The Advantages of Choosing a Non-Realtor Agent With Fred Glick and René Pérez Jr. of Arrivva

Here’s a glimpse of what you’ll learn: 

• The advantages of choosing a broker not affiliated with the National Association of Realtors (NAR)
• The benefits of working with non-NAR agents, including lower fees and increased flexibility
• Highlighting the inflated NAR Code of Ethics and the potential drawbacks
• The major issue in the lack of enforcement of the Code of Ethics
• Discussion about unethical agents and brokers
• Benefits of dealing with non-NAR agents include technology adoption, transparency, honesty, and a client-centric approach
• The role of non-NAR agents in paving the way for a new industry standard
• Fresh insights about the recent conforming loan limit increase, with detailed figures for different regions
• Quick update on mortgage rates and the importance of Core CPI in assessing economic health
• Expert tips for those considering refinancing as a strategy to unlock savings

In this episode with Fred Glick and René Pérez Jr.

Guest host Drew Thomas Hendricks sits down with Fred Glick and René Pérez Jr. of Arrivva to explore groundbreaking shifts in the real estate landscape. Learn about the advantages of non-NAR affiliation, the impact of AI engines, and the need for transparency in the industry.

Let’s get candid about the benefits of working with non-NAR agents, including flexibility, lower fees, and a tech-savvy, client-centric approach. The conversation also touches on challenges in enforcement, conforming loan limit updates, and expert tips on navigating fluctuating mortgage rates through strategic refinancing. Join us for a riveting discussion that challenges norms, advocates for industry transformation, and provides actionable insights for real estate professionals and consumers alike.

EPISODE TRANSCRIPT

[00:00:00] Drew Thomas Hendricks: Drew Hendricks here, I’m the host of We Fixed Real Estate. Today we have Fred Glick on the show and René Pérez. Today’s topic, you know, we were sitting here, Fred and I earlier today playing with Bard.

Have you guys tried it? It’s the new AI engine. We were kind of talking about NAR National Association Realtors and the advantages of actually choosing a broker that’s not in NAR.

[00:00:26] Fred Glick: No NAR. Well, first of all, the biggest thing is, is I’m not liable. A broker who’s not in NAR and who’s not part of, say, any of the other defendants, the Keller Williams, Compass, et cetera, et cetera.

They don’t have any liability. They’re not going to close because of these lawsuits and the continuing lawsuits. It’s not just one lawsuit. There’s probably going to be, I don’t know, 50 to 100 of these, and they’re just going to keep coming and keep coming and keep coming. So it’s funny. I just want to add this little thing.

I was on this webinar this morning and I can actually show you pictures of the people on the webinar and it was a managing broker from an EXP company and they’re involved in these lawsuits too of course, trying to tell people how to deal with the new realities, how the business has changed. And the thing that they were pushing is you have to show people your value.

You tell them, these are the things that we do for you. And you don’t understand these things because it’s new to you. And we’re here to guide you. And I’m thinking to myself, God, I’m going to make an AI bot to just answer all the questions about title insurance, about mortgages. They don’t understand they’re going to be replaced.

Everybody’s going to know whatever they need to know by their bot, and then they’re going to be able to eventually have something submitted with automation as to what they want to do. And they’re going to have a guide. You’re going to have buyer brokers. They’re going to only have the really good buyer brokers.

The low-end people don’t know what they’re doing. They’re going to disappear. But I can see in five years, this AI bot’s just going to do everything for you, what you need to know. And so they’re dying. They’re, they’re desperate. They’re scared to death. And they say, make sure that you get a contract up front explaining how much you’re going to charge.

And they didn’t discuss percentages or facts, fixed fees, or anything about the amount, because they don’t want to have another conspiracy charge against them. But there was this underlying tone of two and a half percent is here to stay on each side of a transaction. We just have to adjust. And the big guys, you know, they’re saying, “Oh, this isn’t going to affect anything.”

Just a few more disclosures. So they have their new way of sneaking around everything or whatever without getting caught. Anyway, having said that, and if you are an agent and you’re licensed in California or Washington specifically, and you’re tired of all this and you want to join a brokerage that doesn’t join the realtors and allows you to charge whatever you feel is reasonable that you negotiate between you and your buyers.

And you take off the liability ’cause we do all the paperwork. Come talk to us. We’re, it’s a – thing. It’s, we’re gonna be involved with you, we’re gonna help you learn about communication better and Drew’s gonna help you market yourself.

[00:03:32] Drew Thomas Hendricks: Yeah.

