Why Most Agents Are Failing (NextHome Co-CEOs James Dwiggins and Keith Robinson)

Summary

Stay Paid Podcast Episode Summary
Episode Title: Why Most Agents Are Failing
Hosts: Luke Acree and Joshua Stike
Guests: James Dwiggins and Keith Robinson, Co-CEOs of NextHome Inc.
Release Date: April 21, 2025

---

Introduction

In this insightful episode of the Stay Paid Podcast, hosts Luke Acree and Joshua Stike explore the critical reasons behind the high failure rate among real estate agents. They are joined by James Dwiggins and Keith Robinson, Co-CEOs of NextHome Inc., a forward-thinking real estate franchise. Together, they delve into industry challenges, share personal experiences, and offer actionable strategies to help agents thrive in a tumultuous market.

---

Co-CEO Dynamics and Leadership

Managing a Dual Leadership Structure

Luke Acree begins by addressing an intriguing aspect of NextHome Inc.: managing a business as co-CEOs. James and Keith humorously discuss the potential for conflict, emphasizing their strong partnership.

James Dwiggins [02:25]: “The funny part is we actually used the box together and we're very different shapes. So I'm very, very tall and half anorexic and Keith is not that.”

Role Differentiation

Keith Robinson explains their complementary roles, highlighting how James focuses on the external aspects of the business while Keith manages internal operations.

Keith Robinson [03:56]: “James handles being the face of the company and helping the industry with the direction and voice that it needs.”

---

Current Market Landscape and Challenges

Market Volatility and Preparedness

Keith emphasizes the current volatility in the stock market and its impact on real estate rates, introducing the concept of "the year of stay ready."

Keith Robinson [06:32]: “I call 2025 the year of stay ready.”

Overwhelming Lead Generation Issues

James discusses the paradox of abundant online leads versus the low transaction rates, pointing out that approximately 70% of agents haven't closed a deal. He criticizes the over-reliance on technology and AI, advocating for fundamental relationship-building.

James Dwiggins [09:21]: “Just focus on your damn sphere and just talk to people in your sphere and just focus on that, you will get your unfair share.”

---

Psychological Barriers for Agents

Emotional Intelligence and Rejection Avoidance

Keith explores how high emotional intelligence in agents can lead to increased rejection avoidance, which hinders effective lead generation.

Keith Robinson [11:34]: “Good agents mostly, in my experience, have really high emotional IQs. The downside is you're more rejection avoidant.”

The Nature of Real Estate as a Relationship-Based Business

The hosts and guests discuss the inherent challenges in real estate being a relationship-driven industry, where rejection is a frequent and expected obstacle.

James Dwiggins [16:14]: “It's a contact sport. You got to pick up the phone and if you call 10 people and not interested, call 10 more...”

---

Strategies for Success

Staying Ready and Leveraging Market Shifts

Keith introduces the "stay ready" philosophy, urging agents to be prepared to act swiftly when market conditions create favorable transaction windows.

Keith Robinson [06:32]: “As rates come down, the agents who are paying attention... will get their unfair share.”

Consistent Outreach and Sphere Focus

James underscores the importance of relentless follow-up and maintaining relationships within one's sphere, emphasizing personal outreach over solely relying on digital tools.

James Dwiggins [09:21]: “Just focus on your damn sphere and just talk to people in your sphere and just focus on that, you will get your unfair share.”

---

Challenges with Brokerage Models

Unsustainable Brokerage Splits

James critiques the traditional brokerage split model as unsustainable, leading to a "race to the bottom" where agents receive minimal profits due to high splits.

James Dwiggins [22:57]: “From a company standpoint... it's a race to the bottom where you have agents that are receiving a majority of the split.”

High-Touch vs. High-Volume Models

Keith discusses the necessity for brokerages to choose between high-touch, high-service models or high-volume, low-margin strategies, avoiding the inefficient middle ground that leads to financial instability.

Keith Robinson [38:57]: “Either offer great stuff and charge them for it or you've got to be high touch, high service... or low touch, high volume, low margin.”

---

Industry Regulation and Professionalism

Call for Stronger Licensing and Accountability

James advocates for stricter licensing requirements and greater accountability within the industry to enhance professionalism and consumer trust.

James Dwiggins [30:30]: “There needs to be much tougher licensing laws and there needs to be more accountability.”

Balancing Industry Image

Keith acknowledges the industry's poor reputation but emphasizes that individual agents often build strong, positive relationships with their clients, highlighting a disparity between general perception and personal experience.

Keith Robinson [34:30]: “While the perception of the industry is one thing, the individual who works with an agent, their perception of that individual is very, very different.”

---

Future Directions and Recommendations

Ancillary Revenue Streams and Consolidation

Looking ahead, Keith and James predict consolidation in the industry and stress the importance of brokerages developing additional revenue streams beyond traditional commissions.

James Dwiggins [39:02]: “The industry is going to go through consolidation... rounding out the margins with additional services is going to be crucial.”

Emphasis on High Service Levels

For competitiveness, brokerages must offer high levels of service, leveraging technology and supportive systems to retain top-producing agents.

Keith Robinson [38:57]: “Be really high service where you're kind of taking care of everything...”

---

Conclusion and Action Items

The conversation wraps up with actionable advice for agents to "stay ready" by being prepared to act when interest rates drop, leveraging their sphere through personal calls, and maintaining consistent, relationship-based outreach.

Luke Acree [42:26]: “Stay ready. Watch the rates. When they drop, reach out to your sphere.”

Keith and James encourage agents to overcome their fears of rejection and embrace a persistent, proactive approach to client engagement.

James Dwiggins [16:39]: “This is just the human being, it's all a matter of...”

The hosts express their appreciation for the insights shared by James and Keith, encouraging listeners to connect with the NextHome team through their podcast and other channels.

---

Notable Quotes with Timestamps

• James Dwiggins [02:25]: “The funny part is we actually used the box together and we're very different shapes. So I'm very, very tall and half anorexic and Keith is not that.”

• Keith Robinson [06:32]: “I call 2025 the year of stay ready.”

