Fred Glick of Arrivva Talks about Why Traditional Real Estate Methods Are Failing

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

• Discover why the age-old notion of ‘more agents equals better service’ is becoming obsolete in today’s real estate market
• Fred provides an essential checklist for condo buyers
• As the spring real estate rush heats up, learn how to adapt strategies to current market dynamics and leverage modern tools for success
• From bidding wars to effective communication, gain valuable tips on thriving in today’s dynamic market
• Delve into the complexities of setting home prices with Fred as he shares common pitfalls and misconceptions
• Fred highlights the benefits of sharing inspection reports upfront

In this episode with Fred Glick

Fred Glick, Broker, Real Estate Realist, and Founder of Arrivva, takes you through the evolving landscape of real estate. In this episode, Fred dissects the pitfalls of traditional real estate methods and reveals why larger agencies might not deliver the best service. 

Discover how Arrivva’s innovative approach, leveraging technology and quality over quantity, sets a new standard in the industry. Tune in as Fred shares insights on condo buying essentials, navigating competitive markets, pricing strategies, and the importance of transparency in transactions. Get ready to rethink real estate on the We Fixed Real Estate podcast.

Resources mentioned in this episode

• Fred Glick on LinkedIn
• René Pérez Jr. on LinkedIn
• Arrivva
• Arrivva Properties
• Fannie Mae

EPISODE TRANSCRIPT

[00:00:00] Drew Thomas Hendricks: Drew Hendricks here, and Fred Glick on the We Fixed Real Estate, wearing black shirts, looking fly, and discussing the difference between a broker and an agent, and positioning, like, is the larger the real estate agency, the better? So Fred, how’s it going? What’s making you happy today?

[00:00:18] Fred Glick: I don’t know. How about those NHL playoffs, huh? Vancouver coming back against Edmonton. I couldn’t believe that game last night, but anyway, moving on.

[00:00:29] Drew Thomas Hendricks: No, at the pre-show, we were talking, we’re writing a piece, a little marketing piece, talking about the power of context. And I had mistakenly kind of talked about all the agents that Arrivva has.

And apparently, you know, it’s just not about the quantity. Talk to me about that, Fred. What do I,

[00:00:46] Fred Glick: So you find an agent from, name them, Compass, Century 21, RE/MAX, XYZ, EXP, FNNOB, it doesn’t matter. The agency, I don’t care who it is. And especially this is for listings. They tell you, “Oh, we have 28,000 agents around the world and 17,000 here in this state. And 1400 to service your listing. ” It’s like, so every one of those people is going to get part of the commission. So that’s why they have to charge you 2.5 to 3 percent to list your house. Cause it got all these people to give money to. What they can’t do is organize. Okay.

Here’s the story, whether it’s you’re purchasing a property or listing a property in California and Washington, Texas is a little different because we have a separate broker, but in California, Washington, you get me, you get René, we’re both licensed brokers. Okay. That means we took extra tests in California to get licensed brokers. We have a certain amount of sales. Look at me. I got gray hair. I got plenty of sales.

Go to arrivva.com/properties and you can see them all. And another reason we’re, so we don’t need to pay up 80, 90 percent commissions to these obnoxious sales people just to go around and find people to get business from because we’re, we, our way of getting business besides referrals from people we’ve done before is we’re going right to people with a message with SEO in one way, shape or form. And that’s Drew’s job. But you’re getting us.

And the other thing is communication. Appreciate it. If you go to the average agent, maybe you start texting with them, then phone calls. They all love phone calls for some reason. It’s 2024. In a phone call, you have to recall what they said. They’re going to say one thing. You’re going to say the other. You have no proof of it. So what do we do? Very simple. Everybody’s in Slack, and if you don’t understand Slack and you don’t get it, you’re probably not going to work out well with us as a client. Although we’ve done things for certain people and we’ve worked off text, but we do not use the phone.

So, all these agents. There was a TikTok where some agents said, well, you put all this stuff on the MLS, but I need to talk to you. You better answer the phone. It’s like, really, honey, it’s 2024. Why do I need to answer the phone? Unless you’re going to try to do something illegal with me. You know, what do you want to know?

