Our Guest: Josh Harley
CEO & Founder, Fathom Realty
Join us for a fun, year-end conversation with Josh Harley on December 9, 2020 at 1:30 pm CST!
0:00:00.0 Geoff Stertz: Hello, and thanks again for joining us for another Fathom Live, a live stream show dedicated to giving you tips and insights from experts in and around the real estate industry. I’m your host, Geoff Stertz, glad to be with you today as far as experts go, we have somebody… I don’t know if you’d call him an expert, he dabbles in real estate, but with us today is the Fathom CEO and founder, Josh Harley. Let’s bring Josh out here for a second to say hi before I just blab about a few other things.
0:00:33.6 Josh Harley: I think you’re right, dabbling is probably the way to put it. My wife always makes fun of me, ’cause whenever we meet a stranger and they ask, “What do you do for a living?” I usually say, “I dabble in real estate,” so I have to sit there and explain everything to everyone.[chuckle]
0:00:46.0 GS: Well, keep dabbling…
0:00:46.6 JH: You nailed it.
0:00:47.0 GS: It seems like it’s working. So very good. Well, before we jump into our questions, I’m looking forward to it, we are kind of focusing on… Well, a little bit about what’s happened in 2020, I know sometimes we wanna take a grenade and chuck it behind us and say goodbye to this year, but we’re gonna talk about some great stuff in 2020, but mainly looking at what you wanna do for 2021 as we’re thinking ahead to next year, so we’ll be looking at that. But first of all, we always have a giveaway drawing, so if you comment, just simply say, “Hey, how’s it going?” on the Facebook or YouTube feed we’ll count you in the drawing, if you comment during the show, ask a question that gets included in the show, then we add you to the drawing a few more times so that you have a better chance of being drawn.
0:01:28.5 GS: For our last show, we had Randall Gross as our winner, so congratulations, Randall. And you can win one of three prizes, you can win a photo listing package worth up to 200 bucks and $200 worth of GoSocial leads service, as well as a $200 yard sign package. So get to commenting, shout out, just tell us where you’re hailing from, we already have a bunch of people on already, I think we have… Yeah, yeah, a whole ton of people, Patty and Jennifer and Rob. And Wendy’s watching, “Hey, Wendy.” Patty, Andre, a whole bunch of you.
0:02:02.7 GS: So thanks for already jumping in, so just tell us where you’re from, and also this is an interactive show, so here’s your chance, if you wanted to ask Josh some questions, we’ll try to save some time for that during the show as well, but we also like to point you to GoSocial agent, where you can get effective and affordable social media services for your real estate business, they’ll help you get your account set up, do automated postings, agent branded articles, buyer and seller handbooks Facebook ad campaigns, and more.
0:02:31.2 GS: So they’ll help you grow your online community, and you can learn more at GoSocialAgent.com, if you haven’t hit the notification bell on YouTube that lets you know that we’re going live, it’s better to watch it live, that way you can ask the questions with our guest, while it’s happening, follow us on Facebook like us on Facebook, follow us on Instagram. That would be great. So anyways, we’ll get that out of the way, it is our Christmas special, and I actually have real hot chocolate in here, I know you can’t taste it, but it helps me set the mood and so thank you for joining us on this special. Josh, thank you for coming on the show.
0:03:10.7 JH: It’s my pleasure, I appreciate inviting me.
0:03:13.1 GS: Yeah. Yeah…
0:03:13.6 JH: I’m excited.
0:03:14.7 GS: So as a special…
0:03:15.9 JH: By the way…
0:03:16.6 GS: Go ahead.
0:03:16.9 JH: By the way, really quick, 73 degrees outside, so hot cocoa is [0:03:21.4] ____. I’m drinking cold water.
0:03:24.9 GS: I’m dying in here. It was cold in our house this morning, so I kicked up the heat and now I’m in flannel and it’s pretty warm. So as it is a holiday special, and whether you have a Mensch on a Bench or a dreidel in your cradle or a elf on a shelf, we’re glad to have you watching today. But some rapid fire Christmas questions for you, Josh. So this is just to get to know you. First of all, what’s your favorite Christmas song?
0:03:55.3 JH: That would have to be Bing Crosby’s rendition of, “I’m dreaming of a White Christmas.” It’s my favorite ’cause it brings back so many amazing childhood memories, I absolutely love that song. Really his version of that song most of all.
0:04:08.5 GS: What if we had 150 live viewings by the end of the show, and I will sing it at the end?
0:04:18.3 JH: I would love that. You gotta repeat that. So, a lot of people don’t know this, that I get to listen to Geoff sing every single week. It’s actually a highlight of my week, so…
0:04:27.9 GS: You’re probably wondering what in the world you’re talking about. I come and serenade him it’s part of my job.
0:04:33.1 JH: It is, it is.
0:04:34.5 GS: I’d have to get the lyrics I mean I think I…
0:04:36.2 JH: I wake up in the morning around 6:30 AM he walks in with my cup of coffee and he sings to me. So… Alright [0:04:41.0] ____. People are gonna think that’s true.
