Our Guest: David Barney
Join us Wednesday with David Barney as he takes us through his business plan for leveraging each transaction to create the next opportunity in a flat-fee model. With over 90 transactions in 2020, we know David holds the keys to success!
Wednesday, August 4 @ 1:30 Central Time.
0:00:00.0 Geoff Stertz: Hello, and thanks again for joining us for another Fathom Live, a live stream show dedicated to giving you tips and insights from experts in and around the real estate industry. I’m your host, Geoff Stertz. So glad to be with you here today. I’m gonna apologize off the bat here, my producer is out of town and somehow, I’m streaming into the ether right now, meaning that it is streaming live here on our YouTube channel, but if you could help me out viewers, because I don’t know if I can do this on the spot, if you can help me out and post to the Facebook post that we are live over here on YouTube, that way everybody can just join us here and we can enjoy things together. We can experience the same thing with the comments and all of that jazz. So we are here over on YouTube, so you can check us out over there.
0:00:47.1 GS: We’ll give everybody just a couple of minutes to jump on. As always though, if you are watching and you give us a comment, give us a shoutout, tell us where you’re from or you make a comment during the show, it is interactive, then we automatically enter you into a drawing to win one of four prizes… One of three prizes. You can win a photo listing package worth up to 200 bucks, yard signs worth up to 200 bucks or GoSocial Agent’s leads service, which is also 200 bucks, so get to commenting right now. And we do have with us today, and I’ll introduce Dave here real quick, we have with us Dave Barney. Dave, welcome.
0:01:22.3 David Barney: Alright, thank you, thanks for having me.
0:01:23.4 GS: So, looking forward to our conversation here in just a moment, but if you haven’t checked them out in the meantime, check out GoSocial Agent. They offer effective and affordable social media marketing tools for you to help you grow your business. So you can check them out at gosocialagent.com. If you haven’t hit the notification bell on YouTube, do that. Today is a great example of it because we just all of a sudden, went arbitrarily live on the channel instead of the regular Facebook feed. So, hit that notification bell, that way you always know when we’ve gone live and that will help us out. Well, let’s get to the conversation at hand. Dave, welcome.
0:02:08.6 DB: Thank you.
0:02:08.8 GS: So, you are hailing from McKinney, Texas, but you haven’t always lived here, you had a background elsewhere before real estate. Maybe you can tell us a little bit about that.
0:02:19.9 DB: Yeah, absolutely. Well, my background, I’d say from a professional standpoint, I’m 37 now, I’d say it really started right after high school. I don’t consider this a professional job, but I actually had a chance to do a two-year mission for my church where I lived in Honduras, so I learned the Spanish language and I spent two years there teaching and helping people and knocking doors. The reason why I shared that is because I started off really at a young age, dealing with a lot of rejection in my life outside of my dating life, but that’s another story. So, that’s where it started.
0:02:58.8 DB: And then I went over to a company called Apollo Group over in Phoenix, it’s known as University of Phoenix, and I was actually there for 11 years total. In 10 of those 11 years, I spent, as a manager, managing teams, where my background was to basically help bring the leads in, right, through the systems, along with with that, taking each lead and coaching people on how to have effective conversations to help our clients or the leads enroll in school. So I spent a good chunk of my career working with people on the phone, dealing with objections, a little bit different, but it was still a service industry because you’re helping people get educated.
0:03:39.7 GS: Right. Right. And you’re still on the phones, doing… Helping people make a big decision in their life.
0:03:46.6 DB: Absolutely. I mean, I think that’s why I love real estate. It’s a business of service and relationships. So, it’s very enjoyable for me to be on the phone with people.
0:03:56.6 GS: So you’re doing something a little bit different with your real estate model. I mean, we obviously have the Fathom model, which is flat fee, that the agents pay a flat fee to the brokerage…
0:04:06.4 DB: Yeah.
0:04:06.5 GS: But you’re doing something similar within Fathom, with your own business. Could you tell us a little bit about that?
0:04:16.2 DB: Yeah, so I think… I went to the flat fee model and I’m sure a lot of people on here… ‘Cause I get it, I have a lot of peers that don’t love the model, they think that we’re disrupting the industry, making it harder for everyone else, and I get that. So my hope with this call is, I wanna educate people on what I do and why I do it. It doesn’t mean it always has to be the right fit for you, but what I do different is, we generally, as a listing agent will come in and charge someone a percent to sell the home. So instead of taking on a percent, what I did is I switched to a flat fee model, where we charge a seller $3500 to list their home.
0:04:51.1 GS: Right.
0:04:52.2 DB: But then the co-broke is decided with the seller between the negotiation process. But in general, that’s kinda what I do different, I guess, from a basic perspective.
0:05:02.9 GS: And if I missed it, forgive me, why did you decide to go from your typical, in charging people 6% listing fee to this?