Just send me an email or join our Slack with Slack Connect. Not one single real estate agent has ever had Slack Connect when I asked them about it. It’s just they’re the past and they’re not changing. We’re obnoxious about it because it makes a lot of sense. We don’t understand why everybody doesn’t get it.

You know, and people say, I need a local, you need a local agent to sell your house. And I ask the question, why? And I don’t get a good answer. Well, I know the rules and regulations and I know where the coffee shops are. And I know this person. That doesn’t matter to a buyer. My job is selling, to sell your house is to make it the best it can look, price it correctly, run an efficient way for people to see it, make everybody happy so that they want to give you the highest offer.

That’s all it’s about. They have buyer brokers who can tell them where the coffee shop is if they really want to know. So the whole idea of having a local agent as a seller is just so stupidly old school and it’s all they have left to tell you. I lost the listing and it was, well, we decided to go with a local agent.

You know, I’m 10 miles away. I am not like I’m in Peru, you know? And it’s like there are new means of communication. There’s new ways to do it. We’re paying for everything, all the inspections. We’re paying for the staging now. Properties, doing all the photography. We’re using AI to write our description so they don’t start out to, “Welcome to this beautiful home that you should make your house.”

I mean, come on, so. The fact is, we can do it this way. We also don’t take on 25,000 people. We keep it so that we can make sure that we take care of everyone. You know, I’m usually here all the time, so I’m hitting slack left and right. René’s probably out a little more, but he’s driving his Tesla and letting the auto drive go while he types away on his phone.

So, you know, we’re in touch. We’re in touch all the time. And it’s sad that people are still schnookered by these people who are making just massive commissions.

[00:06:19] Drew Thomas Hendricks: Quantity is not quality. Quantity is, trumps quality, especially, you know, you may have 25,000 agents, but they’re all working for a broker.

[00:06:30] Fred Glick: Yeah, and they’re all working independently.

[00:06:32] Drew Thomas Hendricks: All of them are working independently. And of those 25, a small percentage of them actually sell more than 1 or 2 houses a year.

[00:06:38] Fred Glick: Yeah. Oh, that’s that. But here’s other things like. I have a client looking for condominiums—three different condominiums. I emailed them. I said, do they now meet the Fannie Mae standards of November 2023?

Never heard back from them. Never heard back. So, which tells me that they’re going to write a contract. Somebody said, “Can I have a mortgage contingency?” And then guess what? They’re not going to get the loan.

[00:07:03] Drew Thomas Hendricks: Wow.

[00:07:04] Fred Glick: And the thing’s going to go back and then the value is going to go down because nobody can get a mortgage.

[00:07:09] Drew Thomas Hendricks: What’s the Fannie Mae standards?

[00:07:11] Fred Glick: Well, the biggest thing is you have to have an estimate of what the repair costs in the future are going to be based on, you know, the roof 20 years from now, it’s going to cost 50,000. So you plan ahead, you put aside X number of dollars per month per owner. To figure out when you get to that point, you know, that you’re going to have the 2050 grand to fix the roof.

So you have this survey has to be done within the last 3 years. There could be no more than I think it’s 20 percent of the people delinquent as a couple more rules, but that thing about the reserves, it’s not negotiable. If your condo hasn’t, that’s another while every reason why a lot of properties in Florida are gone, just dropping in value on top of the insurance crisis there. But they don’t have the money.

[00:08:12] Drew Thomas Hendricks: The community underfunded the reserves?

[00:08:14] Fred Glick: Yeah, and that was kind of okay. And people said, “Oh, I want to buy this condo. The condo fees are cheap.” And I always say to them, that’s the wrong reason to buy a condo.

You want to see if they have the reserves. Yeah, you want to pay an extra hundred bucks a month, but you don’t, that way you don’t have to worry.

You know, it’s a well-run condominium. They get it with –

[00:08:37] Drew Thomas Hendricks: What happens with these condo complexes with underfunded reserves? Do all the owners have to come in and be

[00:08:44] Fred Glick: Yep. If they need, you know, 50,000 and there’s five units, everybody put, has to put up 10 grand. So pay now. Pay later, pay it forward kids.