[00:03:34] Fred Glick: Period. And that, that’s the key thing ’cause right now you’re all over the place.

You don’t know what you’re doing. We pretty much have this hopefully develop them. We’re always changing keywords, and I’m always, you know, finding something stupid that Drew thinks I’m crazy. And, you know, who knows?

[00:03:49] Drew Thomas Hendricks: You definitely sent me down the rabbit hole today. So Fred sends me this link is Bard.

[00:03:55] Fred Glick: Yeah. So to the Bard thing.

[00:03:57] Drew Thomas Hendricks: So, yeah, so he’s investigating this AI bot and then I followed through with it. And I kind of wanted to ask Fred about this because it came up as a good idea. So I was, I wanted to, so I wrote the, what did I ask the thing I said is, well, we get down here. Oh, so I was talking about the benefits of actually working with a, with a non-NAR real estate agent and what they are, and it came up with some really good ideas.

I mean, so one, what am I looking at here? Oh, lower fees. Freddie touched on that. More flexibility because, and this is the part that I went down the rabbit hole. And so more flexibility. non-NAR agents are not bound by the NAR Code of Ethics, which can give them more flexibility on how to conduct business.

This may be beneficial.

[00:04:42] Fred Glick: And so I always put it this way. We have an inflated code of ethics. We’re 10 times a billion times higher. Their great code of ethics took them into a lawsuit, which they are, you know, a 1. 8 billion judgment against them. Plus 49 more suits. That’s a real great code of ethics. Hello.

[00:05:03] Drew Thomas Hendricks: Yeah, no, it’s,

[00:05:04] Fred Glick: Oh, we forgot to follow the code of ethics.

[00:05:07] Drew Thomas Hendricks: And I think the underlying thing is that NAR tends to think that if you’re not NAR, you’re not ethical.

[00:05:14] Fred Glick: Oh, they even advertise that way. Use a realtor cause the realtor has a code of ethics. I heard these commercials maybe even a month ago. After the 1. 8 billion judgment.

[00:05:28] Drew Thomas Hendricks: So the, one of the things is I was wondering, so I asked, and this is just me learning and Fred can probably comment on this, but it gave four or five good points, five good points. I came up with why the NAR Code of Ethics is a hindrance and may actually be unethical. Potentially unethical.

[00:05:45] Fred Glick: Go for it. Let’s hear it.

[00:05:46] Drew Thomas Hendricks: One is that they, mandatory membership. The requirement for all real estate agents to join NAR and adhere to its Code of Ethics can limit consumer choice and restrict competition.

[00:05:57] Fred Glick: Well, what that really should say, because it’s Bard, it’s AI, it’s not perfect, is that there, if you own a brokerage and you are a realtor member, every single agent in your office must become a realtor without exception. That’s what they’re talking about. And it’s like, it’s going to cost you more because you have membership dues. So obviously they’re going to pass that on to the consumer.

[00:06:22] Drew Thomas Hendricks: And that was one of the advantages of not being, yeah, you have to pass on that membership.

[00:06:27] Fred Glick: Exactly.

[00:06:27] Drew Thomas Hendricks: Potential conflicts of interest. Certain provisions of the Code of Ethics can create conflicts of interest. For instance, the requirements to disclose all material facts to a client may conflict with the agent’s duty to protect the seller’s interest. Additionally, the code’s emphasis on promoting the seller’s interest may limit the agent’s ability to provide objective advice to the buyers.

[00:06:47] Fred Glick: Well, yeah, this is talking about dual agency. And I think we talked about this in the last podcast. This is exactly it, you know, Susie Scumbag, real estate agent, who reps the seller and then does open houses and tries to get the buyers to go through them. “Oh, we’ll give you a discount on the commission. I’ll lower it from six to five and a half.”

You know, big effing deal. You know, and she’s, they’re just trying to get the deal closed. They’re probably friends with the seller. That’s how they got the listing. And they don’t really give a crap about the buyer. So they’re just trying to get the deal done. And then these are the deals we have problems later down the road.

Not, not every dual agency deal is a mess, but see who the agent is, feel them out, you know, ask them why they’re going to do dual agency. You know, why can’t they give me off to somebody else? Why can’t I get another broker? One, you know, as a buyer, you know, ask the hard questions and the little discount is bullshit because they’re just going to add it to the sale price.

You’re going to pay more most time.

[00:07:51] Drew Thomas Hendricks: Find it up. Yeah, but on the other side, the other part, the other part. So there’s 2 more points. The other 1 is strict enforcement and penalties enforcement mechanisms for violating the code can be perceived as overly strict or disproportionate.

