital process.
00:05:14.399 --> 00:05:19.120
So they start their journey of exploring um homes uh through a digital process.
00:05:19.279 --> 00:05:26.560
The reason why that's important is because the mortgage industry has been working for decades to try to figure out how to pivot consumers to a digital experience.
00:05:26.720 --> 00:05:33.839
So if you if you partner with uh with um Redfin, just think of it this way, you've got consumers starting the process digitally.
00:05:33.920 --> 00:05:36.160
And it's easier to roll them into origination digitally.
00:05:36.319 --> 00:05:39.279
Here's the other thing is the funnel has reorganized.
00:05:39.360 --> 00:05:46.959
Uh, and this is a lot of what you know, Zillow put all the data out public in 2000 uh or 2006 and you know changed the dynamics of the consumer.
00:05:47.120 --> 00:05:52.399
There was a big push that happened in 19 through 22, and that was a lot of millennials came to the market.
00:05:52.480 --> 00:05:54.240
We had 78 million millennials came to the market.
00:05:54.399 --> 00:05:57.439
Actually, nobody talked about that because there was this thing that happened called COVID.
00:05:57.519 --> 00:05:58.959
Um, but all of them bought houses.
00:05:59.040 --> 00:06:00.399
Well, this is what happened in 24.
00:06:00.560 --> 00:06:07.759
In 24 is that um the people that were buying houses, 70% of them had a house to sell.
00:06:07.920 --> 00:06:09.519
So they were all move-ups.
00:06:09.839 --> 00:06:28.160
But what happened was when you have 70% of your buyers down funnel that are actually have a house to sell, 85% of them were actually using the same agent to list as they did to buy with, which means you had an influential party up funnel that was affecting your ability to penetrate at the buy level.
00:06:28.319 --> 00:06:28.959
Does that make sense?
00:06:29.120 --> 00:06:30.959
So if I'm an originator, here's two problems.
00:06:31.120 --> 00:06:33.120
One is my consumers are none of them are digital.
00:06:33.279 --> 00:06:40.959
Even with everything that Lone Depot and Rocket and everybody have done, it's a small fraction that are digitally starting their experience, which kind of blows your mind.
00:06:41.120 --> 00:06:48.879
The other thing is the fact that my consumers are developing a relationship with the real estate agents at the listing table, not at the buying table.
00:06:48.959 --> 00:06:51.920
So by the time they get to the buying table, there's an influential relationship that already exists.
00:06:52.079 --> 00:06:53.600
So how do I get to the listing table?
00:06:53.759 --> 00:06:54.480
How do I get there?
00:06:54.639 --> 00:07:07.120
So those two things were very important, saying, all right, we need to figure out how to get integrated into the real estate part of the transaction in a very immersive and very intelligent and very intentional way.
00:07:07.279 --> 00:07:10.399
Um, and that was like Rocket goes, all right, well, we need to do that.
00:07:10.560 --> 00:07:12.399
Now, your question was about Mr.
00:07:12.560 --> 00:07:14.079
Cooper, not about Redfin.
00:07:14.480 --> 00:07:26.560
Now, the reason why it's important is because I got to increase my capture at the origination stage, and I have to lower my CAC, my customer acquisition cost, because I have to have a natural way of being interacting with the consumer top of funnel.
00:07:26.720 --> 00:07:34.399
And here's the reason why is because once I originate them, the goal is I put them into this MSR mortgage servicing rights portfolio, and that's really where I make my money.
00:07:34.720 --> 00:07:43.680
Fun stat is it is um the the mortgage industry in the United States of America, the mortgage debt, not the equity in a house.
00:07:43.759 --> 00:07:45.600
So if your house is paid off, this doesn't count.
00:07:45.680 --> 00:07:50.800
But if you have$100,000 worth of mortgaged portion of your home, this counts in it.
00:07:50.959 --> 00:07:56.240
That represents$13 trillion across the US market.
00:07:56.480 --> 00:07:56.800
Okay.
