Is 100% Commission The Future of Real Estate Brokerage? • Sam Sawyer

Sam Sawyer the CEO of Pinnacle Realty Advisors talks about the beginning of his experience in real estate when he was just 19 years old. Sawyer describes how he helped friends find apartments and condos while attending Southern Methodist University in Dallas, TX. Sam describes the tool they have built – Brokerage as a service, which is covers all the US, where agents can pick the brokerage plan they want. Next he describes the importance of connecting people and how the idea to connect old agents with the new ones will benefit everyone.

If you’d prefer to watch this interview, click here to view on YouTube!

Sam Sawyer can be reached at 972-338-5441.

This episode is brought to you by Real Geeks.

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Transcript

D.J. Paris 0:00
It’s 2023. We’re almost halfway through the year now and agents are moving around. So we’re going to talk all about recruiting today and switching brokerages. Stay tuned. This episode of Keeping it real is brought to you by real geeks. How many homes are you going to sell this year? Do you have the right tools? Is your website turning soft leads and interested buyers? Are you spending money on leads that aren’t converting? Well real geeks is your solution. Find out why agents across the country choose real geeks as their technology partner. Real geeks was created by an agent for agents. They pride themselves I’m delivering a sales and marketing solution so that you can easily generate more business. There agent websites are fast and built for lead conversion with a smooth search experience for your visitors. Real geeks also includes an easy to use agent CRM. So once a lead signs up on your website, you can track their interest and have great follow up conversations. Real geeks is loaded with a ton of marketing tools to nurture your leads and increase brand awareness visit real geeks.com forward slash keeping it real pod and find out why Realtors come to real geeks to generate more business again, visit real geeks.com forward slash keeping it real pod. And now on to our show.

Hello, and welcome to another episode of Keeping it real the largest podcast made by real estate agents and for real estate agents. My name is DJ Paris. I am your guide and host through the show. And in just a moment we’re going to be speaking with top producer and real estate entrepreneur Sam Sawyer. Before we get to Sam, just a couple of quick reminders. Please tell a friend about this podcast to send it over to another realtor that’s struggling right now that needs to grow their business in 2023 and let them know about our show. And also guys we have started now clipping our episodes and providing short form video content on all of the different social media channels. I think we’re pretty much on everything so you can find us on Tik Tok, Facebook, Instagram, LinkedIn, YouTube really everywhere and probably a few others. So what we’re doing is every day I’m posting a short form usually 30 to 62nd video clip from one of our episodes with a tip or strategy that you can implement and use immediately. So this way you can get these little bite sized nuggets of wisdom every single day but you have to subscribe to be able to access these so find us anywhere on any social media channel. We also have a link tree you can look us up on link tree keeping it real pod is the link tree there. But anyway we will have all of this in the show notes but please follow us on social tell a friend and now on to my interview with Sam Sawyer.

Okay, today my guest is Sam Sawyer with Pinnacle Realty advisors in Austin, Texas. Actually, Pinnacle is all over Texas. Sam is an Austin guy. But let me tell you more about Sam. Sam Sawyer has been licensed to sell real estate since he was and this is incredible. 19 years old at 19 years old. I was not that mature. Not that forward thinking so I’m always impressed when I talked to agents who started that that early and knew that that’s what they wanted to do. But Sam began his career while attending Southern Methodist University SMU in Dallas, where he helped friends find apartments and condos very smart idea for college students. Following graduation, Sam worked his way up to senior vice president at Briggs Freeman Sotheby’s International Realty. So say that Sam later left Sotheby’s to help launch a brokerage called the collective with two other industry leading agents, which was eventually acquired by compass. Prior to launching Pinnacle Realty advisors. Sam worked for the Y Combinator graduate and venture backed startup zero down in Silicon Valley as their VP of real estate operations. Sam now lives in Austin and looks forward to expanding the pinnacle Realty advisors brand nationwide and we are excited to see him do that Sam, we are so excited. Oh, before I bring you on, let’s say how people can find you. So a couple of ways that you can learn more about Pinnacle Realty advisors first visit their website, which is Pinnacle are a.com Pinnacle are a.com and also follow Sam on Twitter. You can find him at Sam H Sawyer on Twitter. By the way we will have links to both Sam’s website and his social accounts on in the show notes. So you don’t have to write that down. Just scroll down to the Sona Let’s go and visit Sam and check out what he and Pinnacle are all about. Sam, welcome to the show.

Sam Sawyer 5:05
Yeah, glad to be here. Thank you for that was a nice intro. Thanks a lot.

D.J. Paris 5:09
Well, I’m just I’m grateful to have you on the show. You’ve been in real estate for a long time. And let’s start at the very beginning, because you’ve done a lot in real estate. A lot of times when I interview people, you know, it’s like, well, I’ve been a broker for the last or, you know, an agent, whatever it’s called in the state that people are listening to, for 30 years, and I’ve basically done the same thing for 30 years. So I am super excited. But how did you get involved in real estate?

Sam Sawyer 5:33
Yeah, I am. Well, it’s I don’t really know, I’m still doing it. But I guess I kind of started kind of on accident I played. I played lacrosse in college. And so in the summer, I would stay into summer school. And I was just really bored one summer and got my real estate license. And then kind of started out. So that was in between, like freshman and sophomore year in the summer. And then kind of started out helping friends on the lacrosse team, find apartments, and then, you know, started helping other people on campus, find places to live. And then when I graduated in 2009, it was kind of the worst time ever to look for a

D.J. Paris 6:23
job. Yeah, especially in real estate.

