Erin: Welcome to REAL TIME, a podcast for REALTORS® brought to you by CREA, the Canadian Real Estate Association. We're all about sparking conversations with inspiring people about all things Canadian real estate and topics that impact REALTORS® and really all of us. I'm your host, Erin Davis, and you're going to love our third episode.
I found myself taking notes the whole time, and I'm not even a REALTOR®. Steve Murray is president and co-founder of REAL Trends. The industry's leading trend and research organization. Now so much has changed, especially in 2020. Yet, I think you'll be surprised at the fundamentals that have stayed the same. You see it is now as it ever was all about connection, trust, and integrity. Here we go with Steve Murray on REAL TIME. Every home is built on a foundation. Before we get ahead of ourselves, Steve, let's talk about the foundation of the industry as you see it today.
Steve: The most important things when we meet with real estate professionals is to focus on foundations. What are they? Well, it would be how much do consumers use agents? How do they find the agent that they use? What do they think about the services those agents provide? What attributes of agents are most valued by consumers? Let me just say this, REAL Trends has done consumer research since 2001 of our own hiring an outside globally respected marketing research firm to do studies of recent buyers and sellers, take foundations one at a time. Number one, in 2001 81% of consumers used an agent to buy a home. In 2018, the summer of 2018, the same results were 90%.
Erin: Was that a surprise to you?
Steve: Not really because we had done it in 2014 and it had moved up from 81% to 85%. It seemed that the more technology and the more data available to consumers, the more frequently they use agents.
Erin: That almost seems counter intuitive, Steve, because you think, knowledge is power and all that and we all think we can fix a car simply by watching a YouTube video but here we are knowing more and yet still going to REALTORS®, going to experts. That's surprising to me.
Steve: It surprises some of us who are old timers in this industry. Even 20 years ago, we thought the internet would really change the relationship between housing, consumers, and agents. It has, they use them more than ever before. When we dig into the research, we find that there are three factors driving this. Number one, the purchase or sale of a home is still an infrequent occurrence. Number two, it's complex and getting more complex all the time, no matter where you are, no matter whether you're in British Columbia, Ontario, the Maritimes or you're in the States, California, New York, Georgia, Colorado, where I live. The documents and the requirements and the inspections and all of the things that go in to purchasing or selling homes have gotten much more complex.
Lastly, it's pretty important to know that consumers in North America, particularly given our heritage, we are people who will go way out of our way to avoid failure or pain, if you will. Consumers instinctively know when they're dealing in a market, if you will, like the purchase of a home or having open-heart surgery, if you will, no matter how much you know, it's infrequent, it's complex. If you screw it up, you could be paying for the rest of your life — that those consumers will shy away from trying to do it themselves and rather they will depend on having a professional by their side.
Erin: I find that amazing. What about the methods for finding an agent? Is it online? Is it word of mouth? Is it seeing signs? Are we still old school in that regard, Steve?
Steve: Very much. The research shows that between two thirds and 70% of all recent buyers and sellers either knew an agent or someone they trusted referred them to an agent. That essentially has not changed in 20 to 30 years in the US and Canada. Now, we should point out that still leaves a third of buyers and sellers who have other means, and that would be yard signs, direct mail but obviously, the biggest segment now is online. Yes, consumers are going online to look for agents when they don't know one and no one has been referred. One last additional point, even when agents are referred or known by the customer, well over half of consumers are going online to seek references on those agents. They go to Google, they go to Facebook, Yelp, Angie's list. They go to a rating site, whether it's at REALTOR.ca or brokerage sites that have ratings. Consumers are accepting the referral and the relationship but increasingly they're checking them out.
Erin: Doing their research but also letting somebody else do the actual legwork. This is why as Terry O'Reilly said in our first podcast, it's so important for REALTORS® to zig while others are zagging and to make themselves stand out when people are looking for agents. For example, when my husband and I bought a place in California last year, this is going to sound funny, we knew nobody down there except the selling agent. What we looked for was an agent who said, "Yes, we know how to deal with Canadians." That just doesn't mean to expect a whole bunch of stories but the ins and outs of the international, the cross-border purchasing, and that sort of thing. For us, that's what really stood out.
Coming up with Steve Murray, other ways to Zig, the tools you can use that your competition may not and why teams can win in more ways than one. Steve mentioned REALTOR.ca there, have you visited Living Room yet? Well, come on in and make yourself at home from informative neighbourhood guides that span the country to key moments in history that influenced interior design. Share the latest trends and insights from your source, for all things home, REALTOR.ca Living Room.
Steve, have you seen, or in your experience, other things that can stand out for those who don't have word of mouth or who are doing the looking and searching referrals?