• James Dwiggins [09:21]: “Just focus on your damn sphere and just talk to people in your sphere and just focus on that, you will get your unfair share.”

• Keith Robinson [11:34]: “Good agents mostly, in my experience, have really high emotional IQs. The downside is you're more rejection avoidant.”

• James Dwiggins [22:57]: “From a company standpoint... it's a race to the bottom where you have agents that are receiving a majority of the split.”

• Keith Robinson [38:57]: “Either offer great stuff and charge them for it or you've got to be high touch, high service... or low touch, high volume, low margin.”

---

This comprehensive summary encapsulates the key discussions, insights, and actionable strategies from the podcast episode, providing valuable takeaways for real estate agents aiming to overcome industry challenges and enhance their business practices.

Transcript

[Luke Acrey]

Welcome to the Stay Paid podcast where we help agents and entrepreneurs master the latest business trends to unlock growth and create a life of freedom. Brought to you by Reminder Media.

[Joshua Stike]

Welcome to Stay Paid. I'm Joshua Stike.

[Luke Acrey]

And I'm Luke Acrey.

[Joshua Stike]

And before we bring on our guest today, we'd love it if you take a minute to subscribe to Stay Paid on Apple podcasts or Spotify. While you're there, drop us a review, please.

[Luke Acrey]

We need these reviews, people. I'm begging you guys, every single time.

[Keith Robinson]

That open alone is worth somebody smushing a button. You guys are good at this. Man, that was fire.

[Joshua Stike]

God, I'm not even done yet.

[Keith Robinson]

You know what the place we get.

[Luke Acrey]

Complimented the most on this podcast is? Your intro. I don't know what that says about the podcast, honestly.

[Joshua Stike]

I do an intro, I sit here for 25 minutes and I do the outro.

[Keith Robinson]

Your intro game is fire. So keep going, keep going.

[Joshua Stike]

I'm joining us today, as always, is Stephen Acry of the Acre Brothers Realty team, the number one team in Lynchburg, Virginia. Welcome, Stephen.

[Stephen Acry]

What's up boys?

[Joshua Stike]

And our special guest here today, James Dwiggins and Keith Robinson, Co CEOs of Next Home Inc. A nationally recognized forward thinking real estate franchise, transforming how agents serve their clients and grow their businesses. Together they co host the Real Estate Insiders Unfiltered podcast where they tackle the biggest issues and trends in the industry with insight and as what we found leading up before we started, they're very unfiltered. Humored humor.

[Keith Robinson]

Yeah, yeah, very unfiltered.

[Joshua Stike]

Gentlemen, welcome to Stay Paid.

[Keith Robinson]

Thanks for having us. Thanks for having us. Great, great intro and read, man. I like it.

[James Dwiggins]

We're just gonna apologize in advance to your viewers, listeners. Like you guys are getting us at the end of a work week. They. I don't know what's going to happen.

[Luke Acrey]

So just though they said we're getting them at the end of a, a work week, but it's only 3:00 there. What, what, do you guys not actually work every day or not?

[Keith Robinson]

For Context, audience, it's April 4th, so if, if you've been paying attention the last 48 hours, it's been a, a rough 48 hours in the stock market. So yeah, I'm hanging up the cleats a little early this Friday.

[Luke Acrey]

Let's just say pour, pull some or pour for yourself or something like that.

[Keith Robinson]

Whatever makes your pain go away.

[Luke Acrey]

Well, we're going to get into the forward thinking, right? Because I want to, I want to hear what you guys think about what's going on in the market and what agents should be doing. But I got to start out with the main question on my mind. I read on the website you guys are co CEOs and I just got to ask, how the heck do you manage the business as co CEOs? Like who? Like how do you guys fight it out? I just want to know.

[Keith Robinson]

Fist fight. That's the thing. It's written.

[Luke Acrey]

I thought it was wrestling or something like that.

[Keith Robinson]

I was like, yeah, well, James, you want to take this one or you want me to?

[James Dwiggins]

I mean, the funny part is we actually used the box together and we're very different shapes. So I'm very, very tall and half anorexic and Keith is not that. And so I'm built for comfort. I have, I have been in the ring with Keith many times and it does not end the way that I want it to. Also true. I've got a concussion once from him, so I do not have that in the contract. That. That is not how we do things because he'll get his way every time.

[Keith Robinson]

I think it was karma because I've made fun of companies that have co CEOs. True. Yeah, yeah. It was sort of a natural evolution, to be honest. James has started doing over the last 24 months a lot of industry facing stuff, sort of being the standard bearer into the industry for our brand next home and for the industry in general. And as he was doing that, it meant he was on the road more. Bunch of flights, attending all the events, going to all the our stuff and just really being an advocate for the industry. And that meant someone needed to stay home and sort of tend the home fires and make sure business as usual back at the ranch was getting done. And so we've been doing it this way really for almost two years. It just sort of made sense to. So I handle sort of day to day operations. James handles being the face of the company and helping the industry with the direction and voice that it needs.

[James Dwiggins]

Yeah, I love it.

[Luke Acrey]

I'm just imagining Dwight Schrute and Jim from the office.

[Keith Robinson]

Yeah, yeah, basically.

[James Dwiggins]

Well, so. But going a little deeper and then we'll move on from the topic. Keith and I have known each other really, really long time. We actually met in 2008, 2009, somewhere in there. And it was during the Great Recession. We were in a room filled with a bunch of industry executives in California and everybody was running around the room talking about how great the market was. And then, you know, we're not shy. And I was like, the hell are all you talking about is awful. Like, we've, like, the whole market's crashed. We've, like, got people that can't afford their houses. We've laid off staff. We've lost 200 real estate offices. And I'm like, I don't know what the hell you guys are all smoking, but I know how the world is. And Keith's like. It was like, we looked up and it was like the movie Step Brothers. Like, are you going to be best friends?

[Luke Acrey]

Pretty much.

[Keith Robinson]

Pretty much.

[James Dwiggins]

And then we left the meeting and went to a bar.

