When to Buy a House

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Randy Lenz – Real Estate Agent Extraordinaire

Podcast Overview:

00:00 Excited about first house, interest rates fluctuate.
05:13 Realtors face challenges with keys and commissions.
06:27 Home buyers will struggle due to spending habits.
11:42 Realtors face real expenses for their work.
13:36 Housing prices soar, making it unattainable for many.
16:50 Flexible timing benefits buyers in our market.
20:23 Zillow dominates market, inaccuracies frustrating for buyers.
23:26 Realtors essential for immediate market response.
25:55 Realtors uncomfortable representing property they haven’t seen.
30:08 Get broker’s license, open real estate company.
34:55 Buyer’s agents may undercut fees, risking inexperience.
37:41 Investors bought cheap, rehabbed, and sold for profit.
38:46 Market shift due to rejected low offers.
43:20 Income determines housing affordability, market correction expected.
47:07 20% belief, 20% disbelief, 60% indifferent.
50:44 Willingness to learn affects pay and prices.
52:21 Office lease abandoned due to lack of foot-traffic.

Podcast Transcription:

Randy Lenz [00:00:00]:
Realtors aren’t stupid. I had a house once that I listed across, from a graveyard. I mean, one of the Next said, quiet neighbors.

James Kademan [00:00:08]:
You have found Authentic Business Adventures, the business program that brings you the struggle stories and triumphant successes of business owners across the land. We’re locally underwritten by the Bank of Sun Prairie. Downloadable free audio episodes of this podcast can be found at drawincustomerscom at the podcast link. Today, we’re welcoming slash preparing to learn from Randy Lenz. Randy is in real estate Randy he’s gonna teach us all the things about all the changes in this crazy, crazy real estate world.

Randy Lenz [00:00:37]:
That is true.

James Kademan [00:00:38]:
Randy, how is it going today?

Randy Lenz [00:00:40]:
Not bad, James.

James Kademan [00:00:40]:
Good to

Randy Lenz [00:00:41]:
see you again, my friend.

James Kademan [00:00:41]:
How are you? You? I’m doing well. I am looking at the market. I look at the market every single day for what’s for sale and all that kind of stuff, just dabbling in there, seeing what’s going on.

Randy Lenz [00:00:51]:
Turn it off, James. It’s gonna make you crazy right now.

James Kademan [00:00:53]:
You know, I just feel like maybe I’m just grossly underpaid or it’s just a weird it’s a weird dynamic. Right? Interest rates were way way low, then interest james rates went what I considered, because I’m old enough to say this, I considered them to be a correction. But a lot of times people are saying like, oh my gosh, they’re crazy high.

Randy Lenz [00:01:16]:
Well, most of the buying market today hasn’t ever seen an interest rate above 3% until this last wave. And now we’re almost up to 7%. First house I bought was at 16%. So I’m 16? 16. So I’m still not feeling real terrible about the where where we’re at right now and people complaining about 7.

James Kademan [00:01:32]:
Okay. So I was excited. Our first house, I got it 6.875. Good. And it was some, I think it was a Super Bowl special or something like that because I didn’t have to suffer through 7 And I thought, top of the world, man, I got this game figured out, and then the rates just down down down, and now they’re whatever, 7 ish, whatever. So but I’m looking interest rates went up. See that, hey, the market, the prices, all that kind of stuff are gonna go down. And at least in the Madison, Wisconsin area where we are Right.

James Kademan [00:02:03]:
Haven’t seen that happen even a little bit.

Randy Lenz [00:02:05]:
Not quite. Yep.

James Kademan [00:02:06]:
Okay. Have you or maybe I’m wrong there.

Randy Lenz [00:02:08]:
No. And I think you’re right. I mean, but here’s what I was telling people earlier this year. I mean, every year that I’ve been in business and, unfortunately, now it’s more than 30 years. Alright. Presidential election. Right. Because people have short memories and to get audited or to make things look great right before the election.

Randy Lenz [00:02:24]:
Right. Because people have short memories.

James Kademan [00:02:25]:
They’re about to get audited.

Randy Lenz [00:02:26]:
Right. And after November, no one cares. Right? Because then it’s Katie bar the door. But if we’re gonna see lower rates, it’ll be sometime this spring, this summer, maybe early fall. And if the Federal Reserve reduces the discount rate and and even even a little bit, quarter of a point, half a point, mortgage rates will come down a little bit. So we might be looking at 6, 6 a quarter by the end of this year. After that, who knows? Alright. Because they’re talking $5 gas now.

Randy Lenz [00:02:54]:
They’re talking, you you know, some things that are just gonna take off. And who knows if the if there are gonna be issues we have to deal with after November. But if you’re looking, this is probably a pretty good time barring the things we’re gonna talk about today and try to

James Kademan [00:03:07]:
explain what’s

Randy Lenz [00:03:07]:
going on

James Kademan [00:03:08]:
because it’s

Randy Lenz [00:03:08]:
a mess out there right now.

James Kademan [00:03:10]:
Let’s start with the big one.

Randy Lenz [00:03:12]:
Okay.

James Kademan [00:03:12]:
With the, the payment. I guess, you would call it commission?

Randy Lenz [00:03:16]:
Yes.

James Kademan [00:03:16]:
For real estate agents and all that jazz? Let’s just, can you give us a little bit of a history? Sure. About sellers, agents, buyers, agents, commissions, all that kind of stuff, what it was, and now what it will be?

Randy Lenz [00:03:28]:
This whole discussion might be a little bit easier if we talked about the meaning of life. Oh, sure.

James Kademan [00:03:33]:
That’s awesome.

Randy Lenz [00:03:34]:
Okay? Because it’s a mess, James. But here’s so let me give you a little example or a little background. So if I’m a listing agent and I would go out to a home seller’s home, I would list their house for a specific price, and then we would have, a commission rate. Let’s just say 6% in our market. Well, how it traditionally worked and how it’s worked up to right now, basically, is that when you sold, that commission would be split between the listing company, my company if I’m the listing agent, and the buying company for the buyer’s agent. Across the country over the last year and a half, a lot of home seller groups started class action lawsuits that said, no. It’s artificially inflating the price of the Home. Plus, the buyer’s agents don’t represent us, which is true.

Randy Lenz [00:04:16]:
They don’t. They represent the buyer. We don’t wanna pay them. And we think home prices will come down, which is a joke. We’ll talk about that in a little bit. But we don’t wanna have to pay a buyer’s agent anymore. They won every one of those lawsuits. Every major real estate company across the country has paid 1,000,000 of dollars to get out of this.

Randy Lenz [00:04:36]:
And last week, the National Association of Realtors made a huge payment to end this.

James Kademan [00:04:43]:
Right?

Randy Lenz [00:04:43]:
But how did it end? It ended where as of July of this year, if I’m a real estate agent right now, I can take an MLS sheet and say, oh, okay. I’m getting paid this. And you know right off the bat. By the end of July of this year, commissions have to be off an MLS sheet. So there’s an agent out there right now that can tell me or tell you where they’re gonna find out if they’re even gonna get paid. They might have to call every real estate company. I mean, it it takes me back to very early when I first started. We didn’t have lock boxes when I started back in another century.

Randy Lenz [00:05:13]:
I literally had to go to the offices and pick up the keys for every showing I was gonna do and then take them back that day. So imagine how many buyers you could work with. Right? Because you can only run around and get 8, 10, 15 keys in one day, right? And that kinda takes me back to that because I think what’s gonna happen is there’ll probably be some resource where realtors will go Randy they’ll say, oh, this property is paying this commission. And you’ll at least know Randy then or you’re gonna end up make writing it into the offer, which the state and the and the and the US government don’t like because it makes the realtor a a party to the transaction. And you’re not really you’re not the buyer. You’re not the seller. You’re facilitating the the sale. So I’m not really sure as we sit here today where it’s gonna go.

Randy Lenz [00:05:53]:
Those home sellers all think that, or one of the the responses they had was that it was going to help reduce the cost of homes. Well, I’ve had over 1500 clients in my career. Never have I had a home seller say, oh, that’s great. James, I get to make ask for less money now because my commission or my rate’s gonna go down since I don’t have to pay a buyer’s agent. Of course, that’s not gonna happen. Every every home seller’s gonna take every dollar that they can get from their home, and they should. But are we gonna see home prices fall? Not a chance. It it’ll never happen.