Sam Sawyer 6:26
And so I actually never intended on remaining an agent or doing what I’ve done, but it was kind of like timing, you know, pushed me a certain way. And so I started working at Southern, basically Briggs Freeman was a company in Dallas that had been around, they’ve been around for a long time, but they joined the Saudis network kind of in, right right around the time that I joined. So I worked at I worked at Southern these in Dallas for a number of years. And then myself and Jonathan Rosen and Christy Berry, who are two other agents there. We left and started a boutique, you know, pretty traditional boutique, high end like Luxury Firm in Dallas that we built up to a number of agents, 30 agents or so. And that was in 2018, when compass was expanding across the country. And so they acquired our firm. And we launched compass in Texas. So our entire brokerage firm joined compass, we became compass in Texas, we launched compass in Texas. And I stayed there for like a year and a half after the acquisition. And then through a mutual friend knew someone in San Francisco that was starting kind of a new age, new age mortgage company lending company, the zero down company. So I left and went to Silicon Valley, worked there for a number of years and kind of while I was there, I had an idea to build kind of a new age brokerage platform. And so left zero down in summer of 2020, and moved back to Texas down to Austin, and we started Pinnacle then

D.J. Paris 8:12
tell us more about pinnacle, because it’s really trying to do something a little different. And I always loved disruptors, you’ve been in sort of the the tech space, the real estate space, you are attracted to starting things and working with people that are trying to change the industry a bit. So tell us more about pinnacle. Yeah, so

Sam Sawyer 8:32
pinnacle, the way we call it brokerage as a service. So it’s kind of a play on software as a service. So it’s a subscription based brokerage platform that’s fully virtual, you know, everything’s online, lower fee, I don’t like to lead with lower fees, a lot of people associate lower fee with really bad service. So we’re really trying to build a platform where the agents can pick the brokerage plan they want, we have a number of different plans, you know, that appeal to a newer agent all the way up to, we have a product that’s a white label option that’s really similar to what side’s doing, you know, for a top producing team that wants to launch their own brand. So basically, we’re taking the brokerage sponsorship side is one part of the company. And then we have like an ala carte service side of the business. So the thing that drove me crazy about being an agent at traditional firms is, you know, they promised that they provided all these things for you, but you weren’t really sure what they provided. And they took, you know, I mean, I was a top higher producing agent. So I had a really good split, but I still didn’t see the value. And you know, most agents are on like a 7030 or 8020 split. The companies provide all these tools that you can go get for $20 a month on your own. Exactly. And so really, it’s really I built something I wish that I had all He’s wanted, a lot of people trying to disrupt this space are not real estate agents, and they don’t really understand what agents want. And so I’m just honest and building something I wish that I had and trying to build something that’s lower cost, but really good service. And and I don’t know, it’s really that simple. I mean, no, there’s a lot of people doing cloud based things. There’s lots of people doing interesting things on the branding side. But we’re trying to just build a platform that appeals to, you know, a lower end age, not lower end. But you know, an agent in the middle of nowhere in Texas, just as much as like an agent in Miami, Florida. And so no one’s really built a platform that spans, you know, the whole breadth of the industry. And the way that we’re able to do that is it’s a subscription business model. So we don’t rely on getting top producers, like, you know, we’ll take a five transaction a year agent, as long as you know, they’re a good agent. And that’s good with us. So we’re really just trying to be a platform that serves everyone let people pick how they want to run their business. If they need add on services, we’re happy to provide them, if they want to go use their own tools, then we’re fine with that, too. So it’s really like brokerage as a service, use what you want, you know, scale up and down as you need us. And that’s really how we think about it. So Well,

D.J. Paris 11:18
Sam, you are a man after my own heart, because I work at a brokerage that has almost a similar model here in Chicago little little bit different, but same idea. So just to get some get some additional clarity on like how Sam’s model works, and how it’s different from a firm like ours is, we have like a monthly fee that people pay, it’s a small fee. And then every time they do a transaction, they get 100% minus a small transaction fee, flat fee kind of thing. 350 bucks is what we charge, what Sam does is actually I even like it may be a little better than the way we do it is because Sam has like a subscription where you don’t pay those per transaction fees. And maybe there are ways where you could do that. But he has basically just a larger monthly fee. And he’s like, that’s we’re just gonna hit you once, once per month. And it’s, it’s really, totally reasonable. And if you are doing even more than one transaction a year, even just one transaction a year, it’s still a good a good deal. But anything more than one, it’s like a total no brainer. And I’ve been I’ve been here since 2011. Here at our company, my whole life is dedicated to a system very similar to what you’ve created in in Austin and Dallas and other parts of Texas. So I am I am right with you. I love this model. I think it’s brilliant. We’ve grown to about 800 agents in the last 11 years. And it was really, really helpful. We see no signs of that model slowing down? Well, I think it’ll only become more and more and more popular as agents start to think about, you know, are the tools I receive from, you know, firms that are taking 20 30% of my commission? Am I getting that value. And it’s not that the firm’s I always find in my experience that I people don’t usually complain about the service, or the support they’re getting at their previous firm. But what they but it does tend to be more of a value proposition. It’s more like, Hey, I’d like the guys at my firm. They’re awesome. They’re really helpful. They’re really, but are they worth 20 or 30% of every commission when I’m doing 99% of the job. And so company like yours is so wonderful for an agent that’s like I use and you provide tools to it’s not like you don’t have tools you guys do. But you know, as well as I do a lot of agents, they like you said they have their own tools, there’s a million options. There’s so many tech players in the space, they want to choose what they want to use, and it’s still gonna save them 1000s of dollars on every transaction, if they just, you know, choose a couple tools of their own if they don’t want to use your inherent tools, which I’m sure are great, too, right?

