Fred Glick, a Broker, Real Estate Realist, and Founder of Arrivva, holds a stellar track record with over $2 billion in residential transactions while grounded in a lifelong passion for real estate. René Pérez Jr. is an adept Salesperson and Pricing Savant, who specializes in strategic problem-solving and long-term growth.
Join Fred Glick, and René Pérez Jr., in the We Fixed Real Estate podcast by Arrivva where they share their expertise and insights in the constantly evolving landscape of real estate. Arrivva is a comprehensive real estate and mortgage brokerage, catering to qualified, motivated buyers, sellers, and mortgagees with a commitment to brokering with love, integrity, knowledge, a well-defined plan, and a transparent flat fee structure.
Here’s a glimpse of what you’ll learn:
- Fred and René discuss the latest Case-Shiller Index and its impact on housing prices
- Fred predicts decreasing interest rates; René remains skeptical until 2025
- Explore why housing prices haven’t dropped despite high interest rates
- Reflection on the Federal Reserve’s role in economic history and its impact on the current market dynamics
- Insights into the holiday real estate market and why it might be the perfect time to make a purchase
- Check out Arrivva’s unique approach to buyer broker fees, offering flexibility for sellers and potential savings for buyers
- Fred Glick challenges an industry giant, advocating for the industry to shift to a full-service flat fee model
- Find out how Arrivva streamlined their processes and tech integration for efficient real estate transactions
- Discussion about the evolving role of real estate agents, emphasizing the shift towards marketing-focused approaches
In this episode with Fred Glick and René Pérez Jr.
Guest host Drew Thomas Hendricks flips the script and interviews the dynamic duo of real estate – Fred Glick, the Broker and Real Estate Realist, and René Pérez Jr., the Salesperson and Pricing Savant. In this episode, the team dives into the latest real estate trends, debunking national reports, and offering unique insights into the local market. From discussing the impact of the Case-Shiller Index to debating the trajectory of interest rates, Fred and René share their perspectives on the current economic scenario, providing listeners with valuable real estate insights.
Tune in for a candid conversation that challenges a cookie-cutter approach and explores the innovative wisdom Arrivva brings to the real estate game– from revolutionizing buyer-broker fees to evaluating industry giants’ perspectives. Get ready for a thought-provoking journey into the complexities and nuances of the real estate market with Arrivva at the helm.
EPISODE TRANSCRIPT
[00:00:00] Drew Thomas Hendricks: I’m back for another episode of We Fixed Real Estate with Fred Glick and René Pérez. René’s on the road today. How’s it going, René?
[00:00:07] René Pérez Jr.: You know, it’s fairly cold out here in Seattle, so. I don’t know if I like that. I miss, I miss SoCal. That’s all, that’s all I’m gonna say.
[00:00:18] Fred Glick: Well, it’s SoCal winter where it’s like 50-something at night, so it’s freezing.
We’re all wearing, you know, heavy coats and wool hats and sweaters and gloves and long everything. So, yeah. Then daytime it goes up to 70 and then it gets cold again. Weather, weather, weather.
[00:00:40] Drew Thomas Hendricks: Top of mind for day, for today that I see, just came out the new Case-Shiller Index, shows that housing prices are continue to rise 3. 9 percent year over year, even though high-interest mortgage rates. What are your thoughts on that Fred?
[00:00:56] Fred Glick: Blah, blah, blah, blah, blah. It’s a national report. It doesn’t mean diddly squat for your local market. Here’s the thing. Ignore all these reports. You think, you know, we have people coming up. I want to negotiate a lower price because of this report that came out and because interest rates were higher.
Well, let me tell you something in California for a really nice house and a really nice neighborhood with really good schools, that’s priced right. They could care less about that. Matter of fact, they don’t care about that. It’s forward. We’re still in a forward market for those kinds of properties. Ready?
Show me the money. That’s it. Thank you very much. Goodbye.
[00:01:38] René Pérez Jr.: And I will just, I will just increasingly disagree with Fred here because it is a huge generalization. People don’t care about money. If people didn’t care about money, they’d be buying things left and right, you know, overbidding a 100K all the time.
