Rob Hahn, founder and managing partner of 7DS Associates, talks with editor-in-chief, Tracey Velt about his background in real estate, current trends, predictions as well as controversy surrounding the industry.
Listen or read the full podcast interview below.
Let's start with your blog. You have a popular industry blog called Notorious R.O.B. How did the blog come about? Tell me a little bit about that.
I've actually been a writer and blogger since 1996. Because I'm a nerd, I was involved with internet newsgroups. I started my own website doing gaming content stuff and then being involved with politics from '97, '98.
Long story short, when I got into real estate, working at Coldwell Banker Commercial at Realogy, then Cendant, I said, "Let's start a blog. I think it's going to be an important part of the overall marketing and PR communications mix.
At the time, the legal department at Cendant said, "Absolutely not. There's no way. If you want to do something, then you have to pass every article through us for legal review." And I said, "Yeah, that's not going to work…." So, I held off on it until I left Cendant and I started the blog around 2009. I immediately just started commenting and writing. It was initially a lot about social media, about blogging itself, about marketing, those types of things. And because I'm a big fan of Biggie Smalls, Notorious B.I.G., being from New York, when I was thinking about, "What should I call my blog?" I just thought it was cute and went with Notorious R.O.B.
You feature some dissident views, and you challenge the norm in the industry. A lot of times, the articles lead to some constructive conflict. Why is it so important for you to push the envelope in real estate thought leadership?
This is actually the first time someone's asked me that question in that way, which is why it is so important for me. I'm often very surprised when something that I write ends up stirring the pot because it feels like these are obvious things. For example, one of the most controversial posts, I've ever had came early on in my blogging life. I off-handedly said that brokerage brand doesn't matter. It was right after I saw a couple of videos put out by Keller Williams in which they interviewed consumers and studies were done that showed that consumers don't care about brokerage brand. They cared about the individual agents.
So I didn't think that this was controversial. I felt like I was saying, "Well, you know, the sky is blue." It just ignited a firestorm. It's not that I'm out to poke the bear. It's asking questions or stating things that we all talk about in private--in conference hallways, or in private Facebook groups or private channels. And everyone knows it, but nobody wants to say it out loud.
For whatever reason, I'm allowed to say those things [and] get away with it. It might be because I don't represent any large companies. I'm not an executive at a major brand or anything, so I'm just responsible for myself and my little firm. I write things that interest me, that ask questions that are on my mind, and sometimes they just become controversial, they drive some, as you say, hopefully constructive conflict. Other times, not so constructive conflict, and then I drop it.
You recently had what you called a black paper on the future of the brokerage industry. Obviously, there are a lot of challenges in this industry, and markets and technology change quickly. I want to know what change surprised you the most?
I think it's probably the same thing that surprised everyone else: that the internet and access to information changed the gatekeeper characteristics of the industry. I felt the brokerage world would respond quickly, but they haven't.
I remember saying, "Look, given the pace of technology change, given what we're seeing, that the competition is going to be between big brokerage ..." and at the time I had in mind Realogy, NRT, HomeService of America, Long & Foster, these big, major, major companies, RE/MAX, Keller Williams ... as I said, "The conflict's between big brokerage and big tech."
And quite frankly at the time, big tech meant Realtor.com. I had in mind Microsoft and Google but obviously, today, I mean Zillow and the like. But I always felt that the brokerage world would respond quickly by investing in technology that was really going to make a difference to them, and they haven't.
For example, I said, "The killer app of the internet for real estate is CRM." And I probably wrote that in 2010, and really no one's done that. No brokerage went and said, "Oh my gosh. We need to go invest $100 million into company-wide CRM platforms" in 2010. We're only start to see that sort of thing now with companies like Redfin. So that surprised me just how slowly the brokerage industry responded to its challenges.
And I suppose maybe in retrospect, I could understand why because that time was exactly when the bubble had burst, so the brokerage community had bigger problems. They had other things on their mind than technology.
You're starting to see a wave now; I think of RE/MAX recently with booj, and Keller Williams announcing their AI app Kelle, and some other companies who are starting to invest more in real estate technology.
