Where did real estate start? Online Real Estate Training Episode 10: The origin of real estate- 4X Formula
Real estate training is here. As a new real estate agent, you should be reading the quick commission blueprint - 4X Formula
Real Estate Training - The 4X Formula RADIO
4XF 10: Origins of Real Estate

Hello everybody. How you doing? Thank you for joining us once again, I’m so excited that you’re here on this podcast once again. We’re going to talk today about the origins of real estate and that will help us understand why there is a major problem out there on the perception of realtors.

Hi, I’m Kelly Johnson, founder of the 4X formula and the big question is this: How are real estate agents like us able to create a constant stream of commissions and a constant stream of leads while enjoying life without wasting big budgets on branding, without working crazy hours, without worrying where the next deal’s coming from in today’s real estate market. This podcast is here to reveal the answers.

The origin of real estate. So I think it’s important to talk about this because where realtors came from, like how we started, as an animal (haha), and then where we’ve evolved to today like to where we are today, are so different. It’s like not even close. I don’t know if my hands are showing up or not, but it’s really important to talk about this because we need to understand where the realtor came from. So that we can understand why the public has this perception of realtors.

The primary reason that I think this course is so important with the 4X Formula and what we’re doing, “my cause”, if you will, my overall master purpose for this course really has to do with the fact, the sad, sad fact that real estate agents are one of the least trusted professionals out there. We’re in the top 10 every year. This bothers me so much because we have to overcome this stuff all the time with people that’s in their psyche, right?

So this has become a really big part of our mission with club 100 online inc and the whole 4X Formula. A major part of why we’ve designed this and how we’ve designed it and things that we really press upon the people taking the course… It’s important because I think literally we can literally change the perception out there. If we get enough people practicing real estate, doing real estate in the proper way with the right mindsets and just really becoming that advocate for the public out there. We can change this, we can change this perception and I tell you, it’s gonna make it easier and easier and easier.

We are in the top 10 of least trusted professionals. We’ve come a long way, but we’ve got so far to go, 19% of people that were surveyed in 2018 say that they have a very low level of trust. 19% said “low level of trust.” That means “We don’t trust them.” And 25% had a higher level of trust. So one out of four people say, “I actually have a high level of trust.” So they’ve had a good experience with a realtor. That’s encouraging! It’s actually come a long way. We are kind of getting better, you know what I mean? But it’s still a problem. And what that says to me is that people are still thinking of real estate professionals as kind of… Like a necessary evil, if you will. “Ah, I just gotta deal with this guy or this gal and I guess I’d better call a realtor. Who Do I call? I Dunno. It’s let’s get a bunch of them in there and then we’ll just see who the best one is, or who we liked the best, or who convinces us that we should work with them.” And you know, they’re just not excited about it. You know what I mean?

I always think of it this way. The real estate sales person started out as a salesperson. This is how it all started. There was this guy and there was some things that happened, well, I’ll get into that in a second, but he literally had listings in his hat. So he kept him in his top hat and he’d take out his hat and he’d have his list. That’s where he kept it private. Right? Because in that list he had a property and then he had what people agreed to sell for and then he would try and get more. So he would approach like sellers and determine a price that those people would sell that, then he would tell the potential buyer another price and that’s how he earned his money. It was the difference. And that’s totally illegal today!

So the idea of listings started with that. Believe it or not, there was no MLS, there was no rules, there was no act, there was no law governing this practice at the time. So imagine the trust factor there! A buyer just has no idea what the real value of anything is. They just decided they want to buy something and he’s the guy that they got to go talk to and “He’s just getting rich on me.” And then the sellers too, at the end of the day, “Oh my gosh, if I knew I could have got that much for it. Oh my goodness, that would have been great. That would have helped us a lot.” And so there’s this dichotomy and in the middle, this listing agent, listing person, just ran around snickering at how he’s fooling people or taking advantage of two different people. So imagine the trust factor there.

