$20,000 in Commissions? Cut Out Real Estate Agents! | Payneless Flipping Podcast

Welcome to the Painless Flipping Podcast where we talk about how to get into real estate the painless way. I know, guys, if you're trying to get into real estate, it can be difficult, it can be painful, but our goal here on this podcast and everything I do is to take away that pain, help you out, because this is Nathan Payne. So guys, right now we have Nick. He is the DIY homebuyer guy, the Homebuyer Academy. He's got a school, he's got— he's helping homeowners get— buy homes without freaking buyer's agents. Who needs a buyer's agent anymore, right, Nick?

That's, that's exactly right, man. The times they are a-changin', as Bob Dylan said. And I'm, uh, I couldn't be more excited about the future of home buying and want to bring that change about as quickly and painlessly as possible.

Let's dive right into it, man. Tell me a little bit about who you are in like 60 seconds, and let's just dive into like how this happened, how you got into what you're doing.

Yeah, for sure. So I got into real estate about 5 years ago, mostly because I wanted to be a real estate investor doing fix and flips, short-term rentals. I was, uh, I had a friend that was an investor and a real estate agent. So I was buying homes through him, but as I was looking at those closing statements, I was like, this guy's getting $12,000, $14,000, $18,000 every time I'm buying a property. And I like him, but I don't like him that much.

Yeah, so you don't like him that much.

No, no. So I was like, all right, I just got to get licensed and figure out how to buy properties on my own. Because I didn't realize that you could buy homes just as a self-representing buyer without a real estate license. I was a dummy. And so I got into the, uh, the whole industry, um, buying my own homes. And then once I licensed, helping people buy and sell their homes. But the more I worked with buyers, the more I realized, like, shoot, these are intelligent people. They have the competence to buy without me, and I could provide far greater value to the world and to my clients if I would just teach them how to buy homes without a buyer's agent than keeping them dependent upon me. So that's where this whole idea of DIY Homebuyer Academy grew out of.

Freaking love it, man. So I am a DIY home buyer as well. Never got a license. Knew, you know, I didn't do what you did. Well, not unfortunately because you learned a lot, right? But like, I just moved to Canada. I was telling you, and we started looking for homes on the MLS, right? Because off market, there wasn't really a lot of wholesalers that are like investors that I could find, like off market properties where I wanted to buy and exactly what I want to buy. So most of the homes were listed. So we would call agents that were listing agents and they'd be like, hey, do you Do you want us to represent you or do you want someone from like our brokerage? And I'm like, no, no, I see the same listings that you guys see. I don't need anyone to kind of help me out. And when I found the house that I wanted, I just told the listing agent, hey, can you represent me on this one? Because there was competition. So I said, will you represent me and then you can double dip? And that ended up being that the agent was the aunt of the owner. So she like gave us all the information we needed because she wanted that double dip commission. And we got it done. And I know you don't always have to be represented by the listing agent, but it does kind of give them an incentive to, to go with you. So anyway, I was able to do that. I know what you do and I love it, but I'm sure you, you got a lot more expertise on it. So tell, tell us a little bit more about it.

Well, yeah, man, it doesn't surprise me that you were not the dummy like I was and were able to just jump right into it. But no, I mean, I'm glad sometimes you got to be the dummy in order to be able to— you got to, bro. What you, what you learned. And so, um, yeah, I mean, what you described in your experience is, is exactly what I'm teaching folks how to do themselves. Because so typically we can think about it this way, right? Anytime you have a middleman in a transaction, like, that middleman is extracting value from, from the deal somehow. Like, in an ideal world, the most efficient way to transact anything is that a buyer goes directly to the seller and that there's no commission payouts. And that's typically how you're able to get the best deal and I'm sure a lot of your audience has done that on a direct-to-seller, right?

That's, that's kind of what we do.

So yeah, so that's, that's like the dream scenario, but it doesn't always work in every market. And you do have this beautiful thing of Zillow or whatever your favorite website is where you see all of these available homes. But the issue is, is with those homes, typically baked into the price is not just the listing agent commission, but also a buyer's agent commission, which tends to be around 3% of the purchase price. And especially for investors, the, that, uh, extra 3 to 6% that is going to agents can be the difference in a deal that pencils versus a deal that doesn't, right? So, um, by learning how to represent yourself, you're removing at least a 3% piece of that commission, or you're able to leverage it like you did with the listing agent to make your offer more attractive. So even if you're not receiving that 3% back as like a price reduction or closing cost credit, your offer is inherently 3% more attractive to the seller or to the listing agent than somebody that's coming in with a buyer's agent. And the thing is, is that it's— and you can probably attest to this— buying a home is not nearly as complicated or scary as real estate agents try to make it sound. Do you agree with that?

