Most brokerages never make a generational transition, and according to RealTrends, more than 50% of all brokerages are currently for sale due to this. However, Michael Nournmand, and the Nournmand family, have successfully upended these statistics by running a multi-generational real estate brokerage in Los Angeles – one of the most competitive markets in the US.
TRANSCRIPTION
Hi everybody. And welcome to Brokerage Insider the podcast where we interview the leaders in real estate and technology today, I’m very fortunate to be joined by Michael Nourmand. He’s the president of Knorr modern associates, an independent real estate brokerage in the LA area. Michael, thanks so much for joining us.
Thanks Eric. It’s a pleasure to be on a, on the podcast.
Great. Well, I’m excited to ask you some questions about the market and how things are going, but first, before we do that, why don’t you tell us a little bit about yourself and I know your family history in the, in the real estate business. And tell us a little bit about that and how Norman and associates got started.
So I was born and raised in Los Angeles, went to local schools, graduated from USC. I was an undergrad business major, and I always liked being around people. I would say that the people, part of the business, the social aspect was what initially caught my interest. My parents would talk real estate at the table. My siblings thought it was boring. I thought it was interesting. I wanted to kind of know how the deals were going to come together. Even kind of for my apartments, but when I turned 13, the theme of the party was monopoly. So it was definitely something that, yeah, we still like something that, that peaked my interest. And then when I was finishing at USC, I had already gotten my real estate license and had closed a couple of deals. And once I got my first taste, I was hooked and the rest was history.
So you started selling real estate to him while you were in college?
Yeah, I closed my first deal. I think I was either 20 or 21, but I pretty sure I was 20 when it, when it closed.
That’s funny. Our histories are almost the identical when it comes to that. I actually started selling real estate in college too, and ended up changing my entire life trajectory to get into the real estate industry. And here I am 20 something years later because I fell in love with the industry after selling it to pay, to go to college. So funny, we have a, a similar start there around the exact same time in our lives. Tell me, tell me a little bit about the company, cause I know it, you know, it’s obviously a family business, but tell me a little bit about how many agents you have and we’re specifically you’re you’re located in the LA area.
So my dad started the company in 1976. It was one office, probably a little bit bigger than a modern walking closet. And then over the years my mom got in the business in the late eighties and my mom did really, really well. So they grew the, they grew the company to have a second office in Brentwood. So Brentwood is right next to Santa Monica. That’s probably the easiest way. It’s just East of Santa Monica, city of Santa Monica. And then we opened our third office in Hollywood in 2000 and beginning of 2008. And we’ve had three offices, about 175 agents on a good year. We’ll do we did just, just really close to a billion dollars in sales volume. And you’re talking anywhere from maybe 500 to 600 give or take sales transactions a year. So it’s a, it it’s a family business.
It’s a boutique. We do a fair amount of high end, but we do a very diverse range of price points and product types. The culture is very warm. It’s a very flat environment. I respond to all of my agents, emails, texts. My top agents will get back to other agents at the company, even if they’re newer, it’s a, it’s a really nice place to work and it’s a special place. And it’s been really nice serving, you know, serving the agents staff and management team. I’ve been running the day to day since the beginning of 2008.
Wow. You took over in an interesting time there to jump in in 2008. So w what was that like to, to jump in and take over and be in the middle of a, of a recession? Like we were back then? Rough, honest answer folks.
Yeah, rough. So there was a title rep and he kind of looked at me and he’s like, I don’t know. I don’t you know, I’m not jealous. I’m trying to think of the right way of saying it, but basically he’s like, I don’t envy your job today. So it was rough, you know, it was rough. The market was, was, was bad, especially kind of the fourth quarter of 2008. And the first quarter of 2009, it was it was really, it was bad. But I did still enjoy the job. It allowed me to gain really valuable experience because up until that point, I had only been in good markets. So now I got to cut my teeth on running the brokerage in a bad market. And as you know, and some of the listeners may know it’s a thin margin business. So the difference of doing 10% of business could mean making hundreds of thousands of dollars or losing hundreds of thousands of dollars.
It’s a very, very, it’s a very small thing. So I think that sometimes people don’t really look at all of the expenses that go into running a successful well run and competitive brokerage in today’s world. So I had a lot of cost cutting to do, and there was a point where I kept adding agents and cutting costs and the losses kept getting worse. But then like everything, you know, we were, we had the financial wherewithal and the commitment, and there were no new companies coming into the market. I mean, it wasn’t like, you know, for like 2012 until let’s say 2017, 18, there was a new company every year coming into the market with a different, I call it a new company with a new promise, right? Every year there was a new, there was a new company telling you why the model was broken and what they were going to do to sort of solve that issue conveniently.