00:07:57.040 --> 00:08:03.040
Now that represents 70% of the entire debt, personally held debt in the US.
00:08:03.279 --> 00:08:09.680
Now, if you think that that is a big piece, the$13 trillion, it's only a fraction across the globe.
00:08:09.839 --> 00:08:13.600
Like globally, that's$289 trillion worth of value.
00:08:13.680 --> 00:08:20.720
So these MSRs, they're servicing two or they have a potential to service$13 trillion worth of money to service.
00:08:20.800 --> 00:08:23.439
That is not the value of the secondary market.
00:08:23.600 --> 00:08:25.040
That's just the value of what they're servicing.
00:08:25.199 --> 00:08:29.519
So you think of all the things they build around it to service it and haul the revenue streams off it, right?
00:08:29.680 --> 00:08:34.000
The real estate industry entirely is like a six to seven trillion dollar market.
00:08:34.159 --> 00:08:35.039
Okay, like that.
00:08:35.200 --> 00:08:43.519
So so for me to find a piece of a$13 trillion market to buy a$6 trillion market makes a lot of sense.
00:08:43.759 --> 00:08:52.879
So for me to buy a redfin, to participate the consumer up funnel, to originate their loan, to push them into my MSR to service them.
00:08:52.960 --> 00:08:57.679
And if I can service them for five to seven years, right, like this is where my model lies.
00:08:57.840 --> 00:08:59.679
This is where the revenue lies.
00:08:59.919 --> 00:09:00.559
Does that make sense?
00:09:00.720 --> 00:09:03.039
Like that is the that's the that's the picture.
00:09:03.360 --> 00:09:08.080
Well, and then you know, it doesn't hurt with Red and having a top four portal.
00:09:08.159 --> 00:09:10.720
Um, you know, having a great they got a great portal.
00:09:11.039 --> 00:09:17.200
Their consumers are digital, they've already got the workflow, they they've got a unique um W-2 market of agents.
00:09:17.360 --> 00:09:29.440
They had 2,200 W-2 agents, and then they had about 10,000 partner agents, and they were able to refine their model and say, hey, now we've got I think they have 24, 2600 um W-2 agents.
00:09:29.519 --> 00:09:37.919
And the reason why that's really important too is this thing, this this, I think it's a five-level letter word RESPA in our industry that we have to be very careful about.
00:09:38.320 --> 00:09:42.559
When you uh when you're a W-2, then Real Estate Settlement Services Act, right?
00:09:42.639 --> 00:09:45.759
So like CFPB is enforcement capabilities for RESPA.
00:09:45.919 --> 00:09:51.519
And if you have a W-2 agent and you have a W-2 loan officer, they fall under fair trade.
00:09:51.600 --> 00:09:54.639
And fair trade says that they can cross-sell products, right?
00:09:54.799 --> 00:09:56.480
And so it creates a different dynamic.
00:09:56.639 --> 00:10:02.720
Doesn't mean they're completely um uh removed from any of the RESPA rules they have to abide by, but they're removed from about 80%.
00:10:03.120 --> 00:10:05.919
So you and I have baseball teams, okay?
00:10:06.240 --> 00:10:08.960
And and we're gonna we're gonna we're gonna play against each other.
00:10:09.120 --> 00:10:13.919
And um you have we have a set of rules, and those are the RESPA rules, right?
00:10:14.080 --> 00:10:19.840
But you've got we have all nine-year-olds on the team, but I put a 25-year-old on the team, just one, just one 25-year-old on team.
00:10:20.000 --> 00:10:27.679
It changes the dynamics of the game, and that's kind of how I look at this is like, yeah, they didn't get out of all of the respir rules, but they've got a couple 19-year-olds on their team, so you better watch out.
00:10:27.759 --> 00:10:30.639
Like it's gonna play different, like ball is gonna play different, right?