Sam Sawyer 13:42
Yeah, no, I mean, honestly, we like we provide a lot of tools that people are used to using, and we’re not trying to build a lot of like tools from scratch, like honestly compass, tried to reinvent the wheel and rebuild like super simple tools. And that’s where like a billion dollars went that they raised. Yeah, and it’s like, I mean, I thought compass at the time was like, the coolest thing in the industry. We sold our business to them, and we’re super excited about it. But we’re just kind of thinking about a different way where like, we’re letting people brand themselves we’re letting people you know if they have their own website like that’s fine. There’s a lot of things in the industry where broker does try to force agents to do things a certain way that for no other reason than trying to keep their brand cohesive and things like that. And yeah, yeah, and so yeah, that we’ve I like yeah, we’re we’ve we’re almost 700 agents now in like a year and a half.

D.J. Paris 14:36
Okay, well, you’re crushing my my now you’re making me feel like a bad recruiter. So the interview was over. Visit Sam Sawyer. I don’t know. I’m teasing I am. I need to learn what you’re doing and do this thing because you’re obviously doing it really, really well.

Sam Sawyer 14:53
But yeah, we’re in so impressed. Texas. So we were in a few states now Texas, Louisiana. We just launched Florida, and then we launched Arkansas. And then we’re gonna launch North Carolina soon. Wow. And then California. But yeah, it’s fine. But no, I mean, I love like your model, the company that you’re at, yeah, these, these models are just better for agents. So that’s kind of the high level thing with images. Making

D.J. Paris 15:19
it it’s, it’s so satisfying when you talk to an agent where this is like a perfect fit for them. Because even now, and we’ve been doing it for like 10 or 11 years, even now, people are still like, really, like it used to be. And thankfully the tide has turned, but it used to be suspicious, really, like you really can do all this, whereas the hidden fees were like, no, no, it’s really just what it is. And once people started getting more used to these models, because obviously you’re not the only person account brokerage in Texas that has this model, it’s becoming more popular, but it’s still, I don’t know, at least here in Chicago, it’s maybe 5% of the agents are at firms like ours. So it’s not that common, but it’s now I don’t get the like, what’s the catch? What’s the I don’t get that as much now I just get oh, that’s cool. But in the past, it was like, This sounds a little fishy. And it’s like, oh, no, it’s What’s brilliant about the fact that people respond that way to me, is that the branding is so strong that the other firms that they don’t look suspicious, sometimes the 100% firms look suspicious, and it’s like, actually, I kind of think of it the other way, personally, for sure.

Sam Sawyer 16:22
No, I agree. Yeah. You have to be careful with hyping only the cost savings, because a lot

D.J. Paris 16:30
of work. Because that’s what people start to think. Yeah. Yeah. Like

Sam Sawyer 16:33
in the beginning, we learned that the hard way. Because like we we did, too. Yeah. And then you attract some people that aren’t a good fit. And then yeah, I don’t know. But like when you approach it as like a service, first lower cost, build your own business? You Yeah, I mean, it attracts great agents, we get agents from, you know, some of the best firms around and then once they’re here, then they stop telling them

D.J. Paris 16:57
they get it. They’re like, Oh, yeah, because the reality of is I’m wondering, curious, your thoughts on this, when we first started, we only were going after agents to transfer from other firms and not brand new agents, because at that time, we didn’t have training and support in any real way. And we just wouldn’t have felt right about bringing on a new agent. And so we only brought over existing agents who really didn’t need a lot of help, just in case, what we learned very quickly was when those agents when any agent needs help, we can’t say, Well, we’re kind of this 100% model, we can’t really help you like that does not fly. So what we learned is we have to provide, in some cases, even better support than we would maybe anticipate because we don’t want people to ever feel oh, they’re not really going to help me

Sam Sawyer 17:41
right now. No, I agree. I mean, we really just started taking brand brand new agents like recently, kind of the same idea, it was like the mid to higher end agents don’t need as much hand holding in the beginning. But like newer agents, to me is a great way to grow. But like to me, we think about that, like we want to build like a real like mentor slash New Age training program, not like I don’t know, some of these training programs at the legacy brokerages are like worse than like sitting in third grade and 9095. And so we’re trying,

D.J. Paris 18:20
I’m never too busy for your referrals.

Sam Sawyer 18:25
That donuts in the office and like somebody you don’t want to talk to. But like we’re trying to rethink, like, partnering up newer agents with older agents. And really like, I mean, we’re a cloud based company, but trying to connect people in real life. Like we’re not like a faceless, like, we get that sometimes. So it’s like, oh, how is there a community it’s like we do in person events with our agents, and we have a Slack channel with all the agents like, I honestly think our agents talk to each other more than agents at a traditional firm, but in different ways than acting like the office is this place where that happened? Because even before COVID, the only real estate agents that sit in the office are the ones that don’t sell anything. So, you know, I don’t know, like, it’s just funny, like, compass in Dallas had this fancy office, it was awesome to go there. But you know, people are only they own like Monday from 12 to four because there’s an Office meeting and then no one’s there. And it probably cost you know, a couple $100,000 in rent or whatever. So it’s like, oh, no, you can spend the money in way better ways than paying rent or like I mean, I’m sitting in this you know, little crappy office in Austin all by myself. Like we don’t spend a lot on our staff and things like

