Convenience is everything in today’s real estate market. That’s why more and more brokerages and team owners today are moving into mortgage, title, home insurance, property management, etc. Not only does it make transactions a lot easier for consumers, but it also allows the team to have control over the entire customer experience, from pre-sale to closing and even beyond.
Another benefit of adopting ancillary businesses is its potential for additional revenue opportunities. And with commission compression affecting the industry nowadays, having a one-stop-shop that puts all these services under one roof can benefit not only the consumers but the real estate agents and broker-owners as well.
Brian Charlesworth joins Mark Pattison, Founder at PorchLight brokered by eXp, also considered as a leading-edge when it comes to branching out to real estate ancillary businesses, as they discuss the value of creating an “Amazon” for real estate and the importance of striving to always continue to grow and innovate.
Top Takeaways:
(04:35) The benefits of automation
(07:21) When Mark decided to focus on ancillary businesses
(11:05) How owning ancillary businesses affects commission per transaction
(16:07) What was the idea behind the “home concierge” concept?
(17:17) Why controlling the client’s experience is crucial
(22:20) The biggest lesson that Mark’s family has taught him
(23:10) Why it's all about implementation
(24:16) What pivots are needed in today’s market?
(29:43) Who is more likely to win in the real estate space: teams or solo agents?
(34:56) Why agents should not focus on commission splits
(38:46) The importance of taking action
Connect with Mark Pattison
Website: markpattisonrealestate.com
Instagram: @markpattisonshow
About the guest:
Mark Pattison was born and raised in Seattle, Washington. Coming from a family of entrepreneurs, he learned the value of hard work and dedication in everything he does and the importance of having the desire to create more opportunities.
After graduating with honors from Seattle University`s Alber`s Business School, Mark went on to work for a variety of prestigious companies before embarking on his real estate journey.
He started his real estate career in San Diego as a solo agent in 2014 and now has a team of over 100 agents and has sold 1,006 homes in 2021.
Today, Mark Pattison is the Owner and Founder of PorchLight Realty by eXp and he belongs to the Top 1% of Realtors in San Diego County. He is also the host of the Mark Pattison Show podcast. He is happily married to his husband Burke and they have two dogs, Luca and Ellie.
Episode Transcript:
Brian Charlesworth 00:35
Hello, everyone. And welcome back to the Grit Podcast. I'm Brian Charlesworth. I'm the founder of Sisu and your host of the show. And today, I have Mark Pattison with me who is the founder of PorchLight Realty Team. And PorchLight has been crushing it. They're on pace to do around 1000 transactions this year. And I mean, a love meeting with team owners that are just crushing it like that. So one of the things I wanted to really point out about Mark is Mark comes from a family of entrepreneurs. And I think he thinks differently than most real estate team owners. Mark dove into a lot of things that I have not seen from other team owners. So I want to dive into that today, Mark, but welcome to the show. Is there anything else you want to add?
Mark Pattison 01:21
No, yeah, thanks for having me. I just renewed my license while it's about to renew. So I'm now in my eighth year of being in the business. So I passed all my exams. So I still got it. I still know some of those details. Some of those questions. Oh, I was like, I've never heard of this. So I don't know where the DRE comes up with these questions. But hey, I passed my renewal exams.
Brian Charlesworth 01:43
Congratulations. I actually met with somebody last week who wasn't even licensed the revenue team without being licensed. So make sense, though, to have your license. I actually still have my license. So yeah, anyway,
Mark Pattison 01:56
I don't I don't actively sell houses. I'm, I'm an awful real estate agent. I feel like I'm too busy. If I need to, like get in there and do it. I could probably get my gets. I'm a little rusty. Maybe, though, but I can get it back.
Brian Charlesworth 02:07
Yeah. Yeah, well, good. Well, I wanted to dive in today. Maybe you starting out, you could just tell us a little bit more about your team. And then I have some questions really around some other areas of the business that a lot of team owners don't think about?
Mark Pattison 02:22
Yeah, so I've had my team for five years, it has had many renditions. I feel like if you're not growing and changing and ever-evolving, then you're going to fall stagnant. And your team is going to implode. Obviously, we've had situations, it's kind of like we say version one, version two, version three, we're probably on like version seven. But the biggest thing is that you know, we've always been innovating. Now we're at the point where the most expensive thing is the customer acquisition cost. So once you have that customer, how can we basically not to say like, that's all we care about, but we need to get, you know, the biggest amount out of that client as we can, you know, we need to make sure we keep them as a forever client, we need to make sure we serve in some in all different aspects. So we've launched into numerous different ancillary businesses that we'll get into. But the biggest thing is, the agents I'm bringing on their bought into the port site way, like every one of our agents uses our CRM, every one of our agents uses Sisu. It's just not an option not to. Because if you knew how to do it, then why are you on our team? And the ones that have been on our team long, you know, we have agents that have been on four and a half years, almost like my original agents, my OGs, as we call it, they've been around, they use all this stuff, too, because they know if Mark's doing it, and Mark has changed this, for this reason, it works. I don't change things just because, you know, I want to test things out. But I have made sure that it is a definite improvement for their business to move to that system. So everything that we have they're using and same with our ancillaries, they're partnered into them.