00:10:31.039 --> 00:10:53.840
Well, and I think it's a great analogy because I think you know, a lot of getting again in our industry, um, you know, agents, gosh, how long did it take for them to make the changes in the Bioburger agreement or even understand it, or even simple things like that, but then you guys start getting outside of their understanding, you know, there's a big impact and there's a big play of getting that kind of consumer and that long-term consumer.
00:10:54.000 --> 00:11:06.480
And I think if we just kind of juxtapose that with the compass anywhere acquisition, I think similar goals, but coming at it from a different direction, you know, almost from that real estate side.
00:11:06.639 --> 00:11:13.679
And, you know, I feel like there's a battle, but I'd love to, you know, have your thoughts on on what that reason and and and how that plays in.
00:11:14.000 --> 00:11:15.519
They they they all play together.
00:11:15.600 --> 00:11:17.039
Um, and this is how they play together.
00:11:17.120 --> 00:11:18.480
This is the way that I think they play together.
00:11:18.559 --> 00:11:22.240
And like my opinion is just an opinion, so like guard in the garbage.
00:11:22.399 --> 00:11:23.919
I don't speak for any companies.
00:11:24.159 --> 00:11:46.000
Um but it so if you look at what Rocket did, Rocket is profiled on the public market, and the public market gives them a stamp of approval or a price, and they say, all right, well, your price today, because of what you're doing with your business model, the opportunity that's in front of you with the trajectory and the direction you're headed, is$70,$80,$90 a share price.
00:11:46.080 --> 00:11:46.399
Okay.
00:11:46.639 --> 00:11:50.879
Well, the higher that share price goes, the more liquidity the company has to do more things.
00:11:50.960 --> 00:11:52.480
So they want to keep on increasing that.
00:11:52.559 --> 00:11:59.279
So Rocket says, hey, we're gonna go over here and we're gonna buy this brokerage company or buy this MSR and we're gonna we're gonna create this ecosystem.
00:11:59.440 --> 00:12:03.519
Well, all of a sudden they have more value, but this is what happens is they move their profile.
00:12:03.759 --> 00:12:13.519
So the profile went a little bit to the left when they did this because now people look at them and they say they're not an origination company just because now they own the dynamic of real estate, they own the dynamic of the MSR.
00:12:13.600 --> 00:12:15.759
So the profile has moved to an ecosystem.
00:12:15.919 --> 00:12:16.559
Does that make sense?
00:12:16.960 --> 00:12:20.960
Well, there's a company, a well-known company that was profiling behind them, and it was Zillow.
00:12:21.039 --> 00:12:22.480
Zillow was very close to their profile.
00:12:22.559 --> 00:12:30.960
If you look to the earnings calls, they they profile themselves very close to looking like a rocket because they want their shareholders to go, hey, they look more like a rocket than an anywhere.
00:12:31.120 --> 00:12:34.399
They look more like a like a rocket, so they're kind of leaning this direction, right?
00:12:34.639 --> 00:12:38.480
Well, when Rocket just kind of took off, so now Zillow's sitting here, right?
00:12:38.639 --> 00:12:40.879
Well, there's another company that is looking at their profile also.
00:12:40.960 --> 00:12:49.360
So you look at like a compass, compass says, hey, if we actually buy anywhere and we own a large portion of the data, we become more of a data company.
00:12:49.600 --> 00:12:50.480
Who's a data company?
00:12:50.559 --> 00:12:51.840
Well, Zillow's a data company.
00:12:52.000 --> 00:13:01.600
So if I can take my$8 shares and I can move a little bit closer to a Zillow share price, which is$79, let's just say I double my share price, I've got a lot of money that I and liquidity.
00:13:01.679 --> 00:13:05.039
So if I need to pay off, let's say a debt carry, I can pay off my debt carry, right?
00:13:05.120 --> 00:13:06.639
If I pick up Apollo's debt, right?
00:13:06.720 --> 00:13:10.720
There's there's a lot of things you can do in the public market when you adjust your profile.
00:13:10.879 --> 00:13:12.639
Um, and that's what that's what this is about.
