Thomas Kutzman and Scott Pollack review their journey on “Real Estate Is Your Business”, notable guests, what the hosts have learned, and how the industry is transforming, in the MouthMedia Network studios powered by Sennheiser.
Transparent commercial brokerage with proprietary smart tools…
The real estate industry is antiquated. For most people they think of the residential real estate first, and that’s lagging enough. But technology and innovation in the commercial real estate space? That’s twenty years behind residential. An exception to this is Squarefoot, an online brokerage platform that enables companies to find commercial properties without going space to space.
Jonathan Wasserstrum, Co-Founder and CEO of Squarefoot (”a team of trusted commercial real estate experts armed with our own technology to help guide you from initial inquiry to lease signing and beyond”), joins Thomas Kutzman and Scott Pollack in the MouthMedia Network studios powered by Sennheiser. Presented by Prevu.
In this episode:
- The state of affairs of commercial real estate today, two decades behind residential real estate, comparative sizes of residential vs. commercial
Enabling tenants to find space more easily
- The problem being solved by Squarefoot is offering transparency and technology, as a listings platform,
- Squarefoot’s biggest size deal ever, and the average size and company needs commercially
- Playing a role in helping solve real estate problems
- How Squarefoot clients can see the inventory
Squarefoot aligns better incentives between broker and client, instead of commission based on deal size, a flat fee per broker, a different comp model, so its not about steering toward biggest commission.
- Most brokers aren’t still at the same brokerage after three years, and at Squarefoot the rate is better than the industry average
- First efficiency, not having to prospect, how inbound people search online and wind up on the Squarefoot site
- Offering further efficiency via tech and products in the space and discovery, and a proprietary app
- Looking ahead to the next level: agency business representing landlords
- Commission structure in commercial vs. residential similar, and how many buildings average landlord own
- A lack of interest from Squarefoot in competing against CoStar — being just a channel for tenants to find space and landlords to market the spaces, not a current interest in data.
- Is Wasserstrum a technology guy or real estate guy?
Ample Hills ice cream makes a special appearance
- Are most companies actually tech companies?
- 20% of market is moving every year, but it takes 5 cycles for everyone to go through a new change of process/tech, with commercial taking even longer
- The need to ask “how do I do it better”
- Anything that can help increase the top line, and decrease expenses, should be a welcome thing
- A lack of Houston TX accent
- Houston’s lack of zoning
Smart online brokerage enable commission rebates via an end-to-end Platform…
Thomas Kutzman, Co-Founder of Prevu (a smart online brokerage focused on saving people money) and host of “Real Estate Is Your Business” podcast, joins Scott Pollack and Pavan Bahl in the MouthMedia Network studios powered by Sennheiser.
Better Technology. Better Service. Best Commission Rebates.
Kutzman touches on how commission rates too high in real estate, with rates in the US/NYC being double and triple than other developed countries, and how his experiences along with his co-founder Chase Marsh led to creating a solution with Prevu. He continues that in New York City the average real estate price is $1.5-2 Million with high commissions, and how it really is not free to be represented by buyer’s agent because it’s built into the price because of commission split with buyer’s agent. How Prevu gets up to two-thirds back on commissions of buyer’s side to the customer, receiving money back as a commission rebate check. It is not because of a lesser service, instead using technology for better experience for buyers and to make agents more efficient, plus a lower internal cost structure. Controlling the consumer experience and the quality of service and interaction. Despite some 30,000 licensed agents in NYC, 10% of them are doing 90% of work. The Prevu brand acquires leads and customers digitally, and provides more stability and experience/activity for Prevu agents. Plus, why it is a scalable model, and best for major markets.
Engineering a smarter buying experience
How Kutzman has been looking at it through the lens of other industries have changed like travel and financial, changing the way agents com into the industry and their expectations of stability, and why you’ll never learn a profession doing it part time. Prevu’s compelling value proposition, the impact of the new tax reform on real estate, and why it won’t impact most people. And, making use of a commission rebate, and expanding to other markets.