No, no, I agree completely. Like, now the issue would be like, if you move— kind of like me, I moved out to the country, so I didn't have a ton of knowledge on like what, what to look for, not like what to avoid. If like I have a well and a septic tank, so it's like, do I need to know that stuff? But what I realized is the listing agent was willing to tell us everything we needed to know. So again, the buyer's agent, like, you didn't really need it, right?

Right. And that's what's kind of funny is that you're— you've got a listing agent whose job is to know everything about that particular property that they have listed.

Buyers don't even know half the time.

I mean, they might have some education about the area in general or about the different systems, septic, well, the different inspections, connections. That stuff can be valuable. But is it $20,000 valuable or whatever 3% of the purchase price of the home is? Most cases, probably not. Now, to your point, like, um, the reason that I've created DIY Homebuyer Academy is because, uh, traditionally there's been like two routes that you can go, and it's full representation where you're paying a buyer's agent 3%, or they're taking 3% from the deal, or you just go at it completely on your own, which can be challenging if you're not comfortable with negotiations, if you're not comfortable with legal documents, or if you're trying to research an area that you've never purchased in before. So I was like, there's there is a missing middle here where somebody who has the competence and drive to represent themselves, but they just need a bit more confidence and education. Where are they going to get that confidence and education? It's like, well, that's where I can build out an academy where through pre-recorded courses I can teach people a lot for free. But then once you're actually ready to pull the trigger on something and you need somebody to help you put together a comparative market analysis, or you want somebody to bounce ideas off of when it comes to negotiations strategies or to review an inspection report. You have a real estate professional, but my, uh, outcomes are not tied to— like, I'm not incentivized to pressure you towards moving forward or rushing a purchase like a buyer's agent is, because they're paid on commission and only get paid when you buy a home.

Yeah, no, I totally get that. So the only thing that I see, like, where— when buyer's agents are extremely valuable is like when, uh, during the pandemic when it was really hard to buy a property and you— they had to really grind and work to be able to get something done, right? With multiple offers are getting beat. So, but like in a market like we're in right now, um, I would say not, not really, right? Because the listing agents, they have the value that is like extremely valuable to have a listing. Uh, well, hold on, let me— that's honestly, having the listing always is extremely valuable, right? No matter what kind of market you're in.

I think so. I mean, it's, uh, if you've got There are more value than the buyers. Yeah, I mean, there's occasions we haven't seen it in a while, but like where, uh, if there's a ton of listings and only, you know, a fraction of the number of buyers, then it might be better to be on the buyer agent side. But frankly, like when it's a ton of listings and you're a home buyer, that's your ideal scenario. Like where there's, uh, very little demand and a ton of supply, that's where you have the most leverage as a home buyer and the least need for a a buyer's agent.

Do you think agents just are not necessary at all? Like even listing agents, or what's your thoughts on agents in general?

Great question. I actually, I do believe that listing agents, the good ones, can provide a lot of value. And I like the way that the incentive structure for listing agents is appropriately tied to the outcome. Like with the listing agent, it makes sense, right? Like, hey, I will pay you listing agent 3% if, you know, for helping me, uh, sell my home. And the more that my home sells for, the more money you as a listing agent make. So there's an alignment between the incentives. And these people can be excellent marketers, they have excellent networks, um, and they, they do a good job. It's, it's the same reason I think that like a dealership hires salespeople on the sales floor, like, and you don't have the general manager out there. Like, salespeople have a lot of value. What's always been weird to me though is adding a second salesperson on the buyer side who has very limited knowledge, as we were talking about, about the property, and whose incentives are misaligned from their own client. Because as a buyer, you're trying to get the property for as little as possible, you're trying to make as smart of a decision as possible, and yet you're hiring an agent that gets paid more when you spend more. That doesn't make sense.

Yeah, it doesn't really. And the way with technology, the way it is right now, like people getting good at like being able to use the internet again, I think buyer's agents again will become obsolete or unnecessary.

Yeah, I see it a lot like the travel agent industry where 30 years ago you, you couldn't imagine booking a vacation to Disneyland without going into a travel agent. But now it's like Whoa, do travel agents still exist? I can do all of that on Expedia. And that's what they do.

Like, they do, right? Yeah, I found that out the other day. My friend booked, uh, using a travel agency to go to Disneyland because he was like, I don't know what to do, I'm so— I'm just gonna have someone do it. So there's always going to be that person, right? Like, there will—

like, they'll serve real defined niches, and that's fine, that's great. But I do think that the, uh, the mainstream way that people buy homes within the next 5 years is going to be DIY or self-representation.

That's solid. I agree with you. Yeah, I'm interested to see like if they take away— if agents in general like aren't in the future, won't be needed. I was talking to Jerry Norton, one of my mentors. I don't know if you know who that is, but he like was saying something like he believes that agents— like it's just going to be transactional and you won't even need an agent in the future. But I don't know if that's necessarily true. Who knows?