D.J. Paris 19:41
that weren’t Yeah, for us. We we spend the majority of our stuff on staff, but our offices are not fancy. They’re slick. They’re just there they just are and you know what, almost, we even were able to leave ours open 24/7 Just because we own the building and whatever. But but the reality is no When he uses it even we have almost 800 agents, nobody uses it. Yeah, so it’s like, it’s like, you know, when, for agents were having a fancy office is important. And there are agents where of course, that’s important to them. And that works for their business model. But that’s a very few small percentage of agents. So the vast majority, I think, are coming around, because they’re going wait, I really work out of my home, mostly anyway, out of my car, it’s nice that there is an office in case they do want to come in and do some work. Um, it’s, I think it’s maybe good just for that feeling of maybe if if there is something local that they can use it even though they never are going to use it. So it’s kind of fun. I’ve been watching this model evolve over the years and watching it kind of hit the public, meaning the other agents in the area. Finally, there was this, you know, initially there was suspicion and now it’s like, oh, you know, and we’re seeing evidenced by by growth like yours like to get you know, almost that many agents in a year and a half is in sane as somebody who does this eight hours a day, five days a week, like, that’s insane. So I am I need to, to learn from from the master like yourself. Yeah, I’m curious on. And by the way, I didn’t mention this, and I forgot to in your intro, and this is equally as impressive as anything else in your in your resume. You were in that you were an AR 30 under 30. guy that is, that is a very, very big deal at only the very best agents I know have ever been on that list. We we usually here in Chicago, we usually never, it’s never been anyone from our firm, but it’s usually one or two people in the whole state of Illinois make it? And so I know what a big deal that is probably saying, but that was

Sam Sawyer 21:39
fun. You know? Yeah, that’s a good group. And everyone stays in touch afterwards. And yeah, some people when they when they read that they think that I was still under 30. Like, I just got it like last year. And I’m like, No, I’m not. I’m not like 28 now, but 36 Now, so that was a few years ago, but

D.J. Paris 21:57
still amazing. Yeah. It’s a badge of honor. You get to wear for the rest of your life. And very, very, it’s very rarefied air. And, and believe me, NAR who’s actually headquartered here in Chicago, and I get, I get to go there quite a bit. They take that that thing? Very, very serious. Yes. No,

Sam Sawyer 22:15
they are so patient on that was like harder than getting your passport or something like it was Yeah, you had to get a lot of references. I mean, it was fun. But everyone, should you learn something even applying for it. If you’re under 30. And an agent listening to this, it’s like, you know, it’s not just all about sales, it’s a lot of things go into it. So yeah, I’ve met some super cool people through that. And it’s a great group. So that’s awesome.

D.J. Paris 22:40
So let’s talk about 2023. So we’re, I don’t know, of quarter of the way through the year, a third of the way through the year now. And, you know, things, I think it’s the spring market and in many, many local areas, that’s going to increase activity, but we still have rates that are not what Realtors would like them to be for lending, although I, you know, there, there’s they are what they are. And that’s preventing some people from wanting to buy. We have still lower inventory and many major markets. So you’re seeing, I imagine, I mean, Austin is, is always always fun and exciting. I don’t know, the real estate market there. But I assume it’s probably booming, like always has been. But what are you telling? Because you have agents in different states? What are you telling agents to focus on this year, especially for those that maybe the phone’s not ringing as much as it was during during 3%? Interest rate days? Yeah. So what are you telling agents to do?

Sam Sawyer 23:35
Yeah, I mean, with, with the way that I mean, I kind of started out in a market that was way worse than this one, like in 2010. It was like, impossible to get things done, and people were way more afraid. And like things weren’t happening. And I think right now there’s kind of like the shock in the system because rates rates moved so fast and everyone kind of freaked out and prices a lot of things were happening but coming out of COVID prices or a mortgage rates were low but to me like with our agents are just when people ask me, it’s like, there’s always people moving. And like there’s always like, it’s not like people stop moving or stop selling houses, even if there’s less transaction. So you may have to like, work a little bit harder or try different things. But I mean, one thing I would always do is just go back to people that you had helped you know, rent a house or buy a house and literally just call them and ask them like, Hey, do you know anyone moving? Or like, Can I help you like figure out how much your house is worth? Like something I used to always do is like, it’s called free? Yeah. Do you want to know like, what homes have sold recently and not, not just send like some stupid email like actually like call them or tech.

D.J. Paris 24:57
You don’t have to meet them in person and take them out. coffee or something? Yeah,

Sam Sawyer 25:01
like you don’t have to call like, honestly, a lot of my clients were busy and they prefer texting, like, you know, like some that’s fine. It’s I don’t think that’s impersonal. I think sometimes people think they have to call. I think you just do whatever makes sense. But I’m just asking people for, you know, business and like a lot of younger agents are afraid to do that. But I used to, like, send, like, 15 written notes a week, like I would literally every Monday have

D.J. Paris 25:28
a Brian Buffini method the

Sam Sawyer 25:31
like, like, here’s a note, I can still do this. And yeah, and like on Monday, I would put 15 out and then by, I wouldn’t always like I would get it done. And I acting like I should always did it. But I would try to just write like, even like, hey, you know, say I’m like good seeing you today at the coffee shop. Like it didn’t have to be anything like in depth, it’s more just like sending somebody something in the mail. Like, I bet 80% of my business came from referrals. And I didn’t do a lot of advertising anything. So I think if you just want to, it’s really just asking people, if you can help them and the market, there’s nothing you can do about it except like figure out a way to make stuff happen. So I get, I get pretty like, I don’t feel sorry for agents that complain about the market, because there’s nothing they can do about it. Right, you can always find a way to sell a house. And like, those still will be like four and a half million transactions this year. They’re saying which is off, you know, from like 6 million, but I don’t know, real estate, residential real estate is the only job in the world where every single person you walk by every day need somewhere to live. Like there’s no other business on the planet like this. So