[Keith Robinson]

So first break was at 10:15. We both leave and we go to the bar. We didn't start drinking right away, but we got coffee, I think we didn't leave that table. I mean, we had two meals at that table. We had lunch at that table. We had dinner at that table.

[Luke Acrey]

That's fantastic.

[Keith Robinson]

We never made it back in the room. And we just shared with each other what we were struggling with, what was going wrong. So that's how our friendship was sort of forged.

[James Dwiggins]

It's all been this way for a long time is the point.

[Luke Acrey]

That's awesome. It's a true. It's a true love story in the making. I love you guys. I love your personalities. It's freaking sick. I actually just wanted to open with that question because I did wonder, because I've actually seen that in other people, and I was like, I wonder, but here's my ultimate thought processes. Titles don't really mean anything. Like, titles are relevant. It's really about the, you know, the activities that you do and the. The, you know, giftings and stuff that you bring to the table. I'm curious. You know, the market obviously is in shambles right now. The stock market is literally cut in.

[James Dwiggins]

Half, if you know what I mean.

[Luke Acrey]

Yeah. You're already. You're already drunk. You can't. You're just like, I can't even think about it. But. So that is not only happened, but you have all the shifting that has happened within the real estate market in particular. You have all the changes in the commission stuff that went down. You have a lot of what I'm calling like mergers and acquisitions happening. Right. You got some huge brain, Red. Yeah. And you got, like, Keller Williams taking capital. You've got just a ton of different stuff, and it feels like, oh. And then let alone we've been mentioning, what, 71% of agents haven't done a deal, if that stat's true.

[Keith Robinson]

Yeah.

[Luke Acrey]

So there's just a ton of turmoil and it feels like half of the industry's in sheer panic and the other half is, you know, still feeling good. What are you telling agents at next.

[Keith Robinson]

Home right now, James, you want to.

[James Dwiggins]

Go first, you go first. Yeah, you take this one.

[Keith Robinson]

So the message that we've really been communicating for months now is 2025 is the year of stay ready. Because there's going to be windows, there's going to be pockets where. And it's an oversimplification, I know, to say, you tell me where the rates are, I'll tell you how the real estate market is. But right now, in this specific cycle, I think we're as rate dependent as an industry. We always have to focus on rates, but we're as rate dependent as an industry as we've been in a long, long time, maybe ever. And we experienced it in 2024. There was a 90 day period where rates bounced between 6 and 6 and a half percent. They started, they hit 6 and a half, kept trending down for about 30 days. Buyers and sellers started to come back into the marketplace. Then it takes about 30 days for them to find the house or get an accepted offer, and then it takes about 30 days to close. But we had a two, two and a half month period there where the market was pretty robust and people were coming back into the marketplace. So we have some recent data that tells us that when rates are between six and six and a half, buyers and sellers come back into the marketplace. So jot that down, mark that. Okay. So this year, at some point that we've made strides in that direction in the last 48 hours this year, at some point, rates are going to go back to bouncing between six and six and a half percent. Might do it for three months, might do it for six months, might do it for 12 months. But if it only does it for three months again like it did last year, the agents who are paying attention, the agents who stay ready so they don't have to get ready, the agents who can take action, per your sign, right over your shoulders there, the agents who can take action are going to get their unfair share. And so while I hope rates come down, I did not hope for the volatility in the stock market to create that downward rate pressure, but here we are. But as rates come down, the agents who aren't going to be distracted by all of the tariff talk, aren't going to be distracted by the horrible news on Bloomberg, aren't going to be looking at their 401k and lamenting it, not that they have a 401k or their Roth IRA and feeling terrible. And the ones who realize that this is a moment where this could be the beginning of the time at which this is going to create a window where some of their clients can transact. And it is my personal mission to make sure none of the agents in our company miss that window. And so I've been telling them about it for months. As soon as I think we're quote unquote there, I'll be screaming it from the mountaintop, sending emails, texts, phone calls, the whole nine yards. Because at a minimum, there'll be windows, hopefully a longer, you know, long, protracted time. But at worst case, 60, 90, 120 day windows where you can make your year if you're ready. And So I call 2025 the year of stay ready.

[Luke Acrey]

Love that.

[James Dwiggins]

I mean, it's great. And the only thing I can add on top of that is there's 4 million transactions roughly that are happening regardless of how bad things are. We know people are going to move because of life changes, job changes, family, divorce, whatever it might be. There's too many agents in the business. But we already know, as your stats said, somewhere in that number, roughly 70% of them aren't doing any transactions. It's funny, of all these conversations we have when we interview people on our pod, we talk about AI, we talk about tech, we talk about stuff. And if you just focus on your damn sphere and just talk to people in your sphere and just focus on that, you will get your unfair shit. You don't need AI, you don't need all this stuff. Just pick up the damn phone and call people and have the conversation. I'm not saying don't do any of that. I'm just saying that basic fundamental will get you so that you're not only thriving in this market, but you're coming out the other side. And I'm not saying don't scale your business. You should be playing on how to scale as the market turns. You should have a lot of automation in place to help you with that. But there are just too many people that make excuses and you just, this is a, this is a contact sport. You got to pick up the phone and if you call 10 people and not interested, call 10 more and call 10 more after that and just leave it at that and you're going to be fine in, in this, in this industry. But so many people come in thinking it's an easy business and it's not. I love it. Keith and I always share this all times. Like, oh, I want to get into real estate because, you know, I want to have my own hours. Hours? What are you talking about?

[Keith Robinson]

There's no hours. Yeah. Oh, man. Get a tight shot. When he said, I want to work my own hours.

[Luke Acrey]

Yeah.

[Keith Robinson]

Stephen had a physical reaction.

[Luke Acrey]

120 hours a week with our new agents.

[Stephen Acry]

It's crazy. Every single time they come in, they're like, we want a flexible, you know, flexibility with our schedule and everything. It's like, do the consumer decides your schedule?

[Keith Robinson]

Yeah, just wait, you know, I mean, it's flexible. You never know when you'll be working. So flexible. Yeah. So true.

