Talking "Time Limited Events" and Creating an Uneven Playing Field with RealtyHive CEO Wade T. Micoley

Brokerage Insider

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TRANSCRIPT:

Welcome to brokerage insider the podcast where we interview the leaders in real estate and technology. I'm your host Britt Chester director of client success at Travis. And today we have veteran agent and broker Wade . McColey Wade. Thanks for joining us today. Thank you. Thanks so much for having me.

Wait, where are you? Where are you joining us from? Where are you based? We are located in green bay, Wisconsin. And how was the weather in green bay right now? Rainy. It's been very nice, but it is raining now, but we, we appreciate even the warm, rainy days after a few months of I can definitely imagine that wait, you've got quite the resume, you know, when we were just kind of talking a little bit, we'd got, got Realty high, you got cash certified.

Tell me a little bit about your history getting into real estate and just kind of give our listeners and audience, you know, a little bit of your back. Sure. Well, I Fell in love with real estate pretty early on in my, in my, in my life. And one of the things that intrigued me so much about real estate is formerly before that I was in a rock band and Doing a little bit of small touring and realize that boy, this is a tough way to make a living.

Cause we weren't, you're going to become the rolling stones by any means. And had a brother-in-law that was in real estate and kind of watched it and thought, okay, this looks interesting. And he approached me and I got into real estate fairly young when I was about 2021. And just absolutely fell in love with it and maybe a little bit for the wrong reason, but I thought houses were cool and really, really enjoy the fact when it, when the light bell went off for me light bulb went off for me.

It was really about the fact that I didn't know anywhere where I could make. The kind of money that I wanted to make. And what I mean by that is in real estate, there's really no ceiling. I mean, you, you set your own ceiling and real estate, you can make as much or as little as you want by just, you know, getting really efficient, working hard, having good systems.

So that's what launched me into it. I was, I started a couple of different real estate companies sold those was number three for close transactions for a major franchise. And just, that led me to all kinds of really cool opportunities. And that's another thing that I always loved about real estate was the opportunities that it can lead you into if you become really good and known as being really good.

So that led me into. The banking industry, which I helped co-found Nikolay national bank and it's now publicly traded a $7 billion company. That's done extremely well, a lot of talent around that, that wasn't just me by any means. But then when the crash came in 2009, 2010, I saw really quickly that community banks and banks needed a system to help promote their properties in a new way globally.

So fast forward through that, we worked with banks in 38 states. I'm always hiring local agents as our reps. We still do that work today. Then got a opportunity to work for the federal, with the federal government selling assets for the federal government and that morphed into. Realty I've been cash defied today.

Yeah. And I was able to look around on Realty hive. I think, you know, one of the things, and we had mentioned this before you're licensed in nearly all 50 states. And, you know, again, that, that thing that stands out is, is that continuing ed continuing education and, and what all that takes. But can I talk about, you know, why, why you're licensed in so many places and then how that kind of speaks to Realty hive and, and the business.

Yeah, what happens is it's, it's kind of a two-way street in this sense. Consumers come to us because they want utilization of our platform. In fact, When we have a consumer comes to us or an agent brings a property to us to help them with, we have an over 85% adoption rate. So what we have people really like and want.

So it's a two-way street in that same. Meaning that agents will bring properties to us. And we will also bring properties to agents that still holds true in the banking industry. We do work with a number of banks all across the United States and we'll get a one-off property in Utah. The reason for the licensing is just from.

A standpoint of making sure that we have all the basis covered. But if a call came in to us from Utah, we're licensed in Utah as an example we can answer a couple of quick questions for that particular buyer, but then that buyer. Quickly spun over to that local agent that we've hired to work on that asset for us.

So it's just a protection thing more than anything we're using local agents everywhere that we work. Now, talk to me a little bit about the, the Realty hive platform. You say people come because they want that access to that platform. Can you kind of walk me through what the, what the model of Realty hive is?

And really what the value is, both for agents coming to you as well as institutes. Yeah, the, and we have as an example entire companies that we partner with I'm thinking about office in beliefs that we just brought on and they have about 325 properties listed currently. And we're pretty, we can pretty much customize.

How we work with a particular agent, but most, most usually a company and they need outreach into the United States and Canada. And we, we do that every day. So we provide that to them to find them more buyers on their properties, but what the real the real. DNA of Realty hive is, is back when we were doing a lot of work for the federal government and the banks, what we very quickly found out is an auction format is very successful in creating bias.

There's, there's a couple things that are really bad about it. And, and I've seen him in full effect with doing some of the ballroom events we did for the FDAC, but most importantly, there's some really good parts. So when we create a Realty hive, what we did is created this high bred model to create the most activity.