0:04:46.2 GS: Yeah. Alright. Well, let’s move on from there. But yeah right now we’ve got… We have a lot of people that watch the show after, but if you can invite your friends and we can get up to 150 people watching live, I’ll sing that at the end. Right now, I think we have 67. So if you can, invite your friends, you’ll get a treat. [chuckle] How about your most memorable Christmas gift or favorite Christmas gift, one of the two?
0:05:10.8 JH: It won’t be favorite, it’ll be the most memorable, I think that’s a great question. So I grew up… I grew up pretty poor. I didn’t know I was poor, I thought we were rich. My father always gave at church and we always had what we needed. We never had what we wanted but always had what we wanted… Or what we needed. So my father was 35 years military veteran. I grew up with five brothers, sisters. I got seven brothers, sisters now but I grew up with five in the house. And so we didn’t really have a lot, it was always hand me downs. And one year, I think I was in the third grade, we were living in Kodak, Alaska at the time, I opened up the first present, and before I tell you what it was, I look back, I feel so ashamed because I feel really bad for my father. But I opened up the first gift, and you know what it was? It was ketchup, it was a thing of ketchup. And the next thing I opened up, was a hammer.
0:06:05.0 JH: And so the series of gifts… All the gifts, we opened up a lot of gifts, I’ll be honest. Five kids in the house, there’s a lot of gifts to be opened. But it was… Actually, at the time there’s four, I believe, at the time. But it was a lot of tool… I’m sorry… Yeah, tools. So screws, hammers, nails, and then there’s actually food items, there’s actually no toys. And so I… I know of course, I was very respectful. “Thank you, dad.” “Thank you, mom.” But my heart, you could probably see all our faces were like, “No toys.” But looking back, he was trying to give us things that we could actually use and do versus just toys that you play with for a couple of days and get thrown away. I understand the value, but it is basically is really was the most memorable gift I ever got and probably the most disappointing Christmas gifts… Before I ever get to my own kids. In fact, I did something the opposite. One year, we gave our kids so many gifts between myself and the grandparents and everyone else, they had so many gifts that my kids refused to open presents. They’re halfway through and they quit, “I’m done.” My daughter started crying, “I don’t wanna open any more presents, don’t make me open any more presents.” It was so bad.
0:07:15.3 JH: So, after I limited my parents and her parents, my wife’s parents, to one present each… ‘Cause they’re all… Everyone’s sending four or five gifts per grandparent, and we had a lot of grandparents. With seven brothers and sisters you can imagine, two gifts per… Yeah, probably 50 presents per child. So we went the opposite, the extreme, and it didn’t work out either, so that’s probably their most memorable childhood memory of Christmas, getting too many.
0:07:40.3 GS: An avalanche. Well, I was gonna ask you what your favorite Christmas food is, but it’s probably not ketchup then. You probably take hammers around and hammer ketchup bottles.
0:07:52.9 JH: I do still love ketchup. By the way, they thought it was funny. So one year, I walked out of the kitchen, they asked me to go get ketchup, and this is why they gave me ketchup, I walk out of the kitchen, pouring ketchup into my mouth. So, they thought that was funny.
0:08:06.0 GS: So it was thoughtful, at least. Oh, that’s funny. Alright, favorite Christmas movie?
0:08:12.1 JH: That’s gotta be Elf. That’s Will Ferrell. I know it’s not a classic, but it’s by far my favourite.
0:08:17.5 GS: It’s becoming a classic, I think.
0:08:19.5 JH: Yeah, it has to be. It’s gotta be one of the best Christmas movies of all time. My opinion I know, but it’s awesome.
0:08:24.7 GS: Well, speaking of opinions, what’s your opinion… Well, not everybody is familiar with this, but Krampus? Do you celebrate with Krampus as part of your yuletide traditions?
0:08:36.3 JH: No, that’d be punishing your children, not rewarding your children. He’s a dude I’d prefer to stay on the good side of. So for those who don’t know, Krampus is kind of the anti-Santa. Some people think that he’s Santa’s right-hand man. So if you’re naughty, you get Krampus instead. So he’s basically a bad Santa. So, nice, and you get toys from Santa, and naughty, and you better hope that Santa gives you coal ’cause otherwise you get Krampus, and who knows what happens. And I think no one has ever survived to tell the tale of Krampus, so, no, it’s not someone I… I’d like to stay on his good side.
0:09:11.5 GS: Well, they try in Norway, they try to tell it with parades and whippings and things like that.
0:09:16.5 JH: That’s right, it’s funny.
0:09:17.3 GS: It’s true. Okay, since we’re on Santa, real quick, and I’ve only got one more after this, and then the show’s over, that was it. No, I’m just kidding. How many reindeer can you name in 10 seconds?
0:09:32.0 JH: Do we have to?
0:09:33.1 GS: We don’t have to.