Get that reserve study done ASAP if you’re in a condo. If you’re an agent listening to this that doesn’t understand, contact me. I’ll get you the list of things that have to be done because we do mortgages and we do mortgages, you know, agents, you can send us your buyers because they’re going to get an insanely great rate and we understand how to get condominiums.

So not that they will because they think we’re competition and going to steal their buyers. No, we’re not. We’re just going to get the loans done.

[00:09:33] Drew Thomas Hendricks: Yeah, people are always worried about that. As far as like as you, from what you’ve been on the street, like in California, how many condo units or communities that are underfunded?

[00:09:45] Fred Glick: I have zero idea. No, it’s like, there’s no way to figure that out. There’s no, like,

[00:09:52] Drew Thomas Hendricks: It’s not a public record.

[00:09:54] Fred Glick: No, it’s like, not at all.

[00:09:55] Drew Thomas Hendricks: It’s like the dirty secret. It seems like every condo association would be, like, especially a larger complex would always have a unit for sale.

[00:10:06] Fred Glick: Yeah. And then you can find out if you have that unit for sale and then you ask them for the documents and see if they give them to you ahead of time.

And check it out and see if they have a reserve. It’s a first question. If you’re looking for a condo, here we go here. Here’s the clip. So whoever does our short clips ready, here it comes. If you are looking to purchase a condominium anywhere in the United States the first thing you have to ask the real estate agent for is to check with the condominium for the reserve study.

And was it done within the last three years? If it wasn’t done, and by the way, I assure you, the agent’s got no clue. If it wasn’t done in the last three years, turn around, and walk out. Why? Because the value of that property is just going to go down because nobody can get financing.

[00:10:59] Drew Thomas Hendricks: Very interesting. Now what it, I guess this is a bad question, but what does the reserve study cost? Is this something that the association is

[00:11:07] Fred Glick: Probably a few thousand bucks. They hire a company. There’s a couple of companies I’ve found. I haven’t had to do one, but I’ve just found them through Googling and somebody told me about one. But yeah, you want to get into it. If you’re an accounting firm, great thing to get into as a side income for you, reserve studies and condominiums.

[00:11:32] Drew Thomas Hendricks: So really most as part of the community association and governance of it, they should have a reserve study done every 3 years.

[00:11:38] Fred Glick: Maybe, maybe not, but the reserve study needs to be within the last 3 years for Fannie Mae. So, you know, 4 years from now, you might get it updated as opposed to a brand new one. You know, they’ll come out to the condo.

They’ll see if you made an improvement and then. Add that to it, or if prices have gone up substantially for certain items. You think when they’re going to be replaced, maybe adjust that, but yeah.

[00:12:06] Drew Thomas Hendricks: It’s not for a unit. It’s for the whole, it’s for the whole

[00:12:09] Fred Glick: Whole complex.

[00:12:10] Drew Thomas Hendricks: Whole complex and the unit, or it’s just the whole complex unit.

[00:12:13] Fred Glick: It’s the whole complex. It’s from walls out what you do on the inside of your apartment is up to you.

[00:12:19] Drew Thomas Hendricks: Now, is the same thing in common places?

[00:12:24] Fred Glick: Okay. You mean PUDs?

[00:12:26] Drew Thomas Hendricks: Is that what it is? I don’t know the name.

[00:12:29] Fred Glick: A homeowner’s association and an HOA. That could be for a condominium homeowner’s association. A PUD is a planned unit development.

So it’s not a condominium. The difference is on a PUD, let’s say they’re single houses or individual townhouses. There’s nothing above or below anybody. So it can never, it has to be a condo if there’s above or below units. So, the PUD is usually the townhouse or single families where you own the house fee simple, but you must be part of an organization that runs this association.

Okay, you’re required to be a member. You have voting rights, and they’re all different. Some of them cover nothing but maybe some maintenance or road fixing. Some of them cover even up your landscaping all the way up to your house. Some of them can actually cover the house itself on the outside. So there’s all kinds of variations on that.

