He looks back at how starting in a down market gave him the grit and know-how to tackle today's challenges.
Ryan dives deep into the current state of the real estate market, pointing out how it can mess with your emotions if you need to be more careful. He shares his thoughts on why agents who can manage these ups and downs will emerge stronger and more successful. From dealing with skyrocketing interest rates to the dwindling number of agents in the field, Ryan talks about how those who stick it out are likely to see big wins in the coming years.
Ryan also introduces Fello, the software that's helping agents turn their databases into treasure troves of listings. He breaks down how understanding your data can seriously boost your bottom line and make your life a lot easier.
Top Takeaways:
(4:42) Was 2010 really the hardest market, or is it now?
(7:11) Will the market shake out the weak agents?
(9:03) Could rising rates be a blessing in disguise?
(10:24) Is the market cutting agent numbers in half?
(11:54) Is the NAR’s influence fading fast?
(13:07) Are new agents facing a 2010-level challenge?
(14:21) Have agents forgotten how to hustle for leads?
(15:31) The high cost of cherry-picking leads
(16:22) Sisu: the power behind smart lead assignments
(19:08) Do you fear discussing compensation?
(20:36) Can 15 questions win more listings?
(23:32) The hidden dangers in your client database
(24:58) Are buyer leads hiding goldmines?
(26:45) Could missing data be costing you listings?
If you’re ready to learn how to keep growing in a crazy market and turn your leads into gold, this episode is a must-listen. Tune in for Ryan’s expert tips and a few laughs as you take your real estate game to the next level.
About Ryan Young
Ryan Young is the CEO of The Young Team, recognized as the #1 large real estate team in Ohio and #15 in the U.S. by WSJ RealTrends. In 2021, he founded Fello, a platform that transforms agents’ databases into 24/7 listing engines. Ryan comes from a family deeply rooted in real estate, being a third-generation professional in the field. His approach focuses on innovation and efficiency, helping agents thrive in a competitive market.
Connect with Ryan Young Today!
Episode Transcript:
Brian Charlesworth 00:35
All right. Hello everyone, and welcome back to another episode of the grit Podcast. I'm Brian Charlesworth. I'm the founder of sisu and the host of the show, and I'm really excited about today. I'm usually excited about these podcasts, but this is a great one. We have Ryan Young here with us. Ryan is the founder and CEO of Fello and I guess that's what you're more known as today, Ryan. But Ryan's built a massive real estate team over the years at KW. He's been in the top 250 teams across the country. He's been in the industry forever. I think you are third generational real estate, if I'm not mistaken, is that right? Ryan? Correct?
Ryan Young 01:12
Can't get it out of the family, you know?
Brian Charlesworth 01:16
So. So anyway, Ryan's been in the business forever. And I'm, I'm excited to hear from him today, because he's built an extremely successful team, and he continues to do so, while he's also building an extremely successful software company. So Ryan, it's great to have you on the show with us today. Thanks for joining.
Ryan Young 01:34
I'm excited to be here and you know, like we're kind of wrapping before, we have so many similarities and synergies in the way we've both skilled our software companies and leveraging some of the real estate teams that we have access to. You with, spring myself with, you know, our real estate team, and so excited to kind of talk through like both software and real estate teams simultaneously. And a lot of times those two conversations overlap when it comes to scaling growth. So super excited to go deeper.
Brian Charlesworth 02:05
Well, before we start, why don't you just tell us more about your team and maybe some other history in the real estate industry.
