Tracy Tutor, de Bravo's Million Dollar Listing, habla sobre bienes raíces

Gene Marks (00:00)

Do you think when the Fed ultimately does start cutting interest rates and people are talking about them cutting like 25 basis point, maybe half, you know, 0.25 basis point or maybe half a basis point, do you think that will make a significant difference or will it take a lot more than that before the industry really starts getting back to where it was?

Tracy Tutor (00:18)

Well, I mean, if you're looking at it on a macro level, if we get a half a point reduction in interest rates, that would be major for most of the country in terms of buyers' ability to, to purchase right now. So, yeah, it makes a huge difference. You know, obviously in California and in Texas in the luxury market, that shifted a little bit. But there's a lot of money out there right now and a lot of capital. So, I'm seeing, you know, investors get back into the market right now because it is a good time to buy.

Announcer (00:55)

Welcome to Paychex THRIVE, a Business Podcast where you'll hear timely insights to help you navigate marketplace dynamics and propel your business forward. Here's your host, Gene Marks.

Gene Marks (01:11)

Hey everybody, it's Gene Marks. And welcome back to another episode of the Paychex THRIVE Podcast. Thank you so much for joining me. We've got a great guest this week. It's Tracy Tutor. Tracy stars on Million Dollar Listing Los Angeles which airs every Wednesday at 9:00 Eastern Time on Bravo. I want to read a little bit of Tracy's bios just so you guys know a little bit of background. So Tracy, you can go and get a cup of coffee and come on back by the time I finish this. Tracy Tutor is a top real estate agent, best-selling author and entrepreneur with 24 years' experience in luxury real estate sales from being the first female real estate broker on Million Dollar Listing LA. Tracy Tutor's on-screen persona is revealed in her book Fear is Just a Four Letter Word, which was an instant bestseller. You know, before I go on with the bio, can I ask you, have you watched the Parisian Agency on Netflix? You ever, have you ever seen that? Joe no, it is, it's another real estate show that my wife and I love and it just, it takes place in Paris and it's a family of real estate brokers and they also sell luxury, you know, properties, but obviously in France and other parts of Europe, it's a really great watch. She only watched it because the men on the show are really good looking. So I'll throw that out to you. Let me finish your bio. Tracy speaks passionately around the U.S. to empower agents and entrepreneurs using her raw and always uncensored attitude with one singular mission, providing a no-nonsense guide to analyzing big egos, deflecting power plays and taking control of any room. A couple of stats for you guys. Following the successful launch of the West Hollywood edition, Tracy has exclusively represented the luxury development industry which has 100% sold in 2021, with sales prices ranging from 4 million to 26 and a half million, totaling nearly $200 million, breaking records in Los Angeles for price per foot. Other significant sales include a Brentwood estate listed at 64 and a half million dollars, followed by 150 million plus in sales at the end of quarter two. Most recently, Tracy has taken her business to the state of Texas and she has offices in Dallas and Austin with over $200 million in listings. So, Tracy, first of all, thank you so much for joining. It's an honor.

Tracy Tutor (03:29)

Oh, thank you for having me, Gene. I never thought that bio was going to end.

Gene Marks (03:32)

I know it goes on. I get it. And you know, and you know what it's like mixed feelings when you have a bio like that. I mean, you've worked to have a bio like that, but then as you're looking to it, you're like, okay, it's a little, you know, awkward, but it's great stuff. And you know, like I said before we started recording, I wanted this conversation to be about real estate. I mean, we can talk about a lot of different topics together, but you know, we have a lot of our listeners and a lot of our viewers who run businesses in the real estate, the construction industry. You've been doing this for many years. You have a lot of experience here. And so, I want to get your thoughts. So, let's just start out with just a general overview. And by the way, I realize you're just in California. I realize you're in a single part of the real estate industry, luxury real estate. And I also know you've branched out into Texas. But yeah, I'm sure you're keeping up with the industry overall. Give me your thoughts on the industry right now. Inventory is low, prices are high, mortgage rates are high. Where do you feel overall the industry is heading?