Randy Lenz [00:06:27]:
What’s gonna happen to the home buyers out there? So I think what’s gonna happen is that they’re gonna realize that, home sellers basically shot themselves in the foot. Because a lot of home buyers that I work with, your kids, my kids, everyone that’s out there now has to have all the toys. So they’ve got all the great devices, all the all the best cars because they gotta have everything that mom and dad had early on. Right? Way before mom and dad had them. And what happens then is that they don’t have any money. So but they could still come Randy they knew that they would that the buyer’s agent would be paid by the home seller at the time so they could buy a house. Well, now what’s gonna happen is this. Now you’ve got home buyers who are gonna come into our office and you’re gonna have to say, okay.

Randy Lenz [00:07:08]:
This is what I charge, and it’s 3% of 200,000 james. So, 6 per $6,000. And you’re gonna have a you’re gonna have a whole bunch of either realtors doing cut rates or you’re gonna have a bunch of people coming into the marketplace who have no experience but think that they can undercut realtors by saying, oh, I’ll do that for a $1,000. I’ll do that for $500. Alright. Randy it’s going to be a disaster. There are gonna be people who are gonna miss things, people who are not gonna be able to explain what’s going on in a Home. And, it’s, it’s gonna be a nightmare for the home sellers because I think a lot of home seller home buyers are not gonna be able to afford the house because why? Because they don’t have the money.

Randy Lenz [00:07:48]:
So just they’re just gonna back out of the market. So I’m thinking that about 40% of the home buying market will say, nope. I’m gonna have the money. I’m gonna walk away. I’m not gonna look at buying a house. I’m just gonna keep renting. I think it’s gonna be that high to start with.

James Kademan [00:08:00]:
Wow.

Randy Lenz [00:08:00]:
And it’ll slowly I mean, it’ll it’ll tell buyers that if they’ve got to if they wanna buy a house, they’ve gotta really have a down payment. You still have lenders out there doing doing loans for 2 3% mortgages.

James Kademan [00:08:11]:
That’s crazy to me.

Randy Lenz [00:08:12]:
It is crazy. And and and they have no real equity, but they’ve got great credit Randy they’ve got all the toys and they want a house. So, I don’t know. It’s it’s as as good a guess as you can make and and as good a guess as I can make right now, James.

James Kademan [00:08:25]:
Alright. I wanna dissect this a little bit. Yep. Who were the home sellers that were going through this whole court thing?

Randy Lenz [00:08:31]:
They were a core of people all over the country. There were different groups. Now, I’m guessing they probably had some cohesion working together, but they were from various places all across the country. It wasn’t just one spot. There were multiple lawsuits around the country. Okay.

James Kademan [00:08:46]:
Because, like, I’ve sold a house Mhmm. And I wasn’t happy paying a realtor commission.

Randy Lenz [00:08:52]:
Oh. But it’s

James Kademan [00:08:52]:
one of Home, like, okay. I was never to the point where I gotta get a class action lawsuit going on.

Randy Lenz [00:08:58]:
Right. So I think once the the this first group found that they had success, they kind of enfranchised other groups to say, okay. We’re gonna do this too.

James Kademan [00:09:08]:
So tell me because I am not aware of all this going on with the different groups. So there’s the Realtor Association. Right?

Randy Lenz [00:09:16]:
Yep.

James Kademan [00:09:17]:
And then what were the other groups that they were going after?

Randy Lenz [00:09:20]:
None of the groups were, were real estate agents or or they were just home sellers. People who had hired realtors to be their agent, basically.

James Kademan [00:09:28]:
Who were the defendants?

Randy Lenz [00:09:29]:
The defendants were the large, Keller Williams, Century 21, all the national real estate companies finally collapsing down to the National Association of Realtors.

James Kademan [00:09:39]:
Gotcha. So where did historically, where did the whole 6% thing when did that come

Randy Lenz [00:09:45]:
about? It’s kind of become just commonplace. But, you know, is it is it always no? There are there are home sellers who who list their property at 5%. There were when I first started, it was 7%. It’s just kind of the ebb and flow of where the market’s been. It’s been 6% about 25 of the years that I’ve been in business.

James Kademan [00:10:04]:
Okay. That’s

Randy Lenz [00:10:04]:
a lot. And it doesn’t, you know, it’s it’s an arbitrary number. It doesn’t mean that it has to be that. But right now, no one knows where it’s gonna be and what’s gonna happen and how you how a realtor is even gonna get paid. So you probably will have a lot of realtors who will leave the business as well Randy Okay. It’s unfortunate because a lot of them are are probably very professional and have been in the business a long Home, have a lot of knowledge, but they’re gonna say I’m just not gonna, fight this for every transaction that I have to do.

James Kademan [00:10:30]:
So they start nickel and diming? Like, hey, for every showing, it’s gonna cost you x or for

Randy Lenz [00:10:35]:
It could be a smorgasbord of things, but again, we’re just you and I are just kinda sitting here We don’t know. Convincing today. We have no idea what it’s gonna turn out to be.

James Kademan [00:10:41]:
And this this happens end of July?

Randy Lenz [00:10:45]:
End of July, the commissions have to come off the MLS sheets. Oh, good. So someone really wants to get going and make sure there’s not a lot of issues, list your house before the end of, you know, in May June because everything will be the same for a realtor until the end of July when those just disappear. I’m guessing that by the end of July, you’re gonna have, realtor associations across the country will have some resource that they’ll direct realtors to go to to say, look. If you’re gonna get paid on selling this house, this is what you’re gonna get paid. Gotcha. So at least they’ll know.

James Kademan [00:11:17]:
Some website like real estate commissions.com or something like that to figure out what interests

Randy Lenz [00:11:22]:
I mean, that’s my best guess. It could I could be completely wrong, but that’s what my best guess because, all buyers want their own agent. But if they don’t wanna pay a sales commission and this the the buyer’s agent says, well, I’m not working for free. Right. They have to know if the seller’s going to offer any commission, any sales commission on the property.

James Kademan [00:11:42]:
Okay.

Randy Lenz [00:11:42]:
It’s the only way, you know. And and, yes, there are, you know, realtors walk away with some pretty staggering checks, but I I I look at it and I go, you know, if you knew what the expenses were, what you were paying for a co broke in other words, every agent has a split that they have with their broker for having the franchise and whatever there that they pay, their own expenses, whether it be travel, whether it be cards, whether it be just, supplies that they have to have to do their business, the signs and things, it’s not as big a number as people like to think.

James Kademan [00:12:14]:
Okay.

Randy Lenz [00:12:14]:
So it’s it’s it can be very good. It can be very lucrative career. I mean, I’ve been in it now. Is my 37th year. So, you know, and I’ve enjoyed every every year. But it does

James Kademan [00:12:25]:
take forever.

Randy Lenz [00:12:26]:
Yeah. 2,008. Okay. 2,008. We’ll take 2,008. We’ll take 2,009 out too.

James Kademan [00:12:30]:
Okay.

Randy Lenz [00:12:30]:
Those are not fun years. I mean, literally, I’d list a property and a house next door would go up and they’d they’d put a $25,000 under what you just listed that house for.

James Kademan [00:12:38]:
Oh, wow.

Randy Lenz [00:12:38]:
Yeah. I mean, I literally had sellers coming to closing writing checks of over $30,000 to get out of their mortgage. Yeah. It was that was a very painful period.

James Kademan [00:12:46]:
No question about it. Essentially, opposite of what we have going

Randy Lenz [00:12:49]:
on now. Okay. Yeah. It was a it was a total buyer’s market at that point. Total. And since probably now about 2,000 probably 15, 14, probably the last 10 years, it’s been an absolute seller’s market. Even here in Dane County and across the country.

James Kademan [00:13:02]:
Yeah. It’s been a long time that I feel like it’s been a seller’s market.

Randy Lenz [00:13:05]:
Yeah.

James Kademan [00:13:05]:
When interest rates went up, I thought, oh, finally. And I was wrong.