So I got through that and did a lot of cost cutting. And we went, we went over the budget and we went line item by line item. We went from the top to the bottom and we cut every single thing that we thought would not be an issue for our agents to make a living. So things that we could cut that we thought, okay, this isn’t going to prevent my agent from doing business. They’re still going to run their business more or less the way it is. And things that I thought would affect their, you know, their business, whether, you know, cutting too much staff or cutting too much marketing. We stayed away from, and then by the time 2010 rolls around by the end of 2010, I think we were slightly in the black. So I had 2008 and 2009, my first two years were, were, were losers. And then after that you know, 2010, I got back in the black, and then it kind of all the work that I put in, you know, during the downmarket started to pay off,
I, I believe that a wholehearted, the, the, if you look at a lot of tech companies that are out today many of them started in, in bad times and it made them lean and mean as opposed to you know, fat with expenses and use to the, those times when things are so great. And I think, you know, being an, either starting a brokerage, I’ve said this many times the past, starting a brokerage, or, you know, in your case, taking over a brokerage right in the middle of this there’s no better business school. There’s no, no class in business school that can do a better job of teaching you how to best run a company than jumping in where you did. So you know, obviously you jump in, you’ve got this company, you, but you’ve been selling real estate before that. So, you know, what are the big things you’ve seen change in that LA market particularly in the markets that you guys specialize in, what are the biggest changes that you’ve seen in the 20 years that you’ve been in the business and certainly in the last 12 that you’ve been running the company?
Well, I think you kind of had more of a mom and pop community you know, company, the person who ran the business, their name on the door. And then, and some of this is me just, you know, listening to other people talk. And then you kind of had like the nineties, which was sort of like larger companies, corporate, you know, companies rolling up other companies, companies going out of business, that whole thing. Some of the stuff that’s happened in the last let’s call it six or seven years has been very positive. So I think that the competition has gotten better. So most agents are more knowledgeable they’re they’re, they’re better than they were. So, you know, if you look at the average agent, you know, five or six years ago, versus the average agent today, I think that the bar has been raised.
So I think that that’s positive. If you look at the marketing materials, the marketing materials look a lot better across the board. You see social media campaigns, some digital stuff, really elegant print marketing. So that’s another positive thing that I think is really, really good. I think that probably the most recent changes that I’ve seen, one of them has been management. And I think that as the margins have gotten tighter and thinner, you’ve seen a lot of companies go cheap on management. I think that that’s a mistake. You see one manager handling two offices or three offices or one manager handling an office of, you know, 200 plus people. I think that it’s a mistake. I think that good management is invaluable. I think that for retention, for recruiting, for staying away from legal issues for keeping your costs down for watching your quote unquote store closely. So I don’t subscribe to that. There’s a lot of that, you know, I have a competitor, they have, you know, a manager, I don’t know what, I don’t know what the situation is today, but they had one manager who was managing an office in Malibu and an office in Beverly Hills. There was another competitor where there’s a manager, who’s managing an office in Brentwood. And I think too in like orange County somewhere. And like, I don’t know if it was Irvine or somewhere like an hour’s drive away.
Yeah. I was just going to say some context for those that don’t know, or haven’t driven in LA traffic before what he’s describing. I mean, this particularly the LA and the orange County ones, it’s probably an hour on the four Oh five with zero traffic at 2:00 AM. And it could be because I did the drive from orange County up to Brentwood two or three days a week for quite some time. And that could take two and three hours to, to do that drive during traffic time. So these are, these are not close areas, at least in terms of drive time that that he’s mentioned in here folks.
So I kind of look at it that they are cutting on some of the services management being one of the, one of the key services in exchange for offering more attractive deals to agents. But I actually look at it that the agent is better off having a less lucrative deal and having more services, because at the end of the day, the expertise that you get from the manager, from having a good transaction person from having good marketing from having somebody who’s at the top who runs the organization well, whether that’s, you know, bailing you out of a legal issue or helping you secure a listing, all of those things to me are more valuable. I think what has happened is that some of the, you know, new entrance to the business have tried to commoditize things. So their view is, Oh, if you’re a successful agent, you’re going to be successful wherever you go.
Michael Nourmand (12:36):
So you’re just going to run your business. So if we take less money from you, you’re better off. But I think that’s shortsighted because I think like anything, whether you have a good real estate, whether you have a good, you know, a basketball coach in the NBA, or, you know, you have bill Bellicheck coaching you in football, or you have a really good mentor. I think that most things in this world are so competitive. And there’s a very, very thin line between making a dealer losing a deal that looking at the pennies instead of the dollars is a, is, is foolish. So, so I think that those are some of the changes definitely changes that are coming print marketing. There was a reduction in print marketing. I think there’s going to be a much more drastic for the reduction in print marketing, moving forward office space.
Michael Nourmand (13:31):
I don’t think that this work from home thing is going to be forever, but I do think that the size of office space is going to shrink when you have office space, let’s say in Beverly Hills, that starts in the $5 plus a square foot. And, you know, pre COVID was a lot of people were trying to get into six plus dollars, a square foot, you know, 2000 square feet is, you know, 10 grand, 12 grand a month, that’s real money. So I do think that you’re going to see a contraction of, of office space. There are several real estate companies that are very, very heavy on square footage, even before Kobe, they were very heavy on it. So I wouldn’t be surprised if lots of companies, whether they shed, you know, 20 to 30% of office space, maybe even 40%, 50%. I do think there’s going to be a big consolidation in office space.