[Luke Acrey]

They. I mean, it is the sphere. All the data points to it. Every coach, every thought leader will say, yeah, call your sphere. And agents still don't do it. So we have to break it down and go, okay, why?

[Keith Robinson]

Oh, I have a concept for why.

[Luke Acrey]

Yeah, that's what I want to pick your brain on. It's like, why aren't they doing it? What are the blockers?

[Keith Robinson]

Okay, so now all the views being expressed for you, Keith Robinson, no one on the Stay Paid podcast or anyone else.

[Luke Acrey]

Disclaimer.

[Keith Robinson]

Yeah. So what I believe it takes to be a really good real estate professional is a very high emotional iq. So you have to know in the moment what this person across from you needs. Sometimes they need to be picked up, sometimes they need to be calmed down. Sometimes they need to be told it's going to be okay. Sometimes they need to be told it's not going to be okay. And really, really talented real estate agents are able to thin slice that quickly in the moment and understand what this other human being needs and provide it for them in the moment. So good agents mostly, in my experience, have really high emotional IQs. The downside of a really high emotional IQ is you're more rejection avoidant than the average bear. Because your. Your high emotional IQ means you're attuned to people's reactions. And when people's reactions are negative towards you, you feel like you take it more personal, more deeply than someone with a lower emotional intelligence who's sort of just sort of going through life thinking, everybody loves. Right? So that's one component. Then the other component is they are the business. So, look, Nike's run narrow. And I don't. Okay, so I don't like Nikes. So when I go to look at a pair of shoes, I might default to Nike, because if I said, name an athletic shoe, the whole audience, anybody listening says, nike, not Adidas, but I wear Adidas because they run wider So I but still will go. Not that anyone goes to shoe stores anymore, but if I did, I'd probably look at some Nikes and then try to find Adidas that were like those. Because Nike owns a piece of my brain, right? But Phil Knight, or whoever owns most of Nike stock, he doesn't care that I buy Adidas. It doesn't change his world one iota. I don't walk up to him and be like, phil, you suck. I'm going with this German company, right? He doesn't have that experience because it's not. He isn't the brand. He cares about the brand a lot. He's passionate about the brand, he's involved. But when someone says no to a real estate agent, they say no to that agent with the face on the sign and the business card. Which is a great point. Right. So the combination of the really high emotional iq, which makes you more emotionally sensitive, and the fact that you're the brand basically just means they're over indexed for rejection avoidance. And it's hard because rejection avoidance is pushing through that is part of the key to success, like we've all been talking about. So that's what I think the psychology is. And sometimes just by saying it helps people identify it and then acknowledging it and telling them, I know, but you got to do it anyway. That's the job. Right. And so that's where I see people having compelling reasons to call. Right. Like, I know so many agents say, I would never door knock. I'm not going to door knock. Door knocking. So icky. But they will door knock next door on both sides of an open house just to politely tell them. Hi. Hey, Luke, I'm Keith Robinson. I'm doing the open house next door today. I just wanted you to know. Here's my card. Text me if anybody blocks your driveway or anything crazy. Because we might have a nutty open house. Right? So agents are super willing to go do that door knock. They don't even think of that as a door knock. But they just gave their car to a total stranger. But if you told them to go door knocking, well, that's rejection that triggers all the stuff. So I think you got to play some mental scaffolding games to push through some of the natural indicators that make an agent more rejection avoidant than the average. Yeah.

[Stephen Acry]

And it's such a long timeline for getting actual gratification. Right. You're looking at six months to 12 months to get a deal done. And so people, they'll follow up with their sphere, but they want to get something out of it instead of knowing that you're just not going to get anything out of it yet. You know, you got to follow up.

[Keith Robinson]

Yeah, yeah. Real estate agents are bad. Pleasure delayers. There's your hook, producer Mark.

[Luke Acrey]

There's a lot of clips, like, already borderline. Yeah.

[James Dwiggins]

Roll it.

[Luke Acrey]

I think you are onto something of the reason to call. And if people would think through the framework of their outreach, through the framework of what is my reason to call? And, you know, I think it's Ricky Carruth, who is, you know, champion from the rooftops. You know, this idea of, you know, you're just calling for a relationship.

[Keith Robinson]

Yeah.

[Luke Acrey]

Essentially, you know, and that is the key. So then the question becomes, well, what are the good reasons to call? One of the reasons why our magazine obviously took off for us is because it just gave agents a reason to call. Like, I would joke. I would joke with people on the phone when I'm signing them up. I'd be like, keith, I mean, let's be real, man. You really don't need the magazine. You could probably call behind sending them an Apple.

[Keith Robinson]

Yeah.

[Luke Acrey]

But the reality is that's still kind of awkward. The magazine makes you look good. It gives you a nice reason to call. It's really easy. You're gonna see. Just try it one time. And the. In the good ages, they get that. They're like, yeah, you're right. I really don't even need your magazine. But it's that it's nice. It's an extra benefit. It's like, yeah, it's just a reason to call. That's all it is, is. It just gives you that reason to have a combo with the consumer. That's natural.

[James Dwiggins]

It all boils down to overcoming your own fear.

[Keith Robinson]

Yep.

[James Dwiggins]

The end. It's just. It's all a matter of. I think about. In companies I've raised capital for, you think about how many companies don't succeed, and it's because they get rejection from venture funds, which is. Which is the ultimate thing to try and get money from, by the way, is the hardest thing possible. And you get, you know, after 50 people telling you that your idea sucks and they're not going to fund it, you cave. But that's the point. You actually have to push through. You have to keep going. Because eventually someone in the next 50 to 100 will say, yeah, yes. And 99% of people can't get past their own fear of rejection. And that's not even just. That's just people in general and the good agents that I'VE met are the ones who are confident in themselves that they can get rejection and they don't let it affect them. They just move on. And they just go, well, there's another 4,000 people I need to get on the phone with. One of those people is going to finally say yes. Even if I have to call them 50 times, they'll eventually say yes. So it's just. That's. By the way, that's everybody.

[Keith Robinson]

Yeah.

[James Dwiggins]

Nobody wants rejection.