[00:08:03] Fred Glick: So, worthless.

[00:08:04] Drew Thomas Hendricks: Natural fines and even a revocation of license can create an atmosphere of fear and discourage agents for taking risks or challenges the status quo for the client.

[00:08:15] Fred Glick: Okay. Well, let me say that. NAR slaps on the head. You ever heard a realtor be so bad you’re thrown out of the realtors and they take you to the licensing board? No. And they don’t make any of this public. So you have no idea which agents have gotten slapped on the wrist and what they did.

[00:08:35] Drew Thomas Hendricks: That’s good.

[00:08:38] Fred Glick: And it’s mediation arbitration. I forget. You knew that way.

They have all kinds of, you know, volunteers in their own organization to do the disciplinary, judicial things. So it’s like, seriously, get independent people from the outside to say if you’re right or wrong. And you know what? Make it public if you’re wrong. That’s the change.

But, you know, if you’ve got a problem with me, you’re going to take me to the Department of Real Estate. You’re going to take me to court, you know. Or mediation it’s in the contract, but

[00:09:11] Drew Thomas Hendricks: The final 1, I kind of thinks the most compelling on the code of ethics is its focus on industry standards. So, the code of ethics primarily focuses on upholding industry standards and protecting the interests of our members.

Well, this is important. It can be argued. The code places less emphasis on promoting broader consumer welfare or addressing societal concerns, such as housing, affordability, and fair housing.

[00:09:36] Fred Glick: Bingo. I don’t need to add anything to that. Yeah, I mean, yeah, no more comments on that, René??

[00:09:48] René Pérez Jr.: Well, so I mean, the thing is, I mean, we talked about the code of ethics part, the code of ethics itself isn’t like the major issue at hand.

It’s the lack of enforcement, right? It’s the amount of agents that are in the market and nobody says, stop, don’t do that. Stop. You shouldn’t say that you shouldn’t. Stop. You shouldn’t discriminate. Stop. You shouldn’t be sneaky and slimy. Stop. You shouldn’t lie. And I think that’s the problem, right?

And it’s not about the actual Code of Ethics. So,

[00:10:22] Fred Glick: You know what, these agents who are sneaky and slimy. The brokers who hired them know exactly that they’re sneaky and slimy. So You can just tell. These franchises requires the franchisee to hire so many people per quarter or they could lose their franchise.

So that’s why there’s some pretty bad, dumb, evil people with their license. ‘Cause the broker knows he needs two more people. Hey, you know, is, I don’t know, gardener. beautician, you know. It’s like, here, I’ll pay for you to get your license. You know, just come join and then pay fees. Anyway, we’re here to just do the right thing and do the job.

So, but the problem is we’re competing against all these people screaming in the noise world. Who are me out here saying, I’m this and I have this. Now you -, so.

[00:11:14] Drew Thomas Hendricks: And I, and I’m here to go down the further down this rabbit hole of NAR versus non-NAR agents. So then I went down and I had to ask another question.

I’m like, so what are these benefits of working with, so of a non-NAR agent? And you’re going to like this because this is some of the stuff we talk about all the time on your site. Number one. Technology adoption. non-NAR agents may embrace innovative technologies and marketing strategies that are not as prevalent among NAR members.

Emphasize the tech-savvy approach, leveraging modern tools to enhance the client experience and achieve better outcomes. That came straight from the sky above. Or the AI bot.

[00:11:57] Fred Glick: Cloud, as they say in France

[00:12:00] Drew Thomas Hendricks: Next 1 transparency and honesty and then the next 1 client-centric approach because they can prioritize a client-centric approach putting the client’s needs above some of the,

[00:12:13] Fred Glick: Yeah, we’re all about the, you know, telling you we can barely do anything and then just come up and get it done. You know, it’s just what is that old line under, under promise and over deliver something like that. That’s what we try to do because it’s fun to do it. It’s fun.

[00:12:36] Drew Thomas Hendricks: So the other thing, so we went down the rabbit hole, and thank you very much. Fred’s given us a lot of food for thought for crafting the message. And hopefully, I’m, my thought is that, you know, rising tide rises all ships. I mean, if we, if all the people, these non-NAR agents can really advocate for themselves, it’s going to be better for the whole industry.

[00:12:56] Fred Glick: Yeah. Well, I hope the whole industry changes into a new kind of industry. So, you know, I,

[00:13:03] Drew Thomas Hendricks: We’re working hard to do that.