Michael Nourmand (14:27):
Yes. Especially you also have some companies yeah. Were acquired other companies. You have, you know, redundancy and areas and it doesn’t make any it doesn’t make any funny, natural sense. A wall street will demand it investors, particularly if there’s an IPO will demand it. The challenge, as you know, is you don’t ever want to pack up your, when you’re moving office space, it’s a very, very easy time to reevaluate things. So if you’re cutting a small amount of office space, you probably don’t make the move. But if there’s a, you know, if there’s a chunk or maybe you need a new build-out or there’s a better location or some reason then I think it makes sense to do it.
Eric Stegemann (15:17):
Yeah. I think everything that you’ve hit on some of these things I’ve been talking about for years in terms of the office space side of it, and now it’s just becoming a, it’s becoming an invoke to, to do that. I’ve been saying for years. And actually when I ran my brokerage, we, we had we had about 125 square feet per agent. And I would actually even recommend less than that today and in what we can do online entirely. But there’s brokerages out there that have hundreds of square feet per, per agent and, and many of them aren’t even producing just to have that glamour of, of, of what’s there. So I think those are all astute points that, that you’re paying attention to. I want, I want to go back to one thing you said though, which is about the staff and about the people that you have around you at Tribus.
Eric Stegemann (16:08):
We did actually a study a few years ago. And one of the things that we found was the number one most important reason when why somebody joined or stayed at a brokerage, it wasn’t commission, which is what a lot of people thought the answer might be. And in fact, commission wasn’t even in the top three items, the number one item was support and what the, what they meant by support was that there was people in the company that genuinely cared about them as an agent and were there if they needed help. So I think you’re, you’re a Stute in investing in that. And I think what you’re finding is that people that don’t necessarily sell a whole lot are going to companies that don’t have that support, or the reason why they’re leaving companies that don’t have that support is because of that they they’re moving on somewhere else. So you know, I think, I think you’re, you’ve hit the nail on the head. It’s certainly what I agree with as well. Now you were talking about a little bit about changes with, with COVID let’s talk specifically and around the office space. Let’s talk specifically about LA real estate ever since this happened. Have you noticed any differences in terms of who your, who your average buyer is or who your average seller is, or who’s looking to get in or get out of LA?
Michael Nourmand (17:25):
Yeah. So, okay. Obviously pre COVID, you have a lot of you know, open houses. So you had open houses on Sunday for the consumer, one to four, two to five, depending on the season you had broker’s opens, which were, you know, Tuesday 11 to two, and then you kind of had a smattering of, you know you know, maybe, okay, this is a agent, our, they have a, a one hour window where they’re going to get us in early, or, Oh, this is my networking group. So we’re going to look at each other’s properties you know, and maybe have like hors d’oeuvres or something like that. So I think what sort of has happened is now you have less people, internet, less international people coming, right? So obviously with Kobe, you don’t have, you know, the same, same sort of number of people coming from Asia from middle East, from Europe.
Michael Nourmand (18:24):
Yeah. So you have more people coming from New York, more people coming from, from San Francisco. And what’s been interesting is that you see a lot of people that are buying a second home vacation home with this idea of being within 50 miles of Los Angeles. So I’ll give you some areas that are hot right now. Palm Springs, hot prices are up, Oh, hi, hot the Valley hot Malibu hot. So, well, why, well, whether work from home is a permanent thing, or whether work from home, is that okay, you work from home couple of days, you work from the office a couple of days, if you don’t have to come into this, the office every day. So like, okay. In last stage, plus the biggest hub of jobs or the biggest hub of good jobs in my opinion is on the West side. So, you know, Beverly Hills Westwood, Brentwood, Santa Monica, there’s a, a huge slew of variation, the successful companies in those markets.
Michael Nourmand (19:29):
Well, if you’re running those companies, yeah. You know, maybe you probably can afford a place close by, but if your staff, you know, obviously not senior management, you are probably commuting. So whether you’re commuting from the Valley or wherever else you’re commuting from, so you want it to be as close as you could to your job. But now with the landscape being that you know, working from home is either here to stay or is going to be for a while. And maybe there’s a modified version of it. I view that there’s going to be somewhat of a modified version where, you know what, you know, maybe somebody works from the office three or four days a week. Can they work from the house one or two days a week? They don’t have to come in at nine. O’clock like before eight o’clock deal with rush hour, they don’t have to leave at five or six.