D.J. Paris 26:41
yeah, funeral directors, people who cut hair, real estate agents, all are gonna stay in business, if they keep working. You know, your idea is such a good one about if anyone out there have any of our listeners or viewers are, maybe again, the phone’s not ringing as much, maybe you’re in between sales, and you don’t really have anything to work on. It was me. And I’m just taking what Sam said, and he can tell me if this is a terrible idea if I misunderstood him. But what I would do is what Sam suggested is I would call everybody I know who owns a home, whether they were my client, or just a friend, and especially if their friend because what you can say is like, I know, I know you have an agent, but I’m practice I want to, I’m working on honing my skills for for CMAs for competitive market analysis. And I would just love because it helps me keep my skills sharp, I’d love to send you an update on what I think your home is currently worth. Because I went on Zillow, and I saw what they put for your home. And I actually think that might not be totally accurate. So what I’d like to do is give you my own two cents on it, can I just shoot that over to you, or maybe I can drop it by or whatever. And make that just a practice of doing once a month for our once a month once a year for everybody you know, and again, you’re adding value, because I mean, doesn’t everybody want to know what their homes worth like, but they might not think to look it up themselves because they’re not thinking of moving. And if all of a sudden they see that the value is different from what they expected in a positive way. They might go hey, you know what, maybe it is a good good time to consider getting out. Alright, so or, and then and then if they were like, Hey, that thank you for this, I’m we’re happy we’re not going anywhere, then I would say to that person like, hey, great. If this was helpful to you, one way that you could help me out is just anyone else, you know, who owns a home who’s who’s maybe you know, thinking about, you know, their their home value, like I would love to run a CMA for them, there’s no cost, I’m not gonna pressure him to use me. I just want to sort of keep honing these skills. So, boy, I mean, you could stay busy every day of the week just doing those.

Sam Sawyer 28:35
Yeah. Yeah, I mean, it’s the truth. And yet a lot of people weirdly when I would ask them like, Hey, do you know anyone moving? They would be like, oh, yeah, like, I didn’t know that you wanted more clients like, right? Like real estate agents think that that’s like crazy, but normal normal. I’m not saying real estate agents aren’t normal sight. Like customers and clients sometimes don’t send referrals because they really think I like bothering their agent because they assume some agents are like so busy. But like, you have to just do it in a nice way. Like, hey, there’s a cool house on your street for sale. Like, you may want to see this. It’s listed for 1.3 million. And that’s it. You don’t have to like have any intention. But then they just kind of remember you and like, oh, Sam knows houses in this neighborhood or? Yeah, I don’t know. That’s something that I think a lot of new agents today just don’t do. And they think they go by Zillow ads and build their business. And I think that that’s a horrible way to go about it.

D.J. Paris 29:33
Like you can do it but what you have to realize about Zillow leads and we probably could agree that those are some of the more high quality internet leads that exist because of course there was hope. So this whole business model is basically today built on on making sure agents are happy buying their leads, however, even in the best paths and Zillow used to be a sponsor of ours. So I’m a fan of Zillow however, it I know because I know that I know their sales reps. You know if you can get above a five percent closing ratio on internet leads, especially these Zillow leads are good. But 5% is about what you’ll get if you do a good job with those leads. So that means you have to talk to 20 people before closing one. And you don’t know when those leads are coming in, and you have to first on it, it’s not that it can work, it’s super expensive. And it is just got a low hit rate. So you can do it if you want to spend 1000s of dollars a month and you want that to be your life. Or you can call everybody you know, and be like, Hey, let me run this cool thing for you that will actually help you. And then they’re going to tell and again, you know, it’s I was just at a top producer breakfast a couple weeks ago, and one of the they asked, the top producer has been doing it 20 years. They said, Do you ever ask for business and he goes, I never did. Until this year. He’s like, this year, the phone stopped ringing and he goes, You know what, I saw other people asking for it. I said, you know, my clients like me, like, I can ask them for that. And, and they don’t if they don’t have anyone, they don’t have anyone. He’s like, I work really hard for people. So he just started asking like, Hey, do you do you know anyone? And he goes, it was hard for him because he felt like maybe that felt like too intricate. But it’s like when it’s a friend when it’s somebody who’s become a friend, like you want to help your friends. So he goes, does he goes dumbest thing I did was not ask for the last 19 years. Yeah. And

Sam Sawyer 31:15
you have to ask the right way. Some people are annoying about it. And I was like, yeah, like, you can definitely be bad at asking like that. You can it’s not just like, ask in a weird way and bother people or people would like sort of avoiding you at the grocery store and stuff, probably. But yeah, I mean, it’s really like simple, like cool ways to ask, or, you know, if I were a super brand new agent starting over, I definitely would have like joined a team in the beginning. That’s something else. I always tell people, it’s like, absolutely. I started out completely on my own, I screwed up so many contracts. And I would get agents calling me and be like, how did you even fill this out? And I’m like, I don’t know, can like can you help me? Like, fix it? Because I, I don’t know, I just filled it in. And I think if you start on a team, even if you’re not making as much money for the first year or two, like you will jump ahead of people by like, years. And if you’re working with a good agent. I mean, I’m like, This is not what I did. But I wish that I did. And I think that you could have, you know, gone even faster. So

D.J. Paris 32:23
yeah, it’s a great way to you know, find open house opportunities in case like your brokerage isn’t as friendly to other agents in the firm, you know, saying, Hey, can I do an open house for you? And if they’re like, Well, you’re not on my team, I don’t really know you. Or now I just want to do my own thing. When you’re on a team, those opportunities tend to be more available, possibly leads at some point if there’s a rainmaker on the team who’s just distributing leads, but the very least even if those two things don’t happen, is you’re just going to be hanging out with people who know what they’re doing, and you will absorb that. And yeah, you’ll take a bit of a pay cut to do it, possibly. But gosh, you know, you were saying you should have done that when you started. I told and again, you had a you have a wonderful career. And it all worked out great for you, but might have been easier path. Right? So I totally agree with you there. And I give that suggestion as well to any new agent. And we don’t have a lot of teams here. So a lot of times I’m, as much as I would love to have the person day one after they get their license. A lot of times I’m like, Look, we’ll love we’d love to have you we don’t really have, you know, a lot of teams, so we don’t have a lot of those opportunities, we’ll train you and we’ll do a good job. But if you really want to get experience like yeah, maybe go find one of these big successful teams. And then you can always join us later to,

Sam Sawyer 33:40
ya know, for sure, that’s smart.