Brian Charlesworth 03:53
So you use the CRM, you use Sisu. Which CRM are you guys using?
Mark Pattison 03:57
We're on Follow-up Boss and Ylopo? Okay. Yeah, so we absolutely love it. Tons of integrations, the biggest thing about it, is I'm not a tech nerd. But the idea of its open integration. So if you want it to sync to different things through Zapier, it just makes it really easy for making automation happen.
Brian Charlesworth 04:14
Yep. And automations are the key. Before we dive into these ancillaries Mark, let's talk about automation. Like, what automations are you running in your business? Because I think a lot of people hear that term automation and they're like, you know, it might just be over their heads like, Okay, what does that mean? Like, what are you Where are you saving time by automating something?
Mark Pattison 04:35
Yes. So the easiest way, whether you're a solo agent or a small team, you can do this right now is there's a form it's called Cognito forms, and I mean, Sisu might even have forms too, but
Brian Charlesworth 04:45
We do see our own intake forms and most of our customers use those but, some use Cognito because they may want that going into multiple places. So…
Mark Pattison 04:54
Yep, so ours go into multiple places. So if you're not already using the Sisu forms, jump on that. We have ours go into Sisu. We have gone into our virtual assistants so that they can upload into Skyslope. We have it going to are monday.com. so we can see all of our transactions happening, we haven't gone to another chart so we can track all of our ancillary businesses. So what this form is, is it's basically an agent fills out, you know, their name, their client's info, all the details of the house, once they have it under contract. They're uploading all the contracts. They're putting in the escrow company because in California, we have escrow and we have title, they're putting in anything that they need to fill out the lender. And then we're tracking all of those businesses. And we're tracking week over week, month over month agent who has the most. So it's pretty cool as it's all done through Cognito forms and a lot of automation. This allows us we only have four staff members in San Diego, the rest of our staff is virtual. So to have a team of 74 agents and only have four staff members, it's pretty admirable in my opinion, is we really watch how much we're spending. And our staff members aren't just like crazy overworked, I mean, we do have virtual assistants, which are also our staff members, but at a much more affordable rate, to make sure that we're profitable so that automation allows it to work. So that Cognito form, when they fill it out, goes to the transaction coordinator team in the Philippines, we have a transaction coordinator here, she doesn't do the tedious work like checking signatures and things. She does stuff like client communications, making sure that the dates are correct, etc. She's the person overseeing everything, and the ones in the Philippines can check monday.com to see everything how it's laid out. And it all starts with our agent filling out that one form.
Brian Charlesworth 06:32
Okay. All right. So one of the things I admire, Mark, when I look at your business like I think most team owners are definitely moving into mortgage, they're definitely moving into title, possibly moving into home insurance. And, as you know, because we've been working with you on this, but you know, Sisu has a big emphasis right now on this home concierge and all the home services and automating things like ordering home warranties, streamlining that process, doing that from our platform. But you are like one that is kind of leading-edge on this kind of stuff like you've been doing this stuff for a while. And even things like NHD in California, which we can talk about as well. But tell me like, when did you start focusing on some of these services beyond what most team owners will do? And why?
Mark Pattison 07:30
So like I talked about earlier, if you've ever tried to generate your own lead, it's not easy. I mean, in Southern California, every market is different. Someone who may be watching this may say, Well, I can get this on Facebook? Well, we can't. It's a little bit more difficult. And the client acquisition is just so expensive. So I looked at it and I said, Hey, look, if we're able to give x to our agents in mind, you commission compression, cost of gas, like our agents are running around town all day writing 30 offers for some clients, because it's so competitive. It's gotten a little bit easier this recent month. But you know, we want to give more back to our agents. And you want to keep them because it does turn into like, hey, I want more money, I want more money, we wanted to come up with these kinds of different systems where we can use ancillaries to pay our bills and essentially create kind of a whole umbrella. Hey, we're a one-stop-shop. So we have everything from insurance like you talked about. We have lending, title escrow Home Warranty, we've got NHD, which is natural hazard disclosure, it's a company that we have for in California, it's just a disclosure company that a buyer has to have if they go under contract here for closing. So we worked with them all together. And we've used our answers to be kind of a service provider for our clients, which is, you know, if you have a party and you've got your home inspector, your home inspector should be maybe contributing to help for that party because it's their clients as well. Well, we think the same way is once we get something under contract, we have our insurance reps reach out on behalf of our team. You know, it's a warm handoff, our clients know who they are. But they check in as kind of a concierge at PorchLight that also sells insurance as well. And how can we help them with making sure that they have an inspector that they pick from the three that we refer to making sure that they have everything to the lender in time if they have any questions on their process because the insurance reps understand everything about the home buying process because they were real estate agents? So we purposely place people that knew the whole flow and knew how it works so that they can work kind of like just a person that's going to answer someone's questions. Not saying the agent won't, but maybe the insurance rep explains it a little bit differently or they had more questions. So it helps out with that. Once it's under contract. We have a past client gift campaign through a client coordinator. We've got it all done through all these different businesses. That's why we're able to have you know four in-house admin staff, or not necessarily admin but Operations Manager, sales manager, transaction coordinator, and Assistant we're relying on those other people.