Michael Nourmand (20:17):
That there’s going to be a little bit more of a, you know, a fluidity on, on when you come and all that. But right now you have people that are not your competitors. Aren’t really working in person either once companies can work in person. I think, I think if you solely work from home, I figured a disadvantage. You have these people coming from New York, coming from the Bay area you know, vertical living as out horizontal living as back in LA sprawling, it’s spread out there’s land. There’s good weather. There’s lots of reasons to, to come here. The diversification of businesses in LA, you know, you kind of had entertainment capital of the world and the entertainment industry ran LA. If you were doing a big deal in the nineties, you knew it was somebody in the entertainment industry. Well, now you have, you have TAC, you have private equity, you have hedge funds.
Michael Nourmand (21:17):
You have different businesses that weren’t really, you know, venture capital. You have all these businesses that are here. And even if you think of like, you know, if you think of New York, you know, not all of them, but you know, Goldman Sachs is in New York, they’re here, JP Morgan is in New York. They’re here. Now. They may be headquartered in New York, but they still have a, a presence here. You’ve got you know, a lot of the companies that are from the Bay area in tech, but, you know, Facebook has space here. Google has spacer. So all of these companies have space here. And I think that people have felt that LA is a really damn good place to live. There’s a lot of benefits to living here. So there’s been, there’s been definitely more migration, but when people ask about it, it’s not a broad migration, it’s a domestic migration, primarily from big cities. And I would say that in New York and the Bay area being the two main places.
Eric Stegemann (22:18):
Got it. That makes a lot of sense. So, you know, you, you, you talked about the changing the buyers and the, and who’s there. But in a company or in a world today that’s less independent. I think the LA market is less independent than it was before. You know, certainly compass has gone in and bought partner’s trust which, you know, was a big independent organization that was there. And, and some of the other consolidation that’s happening or will soon happen that that is going on there. You know, how do you stand out in the crowd beyond compass, beyond these other big brands that are in that space that maybe like the agency, which has, has their own T you know, TV show with million dollar listing or, or things like that, how do you stand out and keep your company where the average consumer knows about you and all of these celebrities that I know were on your resume that you or your company has represented? How, how do you stand out to make sure your company is thought of when somebody is thinking about buying or selling?
Michael Nourmand (23:25):
Excellent question. So being a second generation business, there are a lot of family businesses. And if you are a family business, you’re going to have a bias in favor of doing business with other family businesses you know, being second generation. I think that everybody that has a family hopes that one day that they can pass it on to their kids and their kids could pass it on to their kids. And the truth is no, most of us know what the future holds, right. I’m sure that you know Barney’s right, that nobody anticipated that that business was going to end, or that department stores or other, you know, bookstores. So you never know what the future holds, but if you have a family business, you have a passion for that. And this is a forum to have conversations with other people in family businesses.
Michael Nourmand (24:24):
And a couple of years ago, a family friend took me to breakfast cause he was selling his business and he was going into business with his dad. And you wanted to talk about how I handled the family dynamic and dealing with all the different people and that, you know, was there perceived jealousy or favor too? So that’s, what’s really cool to me. So family business is a big part of it also, you know, we’ve been around now for close to 45 years. We have deep roots, we have good contacts. We’re philanthropic, people know us here. This is our home. So while, you know, other companies may be based elsewhere and yeah, they roll up into town. They have, you know, a nice presentation. They have things very much created in a, in a marketing company, calm it’s a new shiny coin or the new shiny thing.
Michael Nourmand (25:23):
I think that when I can call somebody, that’s maybe the former mayor of Beverly Hills and my word matters, and there’s a level of trust. You can’t buy that. That’s from, that’s from, you know, having a reputation and years and years of relationships and, and engaging and seeing each other. And that’s something where I feel like I have it as good, if not better than any anybody else, I feel that my word goes further. Or at least as far as somebody else’s word in a sales business where, you know, honesty and integrity are often questioned. I feel that our two most distant stinks advantages to sort of bottle up and say in a short sentence would be our culture and our services. And my stuff is always going to be very genuine, very conversational. None of it’s going to feel like it’s forced or somebody I talked to told me to say this.
Michael Nourmand (26:27):
And, you know, I, I, I sometimes hear companies talk about their, their advantages and it, it sounds really canned. So for me, culture and services are the two main, two main things. Like I had said about integrity and having a reputation for doing things the right way and being fair. I view it that services, we go the extra mile. We do things that aren’t necessarily our job. We have a very strong brand and cutting edge marketing. And for me, all of my stuff you can tailor make to one area. I don’t have to roll it out in different areas. And the funny part is even in LA, which is a very spread out place, I have to make adjustments for the markets that I service. And I even have to sometimes make adjustments to how I’m dressed. And someone says, well, you know, give me an example.
Michael Nourmand (27:23):
If I’m on the road West side, I’m usually wearing a suit and jacket. If I go to the East side, depending on the audience, sometimes I keep the jacket. Sometimes I lose it jacket. It depends on kind of the statement and the meeting and who, you know, the message I’m trying to convey. If I’m trying to convey that, Hey, you know what, I’m a more hip, you know, easygoing you know, a younger gun I’m losing the jacket. If I’m trying to convey the, you know, look I run the brokerage, I take professional professionalism really seriously, I’m wearing the jacket. The other thing I think is a big deal are the people at our company and by the people, the management team is, is astout across the board. The management team is great. If for three weeks, I could not come into my office.
