With The Right Strategy, You Can Turn Down Business And Still Flourish w/Todd Tramonte

This is Real Estate Team Builders and I'm your host, Lars Hedinborg, the founder of Real Estate B School. The real estate team building world is driven by big egos who boast about how many homes they've sold or how much GCI they've earned. We don't hear much about their low profit margins, the long hours they put in each week or the unbearable stress they endure. In fact, I've discovered that most real estate teams are losing money when you consider the amount of personal production their owners must do to make ends meet. I believe that if you want to profitably scale your real estate team without working crazy hours, enduring unhealthy levels of stress, or coming up short at home, then thinking like a business owner, building sustainable systems and empowering your team are absolute musts. You won't find any smoke and mirrors or hype here on my podcast, just the real world tools, systems and strategies that work. So if you struggle to balance growing your real estate business with focusing on the areas of life that truly matter, then this show is for you.

What's up Real Estate Team Builders? We're back for a treat. Today I've got Todd tremonti in Dallas Fort Worth has been at the game since 2003 and I've known Todd for a handful of years now and what I've gotten to know about him is that his journey was unlike the typical, not only the typical real estate agent, but also a typical team journey in that one of the few guys that actually set out to provide a differentiated clients and also team members and actually did it and the financial show for it and last year just to give you some stats so you pay attention. 204 sides 3 million over 3 million balanced business 5050 buy, sell 49% repeat referral, average sale price 400k and 4.3 on the list side with regularly a 7.5% in what is arguably the toughest market to get listings where every other agent are just dropping their shorts. So Todd, give us a couple minutes on, maybe a few minutes on like a little bit about your journey, your approach to real estate and then we're going to break down the conversation about like how do you actually build this out where it's legit, a differentiated service and then we'll go into some of your blunders and the good, bad, ugly of a journey. But give us a little bit of your story.

Yeah, I'll make it quick. Depends on if anybody really cares. But I thought I was for sure going into full time ministry so that was My attitude in college I went to seminary to get ministry training. About midway through seminary realized I wanted to do a ton of ministry. But I think God wants me to go have real job and do ministry out of passion on the side. It's always felt like 100% and both, even though that math doesn't line up. But pretty quickly started reading a bunch about how to make money, you know, and ended up going into real estate really because it allowed me to go to lunch with high school kids and go to camps in the summers. And I was foolishly pursuing all this flexibility everybody talks about. Right. You know, fast forward a bunch of years. I got my feet under me a little bit. I was not a quick start, but did get going. I bought a franchise. So I had a five year franchise experience with a flat fee franchise because my heart was to deliver more value. But I was too dumb to figure out that charging less was not the best way to do it. But it was a good experience, no regrets. I learned a lot. We did a lot of volume and at the end I started experimenting with really spending the time, energy, money to deliver more value. We weren't profitable then. Once we got out of that franchise, we began to build what we have now, which is a really lean, not a lot of agents, not necessarily chasing maximum units, but creating some incredible lives for our team members and then also some really legitimately awesome impact for our clients. So as of today we have a small office in Fort Worth, kind of a mid sized office in Dallas on the Dallas side. Altogether we've got about 13 people. We have six, just added our seventh, hasn't even fully joined yet. Total agents and about the exact same number staff members. So that's the million mile an hour version. Happy to tell you more, but that's kind of how we got here and what we're up to.

Yeah, that's awesome. And I didn't, I didn't know, you may have told me in the past, but I didn't realize that you had gone down the mission ministry or seminary route. God had me do it in reverse. He figured I would make all the mistakes in business and chase, you know, chase the world. And I'm actually in seminary now a little bit backwards. But I want to dig into this with you. And you mentioned it, we both know sort of growth, they can't even help it. But to chase growth and businesses that go from 2 to 4 to 6 million, top line and team leaders that are, they have to go out and sell 100 of the 4 or 500 homes because it is not set up with any thought toward a vision of doing something different in an industry that is diluted by agents that are barely getting by. So let's, let's break down. You mentioned before we hit record, you're obsessed about delivery. Like a lot of agents say this, but you're obsessed about delivering a world class service. And you said two clients and two team members. So we talked about kind of breaking this and your team members having a life which is super, super important to you. So we're going to break down that, that entire statement right there because it's translating into a, a very profitable business. Meaning that in a market where I'm positive you're competing against agents that are dropping to one or one and a half percent commission on this side and you're sticking to and even saying no to business where they don't see the differentiated value proposition. So let's break it down. You talked about a system or a model and how you envision this and talk about how this came to be and you're out of production, which allows you to be sort of the wizard of Oz. Right? The guy moving.