We wouldn’t have a counteroffer situations, right? So people do care about money. People do care about interest rates. They’re ignoring things. They’re deciding to ignore things because they’ve they’re tired of not being able to buy something, but they do care, right? So it’s not, you know, it’s not,
[00:02:10] Fred Glick: They do care, but they understand the situation.
And what I’m trying to say is on these particular houses, it’s where there’s no competition. Look, you’re not going to just throw some insane number out there and we’ll give you some guidance as to what to bid, but it’s still, you know, most of our clients come in here, they’re putting at least 20 percent down, they could put more down their debt ratio is way below what the maximum debt ratio is.
And, you know, this is, this is for the type of buyer. That’s in these kinds of areas in California, you know, in the nice areas with the nice houses with the nice school districts. Now you’re trying to buy a condo and I don’t know, Long Beach that’s selling for 350, you know, you got, you got some play, and interest rates are kind of important there because it throws out buyers.
I heard some stat that like for every half a point in rate. It changes the qualifications of 1, 000, 000 potential buyers. That’s a big number of what people qualify for. And yeah, I could see in a lot of areas in most areas, probably that’s going to be a factor. But for California, even Seattle area the rates stuck.
They’re coming down. They’ve come down way over a point and a half.
[00:03:32] René Pérez Jr.: Here’s what I’ll give you. Interest rates won’t matter in markets like California, Washington, even Oregon, all the West Coast, because instead of getting a conventional loan you’re getting the golden, golden egg loan, which is a parent loan.
I mean, if you look at articles right now,
[00:03:51] Drew Thomas Hendricks: What’s a golden egg loan?
[00:03:53] René Pérez Jr.: Well, I mean, I’m just, I’m just kind of using an analogy there. I’m just saying it’s a nice safer loan, which is just asking parents for money. You know, that’s where you see a lot of our clients, you know, and a lot of people in general getting their money from like, “Hey, look, I can’t afford the house, but hey, my parents are going to sell stock and help us with a down payment. help us with the full purchase price.” So that’s why we’re able to ignore the high rates.
[00:04:19] Fred Glick: And that makes for more buyers with more competition.
[00:04:23] René Pérez Jr.: Giving you that point back there Fred.
[00:04:26] Fred Glick: And there’s regular old cash buyers, we’ve had a bunch of them. So you know, the bottom line here, as I said, is kind of ignore the number, go on Redfin, look at the houses you’re interested in, in the particular market, you’ll see the prices, you’ll see the sales.
But no agent is going to say, “Oh, okay, we’ll give it to you lower because the interest rates are high,” or because of some other ridiculous thing. So for negotiating purposes, everybody knows everything that’s public and there’s nothing you can use to do that. To use that in negotiation because everybody knows it there’s, you know, it’s got to be property specific when you’re negotiating.
It’s like, hey, there’s, you know, there’s going to be a mall built across the street. It’s going to have tons of traffic. Yeah, that’s going to lower the value of the property, maybe. The bottom line is all real estate is local. Look at the local, don’t look at the national numbers because it’s not going to really affect anything.
We’re coming out of this high-interest rate things. CPI, PPI, the core rates, everything’s down, it’s going to keep coming down, there’s no reason for the Fed to raise another dime, their next move is they’ll stay the same. Eventually, two, three, four months from now, you’ll see them come down a quarter.
There’s the this is where the fine-tuning of the Fed happens to keep us out of recession and to lower the interest rates back down to where people can do money. Here’s the biggest problem that I see. The job market’s been fine. Businesses are fine, even with high-interest rates. In 1980, you had high-interest rates, so you could lower them because of business spending and things like that.
This is a whole different economy, a whole different world of how it works. So, I think we’re just going to keep rocking and rolling. Rates are going to come down. And there’s going to be things like the pipeline of goods and services flowing like crazy. China needs the money now. They’re hurting. They’re going to produce as much as they can.
They don’t care what it eventually sells for. They don’t really care right now what it sells for. They just need to keep people working. There’s, you know, gazillion billion people there and they need jobs and they built their whole economy on, you know, making junk in the beginning and then manufacturing other stuff.
And so
[00:06:48] René Pérez Jr.: I don’t see rates going lower, meaning, meaningfully in the next year. I don’t see them lowering until 2025. And what I will give a, I hear like a little prognosis is China invading Taiwan. That’s what I see happening in the next summer.