D.J. Paris 33:44
Well, I am I’m such a fan. I’m so glad that we’re talking because again, I just want to spread the 100% love out there not that we don’t like traditional brokerage models, too. There’s room for everybody. There just is and there’s some really like, you know, there’s I love all the big franchise firms. I think they’re expensive, but I do think they provide amazing quality support. You know, they do you know, there is a point a place for them, obviously, in the industry there. They’re still reigned supreme, but it is starting to shift a little bit and we’re seeing some of these brokerages with a little bit of a different business model coming in like you and just kind of just taken over and it is so exciting to watch and I I can’t imagine, you know, the the franchise or the large sort of national international firms, the big brokerages. You know what, I’m curious on what, what, how, how viable they think their model will continue to be into the future. I mean, maybe it will, I don’t know, I think it’s going to it’s going to start like when when, when top producers, top top producers start moving to and they they’ve they haven’t really done that much here in Chicago, but I know in other markets that that has happened and it’s like the floodgates just open because then everyone goes I want to go where that guy’s going. But

Sam Sawyer 34:58
no, I mean, we’ve seen gotten a lot of our markets where you get a few years of bigger agents. Yeah, I mean, I, I am not like a, I don’t have like any enemies with brokerage firms but like enemies with business models, and I just really don’t think like traditional commission split thing will be around in 10 years and people think I’m crazy for saying that but it’s like the innovators dilemma like I don’t know if Clayton Christensen is like this famous professor. But it’s like, you know, this philosophy called innovators dilemma where like, big companies are too afraid to take risks, because they don’t want to cannibalize their current business model. So they don’t do anything. And then it’s too late. But they know that like, things are changing. It’s, I mean, no one ever thought Blockbuster Video would go out of business. And, you know, they could have launched something that looked just like Netflix. And this business is no different to me, just because of the, the, the numbers don’t make sense. Like a decade ago, a big brokerage firm business model made sense. Because, you know, you had to be at the big firm to get your listings in the newspaper, literally, you know, like they owned the newspaper listing. So like, if you weren’t at Sotheby’s, no one would work with you. Now, it’s like the cost of tech and all these things is cheaper and splits are getting to a point where these big brokerages, their margins are nothing. And when agents want more, yeah, it just does.

D.J. Paris 36:29
Yeah, no, we’re starting, we’re starting to see this with Compass. And I hope we have so many compass listeners, I love compass, I actually think they’re such a cool company, from the way they branded themselves. And, and but you know, you’re seeing articles, and I’m not here to spread any fear, because I don’t know anything that anyone else knows. But anyone else doesn’t know, I don’t I don’t have any special information. But there’s lots of articles right now being like, how does compass actually continue to? Or how do they become profitable, they haven’t yet become profitable. They invested a lot into their technology, like you were saying, they built their systems from the ground up, which is kind of their whole spiel, which is like, we’re gonna be this really high end luxury brand. And we have the best systems, which maybe they do, maybe they don’t but but regardless, that they they were also very aggressive in acquiring agents, and they were giving very generous concessions to do that. And then once those concessions start to come due, and all of a sudden now, you know, they gotta pay the bills and deal with the shareholders. It’s, it’s, it’s really interesting. Like, they may have painted themselves a little bit kind of in a corner now trying to figure out the road to profitability and, and compass agents love it at Compass. So I’m, again, I think that’s great. But it is from a financial model. I’m like, How does this work? Like, how do they ever find a path to profitability if it isn’t through like ancillary stuff like mortgage title? That’s the only way I see them being profitable again, I’m I’m a dummy. So who knows? When I know

Sam Sawyer 37:53
Oh, no, no, yeah, look, I mean, a lot of my best friends are at Compass. I love compass. I love the leadership there. Me too. I’m not like an enemy of a brokerage at all. I always say that. I’m not trying to like single out other firms, but I’m like business models, I, I do have enemies against business models. But that’s just a different thing. But it’s like the, the numbers just don’t make sense as the industry gets more competitive. And then people ask me, Well, how do you all make money because they’re so used to companies having traditional infrastructure, and I’m like, Look, we make money every month, whether people sell something or not. So it’s just a completely different model. It’s like, we don’t take as much of your money, but our revenue is subscription based. We literally, when you sign up with us, you literally put your credit card info on stripe, like you’re signing up on Spotify. Like we have the same sort of thing. Yeah, so it’s like, it’s like a recurring revenue model, we’re able to forecast things better. We have we have 20 employees or so but like everyone’s remote you know, our biggest expense is payroll like we don’t have overhead and then the numbers look way way better than a traditional firm if anyone like really looks at it it’s more like a software business model applied to the brokerage industry and then we we have partnerships where we resell services we’re starting to do like there’s a lot of ways you can add on services that agents want that you don’t have to force them to use. So I want to I think a majority of our revenue over the next few years what could even come from the service side and not even from the brokerage side so it’s like