Brian Charlesworth 10:01
So you've got informed relationships with all of these people. I think it's not normal for a team owner to go out and form all those relationships, which is why Sisu has, you know, made the decision to go out and do some of these ancillary businesses outside of the core businesses? Do you actually own any of these businesses when you talk about mortgage title home insurance? And then we'll get beyond those three?
Mark Pattison 10:27
Yeah, so it's a mix. So depending on laws and what you can partner with and what you can't, so with insurance, we do own it. And whether it's and the same thing with lending, it's a JV. So depending on what you can do, because RESPA, you want to make sure everything's compliant. You don't want to be crossing any lines or blurring any lines, so we make sure,
Brian Charlesworth 10:45
Which is different in every state. So make sure you know your laws.
Mark Pattison 10:48
Yep. So I would just make sure that you have a RESPA attorney, take a look at it. Yeah, so anything that you're doing in your wall or in your state, contact a RESPA attorney, someone who really knows the law, and make sure that you're not going to get yourself in trouble? Because one, it's not worth it.
Brian Charlesworth 11:02
Okay. So, in owning those three things, Mark, what does that do to your commission for every transaction?
Mark Pattison 11:10
I mean, just going off of it, I would have to say probably 3x it, just because of what we can normally make off of one, we could make three times the amount.
Brian Charlesworth 11:21
Okay, so imagine if your average is 10,000. Today, and this is just a number I pulled out of the air, but if your number is 10,000 per transaction today, and you could expand that to $30,000, would this make sense to you?
Mark Pattison 11:35
Yes, and the biggest thing is you got to have enough transactions to make it work. Because if you don't have you know, enough buy sides, you can't really launch an insurance company, pay for the insurance rep pay for all the business and then not have enough clients. It's, it's really it's like getting to that point where you're probably at, you know, and it goes to dollar amounts, but it's like how many buy sides you have going through there and what your capture rate can be.
Brian Charlesworth 11:56
I mean, You said it's a dollar amount, which is going to be much different in San Diego, where you are than in Utah where I am, but like, any coaching, any suggestions on where that number should be?
Mark Pattison 12:09
Um, let me look, I'm doing it right now on wait. So 800,000. And
Brian Charlesworth 12:14
it sounds like you have an 800,000 average price point, is that right?
Mark Pattison 12:18
Yeah, it's right around there. But you should probably be doing about 250 million a year before you start maybe adding ancillary is what's for a lot of people, that's not very easy to do just because of price points. So it may be different in everyone's market. But here's the thing is that we're in California, we have to pay our employees more to we have to pay our reps more, you know, the insurance rep has to make more cost of living like average income. I mean, you probably have to make 150 to live a decent life here. So it costs a little differently. So these numbers like it's my area-specific and what and there's no like rule of thumb. So what I would say is that make sure that you have but it's kind of like the people that want to start a team. And they personally haven't sold homes themselves. You can do it for sure. But let me tell you it's a lot easier once you kind of lead from experience. And then you build up your business enough. And then you can throw people in. It's like, hey, you've already got your team going. Just because you have a team doesn't necessarily mean you can add ancillaries as well. But the little things like partnering with someone on insurance, like you can be a part-owner and get paid out. As long as you're part owner, you can get paid on it. You can't get paid referral fees on insurance in California. If it's like, hey, this one close this one did it you can't do that you can get paid on leads though. So if you do sell your leads to an insurance rep, they can pay you on every single lead. Same thing with a home warranty. So if you reach out to these companies, they can pay you on a per lead basis. They can't necessarily pay you on a closing basis.
Brian Charlesworth 13:40
Yeah, absolutely. So you have these main three. When did you decide to go beyond those? What sparked you to go beyond that?
Mark Pattison 13:47
I mean, just become as I said, the hardest thing is getting the customer so it just becomes easier and easier. Once you have it set up. It really is just a plug-and-play model. It's you form the corporation, LLC S corp, like however, you're going to do it. And then you then register it and you just plug that business in you find an employee for it. So I'm starting one now it's a referral fee business to basically any agent that comes on our team that's not licensed yet that is coming onto our team, and then they are getting paid to reach out to people who sell Zero to One home a year in our marketplace. We then will reach out to them and say hey, look, we'll pay your licensing fees every year. And we'll pay you 25% On referral fees or 33% on referral fees. However, we want to frame it for any referral that you guys send in when it closes. Because a lot of people that sell Zero to One homes, it's not that they don't know people that are buying or selling they just are licensed for no reason. Well, you can legally pay someone's you know, a referral fee when they're licensed. And it may be a pain for them to keep their license, you know, active and paying for that. So we're talking about just paying it for him
Brian Charlesworth 13:47
That's a great idea. So essentially they just want to yours is going to keep them active and they can just refer business if they choose. Yep. And if they refer one client a year That closes, we pay for their licensing and we pay him a referral fee. Okay, so it totally makes sense.