[Keith Robinson]

What's that old line about being an entrepreneur is moving from failure to failure with the same enthusiasm that you did the first time. Something like that. Right.

[Luke Acrey]

Isn't that Winston Churchill?

[Keith Robinson]

Or might be. I don't know. I don't know.

[Luke Acrey]

I'm gonna Google that.

[James Dwiggins]

Let's just say it's him and see what it does.

[Keith Robinson]

I get hit in the head for fun, so I have no idea.

[James Dwiggins]

But I mean, was it 99% of quotes are made up on the spot or whatever?

[Keith Robinson]

Yeah, exactly. But I mean, to me, it makes sense. Right? Like, and even, you know, sometimes you get so busy as an agent, you may try to shortcut the service. Right. And. Or you, you just aren't as focused or attentive, and that's a mistake too. Right. So you've got to just push everything else to the side and focus on the human being in that moment and be fully present for them regardless of the outcome. And then you got to do it again, to James's point, they got to do it again and again and again and again. And again.

[Luke Acrey]

So I'm curious, like, and this is a little bit, maybe down a different vein of this, but agents, like, I see this huge problem in the industry of there's, you know, so many leads, but agents don't follow up with them. So in essence, they go to realtor.com and they request info and then they go to Zillow and then they come through this channel and that channel. And that's why there's millions and millions of more leads out there than there are actual transactions.

[Keith Robinson]

Yes.

[Luke Acrey]

Because people are not actually nurturing and following up. So I always thought to myself, well, why doesn't the real estate business, like, why doesn't next home build out the sales team? Kind of like reminder media has a hundred plus people on the phone that all they do is call leads.

[Keith Robinson]

Right.

[Luke Acrey]

And they, they onboard people and then they pass it to an account manager where all they do is empathize and nurture and coach. Right. And. And then we have a retention team, and all they do is, oh, you Want to cancel? Well, you go to this team now because they are specialized in this. It's almost like that conveyor belt, in a way. Why doesn't the real estate industry try to start building that model? And it's like, I felt like Redfin was kind of trying to prove that, but they failed. And I hate to say failed, but, you know, it's. They did. Like, he didn't accomplish what he wanted to do, and he. I mean, you can't say you fail when you sold for one point, whatever billion, but, you know, you can if.

[Keith Robinson]

You put 2 billion in, but.

[Luke Acrey]

Yeah, but you mean he wasn't able to pull it off? Why do you think that is? Why do you think that the real estate model requires the 1099 entrepreneur and you. And you can't, like, systematize, or do you believe it's headed that way?

[James Dwiggins]

You want me to start, Keith?

[Keith Robinson]

Yeah. You go first.

[James Dwiggins]

So this is a complex answer. Number one is that this is. This business is far more complex and expensive than I think most people realize. Um, and I'll. I'll give you this example. I could put a room of a hundred top agents together, and I could ask them to tell me how much time they spend working with a client from the moment they meet them to the moment that they close a transaction. How many hours did you spend with them? What were your operational costs? What were your expenditures? Like, what did it actually cost you to work for that particular. That. That particular client? And they will have no idea because they have no idea how much work they're actually doing with the client. Perfect example. You go show a client, a property client says, I want to go view this home. You're like, great, we're going to set it up. So you go online and you go to throw showing time and set it up. Or maybe you call the listing agent, you set it up, you have a conversation, you get in the car, you drive to the appointment. You're at the appointment, you do the showing, you spend 30 minutes there. You go back to the driveway, you have another conversation. They're like, great. I want to know more about it. Great. You go back to the office, call listing agent, get a copy of the disclosure package, read disclosure package, tell the client everything you had about it. And they go, yeah, I don't really care. Great. Wash, rinse, repeat now 12 to 15 times, and before you know it, you're in this massive, complex piece. So to answer your question, one of the problems with hourly and what Redfin figured out early on and later, which is why their model shifted from doing menus and what you can and can't do used to be full service. Then it kind of shrunk down. When you bill hourly, the client will pay more money. Yeah, that's a fact. So especially on the buy side, because that's where all the work is. You could put buyer's agents in the room and I'll ask them, hey, how many of you think it's more work to work with a buyer than a seller? And we'll be like, yeah, of course it is. Because you're doing all this stuff. Right. So you look at that from the W2 based model you've got, obviously now they're an employee. You're going to do health insurance, you've got benefits, you've got taxes, you've got Social Security. You have all these expenses that wrap up into a deal that you don't know where it's going to close or how long it actually takes. That model has not been proven because I don't know how it works in the current structure of today. So let's just tack that over there for a second. From the real estate broker's perspective, we've been in a declining brokerage split model forever and I just say it. It's a race to the bottom where you have agents that are receiving a majority of the split. Brokerage is taking on all the liability and you can't margin that without increasing the split. Like the broke. The agent has to give up more for you to staff frontline. Follow up, follow up after.

[Luke Acrey]

Agree. Yeah.

[James Dwiggins]

So it's from a. From a company standpoint. I go back to and I'll let Keith dive in because he's actually really versed in this Wikert lead network. These guys were the originators of ISAs and everything else started in Weikert Realtors and they had an entire division like they did it better than anyone. And this is. I'm going to go back what Keith is like 15 years ago, 20 years ago now.

[Keith Robinson]

Yeah, at least 15.

[James Dwiggins]

Yeah. So. But you had to charge 40 to 50% referral fees because somebody pay for the ISAs.

[Luke Acrey]

Yeah, right. Legion.

[James Dwiggins]

So what's ironic about it today is that they had a hard time getting their top producers to take those leads because they were like, I don't want to pay 40 to 50%. I'm not going to do any of that. And so the Weikart lead network is still there, but it's not something people talk about as much. It's not nearly what it is today. The irony of it is, is now you've got Zillow and you've got Realtor and who are charging 40%, which will end up being 50% referral fees, and all these top producing teams that are handling all of this stuff. And we're right back to where we were. And they still complain about the fact it's a 40 to 50 referral fee. So do you think it's the technology.

[Luke Acrey]

That'S going to make it so Zillow, it will ultimately work for them or.