Randy Lenz [00:13:09]:
Well, it it has slowed things down and it has made home sellers a little more, to the point of where they should be. Because a lot of times I see in a market when it first starts is you’ve got all these sellers who have stars in their eyes, you know, and it’s like they they list a property and you kinda go like, what? Where did that come from? 2 years ago, a year and a half ago, I could find people in the city of Madison a home, a nice home for between 240270. Somewhere in that range.

James Kademan [00:13:35]:
Wow. Okay.

Randy Lenz [00:13:36]:
And last spring, it started at 350 Randy that’s where it’s gone across the county now. I mean, a home now is gonna be almost 350, 400, 4 a quarter, 450 as a starter home. And, you know, I look at my kids who don’t all own properties yet Randy I go, how are they ever gonna get into a house? I mean, it’s unfortunate. But we get people from both coasts who look at our market as candy because they’re out there selling for 800, 900,000, or, a 1,200,000,000 3, and then they come here and it’s 400,000, 500,000. They’re going, oh, I’ll take 2, you know. Yeah.

James Kademan [00:14:09]:
You know, it’s interesting. Our first house is a 150,000. I remember just scraping to get that thing, and that was in 2,002. And now, I think, I looked last time I looked it was 303.50 something like that.

Randy Lenz [00:14:22]:
Isn’t that don’t you don’t you hate that when you look back at the houses you own and what they’re worth and what they’re selling for now?

James Kademan [00:14:27]:
I it was one of those things where I’m like, I can’t see that being worth a third of a $1,000,000.

Randy Lenz [00:14:32]:
Right. Yeah.

James Kademan [00:14:32]:
It’s almost embarrassing that someone feels that they’d be willing to pay that.

Randy Lenz [00:14:36]:
Yeah. That But that’s what it is. That’s reality. But And that and what the where that all started was what you referred to right when we started, interest rates. Okay? So there are people who got those 2.8, 2.9, 3.0, 3.1 interest rates. I have it on the house that I have now. 2.9. And those people will never put those houses on the market in my lifetime.

Randy Lenz [00:14:56]:
Why? Because they’ve got a 30 year mortgage on that Randy they go out and they look and they say, I have a 2.9% interest rate on my house. Why am I gonna pay 7 Randy a half percent? Right. 3 james. You know? 2 times. 2 and a half times. And it’s like Home houses will be off the market forever, at least in my career and and my life. And so and we’re not and and COVID killed us a lot because building Randy everything, as we remember Mhmm. Stopped.

Randy Lenz [00:15:21]:
So there’s years where where 2,000 what was it? 2021? 2020, 2021, where virtually nothing was built. And so you have you go from 0 in 2022 to, like, 3. Right. Because there’s nothing there. And that only exacerbated the amount of lack of inventory that we have to the point now where a typical listing is I put it out on on MLS on a Thursday or Friday. I’d say, open house, Sunday, 1 to 2. Offers reviewed, Monday, 5 to 7. 5 days.

James Kademan [00:16:03]:
5 days.

Randy Lenz [00:16:04]:
5 days. Yep.

James Kademan [00:16:05]:
Instead of months

Randy Lenz [00:16:06]:
Right. And sometimes it doesn’t sell. Every once in a while and then you that that language just all disappears in the in the comments and you just kinda go on to a plan b. But about 80%, maybe even a little higher than that, of homes on the market right now go in that 5 day period.

James Kademan [00:16:20]:
Wow.

Randy Lenz [00:16:20]:
So you really you get out there, you market it as high and as fast as you can on every possible website that’s out there. You hit as many past clients as you have Randy and it’s gone. I took a picture 2 years ago at an open house, early in the spring. And I had a picture of 64 shoes in the entryway because there were 30 2 people in the house at that time.

James Kademan [00:16:39]:
Oh, my gosh. Yeah.

Randy Lenz [00:16:40]:
It was crazy. It was crazy.

James Kademan [00:16:42]:
It’s gonna be weird walking past people that are essentially your competition. Yeah. Like, what

Randy Lenz [00:16:47]:
are you That’s why what are

James Kademan [00:16:48]:
you posting on the price here?

Randy Lenz [00:16:50]:
I ask all of my clients if they have flexibility because if I can push them off to Labor Day if they’re a buyer, it’s the best for our market, for Dane County. Because why? Because all of our leases here end in, like, May, June, July. Okay? Maybe August. But everything and everyone wants to be somewhere for the new school year, whatever, by Labor Day. Yep. And what happens is listings drop off a little, but buyers drop off a lot. So as I was telling you earlier, the under list price offers that I got accepted last year all came after Labor Day and Interesting. If my buyers have flexibility, I say, let’s wait till Labor Day because September, October, November, December are great months in our in our market Randy there’s very few buyers competing against them at that time.

James Kademan [00:17:33]:
Alright. Great time to be a buyer.

Randy Lenz [00:17:35]:
That period. Yes. Great time to be a seller right now. Now through the end of August,

James Kademan [00:17:39]:
perfect time

Randy Lenz [00:17:40]:
to be a seller.

James Kademan [00:17:40]:
Because everyone’s looking. They wanna move in the summertime, all that. Interesting. Tell me, I guess, I have to wrap my head around, what exactly is the MLS? I’ve seen it. Who runs it? Who owns it? And do you have to pay to throw stuff on there? How does that work?

Randy Lenz [00:17:56]:
Well, you can’t. You have to be a licensed realtor to Okay. To be able to access it. Companies join and it’s was a collective of all these companies in a certain area. Now, I’ll I’m I’m gonna get to where I wanna go with this in a second, but there are several MLSs around the state of Wisconsin.

James Kademan [00:18:14]:
Oh.

Randy Lenz [00:18:14]:
And only recently did they start actually sharing data. That was the biggest problem because you had all these little MLS’s all over the country for that particular area that were, like, jealous of and very protective of their data.

James Kademan [00:18:30]:
Okay.

Randy Lenz [00:18:30]:
So then a company called Zillow

James Kademan [00:18:33]:
Yeah. Came into

Randy Lenz [00:18:34]:
the marketplace and basically said, the heck with all of you. We’re just gonna list every house that’s out in the country. And they basically took National Associate Realtors of Realtors pants down and said, okay. We we got you. We own you now. And they did. And and that’s what’s happened. Zillow has become probably the first and only national website for real estate out there.

James Kademan [00:18:59]:
You’re so okay. You just blew my mind here a little bit. So we’re Madison area.

Randy Lenz [00:19:04]:
Right.

James Kademan [00:19:05]:
If we take Wisconsin as an example, how many MLS’s were there pre Zillow?

Randy Lenz [00:19:11]:
Oh, they’re still there. They’re still all there.

James Kademan [00:19:12]:
Okay. How many are we talking?

Randy Lenz [00:19:14]:
2, 2? Milwaukee, us, South Central Wisconsin, there’s probably 3 or 4 up north. We must have probably about 6 MLSs in Wisconsin right now. Really? And I only have access to Milwaukee. I can sort of get access to, like, the ones up in the Wausau area, but I can go to Zillow and find anything. And the National Association of Realtors just completely blew it. They just completely missed that whole transition when Zillow came in.

James Kademan [00:19:43]:
Okay.

Randy Lenz [00:19:44]:
And to this day, I’ll have we’ll be I’ll be driving around with a buyer and they’ll say, well, I just saw this house on Zillow. It’s like, you know, I don’t wanna hear that, you know, but that’s the way it is because, Zillow basically came in and took the real estate business away from the National Association of Realtors, and now they are the only national site out there.

James Kademan [00:20:04]:
There’s so the National Association of Realtors didn’t have the foresight to say, hey Nope. We should put together one MLS?

Randy Lenz [00:20:10]:
Nope. That would have been smart. Right? Because they all had they had all these people feeding into them and all these MLS’s with all this data, but it never clicked that they should do what Zillow came in and did.

James Kademan [00:20:20]:
And Do they still stone tools? Like, what are they doing?

Randy Lenz [00:20:23]:
It’s it’s hard to understand myself. I I can’t even really explain how that happened, but it’s it’s really obvious that it does. Very rarely will someone that I’m a home buyer that I’m working with say, oh, I found this on realtor.com or I found this on Home, you know. It’s almost always Zillow. And the only thing I don’t like about Zillow, because I give them credit for everything that they did and and how strong they came in and just basically took over the market, is they like to have always the greatest database ever. Right? So a client will be in the car and we’ll be driving and they’ll say, well, so and so I saw this house and I I wanna go see this one. And then I’ll look it up on our MLS and it’s had an offer for, like, 10 days.