Ryan Young 02:11
Yeah, so I actually joined my folks. Gotta give credit to them in 2010 as you can imagine, 2010 was not a great time to get into real estate, but maybe it was the best time, because there was not a lot going on. So I joined my folks. It was just my mom and my dad. They created a team about seven years before that, I was a chef out in Las Vegas at the time, but cooked all over the country, went to culinary school, and I got so burnt out from the culinary industry, I called my folks up and said, What do you think about me moving back home to Cleveland and joining you in the team. And they welcomed me with open arms. And, you know, I'm super competitive person, and I told him, if I'm going to join you guys like we're going to grow this team, we're going to build a business. And you know, you look back 14 years later, we've got an unbelievable team, not the biggest. You know, we have 15 agents actively. We sell about 500 homes a year. We have always prided ourselves on being like a very listing based team. So if you drive all over northeast Ohio, you see our signs everywhere. You know, we're normally 65% or so listing based, and we've always prided ourselves on helping agents get the most out of their real estate career. So, you know, the average agent on our team sells, really, anywhere from 30 to 40 homes per year. We have a lot of $25 million producers, and we really are proud that there's a lot of amazing mega teams out there, but we've always wanted to be a little bit more dense in, like, more of that Navy SEAL type of model. And what's so cool about the young team was a lot of the things that we were doing to have success, some of the pillars that we were doing to build the young team ended up being the foundation of the software company we built called Fello which is really focused on helping agents generate listings out of their database or convert listings out of their database. And it's really, we're gonna dive into that here, for sure, for sure, we're and it's gonna, it's really cool to build them both simultaneously, because they each support each other. And, you know, it's just one of those things, excited to kind of talk more about some of that. Yeah,
Brian Charlesworth 04:15
I mean that you're right. That is exactly what we went through with spring and sisu, right? Sisu was built to help her grow and scale her real estate team. And because of sisu, she now, and obviously it's her being a great leader and all the things that she's developed, but she's been able to leverage sisu to, you know, get up to a 90 agent team and really streamline and automate all of her systems. But I wanted to ask you, so you got into real estate in 2010 how would you say the market today compares to 2010
Ryan Young 04:49
Yeah, that's a good question. You know me being, quote, unquote, an old timer now, because I'm, you know, been in the industry 15 years, I want to say that it was harder than but. It was so different. I actually think that it's harder now, and I empathize with our agents now. In 2010 it was just hard, right? Like there was just no home selling. A lot of people were underwater on their properties. It was, like, very consistent for, like, maybe three, four years.
Brian Charlesworth 05:19
It was a depressed market. It was a depressed market. People did not have the money, right, correct? They people have the money, but we have other things going on.
Ryan Young 05:28
I think the reason why I say today is actually harder is I feel like it is so emotionally exhausting what we've experienced over the past four years, if you look at the instability of interest rates and the volatility of the economy and, you know, inflation and deflation and all these different things, like the stock market crashes, you know, for a week, and then all of a sudden we see this bull run. And I think it's just from an emotional standpoint, I think it's starting to get to just pure fatigue, because it's high and then it's low and it's hot and then it's cold, versus like for me, for like, four years, it was just depressing. Every seller we were talking to was losing money on their house. We had to find creative ways to help them sell their homes. Average time on market was three times longer than what it is today. But it was consistent. You know, every seller that you were talking to was down, versus today, it's like buyers are losing out in 15 way, multiples, and sellers are selling their home for 10% over asking, but their neighbors sold it for 15% over asking, and so they're pissed. And it's just really like all over the place, which I think makes it a lot harder to manage. You know, expectations and emotions.
Brian Charlesworth 06:41
You called yourself one of the old timers. I would agree with that. Yeah,
Ryan Young 06:45
I'm there.
Brian Charlesworth 06:46
I would say anybody that was in this business before 2020 is probably considered an old timer right now, because the people that came in after 2020 I think my opinion is they don't yet have the grit. Yep, they don't know what it takes to have to actually go work for their business. Do you agree with that?
Ryan Young 07:06
Yeah. I mean, I think that the past four years, I think we will see this batch of agents come out of this, call it half a decade, that are really positioned to succeed because of so much of the instability, but I think we're going to lose a lot of the age, a lot of the agents just, I feel like, can't take and absorb the highs and lows. And so I think there's going to be a smaller population of agents that make it through and that actually leverage what we've been through over the past four or five years to become very successful. Yeah, but I do think that I've already started to see it. I think that it's just there are so many agents that are so emotionally exhausted that they're going into industries where there's some sort of stability and they just need to kind of step away. So I agree with you. I just think that there is going to be some bright spots out of the past four years, which is it's going to produce when you look back in 2030 you know, 2035 and just like I look back in 2010 when I first got started, I think you're going to hear some stories about the 20 way multiple offers and the, you know, home selling for hundreds of 1000s over asking and stuff like that. And I think they'll leverage some of those stories to be the foundation to where they're succeeding in five to 10 years from now.