00:13:12.799 --> 00:13:14.720
Like Rocket is adjusting their profile.
00:13:14.879 --> 00:13:18.399
They're creating an ecosystem, they're becoming more of an ecosystem and less of an originator, right?
00:13:18.639 --> 00:13:20.879
Zillow has to figure out like, are they gonna move that direction?
00:13:20.960 --> 00:13:21.919
Are they gonna move another direction?
00:13:22.000 --> 00:13:24.480
Like, what are they gonna do to adjust their profile?
00:13:24.559 --> 00:13:26.879
Because right now they have a profile of being Zillow, right?
00:13:26.960 --> 00:13:28.320
Like I'm being in this data play.
00:13:28.399 --> 00:13:38.720
Like Compass is like, hey, if we combine like these couple of entities and we have a mass market share, then can we adjust our profile because we have a different dynamic to our business, right?
00:13:38.799 --> 00:13:40.799
We added this new dynamic, which is this data set.
00:13:40.879 --> 00:13:46.639
Like now we can actually leverage data and we can we can use it for revenue, we can use it for these different things, different capabilities.
00:13:46.799 --> 00:13:53.600
If I could take 15% of all of my listings and and put them on a special portal that drives consumers, right?
00:13:53.679 --> 00:13:55.120
Like, is that a revenue stream?
00:13:55.360 --> 00:13:59.600
Right, if Villo had to pay to get to the listings, if like there's all these different dynamics that happen.
00:13:59.759 --> 00:14:04.960
Um, so like that's the way that's the way that I look at like the moves that are happening.
00:14:05.120 --> 00:14:06.159
I think they're fascinating.
00:14:06.240 --> 00:14:07.279
I think they're fun to watch.
00:14:07.360 --> 00:14:08.799
I think that we have a very resilient market.
00:14:08.879 --> 00:14:10.879
I don't think you know everybody's like, it's it's gonna go away.
00:14:10.960 --> 00:14:11.679
It's like, no, it's not.
00:14:11.840 --> 00:14:14.559
Workers are gonna be around forever, agents are gonna be around forever.
00:14:14.720 --> 00:14:15.679
They're gonna look different.
00:14:15.840 --> 00:14:22.639
The market share is gonna be different, their competitors will be different, how they interact with consumers will be different, but but like the industry is not by any means going away.
00:14:22.799 --> 00:14:25.759
I think that it has lots of opportunity because of these things going on.
00:14:25.919 --> 00:14:40.960
That's just no, it like it's uh I I don't want to um get into it because it just dropped and I don't know enough about it or whatnot, but you know, chat GPT and the ability to search for Zillow right built into chat GPT.
00:14:41.120 --> 00:14:44.799
That's going to be interesting on how things change the market.
00:14:44.879 --> 00:14:46.879
So you know, you know my opinion on it?
00:14:47.120 --> 00:14:47.600
What's that?
00:14:47.679 --> 00:14:49.279
Yes, because I got an opinion about everything.
00:14:50.720 --> 00:14:52.399
90% of my opinions are wrong.
00:14:52.639 --> 00:15:01.279
Um, I don't know that Zillow has the right to use an MLS feed under an IDX feed to create derivative works that are placed on someone else's domain.
00:15:01.679 --> 00:15:03.440
Like they don't control this.
00:15:03.519 --> 00:15:08.559
Is I mean, you know, there's a couple people that have already come out saying, like, this is kind of like the Microsoft deal with Bing.
00:15:08.720 --> 00:15:15.679
This is kind of like there's there's there's like, can you take an IDX feed of other brokers' listings and create a derivative work off it?
00:15:15.759 --> 00:15:26.399
And then in those MLX feeds, like you don't necessarily, so I don't know how that the response is gonna happen there, but I would assume there's gonna be a response to it because they don't own chat, like so anyways.
00:15:26.720 --> 00:15:32.399
I've seen a couple interesting takes on LinkedIn for sure, and uh so we'll we'll we'll see how that plays out.