James Kademan [00:21:04]:
Oh.

Randy Lenz [00:21:04]:
So Zillow basically goes active, sold. And unless it’s actually closed, it stays active. So I have clients calling me all the time about, well, I saw this on Zillow. It still says active. Yeah. Well, it’s got an accepted offer. It just hasn’t closed yet. So that’s the only complaint I have about Zillow, but, they did a great job of basically taking over the real estate market in this country.

James Kademan [00:21:25]:
So that information, when there’s an accepted offer, what is that I mentioned it’s not necessarily public. So where does that get posted or does it get posted?

Randy Lenz [00:21:34]:
You if you call up a listing, it’ll say pended or contingent or something like that. Well, that tells you there’s an offer on it.

James Kademan [00:21:39]:
Got it.

Randy Lenz [00:21:39]:
And in the marketplace that we’re in, there’s no reason to go and look at it because probably 50 people have gone through it in the first three days it was on the market. They might have one offer. They might have what’s known as a secondary offer, another offer behind that, maybe even 2 or 3 secondary offers. Yeah. So it’s just better to just move on and go to another property.

James Kademan [00:21:55]:
Okay. You’re too late for that one? Yep. Yep. Look somewhere else. Okay. So Interesting. And Zillow so where does Zillow make their money?

Randy Lenz [00:22:04]:
Realtors. Oh, really? Sure. Because why? Because realtors go on and advertise on Zillow as the agent to call to see this property type of thing. Uh-huh. Pay huge amounts of money to Zillow to do that. And they’re kind of quaking themselves right now with this with this, decision that’s come out because they don’t know if their realtor associates will have the money to pay if the entire commission structure collapses, which it inevitably will now.

James Kademan [00:22:34]:
Interesting.

Randy Lenz [00:22:35]:
So Zillow’s gotta be scrambling a little bit too in figuring out ways of how to how to make things more enticing for realtors to stay on their site.

James Kademan [00:22:42]:
Okay. So with this whole commission thing changing stuff, is there anything positive about it that you can point out?

Randy Lenz [00:22:49]:
I wish it was better thought out as to what was gonna happen because it was just like, okay, we win. We’re home sellers. Yay for us. And that was it.

James Kademan [00:22:57]:
We’re changing the rules in the game world.

Randy Lenz [00:22:58]:
We’re changing this is now disappearing Randy we don’t care what else happens.

James Kademan [00:23:02]:
Okay.

Randy Lenz [00:23:03]:
You know, some people say, well, we’ll just the home buyers will just have their offers written and and reviewed by an attorney. Well, you and I have both worked with attorneys for a long time. Right? And you tell me what attorney is gonna drop everything in their office to go, oh, I have to review this offer right now because this house is gonna sell in 6 hours Randy my client wants me to look at it. Not gonna happen.

James Kademan [00:23:24]:
I’ve never known an attorney to move fast. Yeah.

Randy Lenz [00:23:26]:
So it’s gonna go into the office at Monday. Maybe they get to it by Thursday or Friday. By that point, the house is completely sold and every they’re moving on. So I don’t see attorneys as you know, attorneys have a certainly have a a a good source and a good place in a in a home sale and can be very, very helpful and constructive. But I don’t see their review of offers replacing realtors because they’re just not set up to respond immediately, and that’s what’s gonna have to happen in the market that we’re in.

James Kademan [00:23:53]:
So in Wisconsin, when we wanna make an offer, we use the standard form.

Randy Lenz [00:23:57]:
Correct.

James Kademan [00:23:57]:
And you just fill in the blank or check the boxes, whatever. Is that does every state have that or is that

Randy Lenz [00:24:03]:
Every state has their own form. Okay. So, again, in, like, all 6 or 7 of our MLSs in Wisconsin, we all use our form. But Illinois has its own form. Iowa, Michigan, every state has their own forms. Wow. Some states are attorney directed. Illinois, for example.

Randy Lenz [00:24:20]:
You can’t go to a closing without an attorney in Illinois.

James Kademan [00:24:24]:
Really?

Randy Lenz [00:24:24]:
Attorney directed state, and you pay big bucks to have the attorney review on their time frame and things. So it’s it’s completely different than Wisconsin. I’ve had Illinois clients come up here Randy they’re, like, flabbergasted. Like, well, where’s my list of 8 attorneys I’m supposed to well, about 20% of my clients actually work with an attorney. So it’s, like, it’s not the norm. And they’re just dumbfounded that they don’t have to hire an attorney in Wisconsin.

James Kademan [00:24:47]:
Wow.

Randy Lenz [00:24:47]:
So it it varies by state.

James Kademan [00:24:49]:
You know, I’ve had a lot of real estate investors on the show. Mhmm. And I would say, I bet half of them, invested in real estate that they never saw. They’re remote closing and stuff like that.

Randy Lenz [00:25:01]:
Really?

James Kademan [00:25:01]:
Yeah. There’s a guy

Randy Lenz [00:25:02]:
Who’s got pictures or?

James Kademan [00:25:04]:
Yeah. Okay. Yeah. They Home there’s a guy that lives in I don’t know if he’s Spain or Portugal, but he’s investing in stuff, and I think it’s a lot of flipping. It’s not buy and Home, it’s buy and sell essentially. Okay. But there’s guys selling dirt, literally, stuff that’s not built on, buying and selling stuff like that. So it’s interesting talking to them because I had just come from a closing on commercial property.

Randy Lenz [00:25:31]:
Okay.

James Kademan [00:25:32]:
And I was like, this seems, you know, you’re signing 500 documents, and I’m like, I don’t have to do this when I pay my taxes. Like, how many people are involved in here that really don’t need to be involved? There are even 2 people from the title company there.

Randy Lenz [00:25:46]:
Yeah. And I and I and to kind of piggyback on your question, I’ve had only one client that bought a house sight unseen in my career.

James Kademan [00:25:54]:
Oh, really? Okay. And

Randy Lenz [00:25:55]:
I know there are realtors out there who have done that and done it several times. Makes me very uncomfortable because you’re kind of representing not having maybe even met them or know them or knowing, like, in your case, you want a closet that’s at least 4 foot wide and this one’s only 2 foot. Because if you don’t impress them and and and you are really not attuned to what they’re doing, it’s really hard to write an offer for sight unseen even with pictures. Mhmm. Because if you don’t take the right angle of the picture, how do they how do they know if there’s a gas station right next door? You know, that type of thing. So I I’ve had it. I’ve I’ve seen it done. I know that there are realtors who have done it a couple of times, maybe even more than that, but it’s a really scary thing for a realtor to be put in that position.

James Kademan [00:26:34]:
Yeah. Oh, I can imagine. Yeah. I can imagine. Yeah. I always joke with people because I buy and sell a lot of cars. Mhmm. And you look at the pictures that people post and you’re looking more at what did they not take a picture of.

James Kademan [00:26:47]:
Right? Like here’s the nice fender, but they don’t show the

Randy Lenz [00:26:50]:
past in the

James Kademan [00:26:51]:
fender. Right?

Randy Lenz [00:26:52]:
It’s exactly that way in real estate. I mean, how many times do you go in and you you you get a a very compact picture of the Home? And here’s a church, and here’s a daycare right next door. Right? And you’re kinda going, oh, those kinda got edited out of the picture. Yeah. But, you know, realtors aren’t stupid. I had a house once that I listed across from a graveyard, and one of the techs said, quiet neighbors. So Oh, no. So, I mean, you’ll learn over time to to just kinda play with it a little bit.

Randy Lenz [00:27:17]:
But it

James Kademan [00:27:18]:
was funny.

Randy Lenz [00:27:18]:
It was it was fun. So it’s, it’s been an interesting career. There’s no question about it. And and it just keeps changing year after year. And this is probably gonna be the biggest change that’s gonna Home. And there’s not a lot of people that I can even go to right now. I I worked at my franchise is Next. And I work at NextHome Metro here in town.