Then we started to get organized. We still kind of withheld information and a lot of you not even know about this. A lot of you probably haven’t even experienced this, that you’re in real estate now and if you’re just starting, you definitely wouldn’t even have known about this. But there was actually no internet. There was a time that there was no internet and we couldn’t just go on the Internet to get information. Internet was not a thing. It just wasn’t around. I kinda got into the business when the Internet was just kind of kicking in. It was around 97 and I mean it was going for a little bit, but it wasn’t very good yet. We’re still doing dial up that weird sound that had the connect and we’re doing it off of telephone lines and all this stuff. So it was a very different time. And sending packets of information that we do today so easily, it just wasn’t possible. I remember when it took like 5 to 10 minutes for something to send. And to us that’s lightning fast. What was the other option, right? That was lightning fast. So we have, in our world today, everything just needs to happen so fast. But anyway, that’s a whole other conversation.

So there was no internet, but there was this book. We called it the green book. Our book was green, I don’t know what color the book was in other areas, but our book was the Green Book and it had all the MLS listings in there. And we would open up the book and we’d go through it all. And I remember even taking the book and photocopying it and pressing it down so kind it’d kind of be flat. And then I would photocopy that and then I would cut out some and make a list of properties for certain buyers based on what they wanted and stuff like that. I was not allowed to give that book to people. It was actually a big penalty, harsh, like against your license, all that kind of stuff could have happened to you if you gave that book to somebody. You were not allowed to give that book. So you had to keep that book.

That was our thing. We had the book. We had the information. So we had the advantage. So imagine. There you go again. Like where’s the trust? They just had to trust that we’re giving them all the information. Maybe some agents would just give some of the information or the kind of information that made their job easier but maybe it didn’t help the buyer as well or seller as well, depending on how they’re doing there, how they’re having conversations.

So people learn about houses that were for sale from the newspaper. That was another way. That was now the kind of public information aspect of things. And so it was all about the newspaper. There’s newspapers that specifically printed real estate listings and magazines and stuff like that. But really the local newspaper a lot of times had a whole real estate section and that’s how people looked at real estate.

Now if you think about that. Okay, so you got to get the listings in. You’ve got to get the information in to your board that manages all that and then they got to compile the book. Well, how long do you think it takes to put the book together? So a lot of times, by the time that information got into the book, it was about two weeks old information. Kind of the same thing with newspapers, right? People get all their ads together, you have a certain deadline, you’ve got to get that in, and then that’ll go in the next paper. Well, a lot of that information, by the time you get it all together… And by the way, we didn’t have digital cameras at the time either and we couldn’t just like email photos or load them ourselves or do any of that kind of stuff that we could do today. We actually had to take pictures with a camera, go get the film developed, and we had to deliver though that one picture to our board and then they would load that photo in and it would be black and white. And it would look horrible. And that’s the way it was. That’s, that’s kind of how you’re doing stuff. So I’m making myself seem really, really old. But you know, in the scheme of things, that actually really wasn’t that long ago.

And so the public, like all this information, we’re kind of holding it close to our chest, right? And this is our advantage. This is our value, right? This is how we became the necessary evil to people. So yeah, very salesmen oriented if you think about. Why wouldn’t they think I’m a salesman if I’m withholding all the information. I have an advantage over them, right?

How can they trust that I’m going to be their advocate and do the best I can with the information I have. I mean I did. I tried to, as best I could, back in those days. But how would they trust that I was. It was really hard and they had no other option and it was forced upon them. The real estate salesperson was just that. They were selling listings. The buyers looked at the listings and had very little knowledge about comparable product. Black and white, fuzzy photos of the house and the book with limited information too. It was like a little box of information. So I had the picture and then had a little basic information in there. Didn’t even have like room sizes a lot of times. Very limited information in there. A lot of less than moral real estate agents can kind of manipulate that information for their benefit and kind of almost pick and choose what the public received. I’m sure that was going on. It was easy to do. I’m sure it was going on.