Mark Pattison 15:06
Yeah and then what it does is we get people that are newly licensed or waiting for the state of California to give them their license. And they're calling these people. And they don't have to be licensed to talk to another agent.
Brian Charlesworth 15:17
So when you say you have seventy agents, are these people included in that?
Mark Pattison 15:21
No, these let me look and see my active agents. So one thing that I always do is I tracked everything. So we have all of our stuff somewhere you can find it in our Google Drive or on our monday.com. We're switching more to monday.com. But active agents wise. So we have 72 active agents. Okay, 71 active agents,
Brian Charlesworth 15:42
And so how many agents are? I don't know what you would call that they're
Mark Pattison 15:47
Selling houses? Oh, the referral one?
Brian Charlesworth 15:49
The referral agents,
Mark Pattison 15:51
While we're waiting for them to be licensed? It'd be like, two to four of them. Okay. Yeah.
Brian Charlesworth 15:56
Okay. All right. So let's talk about these additional services. So you set up an LLC, you, you're bringing these additional services. Let's just take an example. I know you've been focused on for a while this home concierge, which Sisu recently launched, and I know you've done it before. And now you're doing it was easy. Let's talk about that. Like, what was your experience? What were your thoughts? Why did you go there before what it actually is? A lot of people probably don't know what we're talking about when we say that. So
Mark Pattison 16:25
yeah. So when you close a deal, you ever get those calls, it's like at, you know, what is ADT? They'll call you back, hey, refer us to your clients, etc, we'll pay you X amount, we were doing that. But the thing is, is that every time we had an ADT person, I felt like they were leaving the company, or we couldn't get in touch with them or so it wasn't the easiest pass off, because they were always having a turnover. So I thought, Man, how can we get this to where we actually are getting something. And that's how we're partnering with you guys. So that when we do get that client under contract, we can, you know, handle all their services, internet, solar, you know, whatever they need, can all be done. And it's a partnership, so it's legal to get paid on those referrals. So that's our next big journey. We already have it happening, but it's just not smooth.
Brian Charlesworth 17:09
Yeah. Okay. So again, are you guys just going further down that pipeline? Like, one of the things you said, Mark, earlier in this conversation is you said you want to control that client's experience. So I think you guys, as team owners have a unique ability to do that. Because you're the first ones to get in the door, like you can control all the way every step of the way you can control and give them a better experience, as long as you perfect that experience, from not only mortgage and title, but all the way to close, and in my opinion beyond close. So let's talk about that for a minute.
Mark Pattison 17:50
Yeah, the coolest thing is, once you create this, like an Empire of businesses that are all helping each other and feeding off each other, when someone goes and checks their home bot, and it's synced to the lender, and then the lender is like, hey, this client here who's checking their home value. Now say that they said that your client bought through a random bank, and you didn't know the lender? Do you think that lender is going to tell you that they're looking at the home thing, they probably don't even remember you from the transaction? They're going to then refer you refer that client to someone else? If you haven't been in touch with that past client. Say goodbye to that past client. Yeah. So it's always with all of our businesses. I mean, the insurance like, hey, this person just called me and asked me about insurance on a duplex. I think they're interested in buying a multi-unit. So that insurance rep will tell their agent, hey, you might want to reach out to him and helps out a ton within our team. We're all looking out for each other.
Brian Charlesworth 18:45
That's a great point. Anytime you send business outside of your business, it's probably not going to come back. Yeah. So if soI and repeat business is something important to you? Do you want to make sure you're controlling that experience?
Mark Pattison 18:57
Yep. So I mean, it does matter. You know, and it does help you out. Do you love like, wow, we're having this while we're doing this right now? I'm taking notes. I like thinking of more ideas. Yeah, well, I'm like thinking, I'm always like I said, if you're not growing, you're not innovating, you're just gonna die stagnant. Like I'm thinking of different ways to better serve my agents to help out once something gets under contract, my mind is always racing. But yeah, it's once you have them in your umbrella of services, it's a lot easier to keep them and to keep them forever. You know, you've got to perform. Once you perform, then you're good. So I think that's the key. And I mean, what Zillow and they have and what they're doing, and they're charging those referral fees for closings, and everything is because it costs them so much to acquire that client, and they deserve it. I mean, to be honest, like they've built a brand, where are people going to PorchLight to go look at homes, are they going to Zillow and realtor.com? Right? I owe them money. Like, if you can't step your game up, you're going to owe someone else money. So once you get that client, you got to keep that client.
Brian Charlesworth 20:00
Yeah, well said.
Brian Charlesworth 20:12
And so of course, I mean anybody in this business is thinking along these lines at this point. So, are you a Flex team?