Brian Charlesworth 08:23
So you've talked about agents leaving. I'm seeing a lot of call it older timer agents than you that are like, they're looking at this lawsuit, going, Hey,
Brian Charlesworth 08:34
like, what's that? I don't want to have to deal with this. I'm out, you know. So I'm interested in your opinion of two things. First, how have interest rates really affected the business today? And then we'll jump into the My second question, which is this lawsuit, and what you expect? I mean, today's
Ryan Young 08:50
the day, right? Yeah, today's the day, tomorrow's D Day.
Brian Charlesworth 08:53
So we are here on August 16, looking at tomorrow, where everything changes tomorrow, and I want to hear your opinion on that
Ryan Young 09:00
as well. Yeah. So first on the interest rates. I personally think the interest rates are the best thing for our industry, you know, for anyone watching this in a year or two from now, you know, basically we went from in 2022 3% interest rates spiking up to 1.7 point 9% now they're coming down, you know, in the sixes, and hopefully they'll drop into the fives, just to kind of keep things moving and keep people guessing. What I really appreciate about the volatility of the interest rates is, I think what you're starting to see is it's really, actually showing who has skill set in our industry and who doesn't. I think you're starting to see the agents that were riding the 3% 4% interest wave, are really struggling, you know, and they were just there were so many people buying and selling homes that it just became easy. But I still see so many people's businesses growing right now, and despite some of the headwinds of the increased interest rates, and I think those. Are the agents that are really setting themselves up foundationally for the next decade or two to build really incredible businesses. So I think it's good. It kind of thin things out, and it shows you who really has the skill sets that aren't using an interest rate as an excuse of why their business is winning or losing, and I think we're going to be a better off industry because of it. Well,
Brian Charlesworth 10:21
I know that NARA at one point, and I think so too. I think the agents are going to be stronger and better, and the ones who stick around and make it through this are going to have, in my opinion, the same kind of ride that you had from 2010 to now. And that, when I say these industries are comparable, that's what I think of. But I was talking to Jeff Glover. He was on the show a while ago, and he shared with me that he said NAR numbers, which I believe it's one point we're up close to 2 million, but he said a year ago, they were 1.6 5 million agents. And at the time he was on my show a few months ago, he said 1.1 5 million agents now in NAR. And he thinks, and I agree with him that by the end of this year, we may be under a million agents. So what's your take on this? You know, it's
Ryan Young 11:09
funny. I didn't know that data, so I'm shocked. I didn't realize that many agents dropped out of NAR. What I'd be interested to see is how many licensed agents are there compared to, you know, obviously with the settlement, I think there's been a lot of friction within the NAR community. And so I know there's a lot of people, large brokerages, MLS is that are distancing themselves from NAR. So it'd be interesting to see how many licensed professionals there are compared to how many people are actually in NAR
Brian Charlesworth 11:41
but that's a good point that's no longer as valid as a step as it once was to Well,
Ryan Young 11:47
it used to be, I can't imagine agents. Yeah, I can't imagine what the concentration was. But, I mean, I'm making an assumption. I could be way off. But I'm assuming 90 plus percent of licensed real estate agents were attached to the National Association of Realtors. Like I said the settlement, I saw a lot of people distancing themselves from NAR. So it would be interesting to see how many licensed agents there are. You know, it's, I don't know. I I really don't know. I think it's going to be interesting to see, you know, when we look at absorption rate in the real estate industry, we're looking at the amount of supply and the demand for that supplier, how quickly that supply is coming off the market, right? It would be interesting to look at the same statistic from an agent perspective of how many agents are there, how many are leaving, and how many new are coming, right? Like, and I think that it would. How do we get
Brian Charlesworth 12:35
that information today? Ryan,
Ryan Young 12:48
I don't know. I'm curious, though, and now I'm gonna find it because I'm curious. Please share it when you do. Yeah, I'm curious if our industry, in this NAR settlement and everything actually impacts the new batch of people that want to get licensed and want to get into our profession, or if they don't know any better, just like I got licensed in 2010 if you were to look back into history of some of the worst real estate markets and recessions that we've ever seen, 2010 was a terrible time to get licensed, right? And if I understood what I was getting myself into I probably wouldn't have done it if I knew the resistance over the first three to four years. And I probably would have said, well, let me wait until, you know, things start to open up. You know, the market becomes more stable. So I'm curious if, when thinking about the amount of new applications for licensed agents, I wonder if they're not looking at this with like, this doomsday kind of mentality of like, oh, this market's so tough. I wonder if they're just excited about becoming a real estate professional and helping people buy and sell homes.