0:09:33.9 JH: Let’s see. Rudolph, Dasher, Vixen… Actually, no, it can’t be Vixen, that’d be an awkward conversation with the kids. Dancer… Okay, that’s where I about end. You got Tipsy, Dopey, Slopey… I’m so bad at names, I really am. Hopefully it’s not sleepy, because that’d make some really dangerous rude comments.
0:09:53.9 GS: He’s in the lead. Alright, last one. Nog, or no nog. Are you a nogger?
0:10:00.7 JH: Oh, I’m a nog guy, that’s why I’m so fat. You have to look and you know immediately I’m a nog guy. It’s very fattening, a lot of calories, I think one cup is like 400 calories. But it’s worth the calories.
0:10:11.9 GS: Yeah, we never had nog growing up, and then I married your sister and she does the full cup of nog and I can handle a shot glass.
0:10:24.5 JH: Easy 600 calories. I stay away from the homemade stuff, I won’t touch the homemade stuff. But the store bought, generic stuff, the cheap stuff, that’s what I like. Sugar, sugar.
0:10:33.2 GS: So we’re gonna try something… There you go. We’re gonna try something during the show. If you… We’re gonna throw in some holiday trivia for our viewers, the first person to comment on either Facebook and YouTube, will get a $25 gift card to… Well, this would be Fathom agents. How would we do this without Fathom agents? Nevertheless, Fathom agents, you get a $25 gift card to the marketing store if you can answer these Christmas trigger questions. The first one… And if you don’t get this, you’re not my friend. Then, who played… You ought to get this. Who played George Bailey in the classic Christmas movie, It’s a Wonderful Life? There you go, there’s your first question. We’ll throw some more in there, if you answer it first we’ll give you a gift card.
0:11:19.7 GS: Since we had you on the show last, kind of transitioning to Fathom stuff, well, not just Fathom stuff, but real estate stuff. But regarding Fathom, we’ve had, I think, well over 1000 agents join Fathom, which is remarkable. It seems like we’ve had you on before that, but would you mind just briefly sharing it? I’m sure there’s a lot of non-Fathom agents, in fact, a couple of people piped in said, “I’ve just heard about this company, really interested in it.” On the comments here. Could you just share the Fathom story, why you started Fathom?
0:11:52.3 JH: Yeah, I’d be happy to. By the way, of that over 1000 agents who joined since the last time I was on the show, 50% of our growth are some agents referring other agents, so I’d love to take credit for that growth, but our agents… It just shows that they love the company, that we serve them right, and they’re willing to tell the story. So, I have to say a big thank you to our agents for helping us hit those numbers. It’s exciting growth and a lot of people tell us how amazing our growth is, but we can’t take credit for it, really the agents are the ones who kept telling that story, so thank you. But the Fathom story. So, hopefully you got some time to me to answer that question.
0:12:28.6 GS: Well, yeah, I did say the word brief, but do what you can.
0:12:31.3 JH: I’ll keep it brief. When I first started Fathom, before I started Fathom, I was an agent just like probably almost everyone listening right now. And I was in Asia with a big traditional brand, and we were closing a lot of business, myself and my team. And it was very difficult, because we were gonna pay me… Between myself and my team, we were gonna pay that company over $100,000 in commission splits. And I couldn’t, for lack of better terms, fathom why.
0:12:58.1 JH: What was the justification? What was the value exchange for the $100,000? We were too big going to the training class, and that’s what they’re known for. We’re too big as a team and spread out to really be in their offices, which by the way, you still had to pay extra for the offices. They never sent us a single lead. So I knew that all of our business was coming from our efforts. In fact, our technology was technology I was getting on the side because the third-party technology I can get was better than what they were providing. And so I just… I didn’t see the value exchange, the value proposition from the company. Still, I still have great feelings for that company. I think it’s a great company, but I just didn’t see the value proposition. I knew that I wasn’t alone. I knew there’s a lot of agents that felt the same way.
0:13:41.0 JH: And I started looking around the industry and I came across that model, that 100% commission model, and while I love the idea of that model, I didn’t find another company that was actually doing it right. It was literally a license warehouse. You move to that company, you hang your license, 100% of nothing is still nothing. In fact, the company I was looking at, they had about 1,000 agents, and they closed about 1,000 homes per year, right. That’s one sale per agent. And so, while the model made a lot of sense, you get what you paid for.
0:14:12.0 JH: And so I knew there had to be some happy medium, some hybrid approach where you get all the tools, technology, training, resources that you could otherwise get from these big traditional companies, but at the 100% commission model. Because the fact is, my job as the broker remains the same, whether you close a $200,000 home or a $2 million home. Why am I taking more of your commission, right? I mean outside of maybe some extra ENO costs because you’re the multi-million dollar level, the ENO costs really don’t change that much. And so, what is really the difference? And so why can’t there be a way that we provide more opportunity for the agents. And I know I needed that. I knew other agents needed the same thing.