Mark Pattison 20:22
We are yes, yeah. Okay.
Brian Charlesworth 20:23
So this is coming from someone that uses Zillow. Do you also use Realtor?
Mark Pattison 20:28
Yes, on Wednesday, I will be going to New Mexico for the top 100 Realtor.com clients.
Brian Charlesworth 20:34
Okay, so,
Mark Pattison 20:36
Before Wednesday, I have to learn how to say the word realtor. I don't know how to say it. So
Brian Charlesworth 20:42
it needs to learn.
Mark Pattison 20:43
Yeah, everyone always makes fun of me the way I said I say beg funny as well. So yeah, we use realtor.com and Zillow flex, we're not on we are on Opcity because that's owned by the same company, Move.com owns them. We're on just regular pay leads on realtor.com because our market is so expensive, that they haven't switched to market VIP. In some markets just so everyone knows it's going to be around 50% of leads. They say by I think 2024, 50% of leads, they say you're gonna have a referral fee attached to him.
Brian Charlesworth 21:16
Yeah, and I know, I personally know a lot of businesses with that. That number is way above that already.
Mark Pattison 21:22
Yeah, yeah. I mean, that's what you're gonna end up running into. But here's the thing, you're either gonna pay a referral fee, or you're gonna pay to get that client and remember how I said, Yeah, I would love if I can get more clients on PorchLight's website to be the first point of contact. But that's not the same. It doesn't work the same as what it does for Zillow.
Brian Charlesworth 21:40
Yeah. Okay, Mark. So I want to back up a little bit. The name of this podcast is Grit. I love having people like you on here that are very entrepreneurial-minded. Can you take us back in time? Like, I know, you grew up in a family of entrepreneurs. Can you talk to us about that?
Mark Pattison 21:55
Yes. So I was the only person in my family that worked for someone else. So like my parents owned roller skating rinks. They had a couple of other buildings, built billboards, etc, that they still have. They have And mind you, they have roller skating rinks, and they are very successful. So if my parents can make roller skating rinks very successful, they're pretty smart business people. But the biggest thing is, they were always wanting to like create more and create more opportunities. And I think that's where I've learned that from, but even like my aunts and uncles, my uncle did work for Microsoft when he was younger. But besides that, he owned the largest chain of retirement communities, My other uncle owns a private custom yacht builder, and My other uncle owned car dealerships. So it's like, always like, and the funny thing is, they all came from nothing, and they just kind of like, built it. So I don't know what it was in my family where they just kind of, you know, stem from that. But I've always had it in me, I feel like if it's part of you, one was, I never wanted someone to tell me I had to be somewhere for something. I don't mind working. But I don't like the idea of being like chained down. So I want to be able to work wherever I am. And that's what's allowed me the freedom and it's, it's all about implementation, you're never going to have everything perfect. You're always going to have something you're going to constantly have to innovate and change. But that's what I find exciting. So if you're someone who is like wants things to be stable, one is to check out the DISC profile. It's like if you're a high s and love stability entrepreneurship is probably not for you, and Team leadership's probably not for you. But if you love like the high driver, the high D, you love getting out there making sure that it's like, how can we make this better? How can we find a new challenge, then? That's what I find this. That's why I thrive in it. Like when COVID hit. And everyone was like, Oh, shit. I mean, there was an oh shit moment. But in my mind, I was like, how do we pivot? How do I make sure my agents don't have to quit real estate because no one knew what was happening. And despite the pandemic, I disliked that change. So finding something where you can thrive in, and entrepreneurship is what's done it for me.
Brian Charlesworth 24:02
Okay. So that being said, I think we're moving into a little bit different market right now. So what are you thinking as far as pivots? And I'm guessing that's part of why you're doing these ancillary businesses. But tell me more about what you think about right now, in today's market, like, what are some of the pivots that you're thinking or planning?
Mark Pattison 24:24
Yes, it goes back to a month ago, or two months ago, you could put a home on the market, it's gonna have offers immediately no questions asked, doesn't take much work to make that happen. Now, you know, we have listings where one of our agents that's only been an agent for a year, and she has a listing and it's not selling and she's like, Oh, my gosh, what is wrong? Well, it's been two weeks. But she really is like, what do I do? Like how do I future pace the client because I've never talked about that? So it's our job to educate our agents. Hey, look, you know, we're gonna have to figure out what the market and where it's going and get ahead of it versus chasing it down. Yeah, I don't think we're gonna see like a drastic, you know, price decrease, I think we're gonna see more stability. But I mean, even in certain markets like for us condos downtown San Diego, we probably will see a price decrease. Because when there's so much inventory, and you're choosing between box a, box B, or box, z, because they're all the same, you will have price decreases. So despite what people say, I think we're going to encounter, you know, in certain markets, especially like the condo market for us. But as for like something that's waterfront or a little bit more unique, we're not going to encounter that same price adjustment because you can't replace that property. And that's how, you know, when you look back in 2008, the home prices that got hurt the most are places that were cities that didn't have much uniqueness to them. They weren't waterfront, they weren't Seattle, you know, la San Diego, they were places like Nevada and Las Vegas, they were in Phoenix, Houston, Texas, as that changes. Because if you can get exact homes all over the country versus if you're on coastal, I feel like it's a lot more solid. Plus San Diego, we have a military, and we have 30% of our population. So there's a heavy military market here, and they're getting paid the same, so it doesn't change. And I think especially when you're looking at investments where you should go and where you should be working, is look at places that have more than just one economy. Look at places that are like, you know, we have biotech, which is massive, with huge health industry, we've got as I said, the military industry, we have five major bases here. So San Diego's gonna be a little bit different than most markets, but we're gonna see in those little pockets. In my opinion, downtown condos are never an amazing purchase. They're good because you can get what you want. And they're easy to maintain. But you're going to have a little bit longer sale time.