0:05:15.1 DB: Yeah, good question. So, I think before I got into real estate, right? I was in the education sector, I was an investor first, I would say, an entrepreneur of real estate. So I think for me, the number one reason why I got into it was, it was easy for me to believe that I don’t need to charge people that kind of money just to list their home. I’d say that’s the first thing. Secondly, it was an opportunity to scale my business and basically change from being just a sales agent to more of like a business operator, and I think that’s what’s really helped me in my career is not focusing on being a sales agent, but more so, how do I run an actual effective business? And that model, in my opinion, is one that you can create systems around, you can create a lot of tools to help generate consistent success, which runs it more like a business than a typical transactional agent.
0:06:07.0 GS: Sure. So, what kind of systems have you put into play… Well, actually let me ask you, just to give our audience a little bit of a background, maybe this would help a little bit…
0:06:17.9 DB: Yeah.
0:06:18.7 GS: You’re in McKinney, Texas, but your team is doing real estate in Arizona where you used to live and operate there.
0:06:27.6 DB: Yes. Yup.
0:06:29.0 GS: So, how does that work? How does that work being in two different locations like that?
0:06:32.5 DB: Yeah, that’s a good question. So, I think to help frame, I guess, the mind behind what I do and how I do it different is, if you look at how the world works today, right? I mean, we can look at Uber Eats, you can look at Instacart, all these different things in our lives that are making everything a lot easier and simple. So my model was designed to simplify the process for every seller. I try and set very clear expectations out the gate with clients, so that they know we can take them from point A to point B in a very quick timeline, meaning from the time we go over the analysis of what their home is worth, we can quickly have pictures done and quickly get it back on the market. So, for me, being… No matter where I’m at, I mean, that’s the whole point of why most of us are agents sometimes, is we want freedom, right? So, we work a lot from our computers, our phones, I mean, I even mentioned it earlier, but a lot of our jobs is on the phone.
0:07:30.9 GS: Right.
0:07:31.4 DB: So, no matter where you are, it doesn’t mean you can’t run your business. Now, I do go back from time to time to Arizona, I typically go one to two times a month as well…
0:07:39.3 GS: Gotcha.
0:07:40.2 DB: For specific client needs.
0:07:41.8 GS: Right, right. So, a homeowner contacts you, and I’ll ask you a little bit about how that happens in the first place, but a homeowner contacts you and says, “We want to list our house with your team.” What’s your process then? What do they do? You obviously say like hey…
0:08:01.6 DB: Yeah.
0:08:01.7 GS: You’re not gonna say, “Hey, I’m gonna meet you. Let’s meet for coffee and then talk about… “
0:08:07.2 DB: Yeah.
0:08:07.8 GS: How does that look? And how do your local team members play a part in that?
0:08:11.2 DB: Good question. So, I think what you asked there that’s important to recognize is, as an agent, you’re never going to scale your business at a high level if you wanna believe that you have to be all places at one time, or if you have to go meet someone for coffee or even get around the stigma that you have to walk through a home to determine what it could sell for, right? That’s the first challenge. So, for me, from the time that I get on the phone with a client, it’s the same conversation that you would have in person, right? We talk about, what has you wanting to sell your home, what’s important, what are some of the needs that need to be met during this process? And then from there, we set the expectation that, “Look, here’s how the process works, I want you to send me 10 pictures or do a video walkthrough of your home,” a lot like you’ll see Opendoor or Offerpad do. And with that alone, we can do an analysis for them and determine, “Hey, here’s what we can sell your house for.” Within a day or two, we can have an analysis to them, for them to review it, sign the paperwork and get it going. Then we have a team set up to do the pictures, drop a post in the yard, put the lock box on the home, so everything is in place, so that once again, the moment we get someone to sign the listing agreement, we can execute the next steps very quickly.
0:09:24.7 GS: What kind of…
0:09:24.8 DB: So yeah, I’ll tell you…
0:09:27.0 GS: Yeah, go ahead.
0:09:27.7 DB: I don’t mind a lot of people asking me to meet them in person, and I think the pandemic might have a lot to do with that, but…
0:09:31.3 GS: Sure.
0:09:32.4 DB: I’ll be honest, I’m going to Arizona next week only because one client has about six properties to sell and it was a referral from a very high-end client of mine.
0:09:40.9 GS: Right.
0:09:41.6 DB: So in that case, they asked me personally and I’ll go meet with them.
0:09:42.9 GS: Right, right.
0:09:44.2 DB: But it doesn’t happen very often.
0:09:47.1 GS: So, have you had people object to it… I mean, to say like, “I kinda want somebody here that I can shake hands with?” Or if people didn’t object, but you kinda had things to overcome, like objections to overcome, what were those objections and how did you overcome those? And I think too, for viewers that aren’t doing business in Arizona or they’re living in Texas, like you’re saying, if you’re doing a ton of properties, it may not make sense always for you personally to be there, and certainly, the larger teams in our company don’t always have the team leader that’s there outside.
0:10:24.1 DB: Right.
0:10:26.5 GS: So how do you overcome those objections?