Pay no attention to the man behind the curtain.

Crazy, crazy guy back there. So talk about the system or the model or the vision you had and actually how you translated it into a full blown multimillion dollar business.

Yeah, again, for the sake of time. In the beginning my goal was the same. My understanding was non existent. But my desire was to never be normal. I never wanted to be a realtor. To this day I don't want to be a realtor. My vision and I most people's vision of a part time winging it realtor working out of the backseat of the car kind of deal is just not appealing. It's not impressive and it's not super valuable. So I was not looking forward to that. So I thought I would buy this franchise and we would charge a really low flat fee and do the same as everybody else and that would be where our unique value was. Well, I obviously learned pretty quickly that it just doesn't work. You can sell houses and you can have happy clients, but you can't do for them what you could if you were giving it a full effort. And you certainly can't support a family and make a living and lead in an industry that way. So that was the desire, that was the genesis of the beginning of the evolution of the model. And we quickly started experimenting where if we were able to pay people better, we could get better people if we were willing to invest in more technology, we could drive a better result. If we would do more, invest more in the process for each seller and each buyer, we could see better outcomes, happier experiences, more referrals, better reviews. We could talk for hours and hours and hours about reviews. We've had a different strategy for a long time, but all of that has led us to, you know, getting better every day. It's certainly not perfect, but it's infinitely better than it used to be. Where we really are obsessive about being able to show a client how we can deliver a different result and then obviously backing it up with numbers and outcomes. And one of the huge key ingredients being finding incredible people that both want to execute on a common plan, but also improve it every single day as we go. So hopefully I answered your question. If not, I'm happy to clean that up.

Yeah. So let's give some examples. So let's give an example. So one of your listing agents or listing partners, they're at a listing appointment, they're interviewing four or five agents, and you guys are clearly not going to do what everyone else is doing. What does that look like? How do you explain the value proposition? Is it like, hey, our tech are like actually running through. Talk about that a little bit because I know there's some folks that are like, there's no way in 2021 they're doing 4.3%. Like where there are some teams doing 1.3%.

A lot of those teams are doing more volume than us. And so their trophies and their rankings look a lot better. But the GCI and the lifestyle doesn't even compete. But yeah, so we have a seven step proprietary system. So we would walk them through that, but we would lead with results. Look, you know, my gu is you've seen a lot of different things. Maybe not maybe it's all looked really similar. Ultimately, in 2021, our team clients who worked with our team sellers averaged 11.3% over the current market average. Now the market average is higher than it's ever been. So factoring that in, our clients walked away with 11.3% more than that. Now, I'd love to tell you how we did that for you. Right, so that now you've got their attention. Look, maybe you're full of bull, but I'm going to listen and at least hear how you might pull that off. And so we take them through a seven step system, which on the surface is pre inspection, staging, photography, marketing, properties. Now, there's a big, deep, expansive thing on marketing, but creating scarcity creating urgency and then executing that as a team with a unique negotiation strategy. So there's obviously a lot of scripting and dialogue and visuals and explanations and numbers behind all that. But we literally are showing them number one. Most people don't have a plan at, you know, they just say, look, I've been doing this for a long time. This is what the neighbors sold for. You know, I live around the corner, let's go. Maybe they say, I'm part of this brokerage. Our brokerage is amazing. Let's go. You know, they might say, hey, we have this really cool website. I mean how many agents have said we're going to put your house on 5,000 websites? Like that's not clever. I'm not sure it ever was. But it's certainly not new. Right. So we're walking them through unique strategies in the way we look at things differently and we tell stories to illustrate each of those main principles. So I want to stop talking to make sure if you want us to unpack that or if that's not clear enough, that we give good value. But those are literally our seven things and that's kind of the big 10,000 foot view. And obviously we drill down on each of those and get buy in from them at each point. Does that make sense to you, Lars? Can you see how that would add more value to you in an industry.

