Lars Hedenborg (Real Estate B School) recounts a day with Gary Keller, summarizing Keller’s views on two major shifts in real estate: (1) an economic market shift (normal 7–10 year cycle; current markets ~6–12 months past a tipping point) requiring expense management and focus on leading indicators; and (2) a consumer/technology-driven shift where consumers demand on‑demand, hyperlocal, AI-enabled services. The episode emphasizes teams as the future, building differentiated, fiduciary service models, knowing key metrics (e.g., listings needed, days on market, conversion rates), and playing the long game in business. Practical specifics mentioned include carrying 65 listings, average days on market ~45 (rising toward 60), and a target of 400 transactions next year for the speaker’s team.
What's up there, Business Freedom podcast listeners. This is Lars Hedinborg, founder, Real Estate B School, Another edition of our Good, Bad, Ugly of building a real estate business. And today I'm going to call this podcast A Day with Gary Keller. And so I had the honor of spending a day recently with Gary Keller and just getting his take on the real estate market, the industry, where it's been, where it's headed, and then kind of sprinkle in my sense of what's going on in the industry and how that translates to you as a real estate agent or if you've gone down the path of building a real estate team, what the implications might be. And so the spoiler alert is that the business is migrating toward teams. And so it's what I've committed my life to is helping top producing real estate agents and team leaders just building amazing businesses that are based on awesome sound business principles. So made me feel good that I'm on the right track. A lot of the time with Gary for a full day was talking about the shift and he said there's two parts of the shift. I've described it as three parts. The two parts that Gary talked about is just the economic market shift, the cycle, real estate cycle, seven to 10 years. We're probably six to 12 months past the actual tipping point in most markets. In our market here, inventory is building, days on market are going up. And so that's just a normal shift. If you've not been through one, you've got to double down on expense management. You've got to focus on the leading indicators, right? Number of conversations, the quality of those conversations, how many contacts and appointments set, med sign, the culture, productivity, those sorts of things. That's the first shift that's going on. The second shift he called the consumer shift. And so this is sort of an obvious one with the. And he lumped in technology, Technology was my third. He lumped in technology into the consumer shift. It's the fact that consumers are increasingly demanding of everything, every service provider because it's on demand. You know, I could think about making reservations for dinner and I can pull up four restaurants within, you know, two miles of me and get reviews. And, you know, it's, it's sick, the amount of information. And so that, that's at our fingertips. So if we're not building our businesses with that in mind, we're going to lose out. And so he talked about the value proposition of a real estate agent and there are, there's lots of venture capital money. The aggregator Zillow and Redfin, they're all going after an end to end solution, meaning they want to get everything from the lead all the way until closing and provide, you know, the plumber that you're. They want every paycheck in there. And Zalob hasn't quite figured out how to eliminate the real estate agent yet. And that's their mission in life and we masterminded that as well. So when you think about your real estate business, the challenge I have for you in the context of this high level conversation is are you properly positioned to take advantage of the shift that's coming economically? That's sort of an easy one. That's going to be a cleansing. Rosters will go down in half, hopefully. And there'll be lots of opportunity to pick up talent people that can't do this business on their own and provide a ton of value to them. And at the same time, you know, making your business run better and giving you more freedom. And then the other is the consumer shift. And are you building a business that's going to provide a service, a service to buyers and sellers that's differentiated in a monumental way? And on our team, you know, we created this, what we call the high performance difference. And it's the fact that the brokerage model is all but dead right. There's no way to make money in brokerage unless you're doing loans, title, those sorts of things. Most traditional teams are just set up wrong. It's a loose collection of agents. There's not a differentiated service they're providing leads to their agents. That's not what we're talking about when we talk about a high performance real estate team. It doesn't mean it's exactly the way that high performance real estate advisors is being built as much as it is making sure you have a legitimate, sustainable business that provides value that's sustainable where you're not in the middle of it. Right. So it's breaking down the job of the real estate agent into its 12 individual functions and making sure they're all well coordinated so the buyers and sellers get the value that they're ultimately paying for in a transaction. He talked about hyperlocal. If you don't really understand your local market, chances are it's going to be difficult for you to win the game long term. He talked about your relationship with your database nobody can take away. You do a great job for somebody and you communicate with them in such a way where they're going to keep you top of mind and be a fan for life. Nobody can take that away from you. More value proposition