James Kademan [00:27:38]:
Mhmm.

Randy Lenz [00:27:39]:
And, the CEO of our of our franchise is a fellow by the name of James Dwiggins who’s been absolutely on top of everything that’s going on in the marketplace right now. But I think even James would say that he’s not completely sure where things are gonna go because no one really knows. And and it’s not for sure that that it’s even gonna work out this summer, which is unfortunate that it comes right now because this is like the start of the season. This is when everyone wants to buy that home and be somewhere before the end of August. So Yeah. It’s gonna be a lot of just kinda tiptoeing through things for a while and trying to figure out where

James Kademan [00:28:11]:
we go from here. Interesting. So, from, the Realtors Association, do you see that having a purpose anymore?

Randy Lenz [00:28:21]:
Yes. They Okay. They do do some education. They do, some training. And it’s very useful training, particularly for brand new people who are just getting into the business because a lot of brokers and a lot of companies are not set up with educating people. They assume that you’re gonna know what you’re doing when you when you sign on type

James Kademan [00:28:38]:
of thing.

Randy Lenz [00:28:39]:
So the real local realtors associations do a lot of that, and they do put on a lot of seminars that are very useful for people with, who are trying to specialize in certain areas, whether it be commercial property or maybe, working with handicapped accessible, you know, those types of things. So there is a purpose for the local boards. It’s just unfortunate that they spent decades just hoarding their information and not sharing and allowing Zillow to come in and just basically take everything away

James Kademan [00:29:06]:
from them. What do you mean there’s an Internet?

Randy Lenz [00:29:09]:
Yeah. Good Worldwide? And it goes to McWonago? Yeah.

James Kademan [00:29:13]:
Right? It’s just a fad. It will go away. So from a if I am a person that’s interested in getting into the real estate business

Randy Lenz [00:29:22]:
Mhmm.

James Kademan [00:29:23]:
Let’s talk a few years ago. Did I have to become a member of the Realtors Association? Or was that an option? Or Okay. Tell me about that game.

Randy Lenz [00:29:30]:
Good question. So you can be a licensed real estate agent in the state of Wisconsin by just taking a test Okay. And passing the test. You have to put in a certain number of hours to start with to get to that level, but you can.

James Kademan [00:29:44]:
Hours of

Randy Lenz [00:29:46]:
Of of training, of education.

James Kademan [00:29:47]:
Okay. K? Not just opening doors and turning on lights and being like,

Randy Lenz [00:29:50]:
hey. And it used to be, because I was one of the last years that could do that, You could go for your broker’s license immediately. Well, they don’t allow that now. If you’re gonna be a selling agent, you have to work for a brokerage. I think it’s 3 years. It’s been a while since I’ve checked it out.

James Kademan [00:30:04]:
And those are the Century 20 ones, the Next, the whatever? Okay.

Randy Lenz [00:30:08]:
After that, you can take your broker’s license test. And if you pass, you can then open your own company and have a real estate company of your own if you want to. But it’s it’s a little bit daunting right now because some of the new people coming in have no clue how they’re even going to get paid. Because when this takes effect in July, they’re gonna have to know something as to how what they’ve their effort that they’ve put in to become a real estate agent. And once you belong to I should I’ll take let’s take that one step further. Once you belong as or once you have your license as a real estate agent and you join a company, you are then required to join the local MLS, the local real estate company. So in Wisconsin, it’s the South Central Home. It’s the South Central Wisconsin.

Randy Lenz [00:30:54]:
They’re over on James Road. Yeah. Real estate company a real estate association. And at that point, you become a you take their their first training and you become a realtor. Okay. And I say that as two syllables because half of my industry says realtor.

James Kademan [00:31:09]:
Okay.

Randy Lenz [00:31:09]:
And I tell you, it’s one thing that bugs the heck out of me because no one rides their track a tour to their dock a tour. Okay? It’s a real tour.

James Kademan [00:31:16]:
Two syllables. English. Yeah.

Randy Lenz [00:31:18]:
Alright. English lesson over. Yeah. But that’s how you become a realtor is is becoming a member of the local association.

James Kademan [00:31:25]:
Okay. So the Realtor Association is connected to the James.

Randy Lenz [00:31:29]:
Correct. They’re 1 in the same in each in each MLS.

James Kademan [00:31:31]:
But I can be a real estate agent and not be a member of the realtor thing.

Randy Lenz [00:31:35]:
Yes.

James Kademan [00:31:36]:
So I’m just using Zillow just like anybody does. Possibly. Do I really need the realtor designation?

Randy Lenz [00:31:42]:
How are you getting paid?

James Kademan [00:31:43]:
I have no idea.

Randy Lenz [00:31:44]:
That’s it.

James Kademan [00:31:45]:
Okay.

Randy Lenz [00:31:46]:
Only if you go to through MLS, until now would you know that you’re gonna get paid and to be able to tell where you’re gonna get paid. If you’re a real estate agent and you’re working with a friend, you need to work that out upfront and have some written agreement to make sure that you’re getting paid for your time.

James Kademan [00:32:00]:
Oh. Oh. Oh. Okay. So before this whole court thing came about, I say I’m a real estate agent, I take my little test, I pass it, and I throw up a house on the market for somebody and somebody buys that house Yeah. And I say, hey, buddy. Now you owe me 6% or whatever. And they’re like, where does it say that kind of thing? Is that was that the james?

Randy Lenz [00:32:23]:
It’s a little convoluted, James, but it’s Okay. It’s kind of it’s kind of there. So you could throw up your own house to sell without any real estate agents involved Randy just say, you know, I’m not paying anyone. And the buyer’s agent would then have to go to their buyer and say, I’ll show you this for sale by owner house, but I’m getting paid this if you wanna want me to write an offer on this. And they’ve already got that agreement in place.

James Kademan [00:32:46]:
Okay.

Randy Lenz [00:32:47]:
If you’re the home seller, you don’t have to have any agreement with any agents out there. You can let them deal with their buyers as the way they want to.

James Kademan [00:32:56]:
But I could be a real estate agent and market houses for people, but then it still wasn’t clear how I’d get paid, I guess. Is that the idea?

Randy Lenz [00:33:04]:
To some degree. Okay. Randy, again, why would a home seller because you have no MLS access. You could have Zillow, I suppose, possibly, but you really wouldn’t have any any way of marketing the property and getting it out to, let’s say, in our market, there’s about 1700 realtors, to that group that would have all these buyers that they’re working with. Oh. So

James Kademan [00:33:23]:
that’s Okay. Help me with this.

Randy Lenz [00:33:24]:
That’s the value of MLS is that collective of information that’s disseminated immediately as soon as a house goes on the market.

James Kademan [00:33:31]:
So, if you get a house listing from someone Mhmm. Do you have to pay the Realtor Association to post it on the MLS or you get to post it on the MLS because you’re a realtor?

Randy Lenz [00:33:40]:
Well, I pay, every realtor pays fees to the MLS.

James Kademan [00:33:44]:
Okay.

Randy Lenz [00:33:44]:
It’s usually about $700 a year. Okay. And and that covers basically everything that you wanna do as a realtor with the MLS. So the MLS and the Realtors Association are the same thing, basically. And your I mean, they’re treated as 2 separate organizations, but they they basically work out of the same place.

James Kademan [00:34:01]:
Okay.

Randy Lenz [00:34:02]:
And so as soon as you list a property, yes, you can upload it to the MLS Randy it’s immediately available to all 1700 realtors.

James Kademan [00:34:10]:
Gotcha. So if I’m a for sale by owner person, I don’t have a way to post my house that I’m selling?

Randy Lenz [00:34:15]:
You don’t. There’s, there are some for sale by owner sites that are actually members of the Realtors Association. Okay. Madison Homes is a for sale by owner site. There’s a couple of others that are out there.

James Kademan [00:34:26]:
Okay.

Randy Lenz [00:34:26]:
And you can list it through them. They’re gonna charge you a fee because obviously they’re paying for Mhmm. Their MLS access. But you’re basically doing it as a for sale by owner, so the fee is probably gonna be less. And you’re the one that’s setting up all the showings. You’re the one that’s, you know, showing them how to get into the house and where to lock up and all that kind of thing. So you become a mini realtor if if you have the time, then you wanna do that.