Steve: Our research seems to indicate that of two big factors about agents, let's call them how many deals have you done? The other would be years of experience. That consumers tilt somewhat towards years of experience over how many deals you got done. It's important, therefore, when agents are presenting themselves that they focus on their experience and not on how many transactions they've done.
Erin: You talked about trust and one of the things I wanted to talk with you about today is of course, trust and integrity. If REALTORS® have all the latest technology and tools to do business, then how important are trust and integrity in the whole picture? How does it all balance out or if you were going to do a pie chart, Steve, where would trust and integrity feature in that pie?
Steve: According to the research we've done, and these actually are questions we ask recent buyers and sellers, trust is number one by far. Of all the attributes of an agent, for a consumer to develop a trusted relationship is more critical than any other attribute of an agent. Now, how does an agent do that? Which then is the number two most important thing, which is to communicate with me the way I want to be communicated to. There are a whole series of trainings and exercises that agents are taught. To give an example, one is, it is far better to when you meet a new customer, even somebody you know a little bit to be a person who asks questions and listens carefully to a potential seller or buyer than it is to rush in, for instance, say, "Well, let me tell you all the work I've done and how many deals I've done this neighbourhood and I've been around for 24 years." That act, that behaviour tends to turn people off, many people. We use an old expression that's been around for a long time, that consumers look at real estate agents and many, not all but many say in their minds, they will go, "I really don't care about how much you know, until I know how much you care."
Erin: I love that. I don't care how much you know-- I'm writing this down because this is so good. I don't care how much until I know how much you care. Wow.
Steve: Right now let's talk about quickly these times, right now, people are fearful for their jobs, for their health, for their family, for their friends. We will come out of this. In Canada and the US, we will come out of this. We're strong countries. We will recover but the memories of this and some of the fears people felt will still be there. Even today, more and more agents should be prepared to ask questions to show that they actually care what buyer or seller or future buyer or seller, how they're thinking, how they're feeling, what their view is before they start talking.
Erin: Do you have any idea how that conversation might go, Steve? Can you walk us through? I'm in a home, let's say 250,000. We're going to have to relocate. We want to sell our house, times are not good. We want to get everything out of this house that we put in. What might be some of the questions that you would ask me, Steve?
Steve: I would start off by saying, "To confirm, tell me about your relocation. Is this exciting to you? Is this a promotion for someone in your family? Is your own personal relocation to be with friends and family? Why you're relocating and how are you feeling about it? Is this really exciting or are you sad to be leaving? Tell me more about that and tell me what's special about this house and where you live, what are the things that have made this really a neat place to you?" I'm asking questions about feelings and perceptions and why. I'm not even talking about money. I want to talk about, tell me what you're feeling and now a third question might be, "Well, if you were looking to hire an agent, someone like me, tell me what are the things that I could do that would make this the best experience for you?"
Erin: Wow, I really feel comforted just hearing those questions. I really do. The fact that you want me to open up to you a little bit and tell you why this house is so precious and it's so much more than square footage, it's the sunrise through the kitchen window or the sunset over the back patio or things like that you wouldn't maybe see.
Steve: That's right.
Erin: Back to Steve Murray in just a moment. Told you he was fascinating. There's an old saying that volunteering is the rent you're paid for the space you occupy on earth and REALTORS® Care pays it forward day after day. REALTORS® are committed to volunteering their time and raising funds for the causes and charities close to their hearts. Get inspired by these incredible stories and share your own at realtorscare.ca.
Now, let's get back to Steve Murray president and co-founder of REAL Trends, gathering data so you don't have to, but you do benefit. Steve, if the business fundamentals that we talk about, the trust and integrity that have been there for decades and decades haven't changed, then besides the obvious, the internet and social media and stuff, can you identify for us any trends? You're all about trends. You're all about the research. Of course, heart too, as we've heard from the conversation in the house with the person considering selling, has the volume or distribution of work shifted as far as you can see.
Steve Yes. As some people know, we ranked the top brokerage companies in the US for 30 years, we ranked the top agents in the US also agents and teams. Now we're going to rank agents and teams in Canada. We're out into the field now collecting that data. What we have noticed both in Canada and the US is that the number and size of teams has gone up rapidly in both Canada and the US. Why?
Erin: That's what I was going to ask next. You make this an easy interview. Steve, thank you.