Michael Nourmand (28:19):
The company would run, I believe, without a hitch. So that, that goes to talk about the management team. We have outstanding agents, professional, productive, good reputations, do things the right way, not frivolous, double lenders. I’m not a, you know, they don’t get us often in legal peril. I mean, the company that let’s say did 600 sales, you’re talking about, maybe I have six steals a year that I have some, some dealing with to sort of figure out a solution. So I think that that’s a very, very low rate. You know, you’re talking 1% of my deals. The other thing is the staff I have transaction coordinators who have been with me. I have one in particular. Who’s been with me for 20 years. So has been at my company even before I was working here, even before I got my real estate license.
Michael Nourmand (29:13):
Cause I got my real estate license, like in 2000 we have a great marketing team. We do really custom stuff out of the box. A lot of these bigger companies, it’s, it’s canned it all looks the same. I know the agents think that they’re, you know, that they’re looking feel as unique, but it, it, it doesn’t look that way to anybody else. So yes, we have, we have guidelines and there are certain things we don’t allow customization because like the listing presentation, I want to know that that presentation that you’re giving to that client is to my standard. So that part of it will be a standardized with an agent’s bio and the client’s name and that, but the customization part is the folder that they bring in the folder that they bring may have custom pieces that they did for other properties, post cards, flyers.
Michael Nourmand (30:07):
So I think it’s a really good melding of, of having standards, but having some flexibility. And I think that being in one market, you know, I’m a, I’m a speed boat I can get in and out much faster. And when there are bad markets, when you’re big, you get slaughtered. There isn’t anything you can do to, to withhold it because of the size, our size. I have zero debt, zero debt. Don’t owe a dollar to anybody. I have cash in the bank for when the market’s not great. I am very cautious about distributing money because I want to always have money in the bank. There are no investors, it’s a hundred percent family owned. We have a shareholder meeting once a year, we go over everything. I keep the other shareholders, which are immediate family up to date on what’s going on.
Michael Nourmand (31:09):
I don’t have quarterly earnings. I don’t have to have certain growth. I don’t have to do the things that other people do so I can focus on longterm. And even right now, with what I consider a moment in time with uncertainty and wall street in the business and venture capital in the business, this isn’t new Sears was in the business twice Merrill Lynch company that many people have heard of. They lost, I believe I I’d have to look it up, but I believe they lost tens of millions of dollars. And I think they got out of the business. I don’t remember the exact year, but I feel like it was like maybe early nineties. And we got hit by Merrill Lynch. We lost a lot of people, the Merrill Lynch at the time, they were promoting that buyer could get better financing with them.
Michael Nourmand (32:01):
And that if there, if the client did not work with the Merrill Lynch, a good luck getting financing, like everything, there was some truth, but there was some promotional aspect of it too. So the challenge that the incumbents have in the business is that a lot of people don’t know the history. They don’t realize that big money has been big money is in the business and it’s not a new thing. They don’t know better. But I do think that you know, for right now it’s just, you know, pivoting making adjustments to try to find ways to make profit, to increase margins, whether that’s, you know, like we talked about some of the adjustments that we talked about, office space, print you know referral business, there are different ways to do it.
Eric Stegemann (32:58):
Yup. I mean, everything you just said is is, is probably it goes down and exactly what makes you, you and your company relevant and succeeding when there’s so much other money coming in. And I think your statement about Sears and, and Merrill Lynch and, and, and there’s other companies that are out there that have tried this too, and ended up merging, look at Prudential, you know, Prudential had Prudential real estate and, and ended up it was an openly for sale for like five years, roughly until Brookfield bought them and then said that they only wanted the the relocation division and ended up selling the brokerage division over to Berkshire Hathaway. So, yeah, it’s it’s you know, it’s, it’s not new that knew that a bunch of money has come in. I think the size of the investment, I think is, is the one thing that is different in terms of the big money coming in.
Eric Stegemann (33:55):
And, and another thing going back to, I’ll tell you a quick story, kind of funny. My very first meeting when we started Tribus back 11 years ago, my our, our top or one of our first three customers was actually partners trust starting. They didn’t even have, I don’t even think they had a name for the company back when they invited me in to sit down with them. And I show up at a meeting with, with all of these guys and, you know, they were buttoned up people. I think they were former Sotheby’s Sotheby’s folks and they were buttoned up, but they all had a meeting and I show up in my suit and tie and have my, you know, my nice my really nice, my best suit on and my best tie on and I’m done up.