Keep the seller and the agent in control of the final sales price and not have to work towards a certain specific date. So by marketing the properties, marketing them in a very unique and specific way and putting them within this. Platform of a hybrid. We call it a time limited event, not an auction.

What it does is just creates a lot more activity on properties and we have all kinds of samples of that properties that have been on the market seven, 800 days that we've come in, assisted an agent. And that agent got an accepted offer in a hundred days. Now being the new third agent in that transaction, there's multiple wins there for those.

Particular people that utilize our platform. So as an example, and I'll just give you this specific case. This agency, young agent works for a great company. They, that great company has all kinds of tools, but the question got asked of the third agent, you know, fairly, fairly new to the business. Tell me what you're going to do that the last two agents didn't do well, that's a pretty tough question because.

As agents, we can talk around that. And but you know, what I really like to do is dive into the details. And if, if I dive into those details, there's very little difference. And I don't mean to offend anybody when I say that, but there's very little difference of what they're doing from the standpoint of marketing and signage and MLS and et cetera.

There's differences. There's no doubt. But in this case, this young agent said, Hey, I've got this affiliation with this global marketing platform. They do time limited events. Would you like to hear about it? And this particular seller said, yeah, let me, let me jump on the phone. So the agent gets one of our business development reps on the phone.

We present to the city. Remember 85% plus adoption rate. The guy in the house says, I love it. I've never seen anything like this. I want to do it. Now. What happened there is really multifaceted. Okay. And what I mean by that is yes. The property came in. Yes. We marketed. We put it in a timeline of that property sold.

Wonderful. But what really happened was that agent got a. That's what really happened because he had to show a differential. So agents are using us as a listing tool, so to speak, they will use us to extend a listing. So, you know, the hardest two conversations you got to have in real estate. We need to reduce your price and we need to extend your listing, the hard conversations, right?

And in what we've developed with Realty hive is this way to work that into both of those conversations. So that either way the agent wins, right. If they're trying to get a price reduction, they can say, well, we typically would do a price reduction at this term and listing with this amount of activity, I would suggest we reduce the price to add.

Or I want to give you another option, which is this time limited. So either way the agent wins, right. I just want to, sorry to interrupt time-limited event. Is that, is that different than calling it an auction? And is there a reason? I mean, because to me those, the two sound very, they sound the same, but I mean it's time limited event.

Just kind of like change it in in its compliance or, or what is the kind of, what is the, the mindset there? Really good in-depth question. We have tested this four years running the same property under two different languages. They both get almost identical reaction. The difference is that when an agent has to go to a seller and bring up the word auction, it's usually a negative situation.

So every seller is willing to say, you know what, for the certain amount of time I'm willing to, in a sense, kind of look at the marketplace and look at all of the offers available within the certain timeframe. Thai I E time limited. So when we switched from doing what I call old school auction formats and switched it to this new retail version, the acceptance rate from the everyday retail seller is off the charts.

So buyers love auction. Sellers necessarily don't love auctions. The, the other part that came up with that is there were a lot of auctions back in the downturn that were done for financial institutions and secondary underwriter providers of, of mortgages. And there was a lot of negative connotation to that auction companies were cutting the agents out every chance they got.

Approach the banking industry back then from the standpoint of why do we want to do that? A you're typically don't want to fire sell your product and B we want to be all inclusive. So the idea from day one was that we were not going to do this in a way that was against the real estate agents. We were welcoming the real estate agent.

And it's proved very well for us. I mean, I, you know, auction in my experience, you know, which has been, you know, heavily focused. In residential real estate. You know, my exposure to auctions has been definitely more in the luxury sector, right. And, and the, you know, I think of a company like concierge auctions, they come to mind.

And that's, you know, really where, where my kind of knowledge stops in these, in these time limited sales and in this auction kind of format, are you seeing that same kind of adoption at the. Kind of residential, you know, middle market level or is that a little bit more unique? And, and I asked just, you know, again, kind of going on the site, I see we've got a lot of international properties.

There are some residential listings and kind of residential lands spots, but what's the, what's the adoption like, you know, just from the you know, from that, that residential, single family home level. Well, it's it's most of what we do. There are again, this is the best way to think about it as it's like a retail version of it.

So a it's very inexpensive compared to some of the companies you spoke about. I'm a seller and there's a major difference in philosophy. And that philosophy is what's winning out with what we're doing with the consumers and the brokers. And what I mean by that is. If you take a high end property of $5 million and you tell a seller, they have to commit to taking $2 million or they have to commit to an absolute Ark.

I'm assuming. And I'm going to assume that they don't have shell bitters in the audience, making sure that it doesn't, that it gets up to a certain point, but they. Then pay the agent 6%, 5%, whatever that may be. And then the auction company might take five or 10% now it's buyer's premium, but the problem is the sellers really still paying it in the price.