D.J. Paris 39:40
Yeah, yeah, we’re we’re starting was just so everyone knows and I again, I’ve I don’t have a reference for this stat. So I may be slightly off but it’s going to be close to accurate which and last time I saw this stat again, I’m just pulling this out of my my memory which is not reliable, but somewhere the average margin at a traditional brokerage is Something like 7%. Like it’s really, really low, which means they’re only making, you know, a tiny amount on their overall because there’s so much cost of doing business. There’s obviously the rent, there’s payroll, there’s your commissions, there’s all the marketing they do to sort of, you know, stay in stay in the public’s eye and the brokers of agents eyes. But, but yeah, it is, it is really interesting that there’s now these additional firms like ours. So I could not be more of a champion of your model, because your model, I love it, it’s literally the same cost just monthly. I just I love that. It’s so easy. It’s so simple. And you know, the cool thing too, for agents, when they do decide to take a chance and try a new model like yours, or here ours here in Chicago, is, you know, I always tell them, because I never want somebody to come in because they feel persuaded because I don’t think I don’t like to feel that way. So I always say I always say here’s, here’s the reality, let’s say everything I tell you is a lie. And we’re really terrible. And we really don’t help you. And we’re not that great. If you come over and you find that out, there’s like 500, other brokerages here in Chicago. And if you come in, and then all of a sudden, you’re like, oh, DJ is a big liar. This sucks. You’re gonna leave a moment later, because there’s a million other people calling you to join their firm, and you’re gonna hate my guts, and you’re gonna tell everybody you know that we suck. So the reality of it is like, it’s not in our best interest to not take care of you. So so we all kind of go, you know, we’re we want referrals to, we want our agents to tell every agent Oh my God, why are you at a, you know, XYZ firm instead of kale. But we know that we have to earn that. And so I kind of like our model. For that reason is we have to really earn it. Like, we can have the low price and the high commissions. But if we don’t deliver on support, training, you know, what the agent actually expects, and also setting clear expectations. Here’s what we do, here’s what we don’t do. But if we don’t actually deliver on that people, everyone’s going to leave and and you know it as well as I do. So in some ways, I almost think firms like ours maybe even have to work a little harder to keep agents happy. Because, you know, they might think, well, maybe I’m not gonna get a whole lot. And then we have to go like, Oh, you’re gonna get all this cool stuff.

Sam Sawyer 42:04
Yeah. And then once they’re there, they realized that it’s the same or better, and they’re making more money. Yeah, I don’t know. I mean, I think there’s a lot of industry shifts that are making these things easier. Like, the agent as the brand is what I call it, but like, the agent name is way more important than like the brokerage name and a lot of markets and it like, you know, 10 years ago, it would be some of these or, like, you would say, the brokerage name first, then like DJ DJ. Now, it’s like, here’s Sam’s number. He works in these neighborhoods, like people don’t even really know where you work. Right? So I don’t talk about this for a long time. It’s like, Well, no.

D.J. Paris 42:49
Go ahead. I’m sorry. Go ahead.

Sam Sawyer 42:52
Yeah, it goes back like 30 years ago, like big brokerages. When this industry started, the business models were the exact same then as they are now, back then it makes sense. Because literally, the newspaper, I’ve written a blog about this, I’ll send you but you had to be at the big firm to get in the newspaper. And that was literally how listings were distributed before the internet. And I’m not I’m not even joking right now. Like, I remember my parents when I was little with like circle listings, and then oh, yeah, me too. Worried at the big firm, no one knew your house was for sale. And so like, that is why the commission split model like all these services back then a bit. And now, everyone’s still doing the same model. And we’re like launching people to Mars. Like, it just doesn’t make sense. Like the world has changed. But the brokerage business model blows my mind, because it has not yet it has not changed hardly at all in like 40

D.J. Paris 43:46
years. Well, and then, you know, exp comes along, you know, more prominently in the last five, five years. And they basically, it’s, and again, I’m not I’m not here to be disparaging on exp, I think exp is fine, obviously, they’ve been crazy successful. They’re one of the only firms and all they did was slightly tweak the traditional model by basically saying, no more offices, nobody cares. And we’re going to go more virtual and we’re going to give you a slightly better commission split than what you’re probably getting. And and by the way, anyone you know, they’ve kind of created this multi level marketing thing where you can get your downline where you can have agents from all over the country and you get paid a certain percentage on whatever their deals are. And that really, really worked for I know agents, some agents like exp some, some don’t. So whatever your feelings are about it, it has been crazy, crazy successful and what exp saves all their money is they don’t really do any marketing to the to the to the consumer to the home buyer, or home seller. They’re like nobody cares. Only people care about you the agent. So we’re gonna put that money back into you and kind of give you an incentive to keep recruiting and whatever, but your clients don’t care where you work. So why are we going to try to appease the client we want to appease you the agent they were really the First model, I saw that and now there’s been a few other firms that have followed suit. But it, it was pretty, pretty brilliant. It was just a minor tweak, right?

Sam Sawyer 45:10
No, I agree. It’s like that model like, and now it’s like the recruiting thing. You know, I mean, yeah, a lot of these companies are doing the same thing. And it’s like, you know, we take inspiration from other companies. It’s like a huge industry. But I think just the, the funny thing to me sometimes, like companies have pulled back from this. But like, when companies first came on the scene, every other firms started touting their technology. And there was like, this technology war is what I call it. And then like, you know, now we’re in this phase where, you know, ReMax or Coldwell Banker or someone, you know, laid off all of their internal tech and partnered with, like, Cavey core. And that’s fine. Like, I don’t think like a firm is way more than its tools to me. And it’s like, there’s all these other things that make a firm, and there’s different firms for different people. It’s like, sometimes people ask me, like, oh, how are you going to like, take over this firm? And I’m like, I’m not we’re not trying, we don’t think about it like that, like, Yeah, we should be different options. And like, no industry stays the same, like a decade from now, there’s no way the top firms will be the top firms. There’ll be a lot of new firms that people haven’t heard of right now. And maybe I’m wrong, but I’m gonna try to figure it out. And hopefully, everyone on here will know who our firm is in the next couple of years.