Where not a lot of this exists, or if it does, it's almost lip service where you've committed your mission is to deliver. Not to 4 or 500, because we've had this conversation before, it's not to go to 4, 5, 600 transactions. It's to provide a world class experience to people that actually value it. One of our largest clients ever in real estate. B school. 6 million, top line, barely a million profit. And the owner does almost a million of personal production.

Yeah, it's brutal.

And nobody's having the open, honest conversation about like is there any, is there any system for doing anything? And, and I, I got like the last 40 listings they took and they're all dropped, dropped commission and you just said, and they're mostly referral fees, they're mostly 35% to paid, you know, so it's like this whole not, not a business like you're running. So no, I think that's, I think that's perfect. So let's go on to. You mentioned in talking through that, even when you kind of teed it up, maybe if I wasn't taking like $195 all in listing, maybe I can hire someone besides like Ned in the garage with a computer to work for me. And he's retired, so I don't need to pay him. So you finally made the, you know, there are, there's large sums of money at play here when you're going to go in and $400,000 price point, you're taking 4%. So you're saying, hey, listen, it's going to cost you 16 grand for me to get this done, but it is worth it because we've got a, we've got a world class sort of roster. Right? So talk about the people side of this. I think this is, this is your point number two. It's, you know, to create well, to deliver on a promise, you need to have the right players. You know, and the sports analogy always comes in here like you're not going to win anything if you have, you know, you're not spending any money on the right people. So talk about, you know, this identifying talent, hiring incredible people.

Yeah, it, it took a long time to even begin to figure this out. I, I won't be foolish enough to claim we have this figured out. I think our track record is infinitely better than it ever was and we've had a really good long run of some great hires. But ultimately. This sounds so cheesy, Lars, but it comes down to values. Obviously people have to have an aptitude. Like, we can't hire unintelligent people. We're not going to do that. But beyond that, you've got to find people that value what you value. Right? It sounds great for everyone to say we want to deliver world class value. Of course we do. Why wouldn't we? I mean, you go look at, pick any giant broker with tens of thousands of agents and all their little agent sub sites, they all say the same thing. You know, I put my clients needs before my own and I work really hard and we sell your house faster for more money. Everybody says all the same things, right? So to find people who can show you that in their life they've already wanted to add value in other people's lives. And they're, they're servant minded, but also freakishly competitive. That's a weird combo. But we're looking for weird combos. You know, we're looking for people that are like, I love my clients, but I will also go to freaking war for them. And we're going to win every time because I hate losing. So it's a strange combination. We just added an agent. We only add an agent every year or two, but we Just added one, played college basketball. College athletes, it's a great filter for team player, coachable, loves to win, willing to put in the extra work. Willing to put in the work when the results don't always come immediately, like all this other cool stuff. So not all of our people are literally college athletes, but they're all similar drivers. Competitive, but also team first. If we had more time, I could unpack that. But those are some of the big things we're looking for. And that's not just agent role. We don't have a lot of teams. I've seen even some really great teams have sort of a divide between agents and staff. We have very much one team pretty much always. You know, everyone's together in meetings. It's a culture where the roles are very different, but there's equal values. Almost like a marriage.

Yeah, that's awesome. So give me this. What are your. With probably some failure over the years in terms of hiring. What are like the top two or three questions that you're finding? Kind of dig. Dig a level below the surface and maybe they've saved you from a mishre or they've identified someone that might be a fit where it wasn't obvious. Any obvious interview questions that come to mind or something along those lines?

Yeah, I don't know if I have a magic. I'll give you a couple questions. I don't know how magical and perfect they are, but I love asking people what they're reading. A. If someone's not reading anything, that's a. That's a sign they're probably not a great fit. Not everyone on our team are obsessive readers, but they've got to be learners, right? They gotta hate to not know I'm looking for that. I want to find people that are like, I can't stand not knowing now. I don't care if they use YouTube, you know, versus physical books. I prefer a lot of avid readers, but that's one that's a good discovery question. Hey, what are you reading right now? Or what do you usually find what you're reading? Are they connected with other learners? Are they surrounded by other obsessors? You know, my buddies always recommend stuff. Or is it like, you know, whatever. Whatever is on the top of the bestsellers list. That's, you know, so that's a telling question. Another one. And again, I keep saying this. It sounds really cheesy, but, you know, if you were to look two to three years down the road and your real estate career is just absolutely awesome, what does that look like. What does that look like for you? And if they start saying straight to income, I don't hate it, but I don't love that. If they go straight to recognition and awards and stuff, man, I don't love that. But if they go to their life and how this job will set them up, their family and their life, I love that. That's what we value as a team. Our core values are all over the wall and all over the website and they're not just, you know, mission statement fodder there. I tell people when, if you don't know what your core values are, write down all your pet peeves. Write down what drives you nuts. That's going to tell you what your, what you value because it makes you mad when other people don't value it. And so that's, that's how we would roll. If somebody's just, all they talk about all day long is making and saving money, that's annoying to us. We don't want to talk about that. So I don't know if those are home runs, but those are two things that are important to us. And then it's really, really important to me if somebody's married that their spouse is totally encouraging them to make this move. And if it's anything short of that, that's probably a no go.