Steve: Really great individuals often could become great teams because of technology. Technology in the form of automated CRM, automated transaction management, digital signatures, some of the mundane paperwork, which used to swallow time, driving documents back and forth, or faxing them here or countering back and forth with paper and stuff flying is now completely automated. Secondly, the tools that agents and teams have now to reach consumers, to communicate with them, obviously email, certainly texts, Facebook, CRMs, automated marketing platforms, real estate apps that follow up with customers with new information of listings and purchases in a person's neighbourhood. All kinds of technology enable agents to not only process business more efficiently but enable them to stay in touch with their customers in a customized way, far better than anything we had 15 years ago.
Erin: Is there any good reason not to go with a team in your opinion, Steve?
Steve: No but each team and we did a whole study on the best practices of top teams years ago, to have a great team, you have to have a certain culture which is established by the person who leads the team, right?
Erin: Right, of course.
Steve: You can only have one leader in a team. For instance, if you have three really outstanding individual agents who say, "Well, we're going to form a team." If they try to build an organization around three highly successful individuals who all have their own ways of doing things, that's going to be a challenge. Really strong-minded individuals stay individually and they do a lot of business. By the way, their capability of boosting their volume has gone up as well. It's not uncommon to see individuals who could now do 50 to a hundred transactions a year because that same technology enables them to process far more efficiently. There you are.
Now, it's also important to note that there are tens of thousands of great agents whose idea of a CRM is a Rolodex who don't use advanced CRM. They have a database, maybe it's an Excel spreadsheet. Maybe it's a notebook, but there are tens of thousands of great agents who have sphere of influence, have done such a great job over the years of using maybe personal notes or phone calls to stay in touch with people or big presence in the community. These past customers come to them and they refer people to them. Those kinds of agents don't really need to have advanced outreach tools. Let's just call it the way it is. REAL Trends here, we've been doing what we've been doing for 33 years. We haven't spent a thousand dollars in 30 years marketing our valuation merger and acquisition consulting services. We have just over 30 years built word of mouth.
Erin: That comes back to the trust and integrity. People know you by name. It's not just from the theme song from Cheers. You want to be where everybody knows your name.
Steve: That's a great analogy
Erin: Coming up with REAL Trends, founder, president, and expert, Steve Murray, staying in touch the old-fashioned way. We love experts. Not just as guests like episode one with marketing genius, Terry O'Reilly or episode two's environment and energy, sustainable master Chris Chopik, but experts like you. The people we call upon to find us the right home and get our house discovered. Find a REALTOR® by visiting REALTOR.ca today. Don't forget, we're going to call upon you to share the best advice you have ever been given through our toll free number. That's on the way back to Steve Murray on REAL TIME.
You talk about being in the community. This really strikes a chord with me because I saw something in my Facebook feed a couple of weeks ago that said, "Remember that small business you came to for a donation for your fundraiser, we need you now." A lot of people are finding themselves on hard times, and this is really where people can stand up and be what Mr. Rogers called the helpers. How do you foresee this as a chance, an opportunity to really make your mark as someone who can be trusted not only in good times but when times are not so good, Steve?
Steve: The best example I can say, and I'm sure the top teams and agents who may be listening in on this, by the way, this goes for brokerage companies as well. We're going to see a huge decline in housing sales. There's no way around it. We're going to be slower here at REAL Trends as well. What's my best piece of advice I got on the phone this morning and I made a list of 25 past clients that I haven't spoken to in a while. I called every one of them just to see how they are. You know what? Every one of them were thrilled.
Now, some of them are not even in the brokerage business anymore. They just love the fact that I took the time to call and say, how are you doing? These are people I've known in some cases, 10, 20, 30 years. What should agents and teams and brokers be doing right now? Get on the phone or text or however is best. Call your people. Use Zoom, if that, to reach a larger group if you want to. You're not going to be busy putting transactions together. Not much. Take the time, call everybody you know even if they weren't customers. Call your uncles, your aunts, your cousins, your friends from high school, reach out to people and say, "I was just thinking about you and wondering how you're doing."
Erin: Not making it about you not making it like, "Well, I'm just sitting here. I've got nothing else to do. I thought I'd reach out and see how you're doing." It has to be about them.
Steve: I just said, how are you doing? It's enormously rewarding because many of them said, "You know what, thank you so much for thinking of us and just taking the time to call us." Now, maybe they're in the business. Maybe they're not. Maybe if you're an agent, maybe those people are going to list and sell. Maybe they're not. They're going to remember that you took the time not to call them to ask for business, just ask them how they're doing.