0:10:30.2 DB: Yeah, I’ll start with, I was a little shocked at how few objections I actually got, to be honest with you…
0:10:36.9 GS: Gotcha.
0:10:38.1 DB: I don’t find that coming up very often. I’d say in general, the first one is typically, “Well, how can I trust you, how can I trust that you’re a market expert if you’re living in Arizona,” right? And that goes back to helping the client understand your value as an expert in the market of Arizona. If anything, I remind people that I’m not licensed in Texas, even though I could be, because my 100% focus and dedication is understanding the Arizona market. That’s what I study every day, that’s what I analyze every day, it’s what… We’re in the trenches every day across Arizona, so.
0:11:13.8 GS: Cool.
0:11:14.2 DB: Aside from that, I might get a client that says, “Hey, we have a house that maybe needs a little work.” In those cases, that’s what I have a team for, is I’ll have someone show up and do a quick video walkthrough, assess it with me. Once again, they’ve been trained, right? To know how to do that skillset…
0:11:27.8 GS: Right.
0:11:30.3 DB: Because I’m a one-man… I’m not gonna be a one-man show. So…
0:11:34.0 GS: Yeah.
0:11:34.8 DB: They’re trained to do that, so once again, we can make an educated decision on how to help guide that client to the next step.
0:11:41.0 GS: So, kinda switching gears, do you mind if I ask how you generate leads then? I mean, you’re not there locally, but we’ve said, time and time again, of course, during the pandemic, people generate leads through social media and different avenues, but what is your primary lead source?
0:12:01.8 DB: Yeah, I think that’s always the Achilles heel for every agent is, how do you generate a lead, right?
0:12:06.9 GS: Right.
0:12:07.6 DB: For me, I’d say the number one… I kinda notated it here, I have your sphere, which we all hear that, but more importantly, how do you actually build on your sphere? We also work the For Sale By Owner list, expired and cancelled list, in which I have a virtual assistant team set up to where we get those reports, and in some states that may not do that through their title company, you can use a system such as PropStream to go ahead and pull that data. You upload it to our virtual assistant team, and then what they’re doing is they’re calling, emailing, sending our templates, our text messages to these clients, basically trying to set an appointment with them on the phone with me, so I can get on the phone and close them out from there.
0:12:50.2 GS: Okay, so, your role…
0:12:51.6 DB: Outside of that…
0:12:52.8 GS: And I’ll ask about the other team members’ role in a second here, but your role, you’re the main guy on the phone, I mean, this is what you’ve done for over a decade at University of Phoenix…
0:13:02.8 DB: Yeah.
0:13:03.8 GS: You’re good at talking to people and kind of setting them at ease. So, you’re on the phone more than anybody.
0:13:09.6 DB: Yeah, absolutely. The team… My team’s on like a 90/10 split. It’s very simple, it’s more of a coach and mentor support system. And then they get the opportunity to earn income through my business by adding them as a showing agent, they’re the ones that are gonna show the property to the homeowner or the buyers that are looking for homes when it’s time to do that. And what happens is they get paid a percent of the commissions as we’re closing out the deals.
0:13:34.9 GS: Gotcha. So, how big is your team and how did you determine what hats people are gonna wear?
0:13:44.3 DB: Yeah, my team is really small, Geoff, I mean, we’re… I only have three other people on my team right now. Once again, I think it’s set up not like a traditional team where we’re just supplying them with leads every day. And part of that is because it’s a lot like the Fathom mentality, right? Many agents come in and they start to realize, “Why do I give away such of my commission? Why am I giving away 30%, 40%,” right? When…
0:14:08.1 GS: Right.
0:14:08.2 DB: If anything, they need to be taught how to generate the opportunities for leads, and instead of giving away commission, take your own commission and invest it in your own business, right? Into systems and tools…
0:14:17.7 GS: Gotcha, right.
0:14:20.2 DB: Get paid leads. So, my team role is really, they’re… I’m not gonna say they’re on their own, but in a sense they’re solo agents out there, producing. And then my job is to help mentor, coach and support them to do more deals. So we’ll get on and do role plays, work through some of their client challenges that they have. I kinda set them up on the same model as me, such as we build flyers for ’em, we pick communities where they’re gonna send out flyers, Facebook ads, a lot of the same stuff that a lot of agents do.
0:14:48.3 GS: Right, right. By the way, what’s the average… Diana Compost watching asked, what’s the average sale price in the communities that you’re selling in in Arizona?
0:15:01.0 DB: Yeah, so Arizona, most of where we hit just hit like 400, it’s one of the highest that we’ve ever seen in our market. I’d say on average, we’re probably about 375, if I had to guess.
0:15:14.8 GS: Yeah, yeah.
0:15:16.2 DB: So, you think on average, on a 3% listing, my clients save on average $7500 plus in fees.
0:15:22.7 GS: And how many… I mean…
0:15:23.3 DB: And we emphasize that.
0:15:24.4 GS: Obviously, 6% is a lot more money than $3500, so how much business are you having to generate on an annual basis to be able to make a good income?