Tracy Tutor (04:34)

Well, it's a big, it's a big week for us. We know with the Feds, you know, introducing hopefully lower rates. I haven't checked, haven't checked anything out yet. But yeah, you said it. It's sort of a combination of, you know, obviously what's happening in our world economically. You know, the election always comes into play when we're in, you know, particularly in real estate. Everybody just kind of pauses and says, what's going to happen next? And obviously this year is, is a big year in terms of the election and interest rates we've been struggling with now since, you know, we were at the bottom at 2% interest rates on an IO and now, of course, you know, there has been a real shift. And I think if you look back to 2021, where interest rates were at 2, 3% and prices were soaring at that time, a lot of buyers out in the marketplace were like, I'm going to wait, I'm going to wait until prices come down. Well, guess what? Prices have come down, but interest rates have gone up. So there's, you know, we're always trying to educate, you know, our clients, both sellers and buyers, about where we are currently. And, you know, I think everybody who didn't buy in 2021 is now kicking themselves because they have the ability to do so. And now, of course, the cost, not to forget inflation, but just the cost to own that same home has gone up by a significant amount and people have to sort of readjust their expectations on what they can get into.

Gene Marks (06:04)

Right. Do you think when the Fed ultimately does start cutting interest rates and people are talking about them cutting like 25 basis point, maybe half, you know, a 0.25 basis point or maybe half a basis point, do you think that will make a significant difference or will it take a lot more than that before the industry really starts getting back to where it was?

Tracy Tutor (06:23)

Well, I mean, if you're looking at it on a macro level, if we get a half a point reduction in interest rates, that would be major for most of the country in terms of buyers' ability to purchase right now. So, yeah, it makes, it makes a huge difference. You know, obviously in, in California and in Texas in the luxury market, that, that, that shifted a little bit, but there's a lot of money out there right now and a lot of capital. So, I'm seeing, you know, investors get back into the market right now because it is a good time to buy. Sure. If you're a buyer out in the market right now and you're looking at what was a 7.5% interest rate for the last six months and you're lucky enough to, you know, be in the market today, I'd still say buy now, like lock down. Whether it's an investment property or, you know, your first purchase, don't look at it, you know, on a, this is my first purchase. It has to be perfect. This is my first home. Like, you got, you got to get in at some point. So, the Millennials and you know, Gen Y, even like you start, you have to start thinking about getting into that, getting into real estate early and whether it's buying today or buying in the next 30 days and then perhaps refinancing next year when the interest rates come down another half a point or a point, that's your way into the market. And it takes a long time to build wealth in real estate, but, you know, that's an asset that is always going to be protected. So, you know, in my opinion, that's why I love what I do, because I'm able to protect my clients from losses on a major level. Now, locally, for me, it's a little more challenging because of some of the, you know, decisions and politics that are in California right now. And, you know, we have a new tax that we have to deal with in the luxury market, which has crushed luxury in the last year. So, you know, we've had to pivot and figure it out. But, you know, I'm actually really looking forward to a half a point reduction. And I think that will spur buyers in the market, but that will also spur, I think, an increase in prices.

Gene Marks (08:38)

Yeah, I think, I think you're absolutely right. I feel there is a lot of pent-up demand. I mean, I have kids in their late 20s. They want to buy, they're renting right now. They have the ability to buy and they're kind of holding back because mortgage rates are high. And you know, I don't know if you, I'm sure you do because you sell real estate, you know, I tell them, like, if you find the right place to buy, don't let mortgage rates get in the way of buying that property. As long as you can maintain the debt, obviously. But like you just said, you can always refinance. I mean, if interest rates head down. Okay, so you'll pay a lower banker's rate a year or two years from now, right?

Tracy Tutor (09:10)

Yes, as long as you can cover that, that, that short, that short period of time where you might be pushing yourself a little bit in terms of what your monthly income looks like. I mean, you don't want to push yourself so far that, you know, you can't survive. But I say buy now because the second those interest rates start to tick down, you are going to see that demand, you know, increase and the prices of real estate will go up.

Gene Marks (09:35)

Yep, yep. You brought up an interesting topic, which is California. And I don't want to get political, but I do. I am kind of interested in your thoughts on selling luxury real estate in California versus other places in the country, I mean, with this, first of all, can you explain to our California listeners what these, what the new tax is in California? And I'm just kind of curious what your thoughts are, how you think that's going to be impacting the industry there.

Tracy Tutor (10:00)

So, so they've, they've, you know, we have a homelessness problem in California and there, there isn't any housing. So, they've put in a measure in place which is called the ULA measure that taxes anyone who sells their home over $5,150,000 has to pay a 4% tax on and anybody over $10 million has to pay a 5.5% percent tax. Now that is on top of paying what standard we'll call a 5% commission to buyer and seller in addition to, you know, escrow fees, title fees and recordings. So, you're looking at on a $10 million sale, close to 11.5% in fees. And so that, that's been a real tough pill for a lot of people to swallow. And anyone that bought in the last five to seven years and wants out are struggling with their equity that they've built because they're about to give it right away. And anyone who is was lucky enough to purchase in 2020, 2021 and lock in an interest rate at 2 or 3% can't afford to sell because they're in a much different space right now. So, it's really halted a lot of the big sales that we would typically see. And from a broker standpoint, I think a lot of agents are struggling. Their businesses are down anywhere from 20 to 60%.