Brian Charlesworth 13:51
I think that would say that's the case. I'd say that's the case. They don't know, and be glad you didn't know when you 100% because if you don't know, you just go out and you work and you get things done. It's the people that know and listen to the news that it gets in their head, and then they start going, floundering and doing whatever the media tells them they should be doing, right? And
Ryan Young 14:11
I tell my team this all the time, and I try not to do it by sounding like the old man, you know, that walked six miles barefoot in the snow, uphill both ways. But it's like, I kind of tell them, I'm like, when I first joined my parents, we didn't have leads. We didn't have, like, buyer leads, you know, Zillow leads, realtor.com leads, stuff like that. This was right when leads were starting to kind of like, explode on the surface. So I built, I networked, I went to BNI groups, I joined all these different organizations, and I put in all this work, old school work of how you grow your real estate business and database, joined so many organizations, participated in all these charities and boards of commerce and networking groups and stuff like that. And I tell the agents on my team now I'm like, you guys, you join a team and you get fed all these leads every month. You have all these opportunities, and yet you complain about the type of opportunities we get. They're not good enough. They're not motivated enough. And I'm like, we didn't even have leads when I first started. It was we created our own leads by actually going out and meeting people and so
Brian Charlesworth 15:14
and many of them follow up on the leads you're giving them, especially unless they think it's a good i i know watching agents now for so long, many of them think one type of lead is good and another is not. So if you give them what they feel is bad, they don't follow up on it, you know, 100% Yeah,
Ryan Young 15:30
I remember when we started getting this is probably like 2015, 1617, we started to see the cherry picking, you know, and it's like they would respond to this lead because of the price point, or because of the lead source, or because of what, you know, the motivation was, but they would never call this one. And, you know, I think it's interesting still happening. And I think it's interesting, you know, we've started to expose some of that. And you just look at, as a business owner, all the revenue left on the table. When you look at customer acquisition costs, and you look at the potential lifetime value of what that one opportunity turned into a closed deal, which turned into more referrals, which turned into repeat customers and stuff like that, and all of a sudden, it makes you really want to focus on your process and making sure that like every lead is looked at with the same accountability.
Brian Charlesworth 16:20
Yeah, and that's the, as you know, we're going deeper into that at sisu, but that's the whole point of the ROI report. You know, you know what your return is on your investment, but you also know which agents you should give, which type of leads to,
Ryan Young 16:32
yeah, and that. And that's in, in just in into the the team philosophy. One of the reasons why we've struggled to scale our team. From an agent count standpoint, is we've struggled to hold certain agents accountable to expectations versus we have an applied expectation within our organization that, like you have to sell 24 homes, otherwise don't play on our team. And we've really created this just natural accountability within our organization of like everyone does what they're supposed to do, and that's why we have such a high concentration of high performers. The wider we go, we found like without having the processes in place. From an accountability standpoint, it's really hard to scale if you are not holding agents accountable to conversion, versus just bringing on the right agents that you know will convert? Yeah,
Brian Charlesworth 17:27
well, said, I know we're short on time because I've got a couple of things I want to dive into Fello with you. But before we dive into Fello, tell me about your take on this whole we'll just call it the lawsuit of 2024 and it starts tomorrow. What kind of impact is this going to have on the industry? Like, what changes do you see happening? I mean, I've heard everything from people are going to get out to people are going to make more money than they used to. To, you know, it's all over the board, right? So I want to, I want to get your take
Ryan Young 17:57
on it. I want to talk first about how it impacts the young team, and why I'm excited about it. The young team, historically has been north of 60% of our business has been listing based The reason being is because when you look at the unit economics of the young team, our average commission on the list side is 3.35% and the average commission on the buy side is 2.35% my listing partners on our team take a 30% split, and my buyers partners, or agents, are anywhere from a 40 to 50% split. So I'm making significantly less money on the young team on the buy side, because our average commission is significantly less and I'm paying a bigger split to the agent. It's really hard for me to scale financially with buyer opportunities on the young team. That's why we've always leaned heavily into the seller side. So what I'm most excited for is this concept of we are going to establish compensation, before expectations, before we actually get into a relationship with someone. We've done it on the listing side for a long time. You know how to do it, and we know how to do it. Our team works by buyer representation. We always have, we just never have had the conversation first. And something I've been telling my agents are is the agents who are going to struggle to have this conversation about financial expectations are the ones that struggle to articulate their value proposition, right? So if you fear talking about what our compensation should be, it's probably because you're insecure about the value you bring to the table. And what I'm excited for with the young team is we bring an immense amount of value, and I'm excited for us to articulate that to the buyer, and this to force us to have a compensation conversation or a financial conversation before we actually start working with them. So I am, personally, for my own team, excited about it. For the Can
Brian Charlesworth 19:49
I add something to that? So yeah, I've been working with a lot of teams not yours, yet, but we should probably start that from my experience in real estate. I sold real estate for a year and a half my first year. So. 48 listings, basically. And what changed things for me when listings is when I started doing pre listing packets, and now we're delivering those electronically through our client portal, and I'm working with teams to try to get them to do the same thing with buyer packets as well, right? So that before you even arrive, they already have selected you as their agent. In my opinion, that's a big part of it. What's your thought on that?