0:15:36.7 DB: Yeah, it’s a good question. I mean, that’s part of where the fate comes into knowing how to run a business more so than making money per deal, is… My net dollar per listing isn’t really high. It’s not extremely high. I mean, let’s assume conservatively, you’re at $2500, the good news is, is that gives me a basis to know, hey, if I do four listings a month, I can generate $10,000 a month in gross… In net commissions, right?
0:16:01.8 GS: Right.
0:16:04.4 DB: That’s $100,000 a year.
0:16:04.3 GS: Right.
0:16:04.4 DB: Then we build on the buy side, right? So for every two listings that you take, typically someone’s gonna buy a home, so we’re making the 3500 plus the buy side.
0:16:13.8 GS: Awesome.
0:16:14.9 DB: But most importantly, it’s more about each listing creates another opportunity for a relationship, which goes back to that sphere, right? The better you do with your sphere, which is now your new book of business, your clients, the better your business is going to do long-term.
0:16:29.3 GS: I wanna ask about that, and about leveraging the deal to make more deals basically, or to make more income off that one deal. Brian asks, is he talking 90% or 10% of the 90-10 split? In other words, how much do your agents keep?
0:16:43.1 DB: Oh, 90%.
0:16:44.6 GS: Wow, wow. So you’re get…
0:16:47.2 DB: Yeah.
0:16:47.5 GS: So, is that if they bring the lead or is that anything that they touch?
0:16:50.8 DB: Anything. Anything.
0:16:53.0 GS: Gotcha, gotcha.
0:16:53.6 DB: I give ’em leads, it doesn’t matter. Yeah. Yeah, and that goes back to… I’ll emphasize why I do this, Geoff, is I’ve never believed… And I truly mean this, if anyone that knows me, I’m not a greedy person. Money… We don’t die with our money. It comes and goes, right?
0:17:09.4 GS: Right.
0:17:09.8 DB: But I’ll tell you the one thing I’m confident in is I can always go make more money, so I don’t need to take money from people, and that’s what I love about Fathom is Fathom gives us all the commission in the world to reinvest in our own business, because at the end of day, Fathom doesn’t generate me business, I generate myself business.
0:17:26.3 GS: Right. Right.
0:17:27.2 DB: So, I love that.
0:17:29.3 GS: So, let’s… I wanna keep going on that vein about… And if you’ve watched more than a few shows, viewers, this is something that just keeps coming up over and over again, is you’re running a business, you’re looking at, what I can do with the money that I have to invest in my business and then get an ROI on that.
0:17:52.3 DB: Absolutely.
0:17:52.4 GS: Not I’m clocking in and hoping to get sorta this dependable paycheque that’s… I mean, you want it dependable, and that’s why you have multiple revenue streams and try to diversify what you’re doing, but I wanna kinda go down that road a little bit more. Somebody said, would flat fee carry the business model with buyers agents’ commissions dropped to 1% or less? I don’t know if he’s just asking the community or asking you, or what.
0:18:20.7 DB: Yeah. Yeah. Well, that’s a good question, because I think a lot of people are… We’re all being threatened by the possibility of the buyer fee going away or that the buyers have to pay it. So, that, there is a good question. As far as how that might affect the flat fee model, my theory is this, is once again, it’s scaling opportunities. I have scaled my book of business tenfold most agents, and because I’ve done that year over year, as long as I nourish that clientele, those clients are always going to have a home to sell. What they are gonna have is now income to invest in more properties. More importantly, lean on us as their advisor to help them with any real estate transaction long-term. So, you can’t… It’s not so much about the quality of your paycheque, it’s the quantity, because the more that you do creates more opportunities.
0:19:14.3 GS: Right.
0:19:15.4 DB: Plain and simple.
0:19:16.4 GS: Right. Good point. Somebody said, quick question, so it will be $3500 plus the buyer agent commission, correct?
0:19:26.2 DB: Yep, absolutely. Mm-hmm.
0:19:29.7 GS: Okay.
0:19:29.8 DB: And we always advise 3%. So you’re welcome, buyers agents. I’m always trying to… I get my sellers nine out of 10 to agree to the 3% co-broke.
0:19:36.4 GS: Gotcha, gotcha. So, about business, what have you learned about… In business, both working in the corporate world, and then also starting kind of as an entrepreneur, you’ve done investing, you’ve done your real estate business here and you’re continuing to do those things, what have you learned that you think is worth sharing with real estate agents that are trying to take their business to the next level?
0:20:08.4 DB: Well, my advice would be, one, if you haven’t read Gary Keller’s Million Dollar Agent, I’d highly recommend that you read that book. That changed… That changed my entire career, understanding the value behind that book, even though it’s with Keller Williams, the leader of them. That guy really covers a lot of important things, he talks about the value of why listings are the key to running a successful business as a real estate agent. So building off of each listing to once again, create leads, create leverage of opportunity to build more relationships or whatnot. I’d say the second tip is you have to invest in yourself. Too many agents expect a guarantee, they always ask, “Well, am I gonna get this if I spend this much money?” There is no guarantee.