[00:13:05] Fred Glick: Just listening to these people, I can tell, you know, “Oh, I promise my clients I’ll get back to them.” You know? Or this supervisor person, whoever she was, was telling them, “Make sure that you get back to your people by phone, by email, by text, however, they want, as soon as possible.”

Really? Did you have to tell these people that? We live in Slack, you know, we’re always there two in the morning. I drink too much tea and have to wake up, you know, I’ll answer a Slack. So you can get it when you wake up. It’s just, we don’t know any other way.

[00:13:38] Drew Thomas Hendricks: So, Fred, what’s top of mind for you right now? Other than the ethical responsibilities of non-NAR agents?

[00:13:45] Fred Glick: Hmm. No, we’re just rocking and rolling. We’re in between November’s holiday season and Thanksgiving-ish stuff, and travel, and the Super Bowl. This is when it kind of gets a little quiet, but things are rocking and rolling. Let me tell you one thing, and you may or may not know this, but the conforming loan limits for mortgages went up. Conforming meaning that people at Fannie Mae and Freddie Mac and also FHA and VA adopted. FHA adopts this.

It’s the loan. Maximum loan amount before you have to go to a jumbo loan. Go to the banks. So the national number for a 1-unit property is now up to 766, 550 dollars. That’s the maximum, but if you’re in places like LA, San Francisco, Orange County it will be 1, 149, 825 as maximum. The good, that’s good news for us because we’re competitive from that loan amount on down.

[00:14:54] Drew Thomas Hendricks: And how much did that go up?

[00:14:55] Fred Glick: What was it? One 0 eight six. So that one I’ll play 56-70 grand-ish. It’s got to do with, I forget if it’s median income or averaging average median price or average price. I forget how they calculate it, but here’s some interesting things other than that. That’s for a one-unit property. If you’re buying a duplex, and this is in the big number, Marin, Napa, Marin, LA, et cetera.

By the way, Napa is a little lower. So two units would be one, four, seven, two, 250. Three units, one seven seven nine five two five. And here we go by a four-unit building for 2, 211, 600 mortgage. And believe it or not, if you’re buying it now, you can buy it with 5 percent down. So you’re going to buy a 2. 2, get a 2. 211, a 600 mortgage with only 5 percent down.

[00:15:52] Drew Thomas Hendricks: That’s good. That ties into that multifamily discussion we had a couple of weeks ago.

[00:15:57] Fred Glick: Yeah. Yeah. So these are the new numbers, but the national number, I’ll just run them fast. Two units, nine, eight, one, 500. Three units, one, one, eight, six, three 50. Four units one, four, seven, four, 400.

So, you know, 25 years ago, having a million-dollar property was, oh my God. Now it’s like normal.

[00:16:19] Drew Thomas Hendricks: Baseline in California.

[00:16:21] Fred Glick: Yeah, for sure. That’s for sure. So if you go to conforminglimits.com, as soon as Drew fixes it for 2024 numbers, it’ll have every county in the United States. And the one to four thing and, we’ll figure out a way for you to make it easy.

But now it’s just the Excel, the Excel. Do you see how old I am? The spreadsheet, so it’ll be there and we can put it up there so that people can download it to Drew.

[00:16:51] Drew Thomas Hendricks: So, yeah, why not? Yeah, we can, we can, I mean, it’s very simple where we can just have a, yeah, Google sheet, share it, and rock and roll with it.

That’ll be the minimum viable model, but we’ll get something fancy soon. We’ll see.

[00:17:04] Fred Glick: Got it.

[00:17:04] Drew Thomas Hendricks: The other thing that I did, I read today, mortgage rates down for the 5th straight.

[00:17:10] Fred Glick: Just straight with, yep. Beautiful thing. The core CPI, that’s all I give a crap about. That’s all you should even look at. Core CPI.

[00:17:19] Drew Thomas Hendricks: Not the Shiller Index. We learned that last week.

[00:17:21] Fred Glick: God, no, no, no. Core CPI is basically what’s the consumer paying for goods and services. And that’s inflation. You know, that’s the real, real news inflation, but it doesn’t cover everything. It doesn’t include rents. So it’s not a real number, but it’s a ballpark, but that’s what’s trade they trade off of.

So you hear that it’s going down or doesn’t or lower than expected. That means inflation is turning around. That means rates will turn around. That means the Fed doesn’t have to do anything more. Now we’re on our way down. We’ve peaked, we definitely, definitely peak, obviously out of the eights. I think I priced something yesterday of vanilla 30 or fixes like six and five, eight, six and three quarters, something like that.