So to, to have a an event that costs a seller 10 to 15%, let's just say is a big number and the ability. That most sellers can't agree to that that kind of strike price. Most people don't want to do that. Some can do it obviously. So when we did it, we wanted it to be very much all inclusive. So in our events, there is the seller has control over the price at all moments.

And that's a very important aspect because. If on an on event day, you get X. If we sit for two more days, we might get a bigger number for that seller. So the sellers always in control of calling, when they're going to say that's, it let's take it. The other thing is we're charging only when the property sells and it's as low as 1%.

For us to run the platform. So if you think about it, what we're doing is we're creating this art open architecture platform that agents and brokerages can come in and use when they want, when they see fit. So it's almost like they own their own time-limited event or auction company. It's not white paper because the recognition of our traffic is greater than me calling it.

You know, Travis XYZ. So in that respect, that is that is proven out really well. And because of all those things it's been designed for that typical seller that's, you know, if you go in and list the house right now, and this is a really cool statistic, by the way. So we have the ability to pull in 90% of the MLS is and analyze the data.

When we do that, we found that 18% of the properties that are residential only in the U S that are listed, have been on the market over double the average days on the model. So, what is that is telling you in the hottest real estate market ever, there is still stuff that is taking too long, and that could be just because of price.

That could be because of marketing. That could be of exp exposure in that marketing, but by taking it and wrapping it into a new package, so to speak and promoting it in a different way, then you get really cool and different, exciting reasons. So it was, was Realty and I've launched. When was, when, when did you start Realty dive?

Well, the premise of it, we started back in 2010 when we were working with the banks and after that a little bit, the federal government on a bunch of jobs and about two years ago, probably two and a half years ago now is when we, we kind of took it out of my name, so to speak and made it into a more branded, a generic name called Realty hive.

So process has been going on for you know, 10, 11 years, but yeah. New or the launch of the company itself has been just for the last, let's just say two and a half to three. Okay. And then what kind of, you know, you're saying y'all have access to, you know, 90% of the MLS is, and then there's the, the, the, the thing that comes to mind for me right now is how hot this market is, right?

Like days on market in I'm in Denver, Colorado, our days on market has pretty much halved. Our median home price has gone up a hundred thousand dollars, you know, year over year. So, you know, I'm immediately, you know, not skeptical. You know, I'm wondering like how that, that, that time limited format kind of fits into, into this market.

And maybe it just, it doesn't right now, or maybe it does, like, how do you, how are you breaking into those markets that, you know, can't keep inventory on the shelf? Or is it kind of like using, like you said that as data back decisions to say, yes, there are, there are properties that are moving very quickly, but there are also properties that are not moving quickly and we provide that solution.

Yeah, it's a little bit of both. And then what you have to do then is step back and look at it on a global scale. Right? So the U S is hot right now. There are lots of areas in the world that are. You know, as an example beliefs, the average days on the market and beliefs is over a year. We're very close with a particular major company in assisting them in Europe.

And we're in conversations of that right now. And when you look at Europe, there are certain segments of Italy that are extremely hot, and there are certain segments that are certainly not in the same, and there's different markets that you can go into easier than others. And there's some language barriers and so forth.

But even if you were to take Denver, I would challenge this. First of all, as a real estate agent we tend to. You know, gravitate towards what's happening and, and rightfully so, what I call that is buttering your bread, right? If you go out and you're looking at a medium price range, about $500,000 property, guess what?

All the competition's there from the standpoint of a listing agent, this is coming from the, the aspect of looking at it as a real estate agent, all the competition there, there's probably downward pressure on commissions because of the competition. But there are other segments that I challenge anyone.

If they take Denver and they run a report on the MLS in Denver, they include all the different types of real estate, commercial, vacant land, et cetera. They're going to find their properties that are on the market way longer than the average days on the market. So going back from the agent standpoint, where we fit in with this is on the first step is.

If you want to go after that stuff, you need to have a tool where the tool, if you want to expand your business into different areas for sale by owners, expired listings, whatever that may be, you have to have a different conversation. Otherwise, the conversation typically becomes about commodity pricing commissions.

That's why you see so many of these companies popping up right. We'll do it for 1%, 2%, whatever it may be. You have to have a tool that really makes you stand out. And then the other part. And so first of all is how does Denver is there are properties that are not moving in that market. And, and that's where you help.

On the other side of that coin, we do have agents. We just had an agent come to us in Florida and it's like outside Disneyland. Immensely hot. The question that she proposed to us was let's put this property on your site. We think it's 300, I'm going from memory. So these numbers are rough. 300. But what we want to do is we want to put a list price on it of 3 25 and we'll have an opening of 300.

So they thought it was worth 300, but put 3 25 on it. As our list price, we did...