I feel like they're fighting the last war. In other words, it's wonderful that RE/MAX is invested in booj. They have something. It's great that Realogy went and bought ZipRealty and has been trying to roll out the Zap platform for the past three years and whatnot. But that's our last war. That's already stuff that others have figured out and have done and are doing.
I don't know if that's going to have an appreciable difference. If you're behind, then you actually need to leapfrog a generation, if not two. They need to go to where the puck is going to be, not where it is today. And having a CRM transaction management system, is like, "Look, it's already been solved. Where you need to head if you're a large brokerage today is what's next? What's the next thing that's going to come on down the pipe?" and make a much, much bigger bet on sort of unknown future.
Let's talk about that a little bit. What are the unknown futures? What do you see as the next "Next" in the industry?
Obviously, just by us trying to predict it makes it not an unknown future. There's that unknown "Unknown," meaning who knows what three guys in a garage in Palo Alto might be working on right now? So think of it more as known "Unknowns" I guess, the big emphasis, I think the big focus right now in the industry is probably around the iBuyer movement, so the Opendoors, the OfferPads, the Knocks, these companies that are going in and making cash offers for people's houses.
I think what I'd be looking at is things that are going to reduce the pain point for consumers. The transaction itself is a real pain in the ass right now, and some people have started to realize that, some people realized it years ago. But if I were a brokerage executive today, I'd be really looking at just how annoying and inefficient and painful the real estate transaction is to consumers and try to anticipate where we might help with that?
And again, the iBuyer thing is now done, so to try and go in after seems like not the winning plan. So it might have to be what else? Is there sort of an iSeller? I don't know what's next. Is it iMortgage? Is it iTitle? Is it drone-driven virtual tours? Whatever it is, it's trying to think about what's coming next, but I would probably tend to focus on pain points of consumers.
The other place that I might look at though is pain points within the industry whether that's MLS and data access, or the whole broker/agent problem--the disconnect between the brokerage and the agents and therefore between the brokerage and consumers. The industry's filled with really smart people. I'm relatively new. I'm relatively young. There are leaders who have forgotten more than I've ever learned about real estate. So if they were to actually take the time to sit back and engage in strategic thinking, I feel like they could figure it out and say, "You know what? There's this piece that really needs to be addressed." So I would encourage people to do that instead of, like I said, looking backwards or looking at today's problems and saying, "Oh my gosh. We need a CRM." Yeah, you do, but there are a lot of CRM vendors that figured it out.
Let's talk about your aha moment, where you realized, "I'm going to reboot. I'm going to take a step back and refocus."
The reason why I'm in this industry, the reason why I'm so passionate about it is that for whatever reason, I've fallen in love with the industry. All my friends are brokers and agents. All my friends are realtors. My wife is a realtor. All the people that I respect are realtors.
I feel like there is a difference between a great realtor and what Steve Murray, your boss at REAL Trends, likes to call facilitators. And it really always bothered me that the same people were being painted by the same broad brush because there is no real clear difference between a great realtor, a great consultant, great advisor, and a facilitator that's just kind of in it for the money.
So I've been trying to solve that problem because I do see that as being the biggest problem in the industry. I've decided recently that I would love to help and do what I can, but I realized that's really not my job. I've done what I can. I've said what I need to. And I'll probably still comment on it, but I've shifted.
And I think the focus on the brokerage side, number one, it's made possible because before, before I met [my wife] Sunny, I don't have a brokerage background. I've never sold real estate, and that's always been an issue. With Sunny and I being partners, we have certain capabilities to be able to make a difference in that world, and that world really needs some difference-makers right now.
We talk in private… just how much in trouble the brokerages are. I feel like the rest of the industry who are not brokers, meaning agents, MLS execs, Association execs, they really need to be sympathetic to what the brokers are going through.
And at the same time, I feel like brokers themselves, broker-owners and managers themselves need to be honest about what they're dealing with. I feel like if everyone were to drop their guard a little bit and learn to be a little bit vulnerable and acknowledge the truth, we'll go a long way toward figuring out a solution.
Real estate is all about relationships, we know that. Let's talk about some of yours. I'm sure you've made some interesting connections along the way. Who has inspired you? Who's changed your perspective? Who's impacted you?