Ryan Young 20:25
I love it, and I would love to you know, we're avid sisu users. We love the platform, and it's like, you know, to kind of dive deeper on that for some young team, processes would be awesome. I love when we do buyer consultations. We send them what we call a buyer questionnaire, which basically we know, with the amount of intent that they fill that out is, the higher the probability that they are going to sign a representation agreement, right? The more they invest into that, the more likely we are going to convert them into a one opportunity on the list side, we have what we call a buyer pre qualification script and sheet, and we ask, you know, maybe 15 questions that sets us up to win significantly more listings than most other teams out there, because we know, going into it, they're telling us exactly what they want to hear based on the questions that we ask. And so we customize our presentation on the way they answer those questions. You know, what are you looking for in the agent you choose. What do you love about your home, right? Like, you know, are you interviewing other agents? If everything we say makes sense and you're confident in our ability to sell your home, are you prepared to sign a listing agreement with us when
Brian Charlesworth 21:34
we meet? How do you get them to ask these questions? Like, what is the means to them filling out some form and answering these questions for you. Yeah,
Ryan Young 21:41
it's one of those things that it's, you know, Brian, super excited to meet with you Tuesday afternoon. I have some, you know, a few questions I just wanted to ask really quickly that will better help me prepare. It's a script that'll better help me prepare for, you know, our consultation on Tuesday so, you know, tell me more about your home. And we go through it, and it's like we find that it just gives us so much more information. Walking in to the appointment, understanding what their expectations are, that it really helps us convert. You know, yeah,
Brian Charlesworth 22:08
yep, makes sense Exactly. So yes, pre qualifying the appointment, right? Is everything.
Ryan Young 22:14
I mean, go in blind and you are shooting yourself in the foot, right? Go in not knowing that you're competing against an agent, go in not knowing what their financial expectations are. Go in not knowing what is important to them. In the real estate professional that they choose, and you are essentially limiting your conversion significantly. Yeah,
Brian Charlesworth 22:33
yes, thanks for sharing that with the time we have. I want to learn more about how you guys are a listing team. You're always converting listing leads, and because of that, and I wish, I think every team in the United States today wishes they had 65% listings. So congratulations on that. Realized
Ryan Young 22:52
that was, like, a rare thing until we started Fello like, you know, very rare. Yeah, I didn't realize that. But, yeah, it's one of those things. It's just it's always been a focus of ours, because that's where all our profit is. Our profit is. Yeah,
Brian Charlesworth 23:03
from what I'm seeing, most teams are in the 60 to 65% buy side, right? You've flip flopped that. And I think probably Fello people using Fello to get more listing leads can help them do the same thing. So I'd like you to share the story of, like, what happened and what light bulb went off in your head as you're building your business to say, hey, I need to take this out to the real estate community.