Yeah, exactly. I mean, we're entering a brave new world with, uh, all the advances in AI. Um, I, I just think that it's all going to change. The, the thing that's kind of crazy is just real estate is— tends to be so highly relational, as I'm sure all of your audience knows. Like, those human-to-human connections and the connections that you're able to make with a seller, that's typically where you're able to strike and negotiate the very best deals. I just think that as long as humans are a piece of real estate transactions, there's always going to be value in having professional humans that are guiding that. Um, but I do think that there's a ton of opportunity to reimagine how those transactions go and to make it more financially efficient for everybody. And that's really what I'm trying to bring about. Like right now, our system is just so inefficient from a financial perspective. The costs of transactions are so freaking high that it, uh, It just makes it cost prohibitive for a lot of folks that would otherwise want to enter the market.

Now, that makes complete sense. So tell me a little bit about where people can find you and what they're, they're going to get out of it. Like if they reach out.

Yeah, absolutely. So the thing I'm most excited about, I've got a community, a free community on the Skool platform. So you can go to skool.com/DIYHomebuyer. Join the free community there. There's a forum where you're able to engage in real time with other DIY homebuyers, asking your questions, sharing your experiences. I've also got a free course there that just covers the essentials of the home buying process. So it's about 5 hours of content, bunch of downloadable resources, but you can just go through it as things are relevant to you. So I'm really excited about that offering, and totally free for folks. So do join us there. And then if you want more focused, like coaching through this, you've got a very particular deal that you're looking at, or it's like, hey, the course gets me 85% of the way there, but there's just this little gap. I don't want to hire a full agent. I just need somebody to give me the confidence to get through it successfully. That's where I offer one-on-one coaching. And if that's something that you're interested in, let's set up a call and we can talk about how to tailor that to your exact needs.

That's awesome. That's, that's definitely very useful because a lot of people are going to have questions on specific deals that they don't know what to do. But no, that's awesome. So Where do you see this going? Where do you see your Homebuyer Academy going in the next year or two, 5, 10 years?

Yep.

What's your vision for it?

Yeah, man, I did. I'd love to, to be like looking back as kind of the granddaddy of the guy that helped change the way that we think about transacting homes. And, you know, the ultimate, the ultimate dream. And if somebody steals it, I'll come after you. But the ultimate dream is to create like the TurboTax of residential real estate transactions. So, you know, you can go to H&R Block and sit down with a CPA. You could download all the tax forms off of the IRS, or you can use TurboTax and walk through the, the whole filing your taxes pretty easily. I think that there's an opportunity to do a similar thing in the real estate space where you've got guidance, as much human interaction as you need, but nothing more, to make it as efficient as possible.

Yeah, makes sense, right? Um, well, awesome, man. Is there any advice, anything you'd like to leave with everyone before we wrap up?

Dude, I, uh, real estate is, is where it's at. And I know that there's, uh, all kinds of sexy asset classes out there. Uh, we see Nvidia and we see Bitcoin and all those cool things popping off, and that's fine if you want to diversify, but, uh, real estate is the, the thing that we've been trading since before the dawn of time, essentially. It's something that we're going to continue to invest in and find really great value in long term. There's increasing demand. We need more housing. So just as an encouragement to your audience, everything that they're wanting to do as real estate investors, don't, don't get discouraged by current market conditions. Hang in there. It's, it's going to be worth it long term. I've never met a single person that's been in the real estate game long term that looks back with regrets.

100%. One thing I do see that they do regret though is if they don't keep their properties. A lot of them are like, man, I shouldn't have sold that thing, right? A lot of people—

so true.

So they don't regret that they're in it long term, but they're like, man, I wish I would have kept that thing. And we've all seen that, right? Like, I, I'm sure you sold properties. I've sold stuff where I'm like, man, if I still had that thing.

Oh yeah, every one of them actually, right?

Like, everyone, if you could keep them all. But then you're like, well, that money that I got helped me to do this. So anyway, uh, well, thanks for coming on, man. I appreciate you on here. And, uh, everybody that's listening to this, uh, please go check out his school community, whether— I, I think everybody Everybody should learn how to be a DIY homebuyer no matter if you're, you know, in real estate or not. Like, you should do it. Well, especially if you're not in real estate, you should definitely check it out. But if you are in real estate, learn how to do it. And if you like this episode, please like, subscribe, and do all the nice things. If you're watching this on YouTube, subscribe and hit the bell icon. If you're on the podcast, give us a follow and leave us a good review. And yeah, do you have a podcast, by the way? Maybe we can send people your way. I do DIY Homebuyer Podcast, so check that out and check out his podcast too, everybody.

Dang.

All right. All right, everybody. Peace out. Hey, everybody. What's up? It's Nathan Payne. And for the first time ever, we just released this insane training bundle that has literally everything that I've learned from doing a combined 4,000 deals in real estate, all from starting with absolutely no previous business background experience or any real estate experience. Plus, there is over $19,000 worth of free gifts that we're throwing in, all for an insanely low, low price. If you want to get your hands on this, be sure to click the first link on the description below right now.