Right off the top of my list, I have to put Steve Murray. I remember one event, I think it was a California Association Realtors Event when he talked about the difference between consultants and facilitators. And I said, "Oh my god. This guy gets it." The man is just ... he's freaking brilliant. He's honest as anything. He calls it like he sees it.
Another influence has been David Charron, now the chief strategy officer at Bright, but for the longest time, he was the CEO of MRS. David sees what needs to happen. He sees the reality of where the industry is and where it's headed, but he's got an ability to make it happen, to orchestrate things, and navigate the heavily political waters, so I've always admired that. That's not a skillset that I'm particularly good at.
And then probably my mom and dad. Both my parents are Methodist ministers, and they have a particular preaching style or ministry where they really feel like it was their job as ministers to speak the truth to the congregation even if it's uncomfortable. So maybe I've adopted a lot of that in my life where I say that it's maybe my job ... or maybe it's not my job, but it's certainly my personality to just to call it like I see it and speak the truth as I understand it to the industry.
And then there's so many others who I've met over the years and in small and large ways have influenced me. The real estate industry is filled with people that I like to call salt-of-the-earth people.
And you know this, any industry anywhere, you're going to have the blowhards and the big egos and the jerks. Every group of people have that, but man, real estate, some of these brokers, some of these CEOs of the largest multi-billion dollar brokers, they're the sweetest, kindest, most down-to-earth people you'll run into.
Some of the agents you run into, they're really good people. They're out there busting their ass because they want to help a family experience the dream of home ownership. They're going out of their way to make life easier for their clients. I mean, they're really good people. I'm inspired by them all the time.
And quite honestly, it's not like they're really, super smart, a young Silicon Valley exec who's got this idea for real estate. I mean, those are the ... they're fun to talk about. They're great, I don't know that they inspire me. The people who inspire me are the realtor who's doing eight deals a year because she just really wants to focus on her clients one at a time.
So you're not going to hear her name. She's not going to be on stage at Inman or anything. Or she might, I don't know. Brad would actually put her on stage, but you know what I mean? We're not going to pay attention to her, but boy, she's making a difference in eight families’ lives, and she genuinely cares about them. She's a good person in the community. Those are the people that really inspire me.
Well, obviously, your parents made a big impact, but what childhood or teenage experience really, truly, specifically shaped the person you are today?
Oh my gosh. Gosh. I suppose one thing is because I'm a PK. Well, first of all, I'm an immigrant. A lot of people don't know that. I'm Korean, my heritage, and I came to the country when I was 9 years old. That obviously shaped a lot of things.
The other I think is probably that as a PK ... that's what we're called, Preacher's kids ... I moved around a lot. I say on average, I moved once every year and a half, two years as my parents were assigned to different churches and whatnot. So I got to see a lot of America, I think. That's good and bad. So the bad is obviously I don't have any friends that I went to elementary school with.
The good is I really got to see a lot of America. I've lived in some really lovely, beautiful towns, and at the same time, I've lived in places that you can really only call the urban ghetto with all the problems therein. I've lived in some relatively rural areas. I've lived in New York City itself. So I think that really did end up shaping a lot of who I am today.
I want to talk about future goals. So if you could accomplish just one thing this year, what would it be? Could be personal, could be professional. Doesn't matter.
So let me do one of each. Professionally, I really do think that this brokerage revolution needs to happen with what Sunny and I wrote about in the black paper. So professionally, it would be to prove that that works, and by that I mean this W-2-based law firm pattern model, that that works. Because I can show that to the industry. Then I think I can change the course of it in a positive way. Because I do feel like it ends up creating like a win-win-win situation for consumers, for agents, and for brokers. So that's professionally what I would love to be able to accomplish this year.
Personally, I just moved to Greenville, South Carolina, from Houston, Texas, and I still feel Texan at heart. I feel like my personality fits that state, but I just love my new city, so personally, I think it would be to make some new friends, meet my neighbors, become part of this community, and kind of really get a good start to our new beginning here in South Carolina. When you're kind of in the consulting business, you’re on the road 70% of the time. So I just need to figure out how to balance it where maybe at least like one month out of two, I'm at home enough to be able to go explore.
Well, Rob, we really appreciate you joining REAL Trends Gathering of Eagles this year. Thank you so much for all of your insight.
Thank you for inviting me. You're so very welcome. Thank you.
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