[00:07:07] Fred Glick: Okay, we’re not getting anywhere that.
[00:07:12] René Pérez Jr.: We’re all speculating here. That’s what I’m going to speculate, you know.
[00:07:17] Fred Glick: Well, you know.
[00:07:18] Drew Thomas Hendricks: That’s a big speculation. Let’s speculate.
[00:07:22] René Pérez Jr.: So here’s the thing, Drew. So here’s the thing. You know, two years ago. You know, when COVID was kind of on its last leg, I kept telling Fred, everybody kept telling Fred, I mean, we kept telling every, everyone was saying, oh, interest rates were not going to go past five.
I was probably one of the few people who said interest rates will get to 80%. Now that’s 8%, right? So it’s one of those things that it can happen. You know, there are a lot of proxy wars going on. There’s a lot of conflicts, like, you know, how do, how do countries or how do economies get out of, you know, a bad environment by war, right?
It’s just simple. So we don’t know, we don’t know if rates are going to stay high or low, but they’re at 8%, the reality is rates did hit 8% and you swore you, you said the rates are not going to go higher and you fought back and forth with clients, you know.
[00:08:18] Fred Glick: I look how quickly and look how quickly they came off of 8%.
[00:08:22] Drew Thomas Hendricks: Yeah, it was some market calculation that they went overboard and they realized they went overboard. Now from a newbie, from somebody that’s outside of the real estate industry, just being a charismatic guest host, I do have a question for the everyman.
Now with the interest rates still high, why has housing, how, why is the prices of houses not dropped?
[00:08:44] Fred Glick: Supply and demand, period. There’s plenty of people qualified. That’s not a problem for every single house in the United States. There are plenty of people, mortgage or cash qualified to buy that house. The next step is demand.
Like, for example, I’m looking at a list, an expired listing in Menlo Park on a condo and I looked at the pictures, it’s a picture like in the bedroom. The guy doesn’t have the bed made. He’s got his bicycle in the living room. The outside is not swept clean. It looks like crap. Well, how are you going to get anybody to even be interested in that?
You know, it’s got a pretty house and a great neighborhood and where you want to live. I mean, there’s tons of people in rentals. Rentals is starting to come down a little bit now. This whole thing of everything’s getting cheaper. So it’s getting cheaper.
It’s like, okay, maybe we buy a house, even though the rent came down 50. It’s the worst thing is when the rates get back to even four, four, and a half. That’s going to bring so many more buyers. There’s still not going to be a lot more sellers, so it’s actually going to get worse when rates come down in California.
[00:09:53] Drew Thomas Hendricks: Supply and demand and yeah. Now what about going into the election year? Is there the emphasis that the Fed wanted to do maximum pain in 2020?
[00:10:01] Fred Glick: No, no, the Fed’s independent. They really are independent. I mean, they understand what’s going on, but they’re not going to make some ridiculous moves that’s going to hurt things.
So no, they’re, the Fed is always conservative. And you know, the two guys at the Fed that I’ve ever had a question about were Ben Bernanke and Alan Greenspan, because in the early 2000s, why did they not understand that option arm mortgage, those arms that you got to pay at 1%. We’re complete and utter bullshit and definitely going to kill the economy.
90, put, put no money down, get a 1 percent mortgage. Really? And it was what’s called, it was deferred interest. It was the fancy name for negative amortization. You know, you’re paying it one, but you owe it seven. Well, you got to make up the six, and all of a sudden here it comes. You got to, you go from 500 payment to 1, 800 payment.
You can’t afford it. Blah, blah, blah. Two geniuses, Ben Bernanke and Alan Greenspan couldn’t figure out that these were Oxic assets, which they ended up being, and they could have saved the economy. So those are the two things of, you know, the alleged conservative fed that really screwed up if they had pulled those loans, it would have been beautiful.
Stopped all these bad mortgages from happening, even in the investor side. And we’re seeing that now. I get all these emails. Oh, finance with us, your investment property, your Airbnb, we have a little bit, but then it’s just young guys. Hey, you know, it’s like you’re idiots. You’re not, you have no context.