00:15:32.559 --> 00:15:33.919
But um, but yeah.
00:15:34.159 --> 00:15:38.879
So I used to read I used to read comic books for humor in the past, and now there's LinkedIn.
00:15:38.960 --> 00:15:40.080
So it's just it's good.
00:15:40.159 --> 00:15:45.120
It's like it's like uh the the soap opera world of of you know the business industry.
00:15:45.200 --> 00:15:47.919
It's like people post without thinking sometimes.
00:15:48.000 --> 00:15:49.039
It's good, it's good stuff.
00:15:49.120 --> 00:15:49.440
I love it.
00:15:49.679 --> 00:15:51.840
Or after a couple of glasses of wine or something.
00:15:52.159 --> 00:15:52.639
That's that.
00:15:52.799 --> 00:15:53.120
That's it.
00:15:53.440 --> 00:15:55.279
I didn't want to say that, but yeah.
00:15:55.600 --> 00:16:05.840
Um let's you know, pivoting gears a little bit, you know, uh obviously you've been with uh a diverse group you know you know well versed in the real estate industry.
00:16:06.000 --> 00:16:08.480
You're now with you mentioned a company called local.
00:16:08.720 --> 00:16:24.480
Um and and so how do you think an independent company like yourself, um, you know, how does that compete when you see these types of consolidations and these types of moves by larger you know entities?
00:16:24.720 --> 00:16:31.039
Like what do you think is that secret to having these companies maintain and and continue to thrive in those?
00:16:32.240 --> 00:16:43.200
I think I am I'm very much a um a believer, and it's been proven over and over again, is if you provide true value, you'll always have a place in the space, right?
00:16:43.279 --> 00:16:52.720
In any space you're in, whether it's mortgage, whether it's real estate, whether it's what prop tech, what it doesn't matter what it is, if you provide a solution that is true value to your consumer, then you'll always have a space.
00:16:52.879 --> 00:16:59.200
So, like what is going on with real estate is like we got in this world of generalization and headshops where it's just like it's just a head count.
00:16:59.279 --> 00:17:05.359
We need a bunch of agents and they're very general and they've got okay tools and okay offering and okay, okay, okay, okay, okay.
00:17:05.440 --> 00:17:05.839
Right.
00:17:06.079 --> 00:17:13.839
And um, where I see it going, like, is if you want to thrive in this industry, anybody can be mediocre, but if you want to thrive in this industry, you're gonna have to specialize.
00:17:14.000 --> 00:17:17.200
You're gonna have to have a niche that you're like, this is my thing.
00:17:17.359 --> 00:17:22.880
Like I I list more houses on this lake than any, I know this lake better than anybody else.
00:17:22.960 --> 00:17:26.720
I this luxury category in this town, this is like this is my baby.
00:17:26.880 --> 00:17:28.240
Like I'm the guy for this.
00:17:28.319 --> 00:17:33.839
And like someone comes to you and says, Hey, will you sell a you know a middle market property down in suburbia, New York?
00:17:34.079 --> 00:17:35.759
Like, no, like that's not what I do.
00:17:35.839 --> 00:17:37.039
I'll refer it out to somebody else.
00:17:37.119 --> 00:17:43.039
So so the specializations will become very hyper-local, uh, and they're gonna and they're gonna be very defined.
00:17:43.119 --> 00:17:52.079
And I think that this is an opportunity for the agents to shine because as companies get bigger, they get more vanilla, and the agents, the agents shine is what happens.
00:17:52.160 --> 00:17:58.240
Like they have a unique proposition, they have a unique offering, they have a unique customer set, they have a unique like these things.
00:17:58.319 --> 00:18:06.480
So, like I I'm a huge believer, is like know your value, know how to articulate your value and deliver on your value.
00:18:06.640 --> 00:18:09.599
Like that if you can do that, nobody can replace you.
00:18:09.680 --> 00:18:11.359
Absolutely nobody can replace you.