0:14:54.4 JH: And so that’s really kind of where the idea for Fathom came from. The idea that we need to move more to an agent-centric, right? Empower the agents. Allow the agents to keep more of their own money and let them re-invest it back into their business. I didn’t wanna be big government, right? I didn’t wanna be the people who tax you huge taxes and then go spend your money the way I wanna spend your money, not the way you think it should be spent. If you would invest that money, and feeding your family and setting up vacations or retirement, great. If you wanna spend that money on building your business and investing in growth, great. It’s your choice. But when you give all your money to that big brokerage that’s taking 30%, 40% of your commission, you don’t have that choice or taking that choice away from you, right? So, I really wanna be able to empower the agents. So Fathom means to come to understand, and that’s what we’re trying to do. Trying to move away from that broker-centric idea to the agent-centric. Empower you to do what you want with your business. In fact, I know it works because right now, the average agent, after four years of being with Fathom, increase of sale by 49%. That’s a big number. That’s not us. That’s the agents taking that savings and reinvest it back…
0:16:01.0 GS: Right.
0:16:01.0 JH: In their business. We have a lot of agents who double their business after the first year because they take all of their savings. So right now, I’ll give an example. The average agent who joins Fathom saves around $12,000 to $15,000 per year to pay what brokers are coming from. That’s a lot of money. But it’s not life-changing. Imagine what you could do if you had that $12,000 and you reinvest it all back into your business, 100% of it? I know from my own personal experience that every $1,000 I spend is really… It’s actually $800. For every $800 I spend on my marketing and investing in lead generation, I should close one more deal. So, if I can close 12 more deals per year by reinvesting it all as if I was still at the other brokerage, reinvesting back in my market, that’s another 12 sales per year.
0:16:44.0 GS: Right.
0:16:44.4 GS: Now we’re talking about we’re at $100,000 per year in extra income. Now it’s life-changing. And I want to be able to do that for Fathom agents. And you know though, something’s gotta give to really be truly successful, something’s gotta give. So, I really do believe we provide all the tools, the training, the technology, the support that the other big traditional companies do. But people say, “What’s the catch?” And there is a catch. We don’t provide offices. That’s the catch. But the question is…[laughter]
0:17:14.0 GS: Which in 2020 [laughter] sort of has forced the issue a little bit on that.
0:17:19.3 JH: Well, yeah. If you want an office, I’ll get you an office but I’ll take 30% of your commission. Would you rather pay $450 or $3,000 a month to have an office space that you can go to but never actually use. So I think it’s a fair trade-off. But to that point, one of the things I’m very proud of is that… And by the way, when I speak to other brokerages about this, being virtual doesn’t actually mean you never meet your agents and communicate and take care of your agents. I really stress to our local managers to physically bring our agents together as often as possible. Hopefully two to three, four times per month. If you can do that, right? Because the more often you bring agents together… You can’t build culture in a vacuum. So it’s really important to physically bring people together. Real estate is a people business. It tends to attract more extroverts than introverts. Now, I’m very much an introvert, I know that, but it tends to attract more extroverts. And if you’re completely virtual and you never see each other, you start to feel lonely and isolated and separated. So it is really important to still physically bring agents together. And while we’re virtual, I’m very proud of the fact that we still do that
0:18:23.0 GS: Very good, thank you. Thank you for sharing that. I know we’re somewhat limited in what we’re able to say by way of this next question here, but I don’t know if you can speak to any of this. Lee Taylor asks, “What new technology is around the corner?”
0:18:39.0 JH: So yeah, I gotta be very careful I don’t make any forward-looking statements. But some things that we have made public is the fact that we’re currently building out our own agent websites, our own corporate website CRM system. So we’re replacing a third-party tech that all the other companies use ’cause a lot of our competitors use the exact same technology. So we’re looking to build around now. We’re not gonna roll that out until we have something that’s as good or better than what we’re currently using, so don’t worry if you’re a Fathom agent, if you really love the websites, you’re gonna lose something. We’re gonna make sure we truly build out all those features that you really love, and then some. But here’s the real value to why we’re doing that: Number one, I think we can do a better job. I really feel confident in that. See most third-party companies, they build technology based around the kind of lowest common denominator, who can afford their technology. And so they tend to leave some different pieces out.
0:19:32.6 JH: And on top of that, most brokers have five or six different technologies that they invest in. You as an agent have to log into all these different systems and the systems don’t communicate. So I wanna be able to… When you have a listing and you put that listing in the MLS, it should automatically create a transaction for you in the transaction management system. When you’ve got a buyer who registers on your website and you convert them in the CRM from showings to under-contract, it should automatically create a new transaction for you in the system and start filling in all the documents for you and get them ready for e-signatures.