Yeah. And are you doing like a spouse sort of interview or so we're not.

There's no spouse participation in the formal interview process. But. And I probably should, to be really honest, we probably should add that we try to get a meal with them during their agent in training role, which is their first six weeks on the team. And really that meal, I'm almost like, I'm trying not to, but I'm basically ignoring our new team member and getting full focus on their plus one on how's this impact in life at home. How are you feeling about things? Are you optimistic? Where can we serve you? If that didn't work, it's not going to work.

Yeah. When hearing you talk through some of this, I go to church where I don't remember what my pastor was, was preaching that day, but it hit me like a ton of bricks as it related to business. And he was, he was giving relationship advice and he was talking, I think the name of the series was the Power of Potential and he was talking about patterns versus potential. And a lot of times team leaders, I see us really wanting to see potential in people. Like it's like, hey, you've achieved. You're like 39 years old and there's nothing wrong with being 39 years old, but you have achieved nothing in your life, and there's nothing wrong with, I guess, achieving nothing in your life. But all of a sudden, you're going to show up on my team, and now you're going to demonstrate a totally different pattern going forward. And I remember there's this clip online. It's relationship advice. Steven Furtick is the pastor, and he talks about ladies. He's giving advice to ladies. Like, ladies, the guy is, you know, lives with his parents, he's in debt, he's got a porn addiction. And, like, you think he's got all.

You're going to fix them. Yeah.

No potential whatsoever. Yeah, it's like, look at the patterns, and in the patterns, you'll. You'll see everything you need to see. And I think that's, you know, a lot of what core values are. So that was. I think that's really, really. Like you said, it's really easy to say, but it's, like, hard to do because it means you're not going to hire, like, 97 out of 100 people you talk to.

Yep. It's brutal. And it's just. It's so hard to find. You know, Again, that's cheesy to say it's hard to find good help, you know, but it's really, really difficult to find really great fits. These aren't all bad people. They're just not a fit for what we do or on our team. But when you find a fit, it's so valuable and financially, relationally, just the fun of what we get to do that it's worth the 97 no's. And that's where once in a while we'll hit a little streak where we'll hire like two out of 10 interviews. And it's like, are we okay? Are we getting lazy? Like, this is not how it's supposed to work, you know, so it's just good to know that going in and give yourself permission to be really selective, by the way, if you are. That alone is a confidence builder for the people you add to your team, which is a great way to get started. Just for them to know that.

Yeah, it's a really good point. We would tell our team members how many applications come in every week or in a month. So they know that we're just like. I mean, the process to make it onto the team. And I would go through with the team, you know, our two core values, which, I mean, it seems like standard. You'd need these to succeed. In real estate. But we hustle and work hard and we embrace accountability and discipline. And I asked the team like, what percentage of the general population hustle and work hard? And they'll say like 2%, 10%. I'm like, okay, what percentage of the population, like embrace accountability and discipline? And they're like 1% and 2. Like put them together, cross reference those and then we have four other legitimate core values that like, guys, we're like needle in the haystack here. So really, really good. So the last thing that you mentioned pre record was, you know, this turning down business. So to have a business that is really laser focused on how you operate, who you serve, who can appreciate truly what you do, especially in the kind of market that we're in as we're recording this. So talk about like turning down business or how you identify like a mutually beneficial fit with your clients.