[00:18:01] Drew Thomas Hendricks: Really?

[00:18:02] Fred Glick: Yeah. Yeah.

[00:18:04] Drew Thomas Hendricks: Almost on par of where we were last year. So

[00:18:07] Fred Glick: Exactly. It’s funny. I had a client, I had a client contact me couple about a week ago because he saw rates came down and I remember closing and I didn’t remember the rate off. And I said, what’s your rate? He said 7. 65. And guess what? At the time it was the same rate.

So it went up so far and came back down and he only closed like three or four months ago.

[00:18:30] Drew Thomas Hendricks: So some of those people at the top, is this, is there enough points in there to consider refinancing if you may have bought?

[00:18:38] Fred Glick: Well, if you’re gonna re here, if you’re gonna refi, the only way to do it, usually, unless you’re going down to a 15-year, that’s another idea.

That gives you a chance to get a lower rate and 15, and it’s probably, I dunno, six and a half, six and a quarter, making that up, people. APR of I don’t know what, full disclosure. And MLS number 1, 3 3, 9, 7, 5. This is not an advertisement for rates. There’s all kinds of stuff anyway. Where was I going with this?

It’s kind of thing where if you’re just, let’s say you got an 8 percent rate, stuck that you got it, but now we’re at 6 and 5 8ths, but with no points, but with fees, a couple thousand of fees, title insurance, blah, blah, appraisals. If you can get it, let’s say quarter rate higher and with no fees, absolutely no fees when it’s all said and done, you might have to pay for the appraisal upfront, but you’ll get that back at closing.

Then it’s starting to make sense. Because if it doesn’t cost you anything, you save a hundred bucks a month. Great. And then a year from now it goes down again. You do the, do the same thing with no cost. Just keep doing no-cost refines. You kind of can’t, you have to take them for six months at least, these loans.

But that’s the way to do it for the no cost. So

[00:20:00] Drew Thomas Hendricks: As a consumer, I always like that. There always seems to be like, I saved mortgage for one month when I’m doing the refi, there’s that, I know that’s, I always feel like I miss a payment.

[00:20:12] Fred Glick: Well, you, you, you do, but you don’t. So settled in November, your first payment is January.

So you didn’t have to make a payment in December, but when you refi, so that’s when you refi, you get that extra month off. But you, you owe interest for every day you have the money. Trust me.

[00:20:30] Drew Thomas Hendricks: In the long run it doesn’t pay off, but to cashflow. I kind of, I’ve always liked that.

[00:20:37] Fred Glick: Yeah. But it works. But yeah, it just has to make sense. Make sure the lender you talk to doesn’t have any junk fees. They’re all gonna have an underwriting fee, which I find repulsive. And some of our lenders are up to like $1,200 for this. Underwriting fee. It’s just another way of making money.

[00:20:55] Drew Thomas Hendricks: What does the underwriting fee do? Is it like an insurance?

[00:20:57] Fred Glick: Who knows? It’s document preparation fee, underwriting fee. There’s some other names they call these to be admin fee.

[00:21:05] Drew Thomas Hendricks: Are they putting fuel surcharges in there?

[00:21:08] Fred Glick: It’s like fuel surcharges. Yeah, it’s exactly what it is, but you’re fully disclosed this up front. But again, if you do a no cost mortgage, you’re going to have the cost. You’re just going to get a higher rate to cover the cost. That’s all.

[00:21:21] Drew Thomas Hendricks: And closing thoughts as we wrap down episode something of We Fixed Real Estate.

[00:21:26] Fred Glick: This is six of this season, seven? What are we? Season three, season four. I forget. Go listen to some of our old ones because they’re fun too.

They’re all should see all the words in this, I think.

[00:21:45] Drew Thomas Hendricks: No, no, we’ve got them all out there. There’s about 24 episodes. You guys all got to kind of go back and just kind of see the evolution. There’s a lot of just really interesting dialogue, especially between Fred and Renee who have a synergy, but yet a great, I don’t know the right word, but they show both sides of the same coin very well, unlike any two guests that I’ve had.

[00:22:13] Fred Glick: Yeah. Thanks. Yeah. We bicker and we agree on stuff and we disagree on stuff.

[00:22:20] Drew Thomas Hendricks: And check back next week. René is going to be fit, ready for action and

[00:22:24] Fred Glick: Yeah, we’re going to see the physical René.

[00:22:27] Drew Thomas Hendricks: So that will be next week people. Have a great week.

[00:22:32] Fred Glick: See ya.