D.J. Paris 46:32
Yeah, well, they’re clearly it’s clearly already happening. But I think of it I think of it too, with like cable television, right? That’s, I mean, it hasn’t officially gone away. Obviously, there’s still millions and millions of American subscribers to cable television. But I would love to see the graph of that over the last 15 years about subscriber growth, versus people who just go, you know, I’m just gonna pay for four or five different streaming services. And you know, now everybody’s used to doing that paying monthly fee for their HBO max or their Hulu or Netflix. We all sort of are like, Yeah, we get it. Okay. We see the value there. Now, initially, it was a little little like, oh, how are we going to? How are they going to compete with the with the cable companies? Well, they served a need, where people didn’t want 500 channels of things they didn’t watch, and paying 200 bucks a month for it, where they can pay $15 a month and get like half of the shows they want. And so it’s just it’s been. And now it’s like, I don’t even know people that are actively looking for cable in there. You know, some people still have it, because they for whatever reason, they still want cable. But the vast majority of people I know don’t even have that anymore. And so yeah, perfect. Yeah, it’s so I think that will happen to the big brokerages if they don’t adapt and figure out how to be profitable by being a bit more generous to their agents, because eventually, the tide is is already turning, obviously evidenced by the success of your firm is is the tides turning. I mean, geez, if I could if I could hire 700 agents in a year and a half, I would be I’d be a very happy man. So you are you’re doing amazing work in the different areas that you’re in in, we should talk about this. So this is a great place to wrap up. So if you are an agent, and this conversation was like piqued your interest, and you’re like, Oh, I didn’t really know this was an option. And it’s not in every local market, like where I’m from in Peoria, Illinois, smaller city, they just don’t have 100% option there just doesn’t exist. And maybe someday someone will figure out how to do it. But it’s worth finding out if it does exist. And so, Sam, tell us what markets are you in for? We have agents all over listed. Yeah.

Sam Sawyer 48:33
So we think about it on like a state by state bases. We don’t focus on certain cities just because we all have our operations and everything is online. So Texas, Louisiana, Arkansas, Florida. And then we’re launching North Carolina like next week, like may first or may 2. And then California is one where we’re getting a lot of like inbound interest. And so I’m actually trying to figure out how to launch that like in the next 30 days, then you’re amazing here is in California, I’d love to talk to you. But California, Texas, and Florida are all similar markets that we feel comfortable. They are. And I used to live in San Francisco. So

D.J. Paris 49:19
those are the three biggest markets. So you guys are Yeah, and you’re in Louisiana and North Carolina. Certainly. Yeah, if you are an agent, any of those areas, just owe it to yourself. Even if you’re like I love my firm, I’m not leaving cool, don’t leave but learn learn what other options exist, because maybe today it doesn’t make sense. But maybe in a year from now, all of a sudden there’s a regime a regime change at your office and your favorite managing broker left and the new person you don’t like or whatever this is just just check out what they’re, by the way, great website. Really impressive. Its pinnacle, are a so are a so pinnacle. ra.com is where you go to learn about the different subscription models they have and You know, you can just figure out if it makes sense for you. And it takes time. For some people who explore this right away. They’re like, let’s do it. Other people, as you know, it takes years, some time for them for them to go. Okay, I’m ready, I’m really ready to move. So this is just a great way to plant the seed to see if it’s something that you want to do. So go to Pinnacle are a.com. And also, let’s check out Sam on Twitter. So you can find him Sam H Sawyer, on Twitter, you can read all about his thoughts, and learn what Elon Musk is currently up to fixing, hopefully fixing Twitter, or breaking it and having fun breaking in. So it is it is a fun time to be on Twitter these days, because it’s always changing.

Sam Sawyer 50:42
So sometimes it works. Sometimes it doesn’t. Yeah,

D.J. Paris 50:46
but it’s hopefully it what I what I do love about Elon Musk is he’s finally treating Twitter like an actual business because he has to because he just paid a bunch of money. And he’s trying to figure out a way to profitability for them and they’ve never really been profitable. So it is he’s he’s doing a hopefully some good work and maybe cleaning up some of the trolls on there, I hope. But it’s a great place to to check out Sam. So Sam H Sawyer, on twitter link to his website and his social media in the show notes. By the way, on behalf of the audience, we want to thank Sam, he is a busy busy man, it’s 1000s of agents working with him, it’s got to run a whole team, a company. He is a busy guy, and he took an hour out of his busy day to to help talk to us and our agents. On behalf of our listeners. We thank you, we appreciate you, Sam, you’re great. And also on behalf of Sam and myself, I want to thank the listeners and the viewers for sticking around paying attention to our episode, please support our sponsors, support Sam, go check out and if you know agents in any of the market season, send them a link to their website, they might not even know this model exists. And it is when people get excited about it, it is a really fun thing because like I didn’t know I could keep almost all my commission. I mean your case, they get to keep all of it really. So that’s even better. So check out pinnacle. ra.com. So on behalf of the audience, thank you, Sam, on behalf of Sam thank you to the audience. And we ask the audience to just do one. One more thing for us, which is to please tell a friend about the show. Think of one other agent that you know that could benefit from maybe like we just said maybe learning about Sam’s model, send them a link to this episode. And you can send them right over to our website keeping it real pod.com is where every one of our shows we have like almost 500 episodes now I’m forget exactly how many. But what’s interesting is on the podcast apps, it only typically when we show about 300 And not that I think anyone’s going back to Episode One. But you could if you go to our website, all of our episodes can be streamed right there and my intention when building the show was to have a library of content so that you didn’t have to just wait for our newest episode you could go back through so go back check it out, keeping it real pod.com and Sam, thank you so so much Pinnacle are a.com is the place to go to learn all things. Sam Sawyer and Pinnacle Thank you, Sam. We will see everybody on the next episode.

Sam Sawyer 52:59
Yep, thank you. This was great.