Yeah, well, it's funny because it's a good transition coming out of the, you know, you interview 97 people before you hire someone. It's not that dramatic. But we apply similar principles to which clients we take. Now let me be careful because this can sound really prideful, but realistically speaking, we are the catch. We can serve at a high level just about any client that we are willing to work with, but we're not willing to work with the clients that are not really natural fits a for the service we have. Right. If you want me to sell a commercial property, I could, but I'm not going to because we're not excellent at that. If you want me to sell a property that's too far out of our geographical area, we're going to pass that up. If you have absolutely unrealistic expectations on value, on timing, on how to treat people, it's a no. If you're really unclear on why and what's next and what's going on in your life, then we probably don't want any of that. But if you're in or near the bullseye of what we do at a world class level, then we're likely to work together. Our close rate is extraordinarily high. It's often just, do we want to work with you again? I'm not trying to be cocky. This is just our approach and once we do that, we have a freakishly high success rate. We can offer whatever guarantee we want because we're never going to have to pay it off. On the rare occasion where we do. We're glad to. Our clients can have, I mean our team members can have an unbelievably high level of confidence on their client pipeline and their closing rate and their predictable income and all that stuff. One thing I'll add to this, that a lot of times people want to talk to us about because they don't believe it's true is we usually have a waiting list on the listing side. And there's almost nothing more powerful in your business than a waiting list. There's almost nothing that can support your commission. The authority, celebrity expertise of your clients, the trustworthiness, the lack of your clients trying to treat you like an errand boy or girl. When there's a waiting list, most of that goes away.

Yeah, that's awesome. It makes me wonder, you know, so, so for someone who's, you know, running a team and they want to make this shift, they know they're living in this scarcity, limited mindset, like we've got to take the clients commission is the only thing we're competing on. Maybe we really don't provide a differentiated offering and we are like all the other agents, but we just figured out how to sell a whole bunch of homes. So some of this, some of our listeners are going to say, I total need to get there, like bring it on. So, but, but it's aspirational. So, so how, what advice would you give them? Like their actual business does not do this and so it's aspirational. What, what would you have them do? What advice would you give them?

Yeah, we, you know, I'm, I want to be respectful of the audience. We, we offer some coaching on this, but I'm not selling that. But my, what we do in there is we have, the first thing we do is mindset. That's the point I'm trying to make. We literally have a six hour audio program which in 2022 is like 12 times longer than anybody's willing to listen to anything. Right. But when people go through it, they sort of come away with this like, oh, okay. And it would be a dramatic, abusive oversimplification of it. But if I had to do that, the root of it, the heart of it is you are not a commodity. Your value is not the same as other agents. Even if Lars and I tried, and we both have lots of resources and lots of experience and access to lots of smart people, but if we tried to deliver the exact same value to our clients, we could not do that because we're different people with different gifts and different markets with different property types and price points and weather patterns. I mean, literally all that stuff would impact our abilities. So Obviously, as a Christ follower, I would just say no two people are the same. They're uniquely valued, uniquely created, uniquely gifted. And I believe that is reflected in our business. We're just not the same. So if you can get that garbage out of your head that we really are the same, we do the same, we're worth the same. If you can kill all of that, then we can start to rebuild your confidence, your value, and then your messaging and your delivery of your value to the prospect. Right. And you can start to believe it because I can tell you what to say. If you don't believe it, it doesn't matter. But if you believe it, it and then you know what to say about how to stand out and sort of preemptively negotiate and compete with other agents before you know who they are or that they exist. To the point where the prospect would be like, wow, this is just totally different. This guy sounds nothing like these other agents. This girl is, sounds so much more focused on my life benefit, my transformation. Not just features and benefits, but the transformational value of this for me. Obviously I'm unpacking a lot of stuff, but the point is I would start with how I think about my own values, value, and what I do. And then the first step after that really is learning to communicate your value to your prospects, your team members, your family. I kid you not, in the early stages of me going on this journey, I believed it, but my wife didn't believe it yet. She didn't want to think less of me. She just knew how I used to do it and it wasn't that great, you know. And as I began to see what we could do and what we were starting to do and how different it was and how valuable it was, my confidence was growing faster than hers and, you know, faster than a new, new team member needs a little bit of time to really believe all this before they can go sell all this. I hope that answers your question, but if not, I'm happy to give whatever that's perfect.