Charitable giving, learning, and treating people well
Personal questions cover giving back, a focus on charitable giving, Children’s International, and Code2College which encourages STEM careers at a high school level for underprivileged and minority teens, and how encouraging tech careers at earlier ages leads to greater success. The NYU Violets, how Kutzman was encouraged to save and buy a property instead of having cancelled rent checks, making sure if you didn’t know something, go take a class to learn it. How there are a lot of great real estate people, and a lot of great technology people, but few have a lens on both areas. As time goes on, more people will know both. The meaning of success, a great mentor, treating people the right way serving you well, “The Monk Who Sold His Ferrari”, and “Principles”.
De-rigging the mortgage game with thoughtful technology…
Vishal Garg, CEO of Better Mortgage (a direct lender dedicated to providing a fast, transparent, and online mortgage experience backed by superior customer support) joins hosts Thomas Kutzman and Scott Pollack in the MouthMedia Network studios powered by Sennheiser. Presented by Prevu.
An industry behind the times, the need, and why pre-approval in 3 minutes is possible
Garg discusses how the mortgage industry is dominated by the top 5 banks with a third of the market, why the mortgage industry hasn’t modernized as fast as other industries, how it is one of the last oligopolies, and how because of complexity and size is one of last ones standing requiring modernization and innovation. He covers how startups need at least $20M of capital to make mortgages and finance them with Wall Street or bigger banks, and those amounts are usually not available to most tech startups. He shares the goals of helping consumers know how much they can afford, the challenges that followed a number of financial crises, and why Better Mortgage was created. Garg touches on how the company takes the info provided by applicants, uses an API to create pre approval within typically 3 minutes, whereas usually takes much longer as well as many as dozens of people.
Eliminating commissions, creating certainty, and making obtaining a mortage a non-event
When the numbers have been proven and credit has been checked, there is a high degree of confidence a consumer can obtain that financing. The impact of having no incentives to drive consumer experience or product choices, with loan consultants not paid on commissions at Better Mortgage, and how the company built a marketplace of 21 financing partners, making up the majority of mortgage lending market. How human elements are doing things that empower the consumer instead of just order taking, integrating automation to create certainty, why banks won’t do something like this kind of solution and the industry doesn’t care that the mortgage process is painful for the consumer, as an industry that helps the industry. The objective of making getting a mortgage a non event, helping consumers win with lower down payments, and a look at the source nearly half of default.
Overcoming industry inertia, the only way brokers can prosper, and maintaining focus
The importance of the fact that Millennials don’t want to be sold, creating a platform so 6 of 7 biggest banks in industry are financing off the platform, overcoming the inertia of the industry which cannot innovate, how mortgage brokers and real estate brokers who are really helping people with value today are the only ones who can prosper, and how the rest will have to find something else to do. Plus falafel chips and running a startup with young kids, focusing on the most important thing you need to do, and helping Americans to buy homes.
How Technology Is Modernizing Real Estate …
Real Estate Is Your Business is a series of conversations with the innovators, entrepreneurs, and thought leaders at the forefront of the modernization of the real estate industry. The podcast, presented by Prevu, is hosted by real estate technology entrepreneur Thomas Kutzman and business development expert Scott Pollack. You will hear the about the exciting technological and business innovations that are improving the way we live, work, and pretty much do everything.
Thomas Kutzman is the co-founder of Prevu, a tech startup on a mission to save people money when they buy or sell a home. Thomas has broad experience investing in public technology companies at asset management firms and top-tier investment banks, and has also been an active real estate investor for over a decade. Scott Pollack is a business development expert with experience helping both startups and Fortune 500 companies focus on growth. Scott is a member of the Forbes Business Development Council, author of “What, Exactly, Is Business Development”, and a regular speaker on the topic.