So it was like this up until the late nineties. Really that’s not too long ago. So think about this. In 1862, the homestead act was passed in the US and what they did is they distributed land across the land to different people. And I don’t know how the choices were made, I didn’t study that far into it and on how they made a determination on who got land or who got what but I’m sure it had a lot to do with connections and people who were maybe politically motivated or supported different things or were in the war. In the military, maybe they got rewarded that way with some land and stuff like that. But then soon after that, people started to get together and form communities and stuff.

Then the industrial revolution started. So then it was all these workers would migrate to these certain areas to get work to make money. It wasn’t about the farming anymore. It wasn’t about survival on the farm. Just making what you needed to and growing what you needed to and having livestock and stuff just to survive. It wasn’t just about that anymore. Now it became about having money. But then it became about having money to pay for the place that they lived in and they would be satisfied with having less land to live on. Just kind of a evolution of how we, we kind of evolved in North America.

So people started to centralize and then banks started to kind of get smart and understand… They became kind of more than just a place for rich people to keep their money or store their money as the safe place for money. They became more than that. They started to understand that they can loan money to people. Now they did it with the rich people and the rich people kind of made money off of loaning money. And the bank said, “Well, why don’t we do that? We can start to factor our money. We’ve got deposits in here and so we can start to loan money and get it back.” And then they started factoring and all that stuff. But the concept of mortgages really opened the door for like the average… you know, just struggling working person that had ability to make money and repay to start to get mortgages.

So now the average person could start to own land and own properties and that kind of stuff. So it started to kind of grow. The real estate listing emerged on the scene, right? That’s when the listing guy emerged on the scene that we were just talking about.

Then in 1916, they started to get organized, the real estate industry. A man named Charles Chatburns coined the phrase “realtor”. That was in 1916. He coined that phrase and the National Association of realtors kind of emerged from that. And I believe Canada kind of did their thing very much like the US around that time. Everybody kind of started to get organized. Canada kind of followed suit with US a lot in a lot of different things. Same with money. Same with the banking industry like, the banking act and all that kind of stuff was very similar in timing.

And I just want to make sure I stay with my notes here to make sure I’m telling you all the right stuff. So it was right around that time that National Association of Realtors was created. Here we are, if you think about that, so that’s 1916 realtors are getting organized. We’re a hundred years, a hundred years later! We really didn’t evolve completely from salesperson to a public advocate until really recently, right? Very recently.

So maybe in the last decade where the idea of being an advocate and not a salesperson anymore, like you’re in their corner. You’re protecting them contractually. Dialing in the contracts. We started adding pages to our contracts like crazy. Different built in clauses and stuff. I mean, when I first got in the business, it was press hard. You’re making four copies and everything was handwritten and all that stuff to computer programs and all that. So now our contracts are four or five, seven, eight, 11 pages long depending on the type of deal. Back in my day, the contract was maybe two pages long.

So that whole thing again is just creating more things to be enforceable and protecting people and all that is just kind of evolved and it’s accelerated now and here we are. So I kind of get it. I can see why there’s that whole persona that the realtor’s fall into still like we’re still dealing with it. It took almost 100 years to get there. So maybe it shouldn’t surprise me so much.

You know what, that’s why all the training programs that I paid to go to and the information I was receiving in those programs, were really kind of outdated. They really were. And there’s new stuff. We’ve started to take the new stuff, but there’s still grabbing from old stuff and there’s still trainers that were training back in those days that are training today and they’ve evolved a little bit. But really, they’re still relying on some of those old tactics that sounds smart or they sound kind of tricky or they sound kind of, “Well that’s a good idea.” But at the end of the day, I don’t know what’s going on with the mindset in behind all that. The heart behind it all.

And I kind of questioned it a bit and that’s all the training I received to this day. And I’ve gone to training programs that would focus on kind of one aspect and they made it out like this one aspect, if you get this figured out, it’s going to change your life, your business is going to be amazing and this is why you haven’t succeeded.

And it was just about one thing and they’re charging so much money! I’m kind of going, “Ok, that’s one thing, like that’s just one part of it. Is that really going to be the TSN turning point for me? That’s going to be “the thing”, the magic pill, the blue, you know?” But we fall into that, you guys. We all do. I don’t want you to fall into that. I don’t want to be that for you either.