Eric Stegemann (34:40):
And our meeting is you know, it’s, it’s, it’s at somebody’s house and I walk in and they’re all, you know, some of them are in shorts and a tee shirt and things like that. And they say, you didn’t dress up for us. Did you? And, and that was my entree to, to LA real estate of, okay, well, you know, I’m from the Midwest and when you went and made deals like this, you were in a suit and tie period. End of story. And I had to realize that even within their group there was the shorts and t-shirts people and the suit and tie people, and you could define it by who was selling Malibu and, and past the Dina and Venice and stuff like that. But, and then who was selling Brentwood and that area over there, Beverly Hills.
Eric Stegemann (35:26):
So, yeah, it was interesting. And my brain is going back to all of those memories of, of thinking about how different things are, but I think that the point in, in where you were going, and I think the most important thing to remember of everything you just said is, is, you know, the market, you know, it’s, it’s, you’ve got a 40 plus year history of your your family company of knowing the market and, and being trusted in that market. So we’ve only got a few more minutes here but I did want to ask you a couple of questions about technology and that’s something we haven’t talked too much about yet. You know, you, you mentioned about marketing so you know, whether it’s marketing or marketing technology or technology in general, you know, what are things maybe either today or in the past that Normani, Normando and associates have spent money on, that’s been a huge win tech wise and, and what’s other things that maybe you know, you wish you sat back and said, yeah, I w I wish we didn’t do that. Or that was a waste of money, or it was one of those things you cut back in 2008.
Michael Nourmand (36:31):
So to give you an idea about when I started, there was a runner from the LA times who picked up like literally Polaroid printed pictures and took them back to the LA times and scanned them. So to give you an idea that there was basically a courier who that was his job, we gave him the pictures we wrote on the back of the address, and that’s how different it was. So you, we have, okay, so we invest in technology for our agents and staff, right? The reasoning being, we want to make them more efficient and we want to make them more effective. So probably the most widely used technology, DocuSign, digital signature, pretty much that’s a adopted across the board. Every company is using it. I don’t know why somebody wouldn’t use it. It’s fairly inexpensive. We also do transaction management. So if you’re on a cruise and you want to get something about a deal, you know, if there’s a link and it’ll show you all the paperwork, that’s there.
Michael Nourmand (37:36):
We have a separate server for our marketing team, which kind of lets them know who’s doing what and makes that run much smoother. We do obviously social media campaigns. We have a weekly newsletter, and we’ve done a lot of digital marketing for some of our initiatives. So going to efficiency, probably the most, the most helpful thing efficiency-wise has been a separate server for our marketing team, this way, kind of everybody works together and they know it’s the other person’s doing. It’s very easy for them to share files, share information, send things to each other. So that was something that we did a couple of years ago. And obviously with COVID and working remotely, I can literally walk by I’m in my office right now. I walk by my marketing team’s computers, and while they’re not in the office, I can see on their computer, what they’re doing from their house.
Michael Nourmand (38:28):
So that’s pretty cool. The thing that’s been the most effective, I think has been our digital campaigns. So we did something called decades, which was a two minute video to celebrate the, we are history for the company and what we do it was, we talked about different decades and lifestyle and culture. It was a really creative, interesting way to do it. If you go to [inaudible] dot com, you can find it on the, on the homepage. That was something that, you know, at somebody wanted to know about our company, they could watch that. And that would basically sum it up really quickly and succinctly, and it was impressive. And grungy Tate did it that’s my brother’s post production company and he was nominated for it. So he’s, he’s very talented and good with that kind of stuff. The other thing that we did from a distance listing from a digital marketing perspectives was, was we created a digital listing presentation, which is like a high end commercial for what our real estate company will do.
Michael Nourmand (39:33):
If you hire us as your agent. And the beauty of that is it’s customizable. So, you know, you go and, and I, and I pitch you Eric, and it’ll have your name and we have pictures of your property. And someone says, well, if you ha, if you don’t have the listing, you know, how can you, how can you, you know, how can you, how can you use pictures of the property? Well, you know, you can find sometimes pictures online. Sometimes you can take a picture of the front of it, and it incorporates all that stuff. And what we advise our agents is after you have the meeting, send them that too, that and we’ve had several clients who have said, Oh my God, this is the most incredible thing that I’ve done. Sign me up, let’s do it. So those are some of the things that we’ve done, you know, technology-wise, that are effective.
Michael Nourmand (40:28):
They make a difference. It’s not vanity tech. It’s not, you know what, Hey, I’m going to get a press release for this. You know, I think of some of the different things that competitors have done. Some of them have been interesting. And here’s the thing when you’re the first mover into something. So one of my competitors kind of, in my opinion, started the week newsletter, right? They did it before anybody did it, right. It was very interesting. It was compelling. We’ll talked about it. People looked forward to it, but like anything else when you have a good idea, your time is, is numbered. You have a advantage. And in a matter of a very short time period, it’s going to get knocked off. It’s going to get tweaked. And the company that I consider the first mover into that newsletter, I think that there are other companies myself included that have a much better newsletter now.