Gene Marks (11:36)

So, what do you do to face, how do you navigate that? On the one hand, it's absolutely going to impact a lot of your competitors. It might drive them out of business or drive them out of the state for all you know, which frankly is going to open up more, more opportunities for you. Secondly, it is still California and obviously there's a limit but you know, people want to live there. It's an amazing state. I mean it's not like the luxury market is disappearing. It's just becomes that much more difficult to sell homes. So, I'm kind of curious how you're like, what's your strategy for dealing with that?

Tracy Tutor (12:08)

Well, first of all, I, you know, I pivoted a couple of years ago because the second I saw the interest rates, you know, go down the way that they did, and we were coming out of COVID era and I saw probably 40 to 50 million between my friends and my network leaving the state of California and heading to Texas. I went, hmm, that's really something I should be considering. So, for me personally, that's why I opened in Texas. But you know, I think obviously in the market that we're in, and I think this isn't specific to California. I think it's across the country. I think a lot of newer brokers are, are suffering. I think even, even my own business is, has been down in the last couple of years comparative to 2020, 2021, even 2019. But I'm lucky enough to have pivoted to Texas to sort of rebuild, you know, what I'm accustomed to closing at the end of every year in a new state. I don't think a lot of agents have done the same. And so, I think we're going to see a max, a mass exodus from agents. You know, listen, there's a low barrier of entry for what we do for a living. You can get your license in 12 weeks’ time, doesn't require a degree. You know, you have got to study a little bit and that's it. And I think, you know, unfortunately with, you know, the shows like you're talking about, which you watch, and obviously I'm on one, you know, the glamorization of this industry has in the last 10 years shifted the, you know what now I think a lot of young adults want to do, you know, they, they don't think it requires that much work. And all of a sudden they've been thrust into an industry that is shifting on a massive level with the NAR decision. Them not being educated or have any knowledge or basis to understand what it takes to really do what we do. And so that of course is going to be a, you know what I think is going to be the agents that are out there selling and understand what we do for a living and have an education around it and have been doing it for 10 years plus, are going to thrive.

Gene Marks (14:19)

You mentioned the NAR decision. So, let's talk a little bit about that. This is, the National Association of Realtors had a big settlement, it was last year, but now it actually went into effect in August. Some people say it's going to turn the real estate industry upside down because it now gives both buyers and sellers the ability to negotiate what was allegedly, allegedly a non-negotiable rate of commission between themselves and their brokers. We always thought that, you know, hey, when you're selling a house, it's a 6% commission and when you're buying it It's 6. And that's just what it is. And now this decision is sort of opening up for negotiation. And first of all, am I explaining that correctly? Tracy, do you know, give me some thoughts on how you think this is impacting your business?

Tracy Tutor (15:03)

You're explaining it well enough. I think there's been so, so much media and nonsense surrounding this topic that I think there's a lot of misinformation out there. I actually have chosen, you know, for the better part of the last six months, to not talk about it too much on social media because it's everywhere, and it's a lot of misinformation. Real estate commissions have always been negotiable. Always. Whether or not there is a standard is a whole other story. So standard commission across the board in California is 5%. If you're selling something over 20 million, perhaps that drops to 4%. We put deals together all the time, and during escrow period, where we have an option or a discrepancy in value based on appraisal or based on inspections, we might renegotiate. And that also can mean our commissions. So, the idea that, you know, it's been 6% or 5% and that's, you know, some sort of stringent law is absolutely false. We're still very new, you know, in the new world since August. Right. It's been a month or so since we've all been dealing with this. I have yet to see deals fall apart due to this. I have yet to see on the deals that I'm closing, buyers, agents, not getting paid commission. But again, I'm working at a different level with, you know, very qualified agents on the other side of the transaction representing their buyers. And I think most buyers are coming to the table with the expectation that the seller is still going to pay the commission. And candidly, most sellers want to pay the commission because they want to get motivation, you know, motivation. And, and no one works for free. Now, where I think that that, you know, obviously affects different price points and different agents in our industry is, is again, lack of education, lack of understanding on how to put a transaction like that together. And, and that's, again, where we're going to see a lot of people sort of lose the ability to survive and make a living being a real estate agent.