0:20:51.6 GS: You don’t know.
0:20:53.2 DB: You don’t know, you have got to take the fear out and say, “I am willing to invest a [0:21:00.0] ____ for an entire year in my business doing X, Y and Z, and I promise, I’ll put the work in to get the results” ’cause you can’t quantify it. And third, I’d say keeping it simple. I think we over-analyze everything, I think clients don’t want the process to be difficult. So I have a lot of templates and a lot of… I’ve created doodles, like the fun doodles for clients, so that through each stage, I can send it to them and they love it ’cause it’s very simple, it’s broken down, so keeping things simple really helps.
0:21:29.3 GS: So I remember our first home or maybe our first couple of homes, we signed with the agent to work with them, and then it was just kind of like… You didn’t know what was coming next. It was like, “Oh okay, now we need you to do this, and oh, okay, now we need you to do this.” And it was like, I thought we… I thought we were 90% of the way through, I guess we’re 50% of the way through. And then we find out there’s three or four more steps, and I can see how that would happen from the agent side, where it’s like, I’m not just working with you, I’m working with a whole bunch of people, and they’re all coming in at different steps…
0:22:02.1 DB: Absolutely.
0:22:03.6 GS: But for us, it was very confusing. And our first agent wasn’t a Fathom agent, and she was a good agent, but… Yeah, so for us, it would have been great to have that road map. And that’s something that you kinda mentioned that you lay out with your clients. Can you talk about that just a little bit?
0:22:21.3 DB: Yeah, yeah. So that… I think you hit the pain point right there of a lot of people. And my goal with a lot of clients is I never want them to come to me and ask me about what’s happening next or how it works. So we build that road map out from the very beginning process. Like I said, everything is about learning how to be very systematic too in your business, is we know when a client goes under contract, “Here’s the template and here’s the video that you need to send the client”, so that they understand the next steps on what to expect. When you set clear expectations, all it does is set you up to help overcome any objections that may come up down the road, which most of us can anticipate, so we’re trying to stay a step ahead of every client so they never have to just feel like they’re lost on… What do we do or what does this mean?
0:23:06.9 GS: Alright. So you’ve generated some conversation on the internet here, so…
0:23:14.1 DB: Hopefully positive…
0:23:15.3 GS: Well, I think just sort of maybe… Wonder. [chuckle]
0:23:21.6 DB: Yeah.
0:23:22.1 GS: So somebody said… Brian said, “But if he’s only taking 10% of that, then how is he making any money?” ‘Cause you were talking 10% of 30…
0:23:33.9 DB: The team.
0:23:33.9 GS: Of the team. Yeah, right.
0:23:35.1 DB: Of the team. Yeah, yeah, so I’ll answer that question simple, I don’t depend on my team to make my income. Believe it or not, I try and even take what I earn, and I’ll tell you right now, the time and effort I probably put into the people that I do, I say this politely, but my time is probably worth more but their time is just as valuable. And for me, my GCI last year was just over, I think half a million in my business, and I think this year it might probably be close. It depends. So I just don’t depend on people to make me money, I have other ways I know how to generate business, so.
0:24:13.6 GS: Great… Great answer. So another one… ‘Cause people are looking for clarity here, I think it’s like, how in the world? Kathy says to be clear… Oh by the way, news flash, Rob Fountain, you are the winner from last show for one of the prizes, so congratulations, Rob, on that. And…
0:24:33.9 DB: Alright, Rob.
0:24:34.8 GS: Yeah. We’ve got a lot of comments here, for having to sort of jump over to this different stream that we have, we have quite a bit of conversation that you’re generating. So, if you comment on here or on Facebook anywhere, we enter you into the drawing, so keep it up here. So, Kathy…
0:24:52.2 DB: And it’s a lot to cover in 30 minutes, so…
0:24:54.7 GS: Yeah, well, yeah. So Kathy says, “To be clear, the 3% listing fee paying both the listing… Is paying both the listing agent and the buyer’s agent?”
0:25:06.9 DB: No. So think of it like a coin. I always use this analogy for sellers, heads and tails. On the heads side, you have a listing agent and tails, you have a buyer’s agent. And I explain that to every client. So listing side, we’re on heads, we’re gonna charge a $3500 all inclusive fee, full service representation. The buy side, we always try and get 3% co-broke.
0:25:27.7 GS: Okay. So you’re…
0:25:28.8 DB: And I’ll try…
0:25:29.7 GS: Yeah. So you’re looking at roughly a 4-4.5% depending on the price of the home. Or maybe…
0:25:35.0 DB: Yeah. Depending on the price.
0:25:35.8 GS: Maybe 3.75 or whatever, depending on the price that the seller has to pay out.
0:25:42.3 DB: And it doesn’t matter what… Whether the house is a million or… Right now, we have listings in 750, 354, doesn’t matter the price. Because once again, the model is not built around the commission, it’s built around executing amazing service and results for clients. Because that’s… If we don’t do that, our model would never survive. So you have to execute those two things to generate more business long-term via referral.