James Kademan [00:34:48]:
Okay. I have seen, honestly, flat fee ROAs or something like that. I’m trying to think okay. And that’s essentially the same idea?

Randy Lenz [00:34:55]:
Right. And I think that’s what’s gonna happen with, with buyer’s agents is that there’s gonna be a lot of people who are gonna come out and say, well, I don’t I don’t need 3%. I’ll I’ll do this for $1500. I’ll do this for $1,000, that type of thing. But the problem is unless you’re really, really good as a buyer, you have no idea whether they’ve never even shown a house before Randy they’re just opening up a shingle and and trying to get your business. Got it. That’s where the problems are gonna happen. When people miss things that they should be pointing out and they should be seeing, and should be telling their clients about and they just completely don’t know.

James Kademan [00:35:23]:
Okay. And our buyer’s agents typically part of the real Realtor Association?

Randy Lenz [00:35:28]:
Oh, yeah.

James Kademan [00:35:28]:
There. Okay.

Randy Lenz [00:35:29]:
I mean, I can be a buyer’s agent. I can be a listing agent. I prefer to be a listing agent because I prefer to work with the home sellers themselves. But, I have a lot of really, really good clients that I work with as as a buyer’s agent too. And up until now, it’s not been any issue. It was just kinda the way it always was, and I got paid at closing and, you know, sellers were happy with what they got and, off we go. But that’s all changing now.

James Kademan [00:35:51]:
Interesting. Yep. What a bizarre market.

Randy Lenz [00:35:55]:
It will be. It’s it’s it’s kind of intriguing in a way because I don’t really know what’s gonna happen nor does anyone. And, you know, it’s it’s upon us. I mean, we’re here we are, you know, middle of April right now. Yeah. Randy end of July, the whole world’s gonna be turned upside down. So there’s bound to be some change, some significant change Randy direction given, so real estate agents know what’s going on over the next couple of months here. I mean, there almost has to be.

Randy Lenz [00:36:17]:
Otherwise, things are just gonna stop.

James Kademan [00:36:19]:
Okay. So That 6% thing, was that worldwide or does Canada do that same thing? Or what do other countries do?

Randy Lenz [00:36:26]:
I’m not I’m not knowledgeable in other countries. I’ve never sold or bought real estate in other countries. I can’t really tell you that. Canada and Mexico are similar, but they vary too what, what the standard is. So 6% kinda became the standard. 5% on new construction in our marketplace. It was and it started when I first began because, home prices were a lot lower at that point. I mean, my first house was $79,000.

Randy Lenz [00:36:54]:
That same house is now about 4 20. So, you know, 7% was kind of the standard, but then as, the prices had started going up like this, commissions kept going like that. And at the same time, realtors were doing okay because obviously as as the home prices were going up, they were still even though the the rate was going down, they were still getting, what I considered a a fair shake considering the expenses that they have to take care of.

James Kademan [00:37:17]:
Yeah. I’d take 5% of 400,000 over 6% of 79. Yeah. Bingo. I mean, as numbers go

Randy Lenz [00:37:25]:
Yeah.

James Kademan [00:37:26]:
Interesting. The the market, I believe, in 2008, 2009, weeded out a lot of real estate agents.

Randy Lenz [00:37:33]:
Yes.

James Kademan [00:37:34]:
Because they’re like, woah. I guess in that time, there just wasn’t anything to sell or not as much to sell. There’s more foreclosures going on.

Randy Lenz [00:37:41]:
Well, there was no one wanting to buy anything. That was a problem unless you had a lot of money. I worked with, remodelers at that time and and rehabbers because they had the money, and they would come in and we’d write these offers that were sometimes a $100,000 under list price. And if someone was upside down, they might counter back $20,000 higher type of thing Randy my people would sign it. And then they’d go in and they’d rehab this house and make it beautiful because there’s a certain level of of economy where the the home buyers out there don’t care what’s going on in the market. I mean, yeah, they do. They care a little, but they have the money to do whatever they want at any time. Mhmm.

Randy Lenz [00:38:20]:
And so they would come in and buy these beautifully re revamped homes and pay a considerable amount of money for them because they didn’t wanna deal with anything. They didn’t wanna fix anything, and the remodel had already done that.

James Kademan [00:38:30]:
Alright.

Randy Lenz [00:38:31]:
So I worked with a number of those people during that 2008 to 2010 period because the average buyer, the average seller was just I mean, like deer in headlights. They had no idea what was going on, and they were just stopped.

James Kademan [00:38:44]:
Interesting. Yeah.

Randy Lenz [00:38:46]:
And slowly slowly. I mean, there was that turn where, all of a sudden you get to a point where you realize, oh, the market’s changing because all of a sudden people were rejecting offers written under list price. Oh. And that changed. And a fellow that, you know, Bill Quigley, who was a who was a lender here in town, he and I were doing radio shows back then, and we and one of the radio shows we were actually doing together, I had forgotten to turn my phone off. And my phone started ringing the first 15 minutes. It was, like, endlessly, endlessly, endlessly. Well, what had happened is interest rates had come down from like 7.9 to about 5.9 that Friday.

Randy Lenz [00:39:26]:
And people were going west. Monday? Yeah. It was just crazy. And the market just exploded with sellers wanting to get their houses out there

James Kademan [00:39:35]:
Uh-huh.

Randy Lenz [00:39:35]:
Because buyers were coming and knocking on the doors now. Oh, interesting. So that kind of turned where we’re at now and it just kept going and going and going to the point now where sellers, because of the lack of inventory, control our market. Interesting.

James Kademan [00:39:48]:
So, in your, I guess, crystal ball, are you imagining in 5 to 10 years it’s gonna flip because all these people that had the 2, 3 percent interest kind of thing? They’re like, hey, we gotta move. We’ve been here for a decade or something like that.

Randy Lenz [00:40:04]:
I think it will slowly increase. But I think some of those 2.9, 3.1 mortgages that are out there, people will take to the end of the 30 years. Really? And they’ll they’ll be there after I’ve retired for many years. I mean, I just don’t see that happening. What can what can impact that is if we get a lot of new construction that’s affordable. And I don’t see a lot of that coming into our marketplace because there’s no real place for first time buyers to go. I mean, almost every buyer I have right now that’s in, or has, been in the last year has to have 2 couples working to afford what’s going on. And that’s really difficult.

Randy Lenz [00:40:43]:
So as for if it’s a single person or let’s say it’s a a retiree and now a single person, it’s really hard for them to buy a house even in this market because we’re so used to being relatively affordable, and we just don’t have that much affordable housing in in Dane County anymore. Right.

James Kademan [00:40:59]:
So do you see people just spreading out?

Randy Lenz [00:41:01]:
I see them moving further out of the city. I see them moving up north or or further west or to more rural areas and more and smaller towns where housing prices but we’re talking 50, 60 miles. We’re not talking just like, you know, Tavensville type of thing. We’re talking we’re talking 50, 60 miles to get out of the higher prices because that ring of high prices just keeps getting bigger and bigger around Madison.

James Kademan [00:41:24]:
Mhmm.

Randy Lenz [00:41:24]:
I mean, it’s it’s in Oregon. It’s in Waunakee. It’s in, DeForest. It’s in Cottage Grove. It’s in it’s in Evansville. It’s, you know, it’s that whole ring of of communities around around, Dane County. James. I have a lot of clients who bought homes in Janesville.

Randy Lenz [00:41:39]:
And Janesville used to be a nice place where you could go if you were willing to make the 25 minute drive in and get a decent home. Not many people wanna make that drive in because now they’re paying almost market rate in in Janesville now.

James Kademan [00:41:51]:
Wow. Yeah. You know, it’s interesting. They had a house come up for sale in our neighborhood. And anytime you see the little sign come up here, like, oh, I wonder what you’re getting.

Randy Lenz [00:41:59]:
Yeah. On on the on the Internet immediately.

James Kademan [00:42:01]:
Yeah. And we look it up, and I think it was 550. And I was like, no way. Yeah. 3 days. Yeah. 3 days Contract pending. And I’m like, no way.

Randy Lenz [00:42:13]:
Right.