So. But I do want people to. What's the easiest way to enter into your world? Because I do want our listeners to know how to engage with you on this. But this is not, I mean, not to pick on real estate B school, but if there's a thing I can pick on, we give some of the, the basic stuff around. Like we want you guys to develop world class service, but it's not. And I don't even know what your, your deal looks like, but for sure, how can they engage in your stuff. And then I'm got one more question for you after that.

Yeah, you can go to realestategrowthsystems.com plural just realestategrowthsystems.Com this sounds really bad, but your stuff is R E B s. My stuff is R E G s. And I think we started them around the same time. So no one copied anyone, I hope. Anyway. Realestategrowthsystems.com or just Google Todd Tremani, you email me@todd tremoney.com I actually still have the most obvious email on the planet and I'll help you or I'll at least forward it to someone that can help you. And I'll add one thing here, Lars. I've sent a lot of people to real Estate B school and again, I don't know exactly all of what you're doing, but I know you're excellent at tracking and data and knowing your business and acting like a business owner. And we do that. But those aren't my most natural gifts. So I've sent a bunch of people to you for that. And then we've had the pleasure of doing business with some people that have worked with you or I think maybe same time. And, and it's a really great combo I think, because a lot of the stuff where I'm not gifted on the technicalities that most people never even get to isn't. I know for a fact is amazing in your world. And then they're getting from us a lot of that communication of value and mindset, big picture stuff. And it's, it's. I know I'm sure you guys do some of that, but I know some folks that have done both and have really appreciated both. So that's, it's been fun.

And this for everyone. Real Estate B school or just a listener on the podcast, this is the future of your business. This is whether or not you're still even in business in the future. So this is not like I don't have any kind of affiliate relationship. I never will. And you need to go to realestategrowthsystems.com all right, last question. One or two, like just dumb things. You probably don't have regrets, you know, because we're all learning and. But just like a couple of things that if you could go back, what would a couple of things be?

Yeah, it's hard. I like your caveat of I'm happy with where I am, so maybe I don't have regrets, but. But five years of we will sell your home for as low as $2,995 was about four years too many. Again, learned a ton, so it's fine. But I wish I had not participated in the race to the bottom. Right? So in a race to the bottom, everyone loses. You know, that could be the bottom of commissions or least service offered or least time dedicated to your. To your agents or your staff or your clients or your family, whatever. But I did that 15 years ago. I think a lot of the industry is moving towards that now. And hopefully you heard what Lars just said. If you're not very deliberate about building relationship and value and the communication of that into your business, you're probably gone faster than you think. So I would. Again, I don't know if it's a regret, but I wish I would have gotten to this model sooner and not hung on to cheaper will get me business as long as I did. I came out of that, that even after the franchise agreement was over, I told my assistant I will never charge the normal percentage ever, ever. And I was right. But I swung the other way and now we're like two times the market average. So anyway, that's one of them. And the second one is I would treat my people better and pay them better as early and as fast as I possibly could. And I was never like abusive or rude. I was just broke and cheap myself. So I was really, really careful, like you said, Ned in the garage. But they were good people. I just didn't know how to create an incredible career in life for them yet. I probably just shouldn't have been hiring people yet until I was closer to that. But now it's the only reason we grow now is to impact more families. And it starts with our team members. Those are my clients. And then our sales clients are sort of our collective clients, but it's my team members clients really on the ground. So if I pour into them and they pour into our buyers and sellers, then that's my way of serving thousands of people instead of just my dozen on a daily basis. So there are plenty of others, but those are two that come to mind really quickly.

That is. That's exceptional. I would definitely encourage you guys to check out realestategrowthsystems.com and I'll keep it simple on my end. It's been a couple of years now since Scale or Die came out, but it's still our number one sort of thing that is flying off the shelf. We charge nothing for it. It's scaleordiebook.com Gailordai book.com and realestategrowthsystems.com Brother, I appreciate you and your heart and just your singular I love guys and girls that are just they obsess over one thing long enough to be successful at it. You know this industry has a tendency to distract us and get us all over the place and so many blessings to you, your team, your family. I know you have got kids and a wife and all that good stuff. So much love and we will talk to you soon. Soon.

I appreciate you man. Keep changing people's lives.

Awesome.

Thanks for listening. Would you please take a minute to share the show with other team leaders.

Who may be struggling?

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