0:26:08.3 GS: Okay, cool. And there was another question, but I think you answered both of those. And then Brian responded, “Great job, you’re doing awesome.” So thanks, Brian…
0:26:19.1 DB: Thanks Brian.
0:26:20.7 GS: And then… I said thanks for you.
0:26:22.3 DB: Yes. Not everyone loves a flat fee model. So we appreciate that.
0:26:26.5 GS: And then James asked, “What percentage of your GCI came from working with buyers?”
0:26:33.3 DB: Good question. I don’t know that stat right off the top of my head, but I would say it’s probably about 40%.
0:26:41.2 GS: Okay. Cool. So you’re doing a lot of deals, it sounds like.
0:26:45.5 DB: Yeah. Yeah. We’re doing a lot. Once again, it’s more about every relationship creating more opportunities, that’s what you’re buying in to, because I’ll give you a short example, a client that we helped last year, they worked for [0:26:58.2] ____ county in Arizona. They’re now turning to us to buy about $5-10 million worth of assets, and that’s gonna be huge for our business if we can help them do it. So I always look back and say, had I not had that opportunity, which we found them on For Sale By Owner, had I not created that opportunity and got that business, we wouldn’t be there this year with them. So yeah, we’re doing a lot of deals.
0:27:22.7 GS: Yeah. Can you talk a little bit more about that, as far as leverage, taking advantage of that relationship that you have in a good way. You’re helping them, but helping grow your business.
0:27:35.7 DB: Yeah. To simplify it, so once again, having systems in place. We help a client, we now can set them up into… Or let’s say we generate a lead that has a home. We can now put them into Homebot. You may be familiar with that. Homebot is a great system to use. You plug them in there, we plug them into our CRM, so we can now send them a blog every two weeks or any type of marketing content, and now we can put a client into our private Facebook group, where we do like monthly giveaways. That’s something I do for my clients is, as me saying, “We love you and appreciate you.”
0:28:09.2 GS: That’s awesome.
0:28:10.4 DB: I have a private group…
0:28:10.7 GS: So your clients get to know each other in a sense, and then you just keep them abreast of things going on and give them swag… Or more than swag.
0:28:22.3 DB: That group specifically is just for giveaways, we don’t market to them, we don’t give content, it’s all about, “Hey guys, this is a client appreciation group that you’re a part of, now that we’ve helped you in the business of real estate, and we’ll give away a TV, we’ll give away things every single month.” I do a live video with them, share a little bit about what our business is doing in those videos, but most importantly, we remind them that we would not be here if it wasn’t for them. So once again, it’s about relationships. A flat fee model is transactional, but to me, if you understand the relationship side of it and you know how to work that, the business will grow month-over-month.
0:29:00.4 GS: Somebody asked, do you offer coaching or training? You’ve obviously piqued some interest in the way you do things.
0:29:08.8 DB: Yeah. It’s tough because I’m not opposed to it, by all means, with people on my team. If someone’s interested in joining the team, we can talk through that. But my team has a good understanding too that on a 90-10 split, we’re not holding your hand for 10 days, seven days a week. At the same time, there’s some give and take there with that 90-10 split. But yes, I would love to be jumping on a call with anyone that wants to learn more about the model, I am 100% all for that.
0:29:38.8 GS: We’ve got your Facebook handle there up on the screen, so if you’re watching, you can message David over on Facebook with…
0:29:44.6 DB: Yeah. I would definitely make the time to do that for anyone that wants to talk more.
0:29:49.3 GS: Also, and I would assume the answer is yes on this, based on what you said earlier, does your $3500 fee include the cost for professional photos and measurements, etcetera?
0:30:00.1 DB: It does. Yup.
0:30:01.7 GS: Okay. Go ahead.
0:30:04.7 DB: I was gonna say, yeah, in your market, you have to figure out your median sales price, what’s the cost of your marketing. I factored all of that in before I even decided how I came up with $3500 in Arizona. So I think depending on your market, you could structure a flat fee model, but you have to analyze all of those numbers so you know what net dollar you’re working with. It’s the only way for you to measure, what can I expect to earn, year-over-year?
0:30:30.0 GS: Livingston Real Estate Group said, “Is the flat fee charged at closing or regardless if the home closes?”
0:30:37.6 DB: So it’s only charged at closing through escrow. And I’m glad they brought that up ’cause I wanna give you a caveat that we give every client. I put it in every clause that they can cancel at any point in time, and part of my message there to sellers is once again, Geoff, it’s about helping them understand that we’re a business and we’re not afraid to invest in you. I’m not gonna tie you into a listing agreement and make you refund me money if I can’t sell your home. So I walk in with these sellers with the mentality that, “Look, we will invest the money into you. We’re confident we’ll get the results, and if we don’t, you can… We don’t get paid.” It’s as simple as that.