James Kademan [00:42:14]:
So I tried to talk to my wife. I’m like, let’s just sell now. We’ll live in a camper because I feel like the bottom’s down. I know where

Randy Lenz [00:42:20]:
that conversation went.

James Kademan [00:42:22]:
That was a big fat no.

Randy Lenz [00:42:24]:
But that’s that she was probably looking at it like, oh, great. We’re gonna get what we want. But what are you doing? You’re going into a market because I know you’ve got a low interest rate too. Yeah. And you’re going into a market where your interest rate is gonna be more than double what you’re paying right now. My

James Kademan [00:42:36]:
and this is coming from a guy that thought that e commerce wasn’t going to take off. So, don’t take this as gospel by any means. But I still have this feeling that there’s gonna be a correction. That the market is

Randy Lenz [00:42:49]:
How do you mean? What do you what do you think is a correction?

James Kademan [00:42:51]:
I think home prices will drop by 20 30%.

Randy Lenz [00:42:55]:
Really? Why? Why would they do that?

James Kademan [00:42:57]:
Because well, because I feel like people, broadly speaking, when you look at from my point of view. Mhmm. So you can totally tell me my math is wrong, because it probably is. Mhmm. I take average of what people make. Right? Okay. Not that way up top, like I’m professor at university kind of thing, or something like that, or I’ve found oil in my backyard, but just a typical run-in the mill, I got a full time job and a couple kids kind of thing. Yep.

James Kademan [00:43:20]:
This is my income, and I look at 30% of that is essentially what you’re expected to pay for your where you’re living. Rent, mortgage, whatever. Mhmm. And then with a house, you got your lawnmower and all that other stuff that you got to buy, and I look at that’s what you can afford, and then I look at this is a monthly not that you can afford Right. With interest rates. These are the houses that are available kind of thing. There’s not a ton for them to buy, and the ones that are are going away, and I don’t see a lot of stuff that’s being built that replaces that. So I feel like the markets, just like stocks, there’s gotta be a correction.

James Kademan [00:44:00]:
I could be wrong. I’m probably wrong.

Randy Lenz [00:44:02]:
If there’s not a lot for them to buy, that usually means that prices are just gonna keep going up because the sellers can ask for more since they’re a very limited quantity.

James Kademan [00:44:12]:
So, well, I mean, you raise an interesting point there. So maybe people are gonna say like, hey, instead of 30%, something’s gotta break. Right? Mhmm. Maybe I do 50%, and then we end up with a 2008 issue again, or something like that. I feel like it’s growing awfully fast, awfully high,

Randy Lenz [00:44:29]:
and I don’t feel

James Kademan [00:44:29]:
like it’s sustainable. So that’s where I’m like, let’s just get a camper, make some money on our house, live on a beach. I don’t know.

Randy Lenz [00:44:37]:
I see more people moving into just staying in apartments. Oh. I don’t see I don’t see an end to where we’re at right now unless we get more in inventory and that it’s affordable.

James Kademan [00:44:48]:
Okay.

Randy Lenz [00:44:49]:
Because right now, the sellers absolutely control the market Randy they do until Labor Day every year. I mean, if someone’s got flexibility and can wait till Labor Day and buy a house September, October, November, December, they’re gonna be okay. They’re gonna be fine. Yeah. But most people wanna buy, like, right now to the end of August. Uh-huh. And that’s gonna be tough. And I think that a lot of people are gonna get disillusioned.

Randy Lenz [00:45:12]:
A lot of people are gonna realize that they don’t have the money to pay a real estate commission. They don’t wanna work with this guy who’s just doing flat rate, who they’ve never heard of, who’s never sold a house before. And they’re just gonna say, the heck with it. I’m just we’re just gonna rent for another 5 years and see what happens. Right. And I unfortunately see that happening. I see a lot more, apartment buildings being built in the Madison area

James Kademan [00:45:32]:
Oh my gosh.

Randy Lenz [00:45:33]:
To accommodate not only EPIC and all the kids at EPIC type of thing, and there’s now, like, what, 13,000, 12,000 there. But I see that happening in the general swing of things because the real estate industry is changing so drastically this summer.

James Kademan [00:45:48]:
Dang. That’s crazy. You have perfect segue though. It says you’re seeing a psychic medium. Oh, yes. So maybe we can ask this guy.

Randy Lenz [00:45:58]:
I’m gonna see John Edward. Now, we’re in mid April, and I’m gonna see him this week. And I I grew up watching his show called Crossing Over many, many years ago.

James Kademan [00:46:08]:
Help me just jog my memory here.

Randy Lenz [00:46:09]:
K.

James Kademan [00:46:10]:
Who’s John Edward?

Randy Lenz [00:46:11]:
John Edward is a psychic out of out of I believe he’s from Long Island.

James Kademan [00:46:15]:
Okay.

Randy Lenz [00:46:15]:
And he had, it used to be the sci fi channel and he had a show there called Crossing Over for a couple of, about 4 years. And then he had another show, that he did some things across the country.

James Kademan [00:46:27]:
Okay.

Randy Lenz [00:46:27]:
Well, I’ve had too many things happen in my life not to believe in these kinds of things.

James Kademan [00:46:32]:
Alright.

Randy Lenz [00:46:33]:
And, I found out he’s coming to Madison Randy I’m gonna be I’m gonna be there at Monona Terrace on Friday when he’s there.

James Kademan [00:46:40]:
Alright. So are you gonna be on the stage getting

Randy Lenz [00:46:43]:
No. No. No. I’m just gonna be one of the people Oh, attending. Attending and and watching for the people to go,

James Kademan [00:46:48]:
oh my god. I can’t believe you did that. So you’re gonna raise your hand and say, tell me about

Randy Lenz [00:46:54]:
real estate in 5 years. No. He usually has people that he goes to, that he feels he’s being pulled to Randy then he’s gonna answer questions and talk to them about it. And,

James Kademan [00:47:05]:
Questions about people that die? That help okay.

Randy Lenz [00:47:07]:
Yes. The people who have died who who want to come and talk to him. Now, he’s explained in the past that there are 20% of the people in this country who just absolutely believe you don’t have to convince them. I’m part of that 20%. Okay. He said there’s 20% of the people who will never believe no matter what you tell them, what you show them. And, I do have some friends and people like that too, so I don’t really discuss it with them. And then there’s the 60% middle class who say, well, okay.

Randy Lenz [00:47:28]:
If you if you tell me something that I think is right, I’m I’m interested, you know? And that’s all he’s trying to do, he says, is reach the the 60% to give them something that they may not have had before.

James Kademan [00:47:40]:
Interesting.

Randy Lenz [00:47:40]:
But, yeah, it’d be interesting if he came to me and said, oh, I I I see the real estate gods talking to you talking to me about you Randy here’s what’s gonna happen. Because right now, we’re all clueless. We have no idea what’s gonna happen.

James Kademan [00:47:51]:
Yeah. You know what’s interesting? I’m part of this group that, we discuss AI Randy our little our little knowledge pool split between us. Mhmm. And nobody knows. And I feel like this is a similar situation, or I feel like even the people that were either changing the rules, making the rules are part of the group that should be either making or changing them

Randy Lenz [00:48:12]:
Yeah.

James Kademan [00:48:13]:
When even they don’t know, like, we’re running out of, we’re running out of either leadership or authority or somewhere we can go to get the answers, which is somewhat ironic.

Randy Lenz [00:48:25]:
I think as Americans, we want answers. We always want answers. And it’s it’s uncomfortable when we don’t have answers that kinda direct us because a lot of people just you know, it’s kinda the McDonald’s mentality. You know where to go. You know where to order. You know where to pay, you know where to pick up your food, out you go. Right?

James Kademan [00:48:38]:
We just got past the information age I know. I know.

Randy Lenz [00:48:41]:
But that’s that’s what people have kind of been predetermined to to to know and to want and this is kind of an uncomfortable situation. They don’t know Yeah. Where we’re going and what’s gonna happen. I see AI things. I mean, I I look at a lot of AI stocks because I think that’s the the the coming trend. And so I’m really into a lot

James Kademan [00:48:58]:
of that. Yeah.