Brian Charlesworth 26:47
Yeah. So the selling time I think is what I'm seeing is already impacting. So here in Utah. Today being May 23 2022, there has been about 2000 homes or less on the market along the Wasatch Front over the last two years. And you know, it's not that homes aren't selling, you have even more problem selling but they're only staying on the market for a day or two. So you don't have the big inventory, right? Yep. Today because they're taking longer to sell. All of a sudden, there's over 500 or 5000 homes on the Wasatch Front for sell today. So what is that? What does that mean? Mark to help help me help me identify like, what does that mean to me as a real estate team owner, as a business owner, as a Realtor?
Mark Pattison 27:41
The biggest thing I think is that and trust me if any of us knew what was going to happen, you know, everyone says, oh, it's not going to be you know, it's not 2008. I said, Well, you know, what, 2008 wasn't what the previous recession was either. So it always is something that's like, oh, shit, what happens? To me, I think it's going to turn down to affordability. And yes, supply and demand, we have no supply because we didn't build homes after 2008 For 10 years or something. So we had this huge shortage. And then we had this thing called COVID. And lumber prices went through the roof. So lumber prices a year ago, were almost three times what they are today. So thankfully, they've come back down. But what do you think that did for building like, it didn't help in building, it hurt? So we're just at such a shortage. But even if we're at a shortage, that becomes a problem with affordability? And how much can these people afford? I mean, what jobs are being able to afford? Our average home price in San Diego right now is $1 million, which, well, how much do you need to make to bake a $1 million home payment? And that's average, that's not even a nice house. So, you know, coming to it, it's, I think that it is gonna see, you know, there are some cities where a million bucks aren't much and they thrive, like look at Vancouver, Toronto, New York, friggin, all Seattle, all those places have been San Francisco, they've all been high for a very long time. So just because we're hitting the million-dollar price point doesn't mean that there can't be people that afford it. But I do think there's that. It's just like, how many people can really afford that, you know, for a long period of time, especially now the interest rates, five-plus six, you know, that changes your affordability every month?
Brian Charlesworth 29:18
Yeah, I mean, I was gonna say most homebuyers today aren't looking at the price of the home. They're looking at the price of payment. Yep. And so, so now all of a sudden, just overnight in a matter of 90 days. What used to be a just call it a $5,000 payment is now a seven $8,000 payment. Yeah, so they can't afford the same level of the home that they could afford then. So in this world that we're in who wins like as far as the real estate, business owners like there, there are a lot of people in this real estate space. Who wins who disappears. I see the space getting smaller. What do you think?
Mark Pattison 29:56
The people who will win are banks and title owners? No. No, They were just listening bucks. Yeah, it's uh, they said NAR said that the statistic was we lost agents this year. So we've lost q1, we lost agents, and it's the first time I think in, since 2010, we've lost agents or something. So it's going to shift, I mean, the teams are going to gobble up all the leads, rather than creating systems to hold them so that they never go away. Leads are no longer going to be for purchase,
Brian Charlesworth 30:26
can you explain why that's going to happen? Like, why are the teams going to gobble those up? And why do they have an unfair advantage?
Mark Pattison 30:34
So think of it this way is like teams. Twenty people used to be a large team, three, four years ago. Now 20 people is a small team. Solo agents, if you've got sphere of influence, or if you have, you know, some scenario of like a past client database, fantastic, work the crap out of them if you can, because it's the most profitable business you'll ever run. If you're a newer agent, join a team immediately and stay on that team. The biggest thing is that when you're on a team, and when we build the teams that we have because we have all these answers, we've created this, like an ecosystem, that the client now sees that it's basically a one-stop-shop, and it's easy for them. And they're getting the best service, they're getting the best rates, they're getting their offers accepted. So why would they go somewhere else? You know, we were creating the Amazon of real estate. And it all comes back to making sure that we manage it properly. And why is that client going to come up, there are only so many clients, so many homes that are going to be for sale. So we're grabbing them up, it's a land grab, there's just not as many clients, you're just not gonna have anything left. No team has ever sold more than 500 in San Diego County. And I think last year, maybe five teams sold more than 500. So and we sold 800, another team sold 800. Like it's getting pretty up there on the numbers to were like, those solo agents are only grabbing and it's gonna be rare that they're going to sell 24 houses like they used to.