0:31:14.9 GS: Very good. And I appreciate that. I think that’s… My wife and I have a small business that I’m not there, hardly ever. Kind of like you, it’s run from a distance. And I find working with other business owners, you have people that they’re very much givers and they’re very much like… There’s a element of default trust that you have with people that makes for good relationships and good business, whereas we have other people, it’s like, “I’m not sending this to you unless you pay me now for this $20 item.” And it’s like…
0:31:54.0 DB: Yeah. Horrible mentality.
0:31:57.1 GS: Yeah, it’s like, I don’t really wanna work with you. It’s like all of a sudden, something’s three days late, ’cause you’re waiting for some payment to come through or whatever, versus like, “Hey, here’s your stuff, pay me. We’ll get you taken care of later.” Just that attitude engenders trust. And it’s like, alright, if you lose 500 bucks… Maybe when you’re starting out, that’s like, ugh, that’s really hard. But if you can get away from that as soon as possible, to me it’s like, be that person that people just know that they’re easy to work with, and…
0:32:29.3 DB: Absolutely.
0:32:30.1 GS: I think that causes… Just to be able to say that to somebody, I think is so important and that they’re more likely probably not to cancel on you because you’re being that person. It’s like, well, I would be a real schmuck to walk out.
0:32:40.9 DB: Absolutely.
0:32:43.9 GS: On something like that if they’re kinda…
0:32:48.8 DB: Yeah. Well, and like you said, I think that’s the problem with a lot of our agents, all of us is, we all expect a guarantee. That goes back to the mentality of, you’ll take a listing if you know that you’re gonna get paid, if you know that they’re gonna sign and lock into six months and they can’t go anywhere else. Sellers don’t wanna feel that. No one does. That’s why we differentiate and say, “Look, most people wanna sign you in a set six-month agreement. This clause that we put in here allows you to cancel in a month from now if you’re unhappy ’cause we don’t wanna work for you if you’re unhappy.” So it gives them the confidence.
0:33:24.9 GS: And then… Yeah, and you answered a bunch of questions here they’ve been asking, “Is the listing fee paid upfront whether the home closes or not? Does the $3500 fee included professional photos and that?” and you’ve already answered that. No early cancellation fee… [chuckle] You just hit them all there, I guess here. James said, “I’ve heard coaches encourage including value-adds like free staging, free moving trucks, etcetera, to defend against the flat fee realtors. Do you ever get requests for those kinds of services?”
0:33:54.8 DB: I don’t. I don’t. And in the event that a client feels that we need to stage or they want to, that’s an additional fee that they would pay. I’m happy to cover the cost. I’ve covered the cost of remodel for a home and then charged a fee back to the seller through the escrow, but they would have to pick that up if they decide to do it.
0:34:13.9 GS: Gotcha. Any other sort of things that you’ve learned generally from business? I think if people are watching, they’re taking away a lot of stuff already, but any last thoughts on just managing and growing a business?
0:34:29.9 DB: Yeah, I’d say you have to figure out, maybe put in a column and say, “Okay, what are the systems that I actually need to use in my business that are effective and actually help me progress? What are the systems I need?” In the marketing column, “Where should I be investing my dollars that can give me some sort of ROI?” And then on the third, most importantly is your calls. If you’re not good on the phone and you’re not developing your conversation skills, I don’t care what lead you get. The difference of leads and people converting leads, it’s not the lead, it’s not whether it’s a Zillow lead or it’s a Facebook lead. It’s your ability to conversate with people, it’s the ability to help break through that initial call and get them to drop the walls and want to call you back or want to work with you. So my recommendation would be to really sharpen the saw when it comes to your conversational skills with people.
0:35:28.9 GS: On your systems, obviously you have to have a really well-oiled machine, A, to do it from afar, and B, to be able to do that much commission… Your GCI versus against how many people are on your team is pretty phenomenal.
0:35:41.8 DB: Yeah.
0:35:42.8 GS: But for the call aspect of it, I went to… I think it was a Buffini event and he had everybody…
0:35:51.9 DB: Oh, yeah. I love Brian Buffini.
0:35:53.8 GS: He had people work with each other and practice doing phone calls. I used to run a call center back in grad school and we would have people practice as well. Outside of that, is that the best way you think to really practice or just get in front of a mirror or…
0:36:11.9 DB: Yeah, good question.
0:36:12.6 GS: I know some of it’s just time. And of course, David, you have an incredibly winsome personality, so everyone just probably goes…
0:36:21.2 DB: Appreciate it.
0:36:21.3 GS: Five seconds in, “I trust you. Here’s the keys to my house, go ahead.”
0:36:23.9 DB: I wish it was that easy.[laughter]
0:36:26.7 DB: No.
0:36:26.9 GS: But no, what do you think is the best way to go about it?