Randy Lenz [00:48:59]:
And but at the same Home, then I start thinking of of, like Terminator movies and going like, well, okay. How far do we take AI before AI takes us, you know, type of thing?

James Kademan [00:49:07]:
It’s creepy.

Randy Lenz [00:49:07]:
It is kinda creepy in a way, but it’s it’s very, it’s very interesting because it’s like this real estate commission deal. It’s unknown what’s gonna happen. Right. And so you’re gonna have to kind of be on top of it to kind of figure out where we’re gonna where we’re gonna go and what’s gonna happen as we kinda move forward. And and decisions have to be made for it not to just stop people in their tracks.

James Kademan [00:49:29]:
Right. In the end, people they’re still gonna be real estate agents.

Randy Lenz [00:49:34]:
Correct.

James Kademan [00:49:34]:
There’s still gonna be people that help people buy property. Yep. So they’ll get paid somehow.

Randy Lenz [00:49:41]:
They will. And if it’s not enough and if it’s not enough to at least, consider that the income to to support a family, they’ll find something else to do. I mean, that’s just the way it’s gonna be.

James Kademan [00:49:52]:
You know what? You remind me of a conversation that I had with a guy this morning. And he was complaining because he he was complaining. He had a business. It folded. Home blamed it on pandemic, and I was like, yeah. We’re 2024, buddy. Yeah. It’s a little hard

Randy Lenz [00:50:08]:
to that’s really out on the outer edge. Right?

James Kademan [00:50:10]:
Yeah. It’s kinda like blaming the depression. Like, it’s old news. Right? And so he’s got a a subcontracting job, and he’s complaining about not getting paid enough. And I’m like and so he was saying, like, essentially, hourly wages should be raised. And I said, you gotta be careful with that. Right? Because the market is gonna dictate right or wrong, and it’s up to you to take responsibility Right. To work in a job that’s gonna pay whatever it is that you wanna make.

James Kademan [00:50:44]:
So if you’re not willing to learn a skill that works in a job that whatever, pays whatever you wanna make, and you’re just waiting for that handout, you’re gonna be waiting an awfully long time. And so we went down the whole, like, fast food workers making whatever $20 an hour, and then people being surprised when fast food goes up in price. Yeah. Like, it wasn’t like the fast food companies are just like, well, what do we do with this pot of cash now? Right? We’ve been saving this. Like, no. That’s not exactly what happens.

Randy Lenz [00:51:14]:
I think Home kind of people never really feel satisfied or it’s always something else that’s affecting them and not them.

James Kademan [00:51:21]:
It was a constant it was blame. Yeah. And I was like, dude, you gotta take responsibility. Yeah.

Randy Lenz [00:51:25]:
I mean, if he’s working in a consultant or she’s working in a consultant job, they they ought to be getting paid the highest amount that you’d get for that because that’s what you hire a consultant for, an outside consultant to to teach you how to do something. And you can’t really complain that it’s not a good job. If it isn’t, then we’ll find something else to do.

James Kademan [00:51:40]:
Yeah. I joked because so I had my printer repair company. Mhmm. And if I still would Home had that during the pandemic, I sold it before, not because of some hindsight or foresight I should say, but just pure luck. That company probably wouldn’t have made it. It’s very tough to fix copiers and printers in offices of no

Randy Lenz [00:52:00]:
can’t even go

James Kademan [00:52:01]:
in office. Yeah. There’s no one there to break them or kick them or whatever. So it’s just dumb luck. So I told Home, if I was the best typewriter repair guy, I’m still out of business because because there’s not that many typewriters. Like, your skills have to evolve.

Randy Lenz [00:52:16]:
Speaking of that foresight, a month before COVID hit

James Kademan [00:52:20]:
Mhmm.

Randy Lenz [00:52:21]:
I had let the lease go on the office that we had on the BeltLine. And we had BeltLine signage and things like that. And I’m realizing, you know, all people that worked for me at that point were out and about selling things Randy no one was coming into the office. I had this beautiful office around the belt line with belt line signage and stuff. And it’s like, why am I here? So I finally went downstairs to talk to the dude who owned the building, and I said, you know, I think we’re gonna leave. And he goes, well, how I got a 4 year lease at that point. He says, well, how about this? How about you pay me for a year Randy then I’ll let you out? And I said, great. Okay.

Randy Lenz [00:52:53]:
Let’s do it. And we did. And that was February 15, 2020.

James Kademan [00:52:59]:
Oh, wow.

Randy Lenz [00:53:00]:
Four weeks before COVID hit. Wow. I’d have never I’d have been paying for a lease that I’d never used on a real estate office that no one would ever come to for years, and it was just great timing.

James Kademan [00:53:08]:
Wow. Yep. Pure dumb luck. That is cool. Congrats to you for that.

Randy Lenz [00:53:13]:
My pleasure. Been the it was, like, the best decision I ever made without realizing I was making it. Is that you

James Kademan [00:53:18]:
know what? It’s interesting when people, like, you and me just understand that the, I guess, the value of luck, I guess, when it comes to that. Because I’ve met a lot of people that are just like, oh my gosh, I got so many skills. Look at all the stuff that I did. And I’m like, that market could Home gone any direction. Right. And because you made the decisions that you made, it was essentially lucky break. Right. Don’t treat that as skill.

Randy Lenz [00:53:39]:
But we may just like you did, we made a a a forward thinking decision. Randy and we’re willing to take the consequences because we became one of the few virtual offices for Next, and NextHome allowed that. So my team and I would meet through Zoom and other things that were available, and it was perfect. It worked great. My wife, Molly, and I were in a little bar down, in Union, Wisconsin. Okay. The day the cops came in and said, you all need to go home. We’re shutting it down.

Randy Lenz [00:54:09]:
It’s like, what? It was like Saint Patrick’s Day, something like that. Did

James Kademan [00:54:11]:
you get a bar?

Randy Lenz [00:54:12]:
They came into the bar and shut it down. Randy this was, like, 4 weeks after we had closed the real estate office. And it’s, like, what did I do for the next 3 months? What everyone did. Just sat at home and going, what’s going on here? You know?

James Kademan [00:54:21]:
Yeah. When they closed the bars in Wisconsin, you know something’s going on.

Randy Lenz [00:54:23]:
You know

James Kademan [00:54:23]:
something’s going on. Are you sure? Oh, that’s funny. Randy, thank you so much for being on the show.

Randy Lenz [00:54:30]:
My pleasure, bud. Appreciate it.

James Kademan [00:54:31]:
I don’t know if we if we brought any answers, but we certainly

Randy Lenz [00:54:34]:
Well, we’ve raised some questions. Well, maybe we’ll talk in a year and see where everything kind chilled out.

James Kademan [00:54:39]:
See what that psychic guy says. Yeah.

Randy Lenz [00:54:40]:
There we go. If he says anything important, I’ll let you know, James.

James Kademan [00:54:43]:
Just ask Home, are you buying or selling? What’s,

Randy Lenz [00:54:46]:
what’s your plan? I like it.

James Kademan [00:54:48]:
This has been Authentic Business Adventures, the business program that brings you the struggle stories and triumph and successes of business owners across the land locally underwritten by the Bank of Sun Prairie. Authentic Business Adventures is brought to you by Callsoncall.com, offering call answering and receptionist services for service businesses across the country on the web at callsoncall.com. And, of course, the Bold Business Book, a book for the entrepreneur Randy all of us available wherever fine books are sold. I’d like to thank you, our wonderful listeners, as well as our guest, Randy Lenz. Randy, if someone wanted to find you on the interwebs, could they?

Randy Lenz [00:55:23]:
Yes. Okay. Email address, Next. Cell Home, 608 444-1100. Well, there you go. Yep. So you got all the answers, at least the questions right Home.

James Kademan [00:55:34]:
This guy. Randy’s a great guy. And I tell you, anyone in the real estate world, real estate market, I mean, you gotta have thick skin and a Yeah. And a smart brain, I imagine, if you wanna laugh anymore.

Randy Lenz [00:55:45]:
I’ll take your word on that, but

James Kademan [00:55:47]:
6 months. All good. Past episodes can be found morning, noon, and night at the podcast link found at drawincustomers.com. Thank you for listening. We will see you next week. I want you to stay awesome. And if you do nothing else, enjoy your business.