0:20:07.8 JH: We can automate that process to really save you time and save you energy, so you spend more time selling and less time worrying about the paperwork. So we’re really excited about being able to do that, and more importantly, by differentiating, we can actually start generating more traffic and more leads for our agents, and I think that’s really key. A lot of agents are spending huge amounts of money with Zillow and Realtor.com and the rest of these places, why? Why can’t we generate the leads for our agents instead? Instead of spending that money outside of the company to grow your business, let us help you grow your business, and so we’ll generate the leads for you. So there’s a lot of really exciting things we’re working on. A lot of really cool modules that I can’t share right now, but we’ve got underway right now that we’re getting ready to roll out, so I’m really stoked. We got some things that are gonna make your eyebrows raised like, “What?” And I think you’re gonna be really excited about some of the things we’re rolling out but again, I can’t share too much.
0:21:01.6 GS: Wow, well, thank you for even sharing that, good question, Lee. And just several comments, “Great news, it’s really exciting to your culture.” Kayla, or excuse me, Brandy said, “Our broker does an awesome job at that and making everybody feel supported,” so that’s good. Well, kinda getting down to the agent level, maybe you can share some experience here. You’ve been a highly successful agent as yourself, you’ve started Fathom, which has been successful. So what are some things that you’ve learned from that whole journey that you could share with our agents who are in the thick of it?
0:21:36.2 JH: Sure, I think first of all, stop looking for the silver bullet. A lot of agents I talk to, who are closing just a few homes per year, they’re always looking for that quick fix, “What can I do right now to start selling 15, 20 homes per year?” And outside of spending a lot of money on Zillow and Realtor.com, and places which most people don’t have those funds starting out to do that, outside of that, there is no quick fix. So stop looking for that silver bullet. I think it’s really important to take a step back and really think about, “How do I grow this business?” And that comes down to relationships, I would focus on relationships. Every top agent I meet with, how do they grow their business? It always comes down to their sphere, probably 90%, 95% of their business is coming from their sphere. We’ve got agents who are closing 80-90 homes per year without a team, and about 90% of the business is coming from their referral base.
0:22:28.6 JH: When you look at the referral base, we’re not talking about thousands of people in their sphere, we’re talking about 150, 100, 150, 200 agents at max in their sphere. So I would really focus on that first and foremost, and then as you build that out and you get to a point, at some point that does cap, there’s always so many deals you can generate per year from your sphere, that’s when you start to supplement with outside sources. Now you’ve got the money coming in to be able to afford to deviate an extra $2,000, $3,000 or $4,000 per month on lead sources, because if you think you can spend $300 or $400 per month on a lead source, I’m sorry, they’ll take your money, but you’re not gonna generate a lot of closings from that.
0:23:09.5 JH: But I mentioned earlier, kinda my own experience that it takes about $1,000 per month over time to really generate one closing from most lead sources. So you’re gonna have to probably spend a good $6,000 before you see that one closing come in, and a lot of agents just don’t have that, and what typically happens is they’ll start down that path, they’ll start investing $1,000 a month, and they’ll get three months into it without a closing, you know they get some leads but not a closing yet and they quit. The problem is they’re quitting too soon, and part of it is because again, it’s not enough money to really generate the leads. So I would go back and just focus on the relationships first. And so I’d put it this way, and I don’t wanna take too much time on this, but think about that source. I can show you almost every agent, how to generate about 50 closings per year from your… Just about 100 people in your sphere. That’s it just 100 people.
0:24:01.2 JH: And the way you do that, first, you have to understand the math. I think that’s really key is understanding the math behind it. So for example, we know that about 5% of the population moves every year. If you’ve got about 100 people in your sphere, the reason I pick 100 people is because it’s hard to build an intimate relationship with anything beyond 100 people. If you’re really extroverted and you’re really good at your CRM, maybe it’s 150, maybe 200, but you’re stretching it, but to really build a solid, strong relationship where they know you, they know your family, you know their children, it’s about a 100 people. So out of 100 people about 5% moving, that’s only five people moving per year in your sphere. So that’s not the math we’re talking about. So how do you get 50 closings per year out of a 100 people? We know that if you really build those solid relationships, it’s about that second level of your sphere. How do you get those 100 people to refer business to you?
0:24:53.4 JH: If each one of them knows 100 people, if they’re more extrovert, they might know 150, if they’re more introverted, like me, they might know 50, but the point is we all know a lot of people, people that we go to church with, people we go to our kids schools with, and people we hang out with at soccer or whatever it is, or you’ve got people you know enough that you can have conversations with and get to know them really well. And so that’s 100 people times 100 people. Now you’ve got 10,000 people in your sphere, in your extended sphere. So how do you get every single person to refer just one person every two years? If they know five people per year that are gonna move, they know basically 10 people every two years, you’re just asking for 10%, you’re not asking for 50%, just give me one person every two years.
0:25:37.7 GS: Right.
0:25:38.7 JH: That’s it, right? If you do that, that still comes down to 50 closings per year, but the question’s like, “How do you do that, how do you go from right now… ” That’s math and you can do math, right?
0:25:48.5 GS: Right, right.