Erin: That's the important thing to point out to Steve. I think you're doing it very well. Here is the last thing you want to come off as is thirsty. You're just honest to God, make sure that is your motivation, that you're checking on them to see how they're doing because I know I'm going to be telling people that I heard from our bank manager yesterday, who was just calling to tell us, "It's okay. It's okay. You've got a few stocks that we've put in this that are going to make you feel better." That sort of thing. It's like, "Wow, the guy from the bank called us and it wasn't Mr. Potter asking for his money or we're going to shut down Bailey's loan or whatever." It just matters so much. I think that we're finding in this isolation that we have all gone through for varying periods that connection matters more than anything.
Steve: I assume that that's where I'm heading. This is my 44th year in the industry and 34th year as a consultant, we have a philosophy. We talked earlier about integrity. We have a philosophy here. We have several consultants that work here and I drill into them from their first days is we will never get caught worrying about the fee income we may make from an assignment. The first thing we worry about is did we take care of them and their problem, the money will follow and every great agent, every great team, every great brokerage company knows that's the truth.
Erin: Remember the Notting Hill soundtrack song, you say it best when you say nothing at all. Steve Murray cautions that things not to say in uncertain times, a good reminder for us all. I'm Erin Davis. I'm so glad you're sharing this REAL TIME podcast and hope you'll subscribe and stay in touch. Meantime for everything real estate made your way, visit CREACafe.ca. — a cozy place for REALTORS® to connect on the latest real estate news and industry developments. We're looking at developments, trends with Steve Murray but before we look ahead, we're going to ask Steve to look back. I can't help, but remember the saying from the Dalai Lama, "If you lose, don't lose the lesson." Back to Steve now.
There is an important point about being tone-deaf. Now, I understand you are a huge communicator and I am too obviously, and we love communication. We love reaching out and connecting. Can people come off as tone-deaf? That would be, I guess, asking if you're thinking of, well, keep me in mind if you decide to sell or if you have to move or something like that. That's a big caution I would say, wouldn't you?
Steve: Right now is the time when we all need to connect with each other, stay in touch with people, offer to be there for people. You know what, the business will come. It'll come back. None of my friends right now, we're still all doing our jobs because those who have jobs, we have to keep working hard but this is a very, very scary time.
Erin: You've been through recessions before. Before we take a look at the future and really that has been how you have built your business. Let's take a look at the past. People forget that there have been some pretty big craters over the years and here we are. Can we start again? We'll go back to that foundation that we began with. Start with the foundation as we get set to close here, Steve, with how it was and how you saw people get through and what the good was that came out of it.
Steve: This will be my fifth housing downturn.
Steve: '80 to '82, '88 to '91. Except in Canada it went from '88 till the late '90s. It was a long drought in Canada. Then we had a little blip around 911. Then we had the great recession. The US suffered far more than Canada did. We studied it a lot in Canada, but Canada had a little, little hiccup back there in '08, '09. Now here we are. First, we released our own message to all of our brokerage clients in the US and Canada. I said, just focus on two things. One, stay in touch with your people. If you're a brokerage, stay in touch with your employees and your agents. Be encouraging, be communicative, stay in touch over and over. Get closer to them than you ever thought before.
Number two, right now business people, real estate brokers, teams, agents, you need to preserve cash. You need to figure out for your own business, what do I not have to spend for the next 60 to 90 days? Because it's not going to make a difference if you keep pouring money on a fire that is no longer burning, it's not going to result in short-term gains. People are not unless they're in a desperate situation, they're not going to be looking to buy and sell a house for the foreseeable future.
Having said that we will come out of this is going to be tough. It's going to be tough in Canada. People can't go to work. You're sheltering at home. There's a lot of the population, fortunately, they can still work from home. Our whole team is working from home but this is going to take some time. You've heard numerous people say, "Well, this will be a V recession." You have a quick drop and a quick back up. I am not an economist, but I've been at this a long time. I just don't see that happening.
Erin: Wishful thinking, perhaps.
Steve: If you go back and look at the US and Canadian housing recessions of the past 40 years, they were more like-- I pardon using this analogy, the hockey stick.
Erin: Oh. Okay, now you have my attention.
Steve: Sharp drop leading the hockey stick with the foot of it, sticking up in the air. It goes down, sharp and you have this long recovery.
Erin: Did you have to remind us of hockey, Steve?
Steve: Sorry about that, but you know what?
Steve: We're all spending more time with each other.
Erin: That's right. There's either going to be an uptick in babies or divorces.
Steve: As one guy told me, one real estate guy told me the other day, he said, "Steve, this is the good news, either we're going to have a lot more babies or a lot more divorces, and both are really positive for housing."
Erin: Oh, very good. There is your bright side. Thank you.
Steve: The recovery will start and it will come back slowly but steadily, but it may be a year or two or three before we get back to where we were.