00:18:11.759 --> 00:18:13.680
Yeah, no, I think it's a great point.
00:18:13.759 --> 00:18:31.680
I think you've always kind of lived by um having value as front and center, whether it's value that you as a brokerage broker is offering to your agents, or if you're an agent that you're offering to your consumers, or you know, if you even level up, it's what the franchise owner is offering to their franchisees.
00:18:31.920 --> 00:18:34.000
And it's you know, it's all about the dots.
00:18:34.160 --> 00:18:45.440
And right now we're in the middle of MLS, you know, what are they providing and what are they doing to you know stay relevant and and to really stay, you know, continue with a big chunk of of their meaning, you know, kind of pulled out.
00:18:45.599 --> 00:18:53.759
So if you if you have uh if you have a uh if you have two or three large mega brokers that are developed, like then that will be the question.
00:18:53.839 --> 00:18:58.400
Like that will be the real question that's gonna be answered like what is the what is NARS value?
00:18:58.640 --> 00:19:02.720
Not that I think NAR has value, but they're gonna have to have very defined value.
00:19:02.960 --> 00:19:04.559
What is the association's value?
00:19:04.720 --> 00:19:06.640
What is the MLS's value, right?
00:19:06.720 --> 00:19:13.599
Because if you have brokerage companies that start building private networks and they're they're holding data, like what does the MLS do?
00:19:13.920 --> 00:19:15.599
They can't share co-op commissions anymore.
00:19:15.680 --> 00:19:17.279
Like that's already been taken away, right?
00:19:17.359 --> 00:19:19.519
That's not part of the value offering they have.
00:19:19.599 --> 00:19:21.839
And then they're no longer the data repository.
00:19:21.920 --> 00:19:23.599
There's now like a subset of data.
00:19:23.839 --> 00:19:25.279
So it's like, what where do they live?
00:19:25.359 --> 00:19:31.119
So they they have to they have to figure out what their value is and they have to articulate their value and they have to deliver on their value, just like anybody else.
00:19:31.200 --> 00:19:37.519
Like that's that is, Kyle, that is the um that is the premise or the bedrock of a good company, right?
00:19:37.599 --> 00:19:44.720
Like an agents are a company, and brokerage companies are a company, and teams are a company, and Top Tech is a company, and like they're these are companies.
00:19:44.880 --> 00:19:46.319
So you have to know your value.
00:19:46.480 --> 00:19:47.759
You have to articulate your value.
00:19:47.839 --> 00:19:52.240
Otherwise, if your consumer doesn't understand what your value is, like that you're not gonna sell anything, right?
00:19:52.319 --> 00:19:53.599
And you have to deliver on it.
00:19:53.759 --> 00:19:59.759
Because if you don't deliver on it, eventually people are gonna realize like, yeah, I got sold a bill of goods that didn't deliver.
00:20:00.319 --> 00:20:01.680
And I'll never use them again.
00:20:02.319 --> 00:20:02.880
That's what happens.
00:20:02.960 --> 00:20:04.319
And eventually it comes back to bite you.
00:20:04.400 --> 00:20:06.559
It's like karma comes back and gets you.
00:20:06.720 --> 00:20:09.119
So like that's my, you know, that's my shtick.
00:20:09.519 --> 00:20:10.240
No, I hear you.
00:20:10.319 --> 00:20:13.680
And I, you know, a lot of the MLSs are doing some unique things.
00:20:13.839 --> 00:20:16.640
And there's a lot of everyone's having a pivot.
00:20:16.720 --> 00:20:27.119
And I think that they're um, you know, so there's some cool things coming out of the forcing mechanism of change and you know, all of the things that go along with that uh to provide stuff.
00:20:27.440 --> 00:20:37.440
Uh I think wrapping it up, you know, this is CrossTech Pulse, and you as a um someone who's been, um I think you were early on, dot loop and and some other systems.
00:20:37.599 --> 00:20:42.559
I know you you've used uh some of our back office tools in the past and growth metrics and things.