0:25:48.9 JH: The excel spread can do anything you want it to tell you. So really comes down to communication. You’ve gotta be willing to reinvest into your sphere. Your sphere, those referral businesses is not free, every agent that thinks your referral business is free, go back and look at their business and you’ll probably see them closing no more than six or seven homes per year, that’s the 5% basically of your direct sphere, who’s giving you their business, ’cause they’re your friends and family, so naturally they’re gonna give you their business, if they remember.
0:26:18.5 JH: So you’ve gotta be willing to invest your time and your money into your sphere, into those relationships, if you want them to refer. How many times… I bet you right now, if I ask the question, “How many of you had a friend or family or someone, a neighbor sell with someone else?” Not because they didn’t like you because they forgot, and whose fault is that? It’s not their fault for forgetting, it’s your fault because you aren’t constantly reminding them. And by the way, there’s right ways and wrong ways to remind people you’re a real estate agent. So one of the things I really intend to do is learn to tell stories.
0:26:52.5 JH: As you’re selling homes, every single… My wife always… Can you tell… You need to write a book about all the crazy things you’ve experienced selling homes. Well, the fact is, every one of us listening right now, could probably write a book about the crazy things. I sold one home, for example, we walk into the kitchen, the guys was a little nutty but we walk in the kitchen, and all of sudden he sits down cross-legged, on the floor of the kitchen. I’m like, “What are you doing?” He’s like, “I’m listening for God.” Said, “Okay.” Said, “Would you sit with me?” “Sure I’m not gonna be opposed to listening to God, I’ll sit down.” And just quiet for about five minutes, this is feeling really weird, and I start to stand up he’s like, “What did you hear? Did God say something?” It’s like, “Well, God doesn’t really speak to me that way. I think he speaks to me through the word, but I’m always willing to listen.” He’s like, “I really feel like God’s telling me this is not the right house.”
0:27:39.2 JH: It’s like, “Okay, this is really getting interesting, why is God telling you it’s not the right house?” He says, “Because the house backs up to a main street, and I’m worried about people throwing bombs into my yard.” I was like, “Okay.” This guy’s a nut. But that’s a fun story so now when I go and I meet people for coffee, I can tell that story, I’m not saying, “Hey, don’t forget I’m a realtor.” “Don’t forget I’m a realtor.” Instead, I’m telling this really fun story, and through that story, I’m reminding them that I’m a realtor. And so I’m always looking for ideas and stories I can then share.
0:28:12.3 JH: I had one agent that was telling me that she was on the way to a listing, she had her top down in the car, and all of a sudden, just out of the blue, torrential rain, by the time she got to the listing appointment, she was just drenched ’cause she had the roof off on her car she had a convertible, just completely drenched. She had puddles on the floor. So that’s a funny story to tell. But again, you can tell those stories in ways that reminds people you’re a realtor without shoving it down their throats.
0:28:38.5 GS: Right.
0:28:39.0 JH: So one of things I really encourage you to do is try to meet with everyone in your sphere, at least once every three months, but that means that every day, your job should be to meet with one person per day for coffee or lunch. I used to have this policy, you never eat alone. If you’re gonna eat, eat with somebody, use an opportunity to break bread, get to know them, get to know about their family, their stories, let them get to know you better. That’s how relationships are really built. ‘Cause now when you pick up a phone to call them say, “Hey, how you doing?” It’s not weird anymore. But if you just pick up a phone right now and randomly call someone in your sphere that you haven’t talked to in a year, like, “What can I do for you?” They’re thinking you’re selling them something.
0:29:19.4 GS: Right. It’s like a Amway call or something, yeah.
0:29:21.6 JH: That’s right. But if I met them for coffee 30 days ago and they told me about going to Hawaii next week, I can pick up the phone, say, “Hey, how was your trip? How’s your kid’s doing? Is that something you do annually now? That was pretty exciting.” So you’ve got an excuse to pick up the phone now, but that can’t happen without meeting people and really build relationships to where now you can start… So I encourage you, if you wanna build those relationships to be able to get those referrals, and the relationships is really try to meet with everyone at least once a quarter.
0:29:49.8 JH: Use Facebook as excuse to reach out to people. So you can almost stalk them a little bit. When they talk about their trip to the beach, you can probably mention to them say, “Hey, where did you guys go? We’re thinking about going to the beach, the next quarter with my family, I’m looking for the best place, did you love, where you went to?” Facebook gives you an excuse to reach out, and then that gives you an excuse to take it to the next level say, “Hey, let’s grab coffee together, I’d love to hear more about it.”
0:30:14.4 JH: So then moves to personal, and then you can move to the phone call to where now you should be touching everyone verbally at least once a month, and then you’ve got your email blast going to them, their Facebook that you’re putting out there. The mailer that they get in the mail, knowing full well, they’re gonna get that mailer and throw it away and that’s okay, that’s okay.
0:30:34.4 GS: They remember you then.