Brian Charlesworth 32:00
Yeah, it's so interesting. So you just said something which you said, if you're a new agent, get on the team and stay on it. So I think five years ago, people were getting on teams, and then they think, okay, I know how to do this. And they were disappearing from these teams. Like that's not happening anymore. Right? If you're on a team, you want to stay on that team talk about why.
Mark Pattison 32:23
Yeah, I mean, it goes back to I mean, obviously, everyone always talks about splits. You know, it's the cost of that first client is expensive. But as we grow and able to change, like we're giving better splits to our agents, it's actually better than what if you're gonna go sign up at KW, no offense to kW, just labeling random brokerage, or compass or Sotheby's, your split there more than likely is going to be less than what you'd be on a team. Now, if you're a brand new agent, you do need training, it's kind of an apprenticeship, you're paying to have amazing training, you can get your real estate license, but it's not the same as you know, in the field, working with agents that actually sell a lot of homes. This way, you're getting that experience. And then after that period, your split changes, we have you on graduation to where it gets to be where like, Dude, you got it pretty damn good. There shouldn't be a reason you leave. Because we have our ancillaries. Now, if you're using the ancillaries which we don't force our agents to use. But if you're using those, it helps us be able to pay you more. So why wouldn't you want to if it is the best thing for your client? So we just make sure I mean, Berkshire Hathaway and they have been doing this for years. They're, you know, they have Pickford Esker, I believe, and another title company, they all own, they own all those. So they've been doing it for years. And that's how they make their money. And now it's just time that it's shifting to the teams.
Brian Charlesworth 33:39
Yeah, and well said, I always question though, is splits really what somebody should be focused on? Or should it be focused on their income? Never about? If you got if you go to any other industry, people focus on the income, like, if I want to make 300 grand a year? Okay, I want to make 300 grand a year. Where can I do that?
Mark Pattison 33:57
Yeah. So if anyone asked in the interview, I say, okay, so wait real quick. You've been an agent for six months. Right? So what's your split there? They tell me, I guess. So. How much did you make? Will? If your split was better? Why don't you make the dollar amount that you just told me that you wanted to make? Because it has nothing to do with splits. It has everything to do with opportunity. But the reason being is that people don't understand a great team can catapult you to that opportunity. And just because I'm taking 50% I'm not I'm taking that 50% That's going to pay for I mean, our bills are well over $200,000 a month. There's a lot of money that goes into making sure your business to making sure your phone rings, right if you don't understand that, go somewhere else for six months. And please tell me how that works out for you. But
Brian Charlesworth 34:44
I know that you don't have the risk of 200 grand a month if the industry goes away, right?
Mark Pattison 34:51
Yep. Yeah. So it is a it's a thing as you know, if people ask about splits on the team, it's like, I have a very hard feeling about that. And if they knew how to do it better, then, by all means, go do it.
Brian Charlesworth 35:05
If somebody asks that in an interview process today, they're probably not the right fit for your team, I would guess.
Mark Pattison 35:09
You know, we just had a guy that we actually were interviewing, and we told them, I ended the interview, I said, Hey, man, you've asked about split stuff three times, you haven't sold shit for homes, and you've been an agent for five years. So you don't understand the concept. You're not gonna be on our team. And he was like, Well, you know, and I said, No, no, no, I told you not to mention it. It's not about that. So you're so short minded, like, you need to see beyond that. And if the opportunity, I explained this in the way of like, all of our services in the programs that we pay for, like Sisu, and Follow Up Boss, and Ylopo, all the leads that are coming into those systems, that's your foundation, I don't want you to be on leads in freakin two years, I want you to have a business that you can be proud of. But without those leads, you're not going to have a business. So if you want to start from your sphere of influence, and you're 24 years old, and the average home price is a million bucks, please, I'll be very impressed when you do. But if you don't have those leads coming in good luck. So we'll build your foundation, it's your job to follow up those clients and get referrals from them. That's the walls of your house. And then when those clients sell, that's the roof of your home. And that's how I'm going to teach you how to make a solid business in real estate. It's through my leads, but without it, and without my training. It's not possible. So stop focusing on splits focus on and I mean, if you want to focus on splits, I'll just take more from you. Because I need more too. Where does it end?
Brian Charlesworth 36:26
You get what you focus on. So if you're gonna focus on splits, you can pay a higher split, right?
Mark Pattison 36:30
Yeah, it's like shit. Come on, like you're gonna, you're gonna have a really, you can go and pay 70/30 and another company that gives you absolutely zero, you know? Yeah.
Brian Charlesworth 36:38
Okay, so I'm going to just ask in wrapping up here, just have a few personal questions for you. So where are you from? Originally? Where'd you grow up?