0:36:31.8 DB: Yeah, I’ve always loved live calls. I think that people with technology today, you can record a live call with these leads when you’re making the outbound calls. I do that, I’ll record some calls and give it with my team, so that they can actually hear the two-way dialogue between a seller or a buyer. Sometimes I’ll add them as a third party so they can hear the live interaction between a lead or an appointment that I have and how we handle that. So role playing is awesome, but you’re never gonna get good if you’re not willing to just jump in full speed. And that’s what I love about door-knocking, when I used to door-knock, is you can’t walk away from the door, you’re gonna deal with a lot of objections. You don’t have to have a map of what to say and how to say it, you have to be fast, you have to know how to hear one objection, and how do we divert the call or conversation to help get over that? So I would say, live call training is really valuable…
0:37:26.7 GS: That’s awesome.
0:37:26.8 DB: Have someone listen to your calls.
0:37:28.9 GS: Do you have to tell people that you’re recording them or are you just… You’re saying, have it just on speakerphone?
0:37:33.9 DB: Yeah, I just say, “Hey, I got my agent here on the phone with us, just so you know. They’re on mute, but they listen to our calls with our clients.”
0:37:40.9 GS: That’s a great idea. And then not fearing rejection ’cause it’s like… I think… And I’ve done door-to-door stuff before as well and it’s terrifying. It’s absolutely terrifying when you first start out, but if it’s just a game of numbers, then you go, “Hey, every nine rejections or every 50 rejections is somebody saying ‘yes’, so all I gotta do is get through those 49 and… “
0:38:08.9 DB: Absolutely.
0:38:09.8 GS: “Boom, I’ve got a deal or I’ve got a conversation with somebody.”
0:38:13.8 DB: Yeah. What you just said right there is the nail… You hit the nail on the head is, you have to ask yourself every week, “How many calls are being made a week?” because it’s a numbers game. I invest in a virtual assistant team for that reason because I’m not here making the call every day, but I do have someone that I invest my business and money into, that they’re making calls every single day and it’s just a numbers game. I literally at 8:00 PM last night, I get a notification from a virtual assistant saying, “Hey, we have seller A located at this address, phone appointment set up for 9:00 AM tomorrow.” I took that call this morning. And it’s a system and I get on the phone and I gotta close them out. So you do have to have something moving five days, seven days a week to keep your business going. So if you don’t have that going, you need to figure out how to get that going.
0:39:06.9 GS: Alright, last question, ’cause we gotta get going here. I’m just trying to cram all this stuff in here ’cause I know…
0:39:12.9 DB: I know.
0:39:13.3 GS: There’d be a lot of stuff and there’s been just absolutely fantastic questions and I keep hearing them through my earbuds here, ping… People have more and more questions, but why did you join Fathom? And I know you already mentioned it, but why did you make the switch over here?
0:39:30.9 DB: Yeah, I think, once again, it’s the same theory of Fathom… Fathom, I did a lot of research before I came over, and Fathom offers an extensive amount of tools to us agents. And I love the fact that even though it’s not a brick and mortar where you have an office around the corner, they offer tons of tools that are at the tip of your fingers. You sharpening the saw comes down to your discipline and commitment to utilizing the tools that Fathom has. I came over because the commission structure, once again, in my business, it made sense to maximize my net proceeds, my net profit. And then, I love the fact that they’re across 26 states right now. I think it opens up a massive opportunity for networking. And then, the last thing would probably be the stocks. I like the fact that they have stocks. Following that EXP model. So I’ve bought quite a bit of stock and hoping that it just keeps going up.[laughter]
0:40:31.7 GS: We’re hoping so too. Exciting stuff. Well, David, it’s been a pleasure having you here on the show and really cool to hear about how you’re running your business and wish you very well here…
0:40:44.8 DB: Thank you. I appreciate the opportunity.
0:40:48.1 GS: Sure thing. We’ll let you go. And for those of you who are still watching, if you haven’t checked out Fathom, you’re not a Fathom agent, head over to fathomcareers.com, and you’ll find a company that gives you the tools and technology for your success, including but not limited to, equity ownership, as David just mentioned, a powerful CRM, truly affordable healthcare, Intelliagent’s transaction management system, multi-tiered support, marketing resources, and a whole lot more. You can, again check them out at fathomcareers.com, and they will allow you to be at the helm of your business and that’s so so important if you’re wanting to build a long-term real estate career.
0:41:25.3 GS: Also, one of the things that David mentioned was being able to plan out your calls. I’ll post a link… Or plan out how many things you’re gonna do in a day to guarantee that you’re gonna get some sort of response. I’ll post a link to a resource that we have that’s a Fathom business planner after I’m off-air here, and that helps break down, if you wanna make this much in income and here’s your habits, here’s what you need to do each day, down to the daily efforts to be able to hit those goals. It’s a great tool, I’ll post it below.
0:42:00.9 GS: Next. Our next show is in two weeks, and we have Sean Varin from over at Encompass, formerly Parkmont Lending, and we’ve had Sean on the show I think twice before, once in a group and once by himself. He’s just a wealth of information. And so, if you wanna learn more about what’s going on in the mortgage world right now, this is the show to tune in for. Looking forward to having him in a couple of weeks. We’ll see you then.