Michael Nourmand (41:29):
So, you know, when you’re a new company and you have a new technology, or you have a new business, whether that’s from, you know, starting a concierge service where you, you know, finance somebody to do prep, work to their house or get it staged in a short time period, most of the good companies are going to have something like that. But that high end commercial that I did, even if I gave it to my competitors, I would have to dare them to try to come up with something as good as that high end commercial that I have to pitch a listing. And I don’t think that they would be able to do it on the same level. It’s really, really unique. It’s really good.
Eric Stegemann (42:15):
Makes sense. So it seems like marketing is the, I mean, that’s really where your focus is. You’re not focused on nowhere. Did I think I hear you say CRM or websites, pretty much everything I heard you talk about was marketing. So would you say that your budget, your thoughts outside of your people, would you say that the number two thing you think about is, is marketing and in having the marketing tools to make sure your agents are most successful in helping our clients? Yeah.
Michael Nourmand (42:49):
Yes, because to me, okay. A company says we have a end to end platform, this, that, and the other, whatever, whatever, whatever it’s, it’s at best marginally, better than what you can get from a third party marginally. The other thing is the adoption rate. Okay. So your clients can go and you send them this thing and they can comment about, and you can see what property they looked at. Like, okay, here’s the thing. 80 or 90% of the clients are using the Redfin app. Do I love that they’re using the Redfin app? No, of course I don’t love it, but that’s the standard. So I’m not going to throw good money at a battle that I can’t win. Redfin is dominant on search. Redfin has more money to spend on it. It is a, it is a battle that we have lost. I can’t win that battle.
Michael Nourmand (43:43):
I’m not going to try to win that battle, but I can have agents who know more about the market. They’re more professional. They can give you inspectors. They can give you advice. They can tell you which property to buy. And the other thing that goes hand in hand with the branding is we have a PR company on retainer Quinn, PR. They are excellent at press releases. They’re excellent at getting us pressed. They get me, they get me meetings, they get me in wall street journal. So we do spend, you know, you kind of look at it and say, okay, we’ve pulled back some on our print, on our print budget. And I’ve shifted it into digital marketing and into having a PR company on retainer. But yes, you’re right on the CRM on the end to end on
Marginal advantage for, you know what, maybe it’s a little bit more user-friendly when I can say, well, I’m going to get you leads. I’m part of leading real estate companies of the world. We can promote your stuff nationally, internationally. We’ve got all these amazing affiliates and they’re sending us business and we’re sending business to them. You come to my place and you know, maybe there’s an extra dealer too, that I can do for you. And that’s a tangible thing that I can say you made X amount, more, a tool, a cool bell, or bell and whistle or bells and whistles that doesn’t put money in your pocket. That’s not income producing. Maybe it saves you a couple of minutes of time. I’m sure there’s a third party thing that I can find that’s fairly similar. And the other thing that you and I both know is a lot of the companies that say that they made all their stuff in house and this and that, we know that that’s not true Compass for sure. Listen, I’m not, I’m not going to, I’m not going to name companies, but there are several companies that they say that all this stuff is developed in house. Everything is that. And you look at the backend and it’s just there you know, private labeled Mail Chimp.
Michael Nourmand:
I I’ll, I’ll say it, you know, compass for a long time. They’re their big three components of what they offered as tools. Their big three items was email marketing, the email marketing, the websites, and then a backend CRM tool. All three of those tools were white labeled from other companies. You know, and then they set out, they were going to go build all of their own stuff. And of course what happens they, they end up buying contextually to, to, to go execute on it for them. So, yeah, I mean, obviously as a, as a tech vendor and, and as a former broker we agree that a brokerage can go grow, get great stuff off the shelf. And it’s a bad investment. Not, not just, not a good investment, a bad investment for them to try to build their own tech because oftentimes they just do not understand the costs and complexities that are involved in it.
We have actually had multiple of our current customers that try this, and these are large companies, you know, hundreds. And in some cases, thousands of agent companies that had their own tech and throw it in a trash can to come to try this because they were spending more on developer salaries to manage it and not manage it well, then they had to pay tribes per month to go in there and just have it and constantly have updated great stuff for them. So, yeah, I mean, it’s, I, I think, you know, your, your understanding of it is obviously very astute and and marketing is, is real estate. I actually once gave a quote to a newspaper that, to be a good real estate agent and to be a good brokerage, you had to be both a good agent and negotiator and a good marketer. And I think a lot of people kind of forget that, well, Michael, we are out of time, but I asked all of my guests this one last question, because I always love hearing their unfiltered answers on this. And that is if you could change one thing about the real estate industry, anything, what would you change? You know, on the AI. I’m not going to be able to,
That’s not a, you have to know what you’re good for. So if somebody wants to go to a company where there’s a marginal advantage for, you know, maybe it’s a little bit more user friendly when I can say, well, I’m going to get you leads. I’m part of leading real estate companies of the world. We can promote your stuff nationally.