[Keith Robinson]

Well, let me. I want to add a component here.

[James Dwiggins]

Sure.

[Keith Robinson]

Though first. Right. So you got to remember, let's just use the listing side. Just for example, we use the buy side too. But 80% of humans who are going to list their home call one real estate agent.

[Luke Acrey]

Yeah.

[Keith Robinson]

81. 81.

[Luke Acrey]

Yep.

[Keith Robinson]

So that means my dad's a mathematical physicist. I am not. But that leaves 19%. Right. That call more than one. Well, that means 81% of the people who filled out those online forms are searching somewhere else. Right. Or whatever the buy side is. Are searching somewhere else, but probably going to search on wherever. But call my agent.

[Luke Acrey]

Yeah, exactly.

[Keith Robinson]

All the time. So some percentage of those leads have no interest. They actually don't want to talk to a real estate agent. They just have to fill out this.

[James Dwiggins]

Form just to add. Because I think I just want to pin this. The stat I saw in 2021 was there was 81 million leads distributed across the portals.

[Keith Robinson]

Yeah.

[James Dwiggins]

And I believe it was 6.1 million units were sold.

[Keith Robinson]

Yeah.

[James Dwiggins]

In 2021. I just want to add context.

[Luke Acrey]

Yeah.

[James Dwiggins]

Just insane to add to your point. So.

[Keith Robinson]

Yeah. So a vast majority of those leads that are coming through aren't really leads. Right. I mean, sorry, portal buddies, but they're not. Right. So they're 81% are going to call one person and go work with them. So you really have. All of those people are battling it out for the 19% who really don't have someone who jumps to the forefront of their mind. And you've got to sift through all that noise to get to that. To get to that 19%. Well, that's a lot of work. And things that are a lot of work, most people won't consistently persistently do. Right. Yeah. It's not. The. The lead flow, to James's point is, is not as high as you think. And so the TAM total addressable market isn't as big as you think, then it's even smaller than that because some percentage of those people already have an agent. They're just like searching on your site and then, so whatever's after all that, right? And so you really, you think you got a thousand leads, but you might have a hundred that you're actually working, but you still have to follow up with all thousand because they don't raise their hand to tell you, yeah, I'm just here playing mess around. I'm going to go work with Steven. So that's where I think the devaluing of the online leads to the. To Stephen's point. Real estate agents aren't good at doing something for a long time without getting a result. So no one is. No human being is. And so if you get these leads and 81% of them aren't going to work with you no matter what you do, or some percentage of them aren't going to work with you no matter what you do, and then you've got to sift through them all, you're like, forget this, the online leads suck air quotes, right? Well, they don't. They're just either not really looking to work with you and you got to figure that out, or they're very early in the process. That's the other problem. Average time from someone from when someone fills out an online lead form until they transact is 18 months. So that means some are doing it in one month and some are doing it in three years. So you've got a long cycle where you're going to have to manage this large batch of leads with relentless enthusiasm. And if you do that, some stuff will fall out of the bottom. But usually people will buy leads. They do it for four months. I haven't sold anything yet. Well, right. The average time is 18 months. That means you got to do this for a year before you should expect any result at all. Like many good things, just like geographical farming and many other good things in residential real estate. So it's sort of just set up to. You have an industry that's used to working late stage, late funnel lead acquisition. Right. If someone's sacrificing their Sunday to go to an open house, they're late, they're way down the funnel, they're close to transacting. If someone is like calling you to say, my buddy James said you were a great real estate agent. Well, they're really far down the funnel. That's what the industry is used to. Everything online is top of funnel. And then what is coming through the funnel isn't fully addressable and it takes a long time. Well, you put all that in the gumbo and people are going to say, you know, insightful things like online leads suck. They don't suck. You just got to manage them the right way.

[Luke Acrey]

Yeah, that's so well said. Yeah. I've always seen it as, the issue is that it's a relationship based business and the people who build the relationship are the salesmen. And salespeople are notoriously difficult to manage in every single industry. My salespeople don't believe they get a good enough split. My salespeople feel they're the reason why this company exists. Like it just doesn't matter. I'm in marketing and it's the same problem, Right. That you know, you guys experience in real estate. And so I just go, oh. The problem in it is it's a relationship based business so you have to have the salesman, the salesman believes they have the leverage. They're not going to want to work for you. So it doesn't scale. So your go to market strategy falls apart because you're not owning, you're not owning it at the regional and your value prop is not big enough from corporate down. So it's like, oh shoot that. And that's why you can't have the employee because he doesn't want to be an employee anymore because he's the talent. So he's just going to steal that market and run.

[Keith Robinson]

Yeah, right. And even it's even more exacerbated on the residential real estate side because when an agent leaves, most of their, you know, most of their clients go with them.

[Luke Acrey]

Exactly.

[Keith Robinson]

Just a natural movement. When one of your salespeople leaves, they're still interested, the agent is still interested in your product. They just got a salesperson. Right. So it's even amplified, additionally amplified if you own a brokerage and are trying to operate it.

[Luke Acrey]

So how do we stop the race to the bottom? Like what's you guys thought process on?

[Stephen Acry]

Like yeah, that's my question too. Like what's going to happen to these brokerages? Because like I look across the board, I talk to a bunch of even the top brokerages in the area and none of them are making money. Like we're talking, you know, we're talking $50,000 profits running 120 agents, you know, at their brokerage and you just go, you know, why would you do this? You know what I mean? Why, why would we be in business with this profit margin? And so I'm just curious. But they can't do anything because the agents are coming back with splits all the time and holding no liability.

[Keith Robinson]

So it's interesting who's going first? James?

[James Dwiggins]

You? I'll take this one. You can jump in on it. Okay, cool.

[Luke Acrey]

All right, go.

[James Dwiggins]

So I. It's a question we ask often, but.

[Luke Acrey]

It'S what the question of why are we doing this?

[Keith Robinson]

Or.

[James Dwiggins]

No, no, literally, yes. I thought that was the question.

[Keith Robinson]

That's why I laughed.