Erin: Coming up. He knows trends. Steve looks into that crystal ball of his and shares his wisdom. Don't miss it. Because Alexa doesn't have all of the answers. I'm sorry if your device just answered me, but we're all looking for a glimpse into the future. For example, there were 1.6 million searches for REALTORS® on REALTOR.ca last year alone. REALTORS® make the most of those visits with the REALTOR.ca tools provided as part of your CREA membership. Cool. Huh? Stick around for your wisdom, thanks to CREA.
Here's what I posed to Steve. What makes realty promising as we head through 2020 and beyond? Is it something that you would recommend that someone get into?
Steve: Yes. I'll tell you what, this is a business that rewards hard work. This is a business that rewards people who can exhibit empathy and have some common sense smart and who absorb training and education. There's no limits to what they can earn. It's all based on your own willingness to put time and effort. There's no limits. There's no politics. There's nothing like that. Now, we don't tell a lot of people that come in the truth that no, you're not going to come in. You're just going to have a hundred deals fall on your lap. It's happened certainly, but not normally. I'll leave you with one of my favourite stories of all time was a guy I met in Michigan some years ago after the great recession and this poor young man who's in his mid-forties had lost a 20-year career building a business and his business evaporated. He lost his wife, left him and left the state and left him with six kids and a house and a thousand bucks.
Erin: Is this a country song?
Steve: It could be. We actually reported on him in our publication. I said, "What did you do?" He said, "I had my license. I knew I couldn't wait for sphere of influence marketing. I decided there was a niche to do door-knocking on fizbos and expireds. I developed a system and I had my teenage kids helped me put things together because my age kids were 16 to five in age." He said, "I had a couple of rules. One, I never worked between 4:30 and 7:30 because that was homework and dinner time. I never worked on Sunday because that was church and family time, but I door knocked and in my first 12 months, I closed 45 transactions. In my second year, I did over 70. You don't have to have a college education. You just have to have a work ethic and some to intelligence say, "What is it I'm good at? What can I do to present myself best? How do I get in front of potential clients and customers and I can build a business that nobody can take away from me, but me?" How many occupations are there like that?
Erin: I don't know. I can't think of many, that's for sure. There will always be room in the future for people with trust, integrity, knowledge, and of course, access to great information. Hopefully, this has been some of that. Folks will go back and listen to this again and again because it's been incredible. Steve, thank you. Thank you for sharing your knowledge, your wisdom, your years of experience, and your REAL Trends. We are so grateful to you and good luck.
Steve: Well, thank you. It's been an honour to be with you and I hope out there someone will hear this and it'll improve their day.
Erin: We can hope. Thank you, Steve, so much.
Steve: Stay well.
Erin: Take care. You be well too.
Steve: Bye now.
Erin: Thank you to Steve Murray, president, and co-founder of REAL Trends. Hey, remember his advice to pick up the phone? One of our podcast listeners did just that. Hi, welcome to the REAL TIME hotline. Steve Murray isn't available right now. He's on the phone with clients keeping that connection, but if you're calling to tell us the best advice you ever got as a REALTOR®, share it with us now.
Duncan: Hi there. Duncan Fremlin calling. I'm a broker with RE/MAX Hallmark in downtown Toronto and love the podcast, Erin. I've been slogging houses for about 33 years. I was given a lesson early on in my career and it's served me well over the years. An old-timer told me one time. He said, "If you ask a client, what their decision is, certainly listen to them but a few minutes later, ask them again. Then if they're not entirely sure, ask them a third time." You can never ask them too many times because people change their minds in a matter of seconds. Sometimes they think one thing one minute and then a couple of minutes later, they'll think something else. Give them a chance to really work through the decision. That's my tip. It's amazing the number of times I've seen people do a complete about-face on a very important issue.
Erin: Hey, thanks, Duncan. Ask what's important then ask again and again, and if you have some advice you want to share with everyone, just call this number and leave a message at 1888-768-6793. That's 1888-768-6793. Thanks.
Hey, just before we go, here's another reason you're going to want to subscribe to this podcast because our fourth one, our next one is one you can't miss. We've assembled a team of experts to join us. In response to current conditions, businesses and REALTORS® need to react to a new world though temporary, where human interaction is limited or discouraged.
Now, as you well know, the real estate industry built on relationships between a REALTOR® and their client will be and is significantly impacted, but within adverse conditions come opportunities and new human behaviours. Early adoption is key. For REALTORS®, maintaining a personal connection is crucial. Representatives from various levels within the industry will provide guidance, clarity, and give CREA members real-world tools to implement. You won't want to miss it. I'm Erin Davis, talk to you again soon, and don't forget to subscribe. Bye for now.