With the 4X Formula, it’s a four dimensional full course that goes into every single aspect and we touch on everything and we go deep into a lot of things so that we make sure that you’re well rounded. You’ve learned it all, apply what you want, it’s up to you, but we’re going to give you everything. After that you decide, you know, you could plug people in to take care of parts of it. But as long as, you know… The problem is people don’t know what they don’t know. So we get fooled sometimes.

I went to a training program that focused on marketing and it focused on branding and I thought it was great. I went to it. Great information. The lead in kind of training prior to that that made me want to go to that was very, very well done. And it really had me convinced that this is the one thing that’s going to change everything. And I was still in that mindset of being the big man, the big dog, being the marketing man and just being really good at that and branding, branding, branding and all that kinds of stuff. I’m not totally against any of that, but I’m just saying it’s not the end all be all. It’s not the only way to make it in real estate. It’s a very expensive way.

As we got through, I went to the marketing thing, I had to pay to go to that, which was not cheap. And then I had to travel to get there, which costs money. And then I had to rent a hotel room for a couple of days to go to this event. And it was very good and there was some food and all that kind of stuff. It was great. First class, they did a great job putting it all together and at the end of it, the package that they were selling to me was an $18,000 package. And that’s all fine. I’m not afraid of spending money on things, but they basically taught me everything in it. So I’m like, “Well…” and they’re just basically saying, “Well, we have people that are professionals that will just do all those things we just taught you that you were supposed to do. These guys are just really good writers and they’re good photographers or they’re good at doing graphic design to make all these things look really good for you, and it’s $18,000.” So I was kind of like, “Well, I can get people to do that, or I can go into a mode of creating that kind of stuff myself.” And I did, I went and did it. I hired a photographer and we did a bunch of stuff. I learned a lot and I went back. I actually implemented a lot of it.

That’s the thing with me. I had no problem implementing things or at least trying to. But I do think a lot of people will go to a training program and… There were people that went to that training program with me that didn’t implement those things. So I know it’s a fact. That always bothers me all the time.

So with our training, I’m always looking for ways within the training to have you implement something, a few things to kind of get into those new habits and create new successes. Create more belief. Stretch yourself a little bit and cause you to think deeper about something a little bit and all those kinds of things. Those are really important but sometimes you need action to do that. And there shouldn’t be blockages to that. The only blockages to any of those things should have to do with your own brain. Things you have to overcome and that’s where we come to encourage you on that. But it can’t be about money. It can’t be about, “Oh, okay, well to do that I got to do with this, I got to do this.” And if there’s got to be like five things you’ve got to do to do one action, you’re probably not going to do it. And I don’t want that for you. I want to make it easy for you. So that’s Kinda what our program’s all about.

So I maybe didn’t implement it as well as the $18,000 package, but I wasn’t convinced of the value because it was only about one thing. If it really was going to fulfill a whole bunch of things that I felt was missing in my business that they convinced me of or whatever, maybe would’ve spent the money, I don’t know. Maybe. It was one thing that I felt like, “Yeah, I don’t know if that’s the end all be all” Because I was just starting to get into that mindset of building the business a little bit different. The light bulb was just starting to kind of come on. All this stuff that we’re teaching you, all that was just kind of happening.

So anyway, I was doing okay. I wanted to learn things to go back and teach my agents at the time. I took a lot of good things out of that weekend. But you know what? It was again, selling me on the superhero business. You know, being the big man, being the billboard guy, spending more money than my competition to get more mind share, right? From the community, to attract as many strangers as possible. And that’s old thinking, that’s old mentality. It does work. It does work over time, but you got to spend a ton of money to do it and you gotta be committed to do it. So that’s a thing. And if you’re making more money than you need and you’re not spending money on that stuff, you can go on some pretty nice trips. You can drive some nice vehicles, you can have some nice clothing, you can spend money on those things if you want to. But I look at it and go build the business first and then allow other people to scream about you, Right? Instead of a billboard that basically says “I’m really successful and I’m going to pull stuff off that no one else can pull off. I’m a superhero agent and I’m just way above everybody else and I’m number one and I have all these awards and”… Whatever it is, those people are calling me for that because they think I can pull something off that no one else could pull off. That is not a good position to start from, honestly.