Gene Marks (17:27)

Isn't this just more of an awareness issue? I mean, if I'm buying or selling a house, I mean, maybe I'm an outlier, but like, I always knew that these commissions were negotiable. You know, there was no, you're not required to pay a 5 or a 6% commission. I always knew that it was sort of a standard thing, but I also knew I could, you know, I could ask about it. Do you think it's now what your expectation is because of this ruling, that just more of your customers are going to be, they're going to be questioning your commission than ever before?

Tracy Tutor (17:55)

I'm having conversations every day with my clients. I'm educating them. I have. I've said this to them for years, and I'll say it again. I am not going to work for free, nor am I working at a reduced fee.

Gene Marks (18:12)

Right.

Tracy Tutor (18:13)

This is what, this is the fee for what it costs to work with me.

Gene Marks (18:17)

Right.

Tracy Tutor (18:18)

If you would like to use someone else at a different fee structure, you are welcome to do so.

Gene Marks (18:23)

Right.

Tracy Tutor (18:24)

Here's what, here's what comes with it. Here's what you get. That being said, if we decide that you want to offer a different commission structure to a buyer's agent coming through the front door, you are welcome to do that. And also, you are also welcome to put it at a full commission. And if the buyer walks through the door and gives you a crappy offer, then counter them with a crappy commission. So, it actually doesn't serve the buyer. Excuse me. It actually doesn't serve the seller because you're actually asking the real estate agent to not have their fiduciary duty to the buyer because if they want to get paid a full commission, they need to make their buyer bring in a better offer. And that's like, these are the nuances that I don't think they fully thought through in this lawsuit, because you're asking a buyer's agent to be represented in a transaction, get paid less because that particular buyer doesn't want to offer the seller the full price. Well, that all that real estate agent has to do is say, you know what? There's a better house down the street, far superior location. And by the way, they're paying me a full commission. So, it's not structured in a way that actually makes sense. But I think most educated agents are figuring out how to navigate it in a way where they are of value. And that does mean we have to work a lot harder.

Gene Marks (19:56)

I always would have thought that you just, you get what you pay for. I would think that if I am hiring you to sell my house, and clearly I have a luxury property, I'm going to be paying top dollar to you because you're a top salesperson, you know, and I don't know, I just. To me it just, it's always been the case and in every industry, its rates are always negotiable and you pay. That's why you pay, you know, a top law firm in New York, five, six hundred dollars an hour or more. You get what you.

Tracy Tutor (20:24)

Exactly, you know. So. Yeah.

Gene Marks (20:27)

All right, let's pivot a little bit. I want to make sure that I keep track of our time because I have like a million questions to ask you. I'm fascinated by your day to day as a real estate person. When you watch any, when you watch Million Dollar Listing LA, when you watch any of the other your competitor real estate TV shows that are on, they make it look so easy. You're showing up at these gorgeous places, you're having showings and drinking champagne. And I know that is not reality. Behind the scenes, there is not only a staff of people that are working for you, but also, you've got pipeline reports, you've got calls that you're making, you're getting people that lie to you, you're getting competitors that are diving in. It is a very, very tough business. So, walk me through a little bit of your. Besides what we're seeing on television, even selling luxury properties, you know, walk me through your, your day a little bit. I'll start with this. What technology do you use, Tracy? Do you have like a, is this on a spreadsheet? All of your prospective homes, do you use a CRM system? What do you use?

Tracy Tutor (21:34)

Oh, I mean, well, I don't run my CRM. My CEO Cody Coffman does. But we have a few different systems in place. We have a CRM, obviously, where we've actually created our own app where our clients can come and work with us through the app so we can lead gen better there. I use obviously social media. All of the influx of followers that we get from social media broker inquiries, lead gen from there also gets input into the system. So basically, my day is not spent behind the scenes looking at spreadsheets. That's what I've hired people to do on my behalf because my time is best used being out in front of clients and actually doing deals. So, I know what I'm good at and I know what I'm not good at. And it took me a little bit of time to figure that out. Now granted, in the first 10 years of my business, did I do all of those things? Yes. But it's not the best use of my time. And so that's why I had to kind of take that leap of faith 8, 10 years into my career and say, okay, I need to put a listing coordinator into place. I need to put a marketing specialist that's just devoted to my team in place. I needed to hire a CEO when I decided to open up in Texas because there is no universe that I can add value to 20 plus agents when I have my own business to run. Am on a TV show, am a mother of two teenage daughters and like have some semblance of a personal life.