You’re not giving people details. And guess what? All these like groovy, you know, you don’t have to breathe loans for investors are back and guess what’s going to happen. They’re going to foreclosure. They’re going to be sold. And that’s what kills markets too. It kills homeowners. It really hurts homeowners that people buy these investment properties with funky loans.
And you know, the first-time investors, they don’t know what they’re doing. You know, I always tell first-time investors. Partner with somebody who knows what they’re doing for your first deal. You know, you don’t get 100 percent of it. Maybe you’re 50 percent of it, but you learn. And then you move on to your next one.
You know what you’re doing. So stop just going to some stupid seminar that you saw on LinkedIn by some guy. Makes for a great video.
[00:12:31] Drew Thomas Hendricks: Okay. Yeah.
[00:12:32] René Pérez Jr.: I mean, the seminars are fine if they can back it up with actual data. Right. I mean, Yeah.
[00:12:40] Fred Glick: But they don’t. They’re just trying to sell you crap.
[00:12:43] René Pérez Jr.: Well, that’s what I’m saying, though. That’s what I’m saying. I’m agreeing with you here.
[00:12:47] Fred Glick: Hey, that’s a first today. Well, let’s see if we can be -.
[00:12:52] Drew Thomas Hendricks: Going into the holidays, we’ve got, what, another month left?
[00:12:55] Fred Glick: Oh, fabulous.
[00:12:55] Drew Thomas Hendricks: Of 23.
[00:12:57] Fred Glick: So, last year at this time, between Thanksgiving and the Super Bowl, I should have just gone on vacation. There was literally nothing going on.
People were freaked out. That’s when rates first started to graduate up and kind of get scary. And the weather got ugly. It just shut everything down. But what we did see is some sellers say, “Hey, I, you know, I want to sell. And I’m going to sell it. I’ll sell it this price.” This may be a really, really, really good time to buy.
It hasn’t started in earnest yet because we’re only, it’s today, Tuesday, November 28th. So, but you’ll see maybe in a couple of weeks, definitely. I love Christmas Day because I don’t celebrate. So I’m there ready to write contracts and I’ve done them on Christmas day. You know, show vacant house and agreement on Christmas Day, get it back the next day and you may get the deal.
[00:13:55] René Pérez Jr.: I mean, it happened this year. I mean, we submitted offers on Thanksgiving. They didn’t get something but,
[00:14:03] Fred Glick: Yeah.
[00:14:03] René Pérez Jr.: It was going to be like every other year. Right. I mean, yeah, that’s in a slower market, but people are still buying out there. That’s just,
[00:14:12] Fred Glick: Yeah. So we’ll see how this year develops, but usually, it’s kind of quiet.
Yeah, there’s the whole thing with agents scared to death about all these changes in the commission deal. So they’re, they may want to push these sellers because they want their commission before all this happens. So, and by the way, if you list with us, we don’t require you to put any buyer broker fee, and we will push that and push it out to people to let them know right in the advertisement, like in Redfin, it will say we are paying no buyer broker fee.
So what happens is, they’ll go back to their agent who is charging them 2. 5%, and they’ll say, oh, you don’t want to buy that house, because it’s blah, blah, blah. Which is bullshit. And what we’ll do for you if you come to us is very simple. Look, dual agency done by sleazy people is terrible. Dual agency meaning one person represents you in the seller, buyer, and seller in a transaction.
Here’s the way we do it. If you come to us, we have one of our agents who has no idea what’s going on with our individual listings. And we give her the buyers. So she’s negotiating from the same position that your agent would be negotiating. And here’s the thing, we’re only going to charge you our flat fee of 97. 50, not two and a half percent.
So guess what? You’re getting the price for a lot lower. You’re also going to be able to finance less money. So 80 percent of a lower amount, hello, calculate the interest. So we’re saving, I mean, if we extrapolate it out for, you know, 30-year mortgage at a million dollars, probably, you know, a hundred thousand dollars.
We’re saving people between the commission and the lowering of the price. So that’s the other thing when you list a house that you’re not thinking of, and the other agent’s not telling you is they, they had the two and a half percent period. They’re not going to change that. That’s what their office is still requiring because NAR and Keller Williams and the rest of them are appealing the 1. 8 billion dollar verdict. Good luck.