Mark Pattison 36:46
Seattle, Washington, born and raised. Went to Seattle University. And then my first job was at Microsoft, I lasted a whole six months before I quit, and moved to Chicago. And then after that, I was like, Man, why do I keep going to these places that it's snowing and cold and raining. So I said, I'm gonna move to Southern California and become a real estate agent. And so that's how I ended up in San Diego. I didn't know one person here. Didn't have any money and moved into a pretty crappy apartment, and then just been chugging along at it. I've been here for nine years.
Brian Charlesworth 37:16
Okay, so how old were you when you made the move to be
Mark Pattison 37:20
29, I believe? Yeah. Wait, 28 I moved here.
Brian Charlesworth 37:24
So you just decided I want to be in San Diego. And this is what I'm gonna do. And you went for it?
Mark Pattison 37:28
Yes, I was actually I had a ticket to LA. And then I said, I don't think I really want to sell real estate in LA, and I changed it to San Diego. No means I didn't have any like, person that was saying like, Hey, you should move here. I just was like, I think San Diego might be better for me.
Brian Charlesworth 37:41
Yeah. Congratulations. I love it. So when you learn, obviously, you're constantly growing? What's your best way to grow? Like, what do you like to do? What do you like to listen to and read? Whatever.
Mark Pattison 37:53
So my biggest thing is implementation. So I think that I mean, I don't really listen to podcasts. Even though I have a podcast, I find that if I am constantly consuming information, I don't have enough time to actually do it. So I think there's like forever, like, what do they call it like forever students, like my cousin has like five master degrees, but he's in like, broke his shit. Like, dude, what do you do with these things? Yes. Whereas like, you can take something and make sure you do something with it. So having more of an action plan. If you can listen to podcast all the time, and get stuff done. I think it's great. I think more education, the better. But I think America are just like we're infatuated with learning more, but not taking that and we're too scared to put it into action. Because someone might judge us if we fail. I think it's more admirable if someone has five businesses and four of them failed, and one of them made them a multimillionaire than someone who doesn't do shit. So, like, it's the nature of business. How many no's do you get before you get a yes, same thing in business, you're gonna have so many things where you're just like, Shit, I feel like I'm struggling. You should be struggling. It's tough. That's the point of it. Not everyone does it because it's too hard. Go there and make sure you're taking action. Ask for books. I mean, I've got quite a bit there. So got a bunch of books there that I do go through. I think like the top half, I haven't read the bottom half a half. So there's just ones I think that you can pull certain things out of, but it's more so like I said, don't necessarily feel like you need to do the whole book. blankest is a great app where you can go through and hear like a summary of a book or my biggest thing, honestly, learning from each other. doing podcasts. Like I said, while we were talking, I freaking took notes. Yeah. So going through making sure that you know, if I said something great that you thought you should take action on, take action on it. If I said a bunch of crap, I'm sorry. But if you can take some action, then that's the best way I do my must do's on every conference. Like this is what I have to come back to and figure it out. We do a Monday meeting with our executive team. Every Monday we go through all my notes of what I learned from that week.
Brian Charlesworth 39:54
So I think that's the best advice anyone could ever get is to take action like so many people live in their head, they're afraid. And that fear is going to stop you from taking action. They're 1000. Everyone has 1000 great ideas, but it's about execution. So
Mark Pattison 40:09
I have so many failed businesses. I like a dog collar company, I have a T-Shirt Company. I have like 300 business plans on my computer. There's a ton of stuff, but
Brian Charlesworth 40:18
and every time you learned, right, I mean, every time you're gaining knowledge and experience
Mark Pattison 40:23
100% Everything that I did, like when you're doing those little things, it's not a failure. Because if you took something and learn from it, now, if you're doing the same mistake over and over again, now something's wrong. But yeah, you learn I mean, like learning how to form a business. I learned that from when I frickin made a dog collar company when I was in my 20s. And, you know, I went through with that built the website built an LLC, like, I didn't know how to do any of that stuff. But now I'm doing it freaking every other week. It feels like
Brian Charlesworth 40:48
yep. So guys, go out, take action, mess up. If you fail, learn, make changes, pivot, grow, and continue to take action because that's where the success comes from. So Mark, your great example of that. And just thanks for being on the show today. Really enjoyed our time together and look forward to seeing you continue to succeed and thrive in the San Diego market.
Mark Pattison 41:11
Well, thank you for having me, and for sure, happy to share if anyone ever has any questions feel free to message me wherever you know Instagram or you know, hey, if you're if you're lost somewhere definitely happy to help.
Brian Charlesworth 41:22
What is the best way to get a hold of you?
Mark Pattison 41:25
Probably social media or I have a website. I mean, you can see my name on there. It's MarkPattisonrealestate.com. Or Mark Pattison Show. And it's P-A-T-T-I-S-O- N. Mark Pattison Show on Instagram. If you DM me on there, happy to help anything. Great.
Brian Charlesworth 41:40
Mark. Thanks for being on the show today. Talk to you soon.
Mark Pattison 41:44
Alright. Thanks, man.