Ryan Young 23:24
Yeah, so I'm going to try to do this really expedited and concise, but we did a guaranteed sale program, and when we used to get calls, sometimes people would say, we just want you to buy our house, so much to the point where we started buying a significant amount of homes, and we built a separate company called Flash house. We didn't want to compete with the young team when the young team was going on these appointments, and so the young team was getting a cash offer from flash house, which I owned also. And what we found was there was so much profit in the acquisition space that we basically started building a separate company and going direct to consumer, saying we would buy your house, Flash house, get a cash offer in seconds. What was interesting was I started getting cash offer requests from people that were already in the young team database, past clients of ours that had no idea that I own flash house. So I started getting really upset that we had all these past clients that were requesting offers from my other company. They didn't know that I owned it. They weren't calling us and telling us, Hey, I reached out to this company called Flash house. If flash house bought their house, they would have never told the young team, and we would have lost that opportunity. So I started realizing that there were a lot of people in my database, a lot of homeowners in my database, that were actually like I would have thought they were loyal customers. They had great experiences, yet they were snooping around on flashhouse.com and requesting offers from flash house, and it started to really expose quickly how much we are actually losing within our database, right? The other thing I used to see with the young team was we had a third party software call. Company called forewarn, that a lot of MLS is provide. And every time we would get a buyer lead, it was a part of our process to go into forewarn and to check if they were had any criminal records, right? So before our buyer agent, we call them, we just make sure that they didn't have any criminal records. So we'd put their number into forewarn and we'd pull it up, and guess what we were looking at? Right next to their criminal record was their property address. And so we started taking these buyer leads and actually saying, Wait, well, if we're going to see where their address is, we might as well add it to the CRM, right? We're looking at it, we might as well add their address and see if they actually own that property. So we started looking at buyer leads as also potential homeowners. And how could we convert buyer leads into actual listings? And so the light bulb kind of went off where we saw that there's this major, I would say, pandemic within the real estate industry, which is we are obsessed with buying buyer leads. We build these massive databases full of buyer leads, and there's very little intentionality to converting them into homeowners. And then once we have the homeowners in our database, how do we actually start converting them into listings? And so we launched Fello as this database marketing platform that really was focused on converting buyers into sellers and then sellers into listings by creating this consistent engagement that's all white labeled and all really focused on helping agents move their homeowners and their database down the funnel until they raise their hand. So you started doing this with your own team. First I started doing with my own team, and then we started realizing the young team. What's interesting is Fello has about 35 million contacts synced from agents all over the country. More than 80% of those contacts don't have an address when they come in to Fello, meaning that the majority of agents databases, over 80% of them are buyer leads, not homeowners. If you want to start converting consistently sellers or listings out of your database, it foundationally starts with building a database of homeowners. And so one of the first things that Fello really focuses on is, how do we help you start converting all of these buyers in your database into actual homeowners. Where do they live? And then how do we start marketing to them? And that's been one of the biggest eye openers within the industry, is realizing that some of our clients, 100 200,000 contacts in their database, and 80 plus percent of them, they have no idea where they live. And if we don't know where they live, how do we know if they've ever listed their home? How do we know if that's a potential opportunity for us? And so starting to really create a lot of visibility and awareness around that has been really big for the real estate community.
Brian Charlesworth 27:30
Cool, well, congratulations on your success. I know we're out of time, but guys, if you haven't looked at Fello and you're in real estate, you should check it out, especially if you want more listings, right? Ryan, do you want? Do you want 65% listings or 40?
Ryan Young 27:42
I want 75% so I'm pushing, you know, I'm still pushing on the team on how can we get that number higher and higher,
Brian Charlesworth 27:48
and my guess is, with what's happening tomorrow. Everybody in this business, everyone's always said, listings are control, listings are power. You want listings? That's even more so the case today than it ever has been so anyway, guys, check out Fello. Check out Ryan. Ryan, what's the best way for people to get a hold of
Ryan Young 28:05
you? I'd say either on social, through Instagram. Ryan young Fello, or just send me an email. Ryan at high Fello.com, you know, it's one of those things we're here to help you guys. However we can, our number one priority is helping agents convert more listings like that's what we are obsessed with. That's all we do. We don't, you know, it's that's just what we wake up every day and think about is, how can we help the real estate community start generating more
Brian Charlesworth 28:30
listings? Yeah, so anyway, Ryan, it's great having you on the show. Thanks for taking your time to join us today, and to all you listeners, thanks for joining us on another episode of a grit podcast, and we'll see you all next week. Thanks a lot, Ryan.
Ryan Young 28:44
Appreciate it.