technology, artificial intelligence, you know it is, it's not going to replace us as human beings if as an agent. If you don't figure out how to embrace the fact that the Netflix of real estate or the itunes of real estate when and Gary's running hard at it, the first company that figures out how to give an agent this artificially, this AI driven tool that consumers will have access to to make their buying and selling experience catered to them. That's where the technology shift is going. High level. It can be scary as long as you're willing to embrace that's where it's going and be the fiduciary versus the transaction agent. So we're not going to get paid to be transaction agents anymore. We're going to get paid as a fiduciary, a person that provides high value through the advice that they give, which I thought was pretty cool. Demand for teams will go up. Lower your costs, really trim the fat in your business prospecting base. So we in real estate B school, we talk about a culture of productivity where everyone on your team needs to own a level of productivity that is completely uncommon. At least the next 6 to 12 months, 18 months to get through this shift. Because you can't, your admin has to be able to support your sales so they can continue to prospect. If your sales is in a file in the morning, we call it on our team protected time. If they're in a file when they should be generating new business to keep that admin employed. It's this sort of this connection between the front stage of your business, sales and marketing and the backstage of your business, squeezing the lemon, so to speak, knowing how many listings you need to carry at all times. So Gary made the comment, you know, business is simply a set of formulas and depending on the market you're in, you should know how many listings you need to carry for the number of days on market for your conversion rates or your, you know, the number of homes you want to sell. So we determined our team needs to carry 65 listings. Our average days on market is probably about 45 days, increasing to about 60. So for us to hit our 400 transactions next year, it's simply a calculation. That's a tool that we use in real estate B school. But you've got to know your numbers. You know, listings drive the business. It's always fun to see Gary, the guy that wrote the book, Schiff wrote the book, millionaire real estate agent, millionaire real estate investor, wrote the one thing Pull out the triangle, right listing leads and leverage. And I've only been with KW since January 2017, so I haven't built, you know, my business on the Keller Williams model. This coaching program, our platform didn't come from the Keller Williams model. I don't know many self made billionaires though. So when I get a chance to hang out with Gary, I take it. And the last thing I'll leave you with is a thought around what it really means to play the long game in business. And Gary's been in business for 35 years. He made the comment, so he's 61. He made the comment that he's made 90% of his net worth from the age 50 to 61. And so if he's worth a billion, I don't know what he's worth, but if he's worth a billion, it means he made $900 million in the last 11 years. It means that he was still worth 100 million going into age 50. The point though, my big takeaway is that there's this craziness around growth and I feel like it's for growth's sake. It's not to build a meaningful business, it's not to serve our team members. And I've been there before. So I'm not preaching as much as I'm saying if you take a long view of your business and you really play the long game and me, my business partner in the real estate business talk about this quite a bit, you know, if you take that long view of your business, the immediacy of success goes away. Or you measure success differently, I guess is a different way to say you measure success by the one agent that you brought onto your team and you onboarded correctly and you took your time to teach them so they could be valuable and they can change their trajectory, the trajectory of their life financially. Right. You measure your success differently. And then like I said, this is not me having done it right my whole journey. It's me shifting in the last couple years to really realize that, you know, I'm in the third quarter of my life, I just turned 45. I view this 44 to 66, you know, as this third quarter. And I've got a full 21 years. It's likely that I'm going to be impacting the business world through real estate B school and there's a lot of comfort in that, not having to do it right away. And so hopefully that's helpful, right? One other comment he mentioned building wealth cyclically versus every year, having to be a growth year. So there are times where the market doesn't allow you to build wealth and you have to accept that and be okay with that. And there's times where it's going to be easier to build wealth and you have to accept that. And so that was an interesting takeaway as well. So there my folks, is a day with Gary Keller. As always, I have a lot of love and respect for anyone that's in this industry willing to fight it out, fight the good fight, I will say, and do this business right and just willing to learn from their mistakes as as I've done more than most people I know, I've made more mistakes. I've done things with my team which I wish I could go back and do differently. And all we can do now is use everything we've learned up to this moment in time to impact where the future for our businesses are. So coach of mine Sullivan made the comment, everything up to this moment is research and development for the next phase of your business growth journey. So that's my wish for you. Take what you know at this moment and use it for good and fight the good fight. We'll talk to you soon.