It’s going to change. This is the way it’s going to change. We’re trying to be in the forefront of it. We’re giving you a fixed fee for everything. It’s just, it’s so much lower. That’s that
[00:16:40] Drew Thomas Hendricks: Without paying that. So help me understand, without paying the buyer broker fee, Arrivva won’t pay it.
What if the people don’t want to do the other side with Arrivva and stick?
[00:16:49] Fred Glick: That’s why they can use their own broker, but they’re going to pay two and a half percent or whatever they charge.
[00:16:54] Drew Thomas Hendricks: You won’t pay it, but the other people will pay it.
[00:16:56] Fred Glick: Let’s let’s just, okay. So, so we take a listing. Okay. Let’s just extrapolate some numbers here.
Million dollar listing. We charge our 15, seven 50 to do the listing for you. We buy the inspections. We do all the time. We do everything. And then the buyer broker fee, let’s say, well, here’s the story. Here’s what we will tell you. Okay. Here’s the buyer broker fee. We can put zero and the buyers pay their own, or you can put 50 dollars.
You could put 10, 000 flat fee. You could put two and a half percent. If you decide on the two and a half percent, which is like to make sure that the other agents show the property. I mean, it’s repulsive to have to do this because of their minimum commission situation. So. Some buyer goes and is not, didn’t sign anything with agent from X, Y, Z.
They see the house, they want to make an offer. They say to their agent, “We want to make an offer.” The agent looks in the MLS or, or in the listing in Redfin and sees commission is zero and he works for a company that says you have to go two and a half percent. And then he, he either like. Makes up something.
Why you don’t, you shouldn’t buy that out. Oh, you shouldn’t buy that. ’cause we know there’s terrorists on the street or something. They just make crap up. Or they say, look, you know, our company minimum commission is two and a half percent, so that would be $25,000. And then the buyer say, thank you very much, we’ll get back to you.
They come to us and they only pay 97 50, so they’ve saved a little over $15,000. On buying the house because they’re using us instead of them. We have a firewall between the buyer broker and the listing agent. We make sure that neither finds out anything and we can do what’s called dual agency. Very clean.
I call it, that’s a name. I can’t even remember the name. Basically, you know, it’s not, you will not have the same person representative.
[00:19:08] René Pérez Jr.: It’s called designated agency.
[00:19:12] Fred Glick: Thank you. Right. Designated agent. So we designate a listing agent, designate a buyer agent. So it’s, it’s safer that way.
Yeah, there you go.
[00:19:21] Drew Thomas Hendricks: 9750. No, that’s such a deal. And I was just looking at the math on your site, like for a seller for a million dollar home, they can save up to 17, 000, by
[00:19:32] Fred Glick: That’s just on the listing side that doesn’t include, we should have another thing on there that is the two and a half percent shows 5%.
[00:19:44] Drew Thomas Hendricks: Yeah.
[00:19:45] Fred Glick: Because 5 percent is what the total you’ll pay. We’re only saying pay us 15, 750. If you want to pay anything else, that’s on you.
[00:19:53] Drew Thomas Hendricks: Okay. I get it.
[00:19:55] Fred Glick: So you know what? Let’s change it. No, we will. Here you go. We’re going to, we’re, we’re changing our website live on the podcast, but yeah, we’re going to change it to 5 percent instead of two and a half so you can really see the massive savings.
[00:20:11] Drew Thomas Hendricks: I believe that was on there, but so the,
[00:20:15] Fred Glick: No, the math is on there for two and a half.
[00:20:18] Drew Thomas Hendricks: We’ll be doing some hot fixes on the website later today guys.
[00:20:21] Fred Glick: Okay. Moving on.
[00:20:22] Drew Thomas Hendricks: Check back in. I do have notes. Mention, Keller Williams.
[00:20:30] Fred Glick: Keller Williams, one of the defendants in all the lawsuits about commissions.
They had another thing going on at the same time with Gary Keller and some other dude and embezzlement and fraud. And what are these people doing? We’re just trying to broker real estate. Really? I don’t get it. That’s why Keller’s way of communism. I don’t get it. Why do you want to work for them or why you want to work with them?