Eric Stegemann
So probably the thing that I have the biggest pet peeve of right now which is nothing new is unscrupulous agents that try to double enter every listing that they have. So if I could change it, what I would probably change is that I would want a across the board system of how everybody handled multiple offers and to have sort of a way that everybody did it. So that, that process was more fair because the way it is right now, if you have a buyer and you’re in a multiple with an unscrupulous listing agent, it’s very hard to win that multiple offer. And then what sometimes happens is that that buyer gets frustrated and what do they do? They go direct to the listing agent. And I feel like what’s happening is that the listing agent is being rewarded for being unethical. So I would probably say that my biggest, my, my biggest issue right now is that there isn’t a way that all companies handle multiple offers.
Eric Stegemann
This also goes kind of ties in back to the management thing, right? Because when you had kind of in the old days, you had a bunch of individual agents with the manager overseeing the multiples. Well, now when you have a team of 25 people, that it doesn’t really matter where they work, right. They’re often not, not always, but often they’re working for the highest bidder. They’ve duplicated all the services that the brokerage has, has provided. So basically the brokerage is there to provide risk management, right and to pay for some of their expenses and that they w they, they make more money not having their own brokerage because they don’t have any of the overhead. So in some of those situations, the issue is that they have their own manager. So the manager is on the staff and is paid for by the team. It’s separate from the brokerage manager for that company. So the challenges that that manager is incentivized to get those, all those deals double ended and the rules and sort of the customs and the expectations that you have a, for a company are different than you have for a team. Now, with that being said, there are some very, very well-run incredible teams play fair are there to do right by their clients. They don’t put their interests above their client, but they’re also like everything. There’s some good apples and some bad apples. So for me, my my biggest pet peeve is that when you see somebody who, you know, double ans, you know, 50%, 60%, 70% of their listings, and it’s statistically impossible to do that,
Michal Nourmand
For sure. I, I think that’s a very fair statement. And actually your your answer we actually had on Adam faff, who’s a director of marketing and public relations for scenic Sotheby’s which is a Sotheby’s brokerage in a market that has very high competition in it right now. And he actually mentioned the exact same thing, and they do an extensive amount of training to their agents to make sure that they’re presenting all offers fair and make sure that when they present an offer to a listing agent, that it has the best possible placement and footing to get presented to the seller so that some of these unscrupulous agents can’t get around some of the things that are in these offers that are out there. So, yeah, I think it’s a great point. And particularly in markets like yours, where you have a high volume of transactions that are getting multiple offers on them. I think that’s a very fair statement. So,
Speaker 4 (37:12):
Well, imagine one last thing one last time, imagine that there was a place where they showed how often an agent double ends their deal, so that there would be a place whether the agent double ended or the team double ended it, and that they showed it every single agent. So just like you have reviews, now you have a place online and probably somebody should do this. Hopefully someone’s listening to this,
Michal Nourmand
Actually, I’m actually in my brain right now, Michael, I’m actually thinking we have all of this data and with our business intelligence platform, we could easily put this together. So yeah, that, that sounds very interesting. And then you could almost rate agents is I think that’s where you were going with it, correct.
Eric Stegemann
Not even rate them, but just to say, okay, so you go to Zillow, which has gotten more accurate not perfect, but more accurate. And you can see a general idea, you know, let’s call it within 10%, 15% pretty confidently, but maybe even within five or 8%, you know, even fair to say on most properties, most listings, but imagine you go to a site and it tells you, yeah, you have the ratings, but one of the things other than the ratings, because look, the challenges, somebody has it out for you, they give you a really bad rating. And sometimes you look at the rating and you realize that that person gave the agent a horrible rating and they weren’t even represented by that agent. They were on the other side of the deal. But imagine that one of the things that you could look up as a consumer is you could look up, you know things like how often did my agent double end or his team double end the deal. You know, how many price reductions on average do they have on their listing? How close were they the sales price to the list price, because you also have the other challenge where agents are incentivized to quote a high price, figuring that if they have a six month listing, they can, they can get reductions and they can kind of walk it back to sell the property. Makes it be an interesting idea.
Yeah. I think there’s, there’s a lot of a lot of interesting components that you could have there in terms of also looking from a brokerage perspective as well, if you want to recruit the person and are they maybe a legal liability in that case? So,
Eric Stegemann
Yeah, I agree points, Michael, thank you
So much for being on the show today. Again, Michael Norman is the president of Norman and associates, a leading real estate companies of the world, independent brokerage in the LA area with over a 40 year history in that market. And Michael as a, as a second generation person running that company. So, Michael, thank you very much for being on the show today. Thanks to Derek. It’s been a pleasure. You’ve been listening to brokerage, insider the podcast where we interview the leaders in real estate and technology. Please make sure to subscribe via your favorite podcast player to get this episode in all futures episodes delivered. As soon as we post them live. Thanks so much for listening everybody.