So then I went to other training programs and another one who was teaching me on how to manipulate people into thinking the way I wanted them to think. Kind of tricking them and do some sort of Jedi mind tricks to get people to do what I wanted them to do. And again, I did! I took some good things out of that, but I chose not to apply some other things. But I also chose not to buy the ticket for his major event for that course either because I didn’t think that there was value there.

This is what the public is scared of, right? The public is fearing this. They’re fearing, they get scared of salespeople because they know that there’s a chance that they’re going to get sold on something. That they’re going to get manipulated into something. That someone’s going to talk them into something and not do something that’s in their best interest. That’s still going on. It’s still in the psyche of the people. And the training that’s going on right now out there is still kind of talking about those things. And I don’t like it. So I just want you to know that’s not what we’re doing in our course.

Have you watched those TV shows about those real estate agents like in Los Angeles and New York dealing with all these really rich people. Listen to their language, listen to the conversations they’re having with each other when their clients aren’t around. Listen how they’re talking about when they’re trying to get a deal together and they’re going back and forth and they’ve got it on speaker phone so everybody can hear everything. You can listen to how they’re talking to them and you can see when they hang up the phone, how they’re talking about those clients afterwards. The challenge or the thing that’s frustrating to them. All of those things, more often than not, it is not about doing the best they can for the client necessarily. It’s about closing the deal. It’s about getting the deal done. It’s about convincing them that they should take that deal and these frustrating clients.

Now I’ve seen how weak they are when they’re talking about value in a listing presentation. It’s mind blowing to me to be honest with you. They’re sitting there and they’re allowing the seller to manipulate them coming off like, “Wow, they’re really rich and so they’re powerful and I don’t want to lose this listing because I’m desperate and it’s gonna make me lots of money. I can make $100,000 selling this place so I got to get the listing. I’ll just, oh… Whatever. I’ll do… I don’t like it, but I’ll just do whatever the seller wants and you know, we’ll see how it goes and then I’ll just talk him into it later when we ended up getting an offer.” Like that is kind of the mentality that is going on.

That’s what I see when I watch those shows. I don’t agree with it, but just listen to that, listen to how they talk. This is the thing, this is now in the public’s eyes, in the biggest stage possible on TV, right? This is a show people are watching. People love watching train wrecks. I don’t know what it is. Like the wives of New York and the wives of Dallas and the wives of bliss and all these crazy shows, these reality shows and people like watching them because it makes them feel like they’re not so bad. Right? They kind of look at that and go, “Oh, well at least I’m not like that. Like we’re pretty normal compared to that.” And you’re kind of comparing it, I don’t know, in my mind, to the lowest common denominator. That’s not what you should be comparing… but I won’t get into that.

We’ve come so far as realtors. It’s a hundred years later now. And then things like that are kind of pushing things backwards and I hope you agree with me on that. Or at least gets you thinking about it anyway. We may start to like the characters in these shows and start to respect them a little bit because they’re making a lot of money and they have quirky characteristics or… I mean, that’s okay. But they don’t personify the 4X agent. They don’t. That’s not what we’re shooting for. It’s our mission to create 4X agents that elevate what a realtor or a real estate professional is to the public. That’s our mission. One by one. But over time, this can happen. We have a chance. We just have to start. So once this movement starts, I don’t think it’s gonna be able to be stopped because people, the public wants this. They’re crying out for it. They’re screaming for it. This is what they want from you. This is what they want from real estate professionals. I know it. I know it for a fact. This is what they want and we need to give it to them. And I’m excited to be part of this and to be starting this movement and just create a bunch of 4X agents, 4Xers, just doing well-rounded four dimensional stuff that is treating people properly. Creating answers to their challenges and winning along with people in that way. It’s exciting stuff. I’m really excited about it.

Share your thoughts