A condominium, and you’ll love this, kids, is that you know, house above, units above or below. It could be a townhouse can be a condominium. And guess what? A single-family can be a condominium.

[00:13:46] Drew Thomas Hendricks: Huh.

[00:13:47] Fred Glick: Yeah, you see, everybody says that and it’s like, how can that be? That’s because the physical house is a single-family piece of real estate.

That’s all it is. If it’s a condo association, then maybe everything’s covered from walls out. Landscaping, trash pickup, everything runs like it’s a high rise yet it’s a single family. It’s mutually exclusive. That’s why everybody gets all confused. I think an HOA is a townhouse. It’s not.

[00:14:16] Drew Thomas Hendricks: The PUD.

[00:14:17] Fred Glick: PUD, planned unit development. And there’s what’s called a de minimis plan unit development, but that’s for extra credit. So, anybody who knows what a de minimis plan unit development is, please email us and we’ll send you a prize if you get it right.

[00:14:31] Drew Thomas Hendricks: That’s good. You’re dropping knowledge bombs today. So that’s the temperature of the real estate market. We’re in mid-May. We’re in the head of spring and a lot of people are scrambling to get themselves in the right school district before fall.

[00:14:48] Fred Glick: Yeah, yeah. And we’re still, we had two deals this week. People decided to put in offers that had absolutely zero chance, zero. And we told them that, and guess what? They’ve both lost. So it’s like, dude, it’s in a nine-school district in a great area of the Bay Area. It’s like, do you think you’re the only one bidding? He also came up with preposterous terms like 25 days to close. You know, it’s just.

[00:15:23] Drew Thomas Hendricks: Your client wanted that?

[00:15:25] Fred Glick: Yeah, yeah, yeah, yeah. I said everybody else is 15-17 days tops. How do you think you’re going to compete? And, you know, he only went 50,000 over asking, which is ridiculous. I’m sure it’s going to get three, 400,000 of asking. We know what these things are basically going to go for. There’s always the ones that blow our minds. Somebody offers something stupid. There’s nothing we can do about that.

The one thing we can’t figure out is who the other buyers are in detail and what they’re writing their offers for.

But we do know if let’s say in Cupertino, we know kind of where everything landed the last time. So we get an idea of what people are doing, and then we translate it into the next house. It’s still goofy out there. I mean, you know, again, all real estate is local, but if it’s in a great school district, it’s still going to be busy.

The thing while we’re talking about this real quick, the same person, it’s like, he bought a townhouse 3 years ago, 2 townhouses, 3 and 4 years ago. Something like that. Well, when I did it back then, well, dude, you know, the price of Microsoft stock in 1978 was 20 dollars. So I should be able to get it for 20 dollars when it’s now, whatever it is, 400 dollars. No, it doesn’t work that way. The processes change. It doesn’t remain the same. It’s the context.

[00:16:53] Drew Thomas Hendricks: Yeah.

[00:16:53] Fred Glick: Underline context. We know the market. We know what we’re doing.

We’re telling you what’s happening. Well, my, I did 30 days before. Well, this is not a townhouse that nobody’s competing against you. And this isn’t three or four years ago. So, this is a single family. You want it. We know we have tons of buyers. We’ve had them over the period of time and either people to 1 or 2 things after the 1st, when they stick with it and keep going, or they completely drop off the face of the earth.

Even though we try to explain it in the first time you talked to us. And by the way, the first time you talked to us, and this is important. We don’t want to go back and forth with Texas and you have questions and we get answers, go off the rails. We work very simply with me and René. We want to talk to you on a Google Meet.

It doesn’t have to be video. We just want, we have a list of questions for you, and then we tell you exactly what we do. And by the end, you asked your questions, you know, exactly. And you’re ready to go. By going back and forth with texts or phone calls, it makes no sense. So that’s why we do what we do. Off on that tangent -..