00:20:42.799 --> 00:20:47.920
Um, but you know, where do you see technology going in the future?
00:20:48.160 --> 00:20:59.599
And um, you know, both from a local level, but also just in the broker sphere, you know, especially with the AI noise that's happening, that there's some usage, but there's also other things going on.
00:20:59.680 --> 00:21:06.079
Uh yeah, and you as being a CSO of uh you know uh a technology company and some others, like where do you think that's going from?
00:21:06.720 --> 00:21:10.799
I think there's gonna be massive efficiencies that's gonna happen in companies due to AI.
00:21:10.880 --> 00:21:21.200
Like intelligent companies are using um AI to create great efficiencies on the back end, um, like behind the scenes, because it's uh a lot of the AI is not consumer-facing ready.
00:21:21.279 --> 00:21:22.799
It's not ready to interact with a consumer.
00:21:22.880 --> 00:21:25.119
Like, I I covet that relationship with the consumer.
00:21:25.279 --> 00:21:26.720
Like, I think it's very, very important.
00:21:27.039 --> 00:21:37.279
Um, so I'm like I'm a little more reserved as to like, oh, I want AI just calling everybody and doing all these things, like but the back end, like the efficiencies, the decisions with big data and stuff like that.
00:21:37.359 --> 00:21:44.559
So as we move into this big data world, like we're gonna have to figure out revenue streams for big data and stuff like that, and AI will play a significant role in that.
00:21:44.720 --> 00:21:51.200
Um, and I think I think that companies are gonna have to run smarter and they're gonna have to run more of a business than than just a relationship.
00:21:51.359 --> 00:21:54.559
Hey, I'm I'm just gonna get a bunch of agents together and it's gonna work out somehow.
00:21:54.960 --> 00:21:56.559
So, you know, I'm not gonna hire every agent.
00:21:56.640 --> 00:22:20.720
I'm gonna have agents that align with what I'm doing, and we're gonna we're gonna have this value set that is that's very clear, and we're gonna deliver on it as a team, and we're gonna leverage AI to actually, you know, figure out like where how can I leverage my people to put them in the most efficient, productive role and leverage AI to remove the the daily tasks and the data spreadsheet things that are going on.
00:22:21.039 --> 00:22:22.240
I've got a proposal for you.
00:22:22.319 --> 00:22:26.400
Like, I think that we should start a petition uh to bring DPN back.
00:22:26.559 --> 00:22:30.319
Like, I think that we should like we can take over the world with DPN.
00:22:30.400 --> 00:22:36.960
I mean, a DOS-driven system, you know, the green screens, like hey, you know what?
00:22:37.039 --> 00:22:38.079
There was a lot of data in there.
00:22:38.880 --> 00:22:40.400
There's a lot of data in there, man.
00:22:40.559 --> 00:22:42.480
Like good deal.
00:22:42.720 --> 00:22:44.319
Well, Craig, uh, it's been a pleasure.
00:22:44.480 --> 00:22:45.039
Appreciate it.
00:22:45.119 --> 00:22:47.039
Um live from Atlanta Airport.
00:22:47.119 --> 00:22:48.319
Uh, thank you for joining today.
00:22:48.640 --> 00:22:49.440
I'm Phoenix right now.
00:22:49.519 --> 00:22:51.359
I'm headed to Atlanta, so this is Phoenix, man.
00:22:51.519 --> 00:22:52.160
There you go.
00:22:52.240 --> 00:22:52.640
All right.
00:22:52.799 --> 00:22:53.759
Well, thanks a lot.
00:22:54.319 --> 00:22:55.200
Take it easy, Craig.
00:22:55.440 --> 00:22:56.000
All right, brother.
00:22:56.079 --> 00:22:56.960
Have a good day.
00:22:57.200 --> 00:22:58.640
That's our pulse for today.
00:22:58.880 --> 00:23:03.279
Keep innovating, keep implementing, and keep moving real estate forward.