0:30:35.6 JH: The point is that day they saw your mailer like, “Oh yeah, Josh is a realtor.” Garbage can. But then that afternoon or two days later when the neighbor says, “We’re thinking about moving.” Like, “Oh yeah, Josh.”
0:30:46.2 GS: I know a guy…
0:30:46.8 JH: Two days ago, I remember that. You know they’re gonna throw it away, that’s okay. The point is you’re constantly reminding them that you’re a realtor, you’re a realtor, you’re a realtor. ‘Cause if you don’t do that, you’re gonna miss on that business. The other thing I’d share is you gotta be willing to re-invest your money back… Your commissions back in your business. If you don’t have any money to start with, and that’s okay, get your first closing and take 30% of that closing, that commission and set aside into a bank account. Divide that by six, so if I’ve got $1000 in there, divided by six, that’s how much money I can spend everything single month on marketing. And the next closing goes in there, and now I can spend $120 per month on marketing and the next… You eventually start building that up to where you’ve got enough money to invest in marketing. When I say marketing, your sphere is not free, buying coffee every single day for someone five days a week, you’re talking about 50 bucks a week, times… Right? Times a month, it’s $200 a month.
0:31:42.5 GS: Right.
0:31:42.5 JH: It’s not free. So be willing to reinvest. Referrals are not free not if you want a lot of referrals.
0:31:51.2 JH: But, that is a small way to start building up your bank account. I’d actually encourage you, open a second bank account, by the way, that way your commission money, the money you are setting aside each month to pay for your marketing has its own account, and that way you are not tempted to touch it, that’s your marketing funds and always be dividing that ’cause if you… One thing, a lot of mistakes, a lot of people make, and I don’t mean to keep going, is that, they’ll take those marketing dollars and they’ll spend it all in one or two months and then it’s gone. And most marketing efforts take six months to a year to lose…
0:32:23.3 GS: It’s a farming process.
0:32:25.1 JH: Right, that’s exactly right. So it takes time to come to fruition and you’ve gotta keep it consistent, never give something a month or two months or three months, give it a year, if you’re gonna invest, give it full year to really see the full results. And if after a year, that it’s not converting, then quit. But if you quit too soon, you’re never gonna really know if it worked or not. So that’s why I say divide it by 6, that way every time you come in, you’ve got more money to fill out 12 months worth of your marketing. And at the same time too, think about your own personal family, set aside some money as well to invest in your retirement, into your family, because if you don’t… I meet a lot of agents who are going to be agents until they’re 90 years old because they’ve got no retirement, and that’s a shame. So live beneath your means, you don’t have to drive a Lexus, people will still hire you as a listing agent if you drive a Toyota Camry, right? As long as it’s clean, as long as it looks professional, that’s what matters, it doesn’t have to be brand new, it doesn’t have to be a luxury vehicle. So just take a little bit savings and reinvest back in your marketing, into your retirement and so forth.
0:33:30.1 GS: Just on that… It wasn’t one of my questions here, but now you bring that up, do you find that a lot with agents where they feel like they have to play the… Maybe they are brand new into the business, they don’t have a lot, but they have to play the part, so they go out and get a bunch of expensive stuff to try to look like a luxury agent, but they’re not selling that… Just curious.
0:33:49.9 JH: That is true. And they are not all wrong, so let me explain it this way. If you’re going to specialize in multimillion-dollar properties, you probably don’t want to show up in a 10-year-old Toyota Camry, people want to know and at certain levels, they want to know that you are successful because they need a successful agent who can sell their home. And they want to know if you’re successful, means you probably have a newer car, but, again, it doesn’t have to be a Lexus or a Mercedes, there is some level that they expect from you. Dressing the part, you can buy a nice suit at Men’s Warehouse, if you’re a guy for $500, it doesn’t have to be a $3000 suit. Most people can’t tell the difference. If they can, they are probably a snob, they can feel the difference. Now, of course, if they’re really cheap they can tell the difference. But the point is you can look like a million bucks without spending a million bucks. So I do think it’s really important to always dress at least one level above your clientele. So if your clients are very blue-collar and they’re always in jeans and T-shirts, then that’s fine, wear a jeans and a collared polo shirt or… ‘Cause you don’t want to dress in a suit when they’re in jeans and a T-shirt.
0:35:00.8 GS: Right, it’s kind of intimidating or… Yeah.
0:35:03.9 JH: That’s right. So always think about dress one level above. If they’re always in a jean and a collared shirt, maybe wear slacks and a collared shirt. But you always be one, just one level above those people. Keep your car clean inside and out. People can see inside your windows, unless they’re really dark-tinted. Look professional but, again, you don’t have to drive a Mercedes to get the business.
0:35:25.1 GS: Very good. Well, I have a tribute to throw in here and then a comment from Ray [0:35:28.2] ____, two comments actually, so you can respond to those if you want. Alright, this for another $25 giveaway, so you gotta be get your fingers ready to, your fingers or thumbs or whatever ready to type here. What traditional Christmas decoration is actually a parasitic plant? What traditional Christmas decoration is a parasitic plant?