[00:18:03] Drew Thomas Hendricks: No, I think Google Meets fantastic and also allows you to record it and refresh your memory. And the next time you talk to the client, you don’t need like every transactional message doesn’t need to be by a phone call because that’s where things go wrong. But that intro call, it’s very important to actually have that verbal back-and-forth communication.

[00:18:23] Fred Glick: Exactly, and then we put you into Slack and the rest is history.

[00:18:28] Drew Thomas Hendricks: Now, I have, I know our pricing savant René is not here today. So I’ve got a house down the street for me and I’d like you to explain the pricing.

[00:18:37] Fred Glick: Okay.

[00:18:38] Drew Thomas Hendricks: Well, you can be a semi-pricing savant. So the house was, it just seemed astronomical.

And sure enough, they had 2 open houses. A week later, they dropped the price by 100,000.

[00:18:50] Fred Glick: Yeah.

[00:18:50] Drew Thomas Hendricks: And five days later, they dropped the house by 50,000. To me, that seems like the person at the price that had no idea or they were just hoping for that.

[00:18:58] Fred Glick: Here’s the story with that. It’s 1 of 2 things and only 1 of 2 things.

The seller says, “I want this for my house.” And the agent says, “Okay.” Because they are thrilled to get the listing or the agent said, “I can get you this for your house.” So he lied to get the listing, and then it’s like, “Oh, the market’s changed and it’s slowed down and blah, blah, blah. And then this other listing came on and they’re getting,” they make up excuses, or there’s still listings you’ll see out there and it stays at a certain price.

Like, we were dealing with one in San Francisco. And the guy was so wealthy, he didn’t give a crap. He was waiting for the market to come to him. He’s waiting for, you know, the market. And I’ve said this before, every 5, every half a point of rate equals 5 million more people to qualify. Obviously, 5 more people, 5 million more people qualify for a 3.5 million dollar house in San Francisco, but there’s still going to be more demand at that point when rates go down. Except if it is relative to a recession where the jobs drop out.

So there’s this fine balance, but we saw in 21, 22, I mean, the rates went down because they don’t know what the hell to do. And now everybody’s looking back and saying, you know what, we didn’t need to go that low and they might’ve been right, but we’ll never know. Somebody can run the model and let us know.

But, yeah, they, you know, the owner thinks the house is worth gazillions. All of them do. My house is worth 2 million. No, the tops are 185. So, nobody’s stupid enough to overpay. So, the competitive bid situation is a different story. They’re just emotionally dragged in.

[00:20:49] Drew Thomas Hendricks: That makes a lot of sense. I mean, it seemed like they were just shooting, like, at the casino. Like, maybe we can get it.

[00:20:55] Fred Glick: Yeah. Yeah.

[00:20:57] Drew Thomas Hendricks: As a buyer’s, on the buyer side, you have a client and they they’re interested in the house and they see that it’s dropped 3 times in the past 2 weeks. What would you advise them? It’s going to

[00:21:07] Fred Glick: Let me give you an example. Okay. So I had one of my. I have one buyer, he thinks he’s Mr. Negotiator. Just emailed me. Somebody and I think I still have it here in the browser. Yeah. So there was a house in Lafayette, California that dropped by 86,000 yesterday to basically 1 6. So my guy says, “Hey, they’re having an open house on Saturday. I want to make an offer at 154, and have it expire on Friday, Friday night before the open house on Saturday.”

I said, “Okay.” Number one, they just lowered the price. Why would they take 50,000 less? Their first open house after the price drop is Saturday. So don’t you think if it drops might get some interest? And thirdly, you make that offer, they ignore your five o’clock on Friday limit. And then they shop your offer.

They said, we have an offer. They didn’t, they don’t need to say that it expired. They got an offer though. So that makes, so now you’ve just helped them get more money and use your offer. So for all you geniuses that think you’re just gonna be hard ass in a nine-school district, by the way, it ain’t going to happen.

It’s just that you got to negotiate with something. You can’t just throw numbers out there. If it’s been on the market, six months in a bad school district. Icky neighborhood. Yeah, go for it. Enjoy yourself. Knock yourself out. Not this. Not a single family in a nine-school district that overpriced it to start. Not going to happen. Never going to happen.