Yeah. There’s some great agents. Don’t get me wrong, but the company and just the philosophy and they’re fighting the lawsuit because they want to charge their 5 percent and all that. I think the old way of doing business is just fine.
[00:21:14] Drew Thomas Hendricks: And they say, well, they say that it’s value and they provide value, but as this real estate landscape shifts away from commission base to full-service flat fee, there’s all this value out that you’re giving there, and there’s a justifiable price for what you’re adding to that transaction.
Where suddenly it’s not just a percentage of a house it’s actually tied to the value that you added.
[00:21:38] Fred Glick: Yeah. And currently, if you use an agent who just got their license yesterday, you’re going to pay the same price. Keller Williams with an agent who’s been there for 10 years. What kind of value are you getting there?
You know, I mean, the value thing is all a joke. We do absolutely everything that any of them out would do, plus. They’ve never heard of Slack. We talked to you on Slack. We’re communicating with you all the time. Everything is as digital as possible.
[00:22:11] Drew Thomas Hendricks: Virtual staging, Matterport,
[00:22:14] Fred Glick: Everything. I mean, we have, we put on the idea is when you have a listing on the multiple listing service, buyer contacts you about it, wants to see it or wants to know about it, you go to the MLS.
It’s the first thing we do. We look on the MLS. What’s the showing instructions? How about disclosures? Anything like that? We do it. We get it out. Other agents. We have a listing and they just call up. Oh, I’d like to see the property today at three o’clock, go to the website. It tells you exactly how to do it.
You have the link and you know, it’s like, they don’t understand. So if you’re using an agent, like still calls you on the phone, get rid of them. Because they’re, or how about this? This is what I hate. They’re using personal emails. This is a business. 98 percent of the agents, Gmail, Yahoo, AOL, yes, AOL email for your real estate business.
Really? Really? Just talk to different people. They will tell you, oh, they’re just discounters. You’re not going to get anything. You know what? If we need to get you into a house, it’s not an open house. Absolutely 1000 percent we can do that. It’s just like, it’s a joke, but they had nothing else. So that’s why we tried.
[00:23:39] Drew Thomas Hendricks: Yeah, well, listing times as we see, I think, you know, the average house is going to, it is a transaction. And as you go up into the 10, 20, 30, 40 million dollar million houses, these agents have listing presentations, and they say what they’re going to do to market it, but they’re going to start marketing themselves as a marketing company, which well, they’re gonna, they’re gonna buy it.
[00:23:59] Fred Glick: Well, they all do that. It’s all about, you know, these agents, your personal brand. And I’m Susan Smith with the Susan Smith Group of Keller Williams. Nobody cares. I grew up in this neighborhood and nobody cares. You’ve been replaced by Google. You don’t know the greatest restaurant because it’s on Google ratings.
Yeah. Yelp. You’re there’s the whole thing of you need a local agent. Why? Somebody explain to me why because I don’t know. We do very well. We’re all over California, all over Washington State. It’s just been fine, you know, and most people know where they want to live and know everything about the place before they even think about it.
[00:24:43] Drew Thomas Hendricks: I guess if you’re coming over from Europe and you got your job in San Diego and you don’t know any of the neighborhoods, you may need a tour guide to show you some of the better neighborhoods.
[00:24:53] Fred Glick: Maybe but you’re looking on Redfin. You see what you like. You see the price range. It narrows it down for you.
You look at the school district. Everything is basically online. Yeah. If you want to like live, I have to live near 3 coffee shops that have a rating of 4 and above that have dark, coffee, and bear claws. Okay, maybe somebody could have, oh yeah, I had the bear claw there last week. It was fabulous. Really?
And then, are they the kind of person who knows how to negotiate for you? You know, who knows how to write a contract correctly, who can get information out of the other agents. You know, it’s a whole process. It’s not that easy. René?
[00:25:43] René Pérez Jr.: think I’m going to keep my commentary for later.
[00:25:46] Fred Glick: Oh, okay. Good. Oh, and that’s all right. Future episode.
[00:25:49] Drew Thomas Hendricks: Safe travels back to San Francisco and we will see everyone next week. Cheers.