[James Dwiggins]

Yeah, look, I mean, here's the deal, right? The tail's been wagging the dog for a long time now and until. Until things shift so that people understand the value of brokerage. And I think brokerages have to do a better job, by the way, at the same time. But this, this really does come down to some basic fundamentals. Licensing, what it takes to be a real estate agent is part of the issue. That is a state level issue that varies by state. I've been doing a keynote at Arello, which is the association for Real Estate. Basically it's all the licensing authorities for each state in a couple weeks. And you know, there needs to be, and I'm not a big government guy just so people don't freak out, but there needs to be stronger regulation on how things are done. Yeah, whatever. I'll just give them [e-mail] so you've been waiting. There needs to be much tougher licensing laws and there needs to be more accountability. There needs to be like, I'll give you an example of this. Why in the hell are we having a conversation about days on market as an industry? No, no, no. Literally ask yourself this question. Why are we having a conversation about days on market? Is the stupidest question ever that you're actually having a conversation. Days on market begins when you have an active listing agreement and you are willing to accept an offer. Like it's not the house isn't being staged, but like we're at a place where someone can come in and make an offer on it. And so now we're talking about days on mls, days on market. What is with demo? What is it not like it's these, these things need to be taken care of at a state level where the licensing authority is making those decisions. Secondarily, there needs to be accountability for when people do things wrong. Licenses need to be thrown out. People need to have consequences for that. And, you know, there's just too many people. I think when you, when you shrink this down to a more professional business, you'll. You'll find that this becomes a much more respectful industry. Brokers are taking on the risk of liability errors and emissions policies are through the broker. All of these things happen at the brokerage level. So I think it starts there and you know, it's, if we're going to do this game where there's business models where agents can be all over the entire country for that matter, for that matter, and like have zero oversight, then what you're going to get is this continued erosion of value proposition. Keith, you want to jump in on that?

[Stephen Acry]

I think, yeah, I think that would help the perception from the consumer standpoint too. So like you go into these appointments and you have sellers or people that are going to list their property looking at you, talking to you as if you're non professional because there's so many non professional agents out there. And so we just have such a poor reputation. And so it's just an interesting thing with like the licensing. Like I think if it was much more difficult to get into the real estate industry, I think the consumer side, consumer facing, they would look at our industry as, you know, better.

[Luke Acrey]

You need to, you need more hours to be a barber than you do.

[Joshua Stike]

Hours of, of to cut people's hair.

[Luke Acrey]

You need more hours of training to cut people's hair and get a license to cut people's hair at least.

[Keith Robinson]

I agree with everything you're all saying, but podcasts aren't fun when everybody agrees.

[Luke Acrey]

So yeah, seriously. Yeah, disagree.

[Keith Robinson]

Just to take the other side, while Stephen, I agree there's many reports out there. You look at the, the ranking of professionalism of industries and real estate agent ranks very low, right? It ranks very low. That's an accurate statement. And you also go look, a vast majority of people who transacted loved their real estate agent and would love to use them again. So how do you, how do you balance those two things? Right. I don't think the, the perception of the industry is one thing. The individual who works with an agent, their perception of that individual is very, very different.

[Stephen Acry]

That's true.

[Keith Robinson]

So I'm, I, the reason that it doesn't get seen as professional is because that independent nature, they don't call people back, you know, all of those other components. But when they do pick their person, they absolutely love them and have a great experience with them and a vast majority say they would use them again. So while I like, you know, we can get on podcasts and talk about how, you know, real estate, we need to. And the other thing that pisses me off is how many podcasts have been done where, or, you know, people stand up on stages and say we need more professionalism. It should be a college degree, it should be this, it should be that. And then you're like, okay, cool. Does that mean everyone without a college degree has got to get out of the industry until they get one? Well, no, no, I didn't mean me. I didn't mean I needed that. I meant all the new people said about work. Get out of here. Like, do you want to be part of the change or not? Or you just want to talk about it? Like, there's. It's all this. Not in my backyard. It's not me. It's these new people getting in the business. Stop. Like, we. We don't have to wait. We can control this industry. Steven, you own a brokerage. You probably only hire professional agents. Every once in a while, one slips through, and then you. You take care of that one. I don't mean you, like, put a bullet in their head there.

[Luke Acrey]

You do, Steve.

[Keith Robinson]

Yeah.

[Luke Acrey]

Only professionals. Right, But.

[Keith Robinson]

But, I mean, he probably has a more professional brokerage real bad.

[James Dwiggins]

Yeah.

[Keith Robinson]

Well, okay, then fix your 43.

[James Dwiggins]

On his arm is the number of agents he got rid of right there.

[Luke Acrey]

Stop throwing stones at glass houses.

[Keith Robinson]

No, no, I just mean, like, with. We don't. Like, everyone wants to agree.

[Luke Acrey]

Dude, I. I agree.

[Keith Robinson]

This is not shots at Stephen. This is shots at us.

[Luke Acrey]

No, no, no. Please take all the shots.

[Keith Robinson]

That's why we brought him on. He's the biggest one on here. I'm not coming for him. He's got far too many muscles. Yeah, but if we want to fix the industry, let's just fix it in our offices. Like, I don't want to wait for NAR to come up with some bullshit that I have to follow. Like, no, you want a more professional industry, start with your office. And if we all do that, we'll have a more professional industry. The other thing I think, too, around this is the question around broker profitability. There's a couple things going on here. One is recency bias. Okay, so it's been a terrible three years in residential real estate. We were talking. I think it was in the green room. We're doing fewer transactions now than we did in 2008. Like, just let that sink in. Just. Just let that sink in. We're doing fewer annualized transactions now than we did in 2008. And most people, when they think about 2008, think of it as the worst real estate market ever. This one from a unit count is worse. We have three years of that. So, yeah, profitability has probably been impacted. Right. And so if you look at something at the bottom, you're gonna see worse numbers. So recency bias. I think is in there a little bit. And then in my. This is, this is just my opinion, but you've either got to be really high service. And I mean really high service where you're kind of taking care of everything, right? A lot of things. You got a marketing department, you got a lot of stuff going. You got the call center, all this stuff you talked about, right. If you have really high service, there are models out there who have recruited agents and a bunch of them who will take a lower split if the service that you provide them is really there and you take stuff off their plate to free them up to be just great real estate agents and go do what they're best in the world at. So while I agree agents, sometimes we call them greedy, that's wrong too. They should go get as much as they can. I believe it. Like, trust me, when James and I were negotiating the co CEO thing, like, I'm getting paid, I stay paid, right? Agents should stay paid too, right?