[00:22:53] Drew Thomas Hendricks: That’s, yeah, no, that helps. That helps clarify it in my mind. I’m sure our listeners too. I mean, so if I was looking at this house, just come in at or try. Yeah, that’s what I said to him.

[00:23:06] Fred Glick: Hey, you come back at full price or close to it. He’s a cash buyer. Maybe that shuts it down, but not 50, 000 under. It’s just an insult. And when you insult somebody, they get pissy and they don’t even want to respond to you. So, you know, you got to take into account that this is a business, but it’s dealing with the public. It’s a C to C transaction that’s run by B people. If that makes any sense. So there’s a lot of emotion involved.

[00:23:39] Drew Thomas Hendricks: Very good. Yeah, it’s hard to, it’s hard. And I think that part of your job is helping people navigate through the emotion.

[00:23:47] Fred Glick: Yeah. And they don’t listen to us sometimes and they’re not successful because of it. You know, there’s a reason we’re not saying it just to say it.

We don’t care what price you get the property at. We’re a fixed fee. So, especially for a buyer broker, we’re not going to push you to go 10,000 higher so we can make 50 cents more commission. Stupid.

[00:24:08] Drew Thomas Hendricks: Makes the most. Yeah, it helps. It helps keep you guys in line. Yeah, full process, full transparency. So as we’re wrapping up, what’s the good word?

[00:24:18] Fred Glick: Yeah. One thing that I forgot, it’s a pay-it-forward thing. So we had another deal that died because of the inspection in Los Angeles where they don’t do inspections ahead of time. And we always encourage our buyers to give a copy of the inspection to the listing agent. Why? Because then he’s got to disclose it to everybody else.

So he can’t hide it. So this inspection said some ugly things and, you know, but he can disclose it after you sign a contract, but then people are going to do inspections anyway, find the same thing. So it’s just, we talked about this last week about listings. Where you get everything up front and you’d be fully transparent.

The un-transparency of these agents are ruining themselves. And they’re taking five times the amount of time. They don’t understand time management either, efficiency, but you know, the old model of let’s hire seven assistants to run around and open doors and let’s do this and that and charge 3%. It’s just.

[00:25:28] Drew Thomas Hendricks: So if you send that report to the listing agent, can the listing agent say, “I don’t want to see it.” Or does he have to say that he saw it.

[00:25:35] Fred Glick: Once you emailed it to him? He stuck with it. You got an email that says he sent it. I’ve done this. I know I had one arrogant listing agent and I made sure after, we didn’t close on it, somebody else closed and I made sure I sent a copy of that to the new owners, printed it out, sent it, you know.

[00:25:57] Drew Thomas Hendricks: So that’s just good. Well, that is a good way of paying it. They’re going to find out eventually.

[00:26:01] Fred Glick: Exactly. Exactly.

[00:26:04] Drew Thomas Hendricks: Hide it or make the 2nd person pay for it. I mean, they may want to pay for their own, but

[00:26:09] Fred Glick: Yeah, which is, you know, an idea of every property on the planet should have its own web address.

And every document about it goes up there, every plumbing repair, every disclosure, every inspection, everything. You can see the history. It’s like the CARFAX, house facts. Yeah, exactly.

[00:26:34] Drew Thomas Hendricks: You know, that’s I can see that being on the, on the blockchain. I mean, because every tokenized and every single piece of update will be added to that.

[00:26:45] Fred Glick: There’s my new startup.

[00:26:47] Drew Thomas Hendricks: There we go. Well, we’re going to go plan that new startup right now. If you’re still listening. Have a great rest of your day or evening. This has been We Fixed Real Estate where context matters.

[00:27:00] Fred Glick: Is that the tagline we’ve chosen?

[00:27:02] Drew Thomas Hendricks: Oh, I don’t know. We’re still

[00:27:03] Fred Glick: Well, I like it that we’re context matters. It’s simple.

[00:27:07] Drew Thomas Hendricks: There we go. See you later, everyone.