0:35:49.8 JH: I know this, I know this?
0:35:52.3 GS: You know this? Do you wanna say it because…
0:35:53.0 JH: Oh, yeah, I’d love to [0:35:55.3] ____.
0:35:55.4 GS: Patient, they’ll… Well, you can say it here whenever you want, Whenever you want.
0:36:00.5 JH: I might be wrong. I might be wrong too. I’ll save it for later.
0:36:03.0 GS: Okay, Ray said in relation to the sphere question, the sphere conversation, this is a great time of year, writing handwritten notes, reaching out to people, it’s just a very good opportunity to connect with people over the holidays here, but he also asked you, was there anything that surprised you in your journey of growing Fathom?
0:36:27.4 JH: Actually, yes, but it may be kind of a strange answer. I think, and this is not to be narcissist or think that we are better than anyone else, but our model just makes so much sense that it shocks me sometimes that someone learns about the company and they’re not willing to make a change, it doesn’t offend me, but it’s like, why wouldn’t you? But I get it from a psychological standpoint that a lot of people think that if you’re only $450 versus I am paying my current broker $3000 per commission per sale, something has got to give and they’re afraid of loss. They are afraid of loss, they are afraid of what they don’t know.
0:37:08.8 GS: I hear, I’m gonna… While you take care of yourself there. The answer was mistletoe but I love that somebody answered poison ivy. “Deck the halls with poison ivy, da da da… ” I’m so sorry. I’m so sorry.
0:37:27.9 JH: Tell me [0:37:28.4] ____ has a mistletoe, you see it, it’s just… It starts to eat away the trees, it’s all over the trees, and sometimes you have to clear it out to keep the tree healthy.
0:37:38.8 GS: Anyways. Oh, yeah, as far as [0:37:42.8] ____ just ask you…
0:37:44.0 JH: It always [0:37:44.7] ____ me, but I also understand it. You don’t know what you don’t know. You are scared of the unknown, you are scared that if you move over, will your business die. A lot of our competitors will tell their agents, “Yes, companies like Fathom sound attractive but their average agent closes one home per year, if you go there, your business is gonna die.” Now, is that true? No, in fact, most of our markets, our agents outproduce a lot of our competitors. But they just don’t know that, they don’t have the ability to go into broker metrics and see and compare apples to apples, but that’s something that they’re told and so that’s scary for a lot of people. Again, it just shocks me, why would you keep paying $20,000 or $15,000 more per year when we give you everything they give you? So when I first started the company, I thought this is gonna be like you build it, they will come. It’s a fill the dream, right?
0:38:30.7 GS: Yeah.
0:38:30.9 JH: People are just gonna come by the boat loads because it makes so much sense, and it didn’t happen. We’ve grown by about 40-50% per year, and I’m very proud of that growth and that beats almost all of our competitors, but I get it. So we as a company need to do a better job, I’ve learned, of not just telling our story, but proving the naysayers wrong, and then making sure we hire good people. We don’t just hire anybody. Just because they can fog a mirror doesn’t mean we should hire them, and the people who make fun of it, by the way, the brokers who say they’ll hire anyone who can fog a mirror, they do it too. In fact, the unique thing about Fathom is we won’t, and the reason we won’t is because we don’t charge monthly fees. One of our competitors who charges monthly fees, 120 bucks a month, 125 a month, they don’t care if you close a sale or not, because they’re still making money. They’re not losing money. If you join Fathom and you close no business, we actually lose money. So the ironic part is they say that about us and yet the opposite is actually true. We don’t have a bunch of agents who are closing nothing per year.
0:39:28.9 GS: Yeah.
0:39:29.9 JH: Right?
0:39:32.7 GS: You mentioned the fear of switching. As it relates to fear, when you were starting out as an agent, did you have any major fear hurdles? Earlier you mentioned as well, having to spend some money, and if you kinda enter into the business without a lot, it’s kind of a fearful thing to spend $200 on anything. But where is that kind of line, I guess? What are the fear hurdles that you wish more agents could get over? And on the other hand, things that you say, “Yeah, you should listen to that fear.” Can you speak to that issue of fear?
0:40:12.5 JH: You know, it’s interesting, ’cause one of the things you kinda alluded to is that that fear keeps you from doing stupid things. It keeps you from doing positive things. It keeps you from doing anything, and that’s what courage is. Courage is not the option to fear. It’s the willingness to do it in spite of your fear, and so I’d have to argue that you need to be more courageous. I am not comfortable calling people out of the blue. I’m just not. I never was. Like I said before, I’m very introverted, so having to pick up the phone, just call someone out of the blue, I just was not good at. But what I learned because of that, it’s like I knew that that couldn’t keep me ’cause if I didn’t do it, my family starves. And by the way, that’s actually… The agents who try to be full-time career somewhere else and be a part-time agent, never really fully make a really awesome career of real estate because they don’t have that risk weighing them down, right?
0:41:09.2 GS: Right.