[James Dwiggins]

I'm in an apartment.

[Luke Acrey]

Just a clip of the. So.

[Keith Robinson]

So like, why are we mad that agents are holding us accountable? They should be, right? So either offer great stuff and charge them for it or you've either got to be high touch, high service, high charge or low touch, high volume, low margin. Right. I got a lot of agents, I charge them a little bit, but I'm doing the high volume, low margin. And most brokerages are stuck in the middle. They've picked a few things to provide as a service, but they're not really like low touch, low service. And they're definitely not high touch, full service. And so they end up in Death Valley. And they can't compete with the low touch, low service ones and they can't compete with the high touch, high service ones. And then they just say agents suck and they're greedy.

[Stephen Acry]

No, I think that's where most brokerages are.

[Keith Robinson]

They're no right. That's what I'm saying.

[James Dwiggins]

In the middle, like you've got to.

[Keith Robinson]

Make a, you, you got to make a conscious decision on what am I and then tell the world that that's what you are and then go attract the people that are looking for that and stop trying to be everything to everybody because then you end up somewhere in the middle. And in the middle between those two sucks and you don't make much money and it's expensive and it's a problem.

[James Dwiggins]

And the other thing is with where we're headed as an industry, I'd just be clear. I don't think you put the genie back in the bottle, by the way. I think this is where things are at this point.

[Keith Robinson]

To what are you referring?

[James Dwiggins]

This, this sort of race to the bottom. I don't, I don't think you can change that at this point. And I think that the other part that you have to look at is brokers are going to have to figure out how to get into ancillary revenue streams quickly. Yep, that's going to be the cat we all saw. You know, Rockets, you know projections of the average transaction cost being 40,000. They want to get it to 20. That going to be the Realtor commission as the, the, the discounter and making it up on all the attached rates on ancillary services. So, you know, Zillow's been pushing there, Rockets there. ICE is trying to come around the other side of that. The industry is going to go through consolidation. There's too many brokerages, too many agents. And to Keith's comment, which I agree wholeheartedly, there's lots of room for people who provide a higher level of service because people will pay for that, especially when it's service inconvenience. But rounding out the margins without rounding the margins out with additional services other than brokerage commission is going to be crucial in the Future.

[Luke Acrey]

I agree 100%. Man. Guys, man, I feel like I could talk to you guys all day. We need a Joe Rogan podcast, man. Three hours.

[James Dwiggins]

We're already.

[Luke Acrey]

We're already at 40 minutes in. This is amazing. We're gonna have to have you guys back.

[Keith Robinson]

Yeah.

[Joshua Stike]

James, thank you so much for joining us. Before we close out, let people know how they can connect with you guys.

[James Dwiggins]

So keithnexthome.com my email. No just haven't go check out our podcast. It's Real Estate Insiders unfiltered. All of our information's there haven't come check it out. It's a lot of fun. We do a lot of these conversations with same as you guys. Other people too.

[Luke Acrey]

Love it.

[Keith Robinson]

I'll give you the link so you can put it in the show notes. But yeah, that's the best place to find us is probably through our podcast.

[Joshua Stike]

Thanks guys. Appreciate it, Stephen. Thank you.

[Keith Robinson]

Y.

[Stephen Acry]

Thank you.

[Joshua Stike]

You got.

[Luke Acrey]

Where can they find you? Steve?

[Stephen Acry]

Oh, sorry. Yeah. You're adjusting your headphones every podcast so but shoot me a call, shoot me a text. Follow us on Instagram Stephen at Acrey Brothers and then phone numbers 434-216-5306.

[Joshua Stike]

Love it. Thank you all so much for listening. You can get the links that we mentioned as well as the video and the show notes of all of our podcasts [e-mail] and if you like this episode, do us a favor, go to the YouTube channel, hit subscribe, hit a thumbs up on this video. We greatly appreciate it. If you want to get hold of listen to Keith.

[Luke Acrey]

It's the subconscious.

[Joshua Stike]

Just if you want to get a hold of me or Luke, you can email us at Keith at no wait [e-mail] and of course you can follow us on Instagram. We're at Stay Paid podcast for this episode of Stay Paid. I'm Joshua Stike.

[Keith Robinson]

Guys.

[Luke Acrey]

I'm Luke Acre. James. Keith. Man, you guys are amazing. I've loved getting to know you and your agents, your, your team there. You guys have been fantastic. My action item for everybody listening to this is if you remember what Keith said, stay ready. You know what does that mean right when the interest rates drop, which they're dropping right now. So when this releases, I'm not sure where they'll be, but it is time to reach out to your sphere. And then if you apply the action item that James gave you, pick up the phone and call the people in your database.

[James Dwiggins]

That's it.

[Luke Acrey]

Stay ready. Watch the rates. They drop. There's, there's going to be buyers that need to buy. There's going to be people who need to sell, but they need to be convinced. And the reason why I know this to be true is because I'm talking to agents all around the nation and one of the, the lead sources that normally doesn't close extremely well is popping, which is circle prospecting. And you know why that is? It's because people are need a reason. They want to sell, but they just need a reason. There are people in your sphere. You don't even have to circle prospect. You can call the people in your sphere that already know like and trust you and just talk to them about where they're at with their home equity, what their dreams are. Are they in their dream home? Because remember this difference between top producers, mediocre producers in every business is top producers. Take action. Take action on that today.

[Joshua Stike]

Nice.

[Keith Robinson]

Boom, there it is.

[Luke Acrey]

There you go.

[Keith Robinson]

You guys, you guys are great, man.

[Luke Acrey]

You, I mean.