Gene Marks (23:12)

So, we're going to get to people in a minute and we'll avoid the teenage daughters because no one wants to, you know. But, but when I, when I look at your schedule, like today, we're talking today, it's actually a Monday. You're a few hours behind me. Do you do, do you know your, your calendar for the week or does it change day by day? And who sets your calendar? How does that work?

Tracy Tutor (23:33)

So, my calendar is color coded with probably six or seven different colors. I've got one for Texas, one for California, and those are both in the real estate format. Then I've got all my personal appointments, I've got my daughter's appointments, also a separate color. I've got family travel, social and so it's like a disaster when I'm, when I open it up every day. And candidly I think opening in a new state really sent it over the edge. So, at this point I really do my best not to look more than two days ahead because my schedule, I'm a real estate agent. My schedule changes every single day. So today I was up at 5:30 in the morning, I was in the gym by 6, I was done at 7, got my kids off to school and dealt with by 7:30 and then was on back-to-back calls with clients that are in Texas that are two hours ahead of me. Then at 9 o'clock I had a Texas all team meeting on Zoom from 9 to 10. And then at 9:58 I got on this Zoom and I'll have that with you until it's done. And then I have a listing appointment. So it is, I schedule myself pretty much down to the minute. There is no call that I need to be on longer than 20 minutes. So, I really try to be militant about time spent. I consider drive time, I consider everything. So, and each day is different. Some days I work until 6 o'clock, some days I'm still on calls at 9 pm that is the nature of what we do.

Gene Marks (25:05)

Two more questions and I'll let you go. One is on your calendar and your productivity. Where do you draw the line, in other words, between a work-life balance. You mentioned about all the different pressures on your time. Are you like, I am not seeing anybody after 8 o'clock at night or on Sundays or this is not the kind of thing that I want to spend my time doing. What decisions have you made? Where you draw the lines?

Tracy Tutor (25:29)

I really try, unless it is a very important client to not work on Sundays anymore. You know, I have done my fair share of open houses and taking buyers out for 16 hours. I really try to carve out that time as like a rest day for me. And truth, I, I'm a hustler. If I'm not busy at, at, you know, 6 or 7 o'clock and my day is done, I'm almost a little bit shocked, you know, so. But I know when I hit a wall and I think I just, you have to be present enough to understand that when you have a push and you know what that push looks like for the next two or three weeks and you're like, it's going to be a rough two to three weeks, I make sure to say at the end of that, I am taking two full days off. And I don't, clients don't, nothing is that important that someone needs to talk to me between Saturday and Sunday at the end of, you know.

Gene Marks (26:27)

Are you checking emails when you're off?

Tracy Tutor (26:31)

No, but I also, I have, I have Cody Coffman checking my email. So, if anything urgent come, I never miss a thing because when I off code, Cody is on. So, if something important comes through, he is the only one that's allowed to reach out to me on those, you know, those times that I carve out for myself and my family.

Gene Marks (26:50)

Fair enough. All right, final question then. I'll let you go. You had mentioned about your, your team. I mean obviously you've done support team and you've gone through like you mentioned, hiring a CEO in Texas, putting together a team in Texas. Do not tell me that you're an expert at hiring because none of us are. You know, I mean, you know, and I'm sure you have made your fair share of mistakes in hiring as well, because we all do. It's like you get, you read, you do all the things right and then at some point it's a leap of faith, you know, when you're going to bring somebody on. But knowing all of that, give us just, just a few thoughts on hiring. Like who? You know, what, what. And if I can just, if you don't mind me. I was speaking to one client recently that says when he looks for employees, he actually keeps an eye out when he goes out to like restaurants and retail stores, like, he's like, the guy runs like a windows and doors company and he's like, I can tell anybody to sell windows and doors, but I can't, you know, I can't tell you how to be energetic and show up on time and have the right attitude like that server had, you know, when I had dinner last night. You know what I mean?

Tracy Tutor (27:51)

Right, I do.

Gene Marks (27:52)

What do you look for when you're hiring somebody?

Tracy Tutor (27:55)

I have and admittedly have hired the wrong people many years over and over. What my system is now is they go through a series of interviews and the first interview is with Cody Coffman, who is my CEO. The next interview is with my marketing manager, Ani Cataldi. And then finally after two interviews, then they come to me and what I look for is charisma and grit. Those are the two most important things in my opinion on a how you, how you become a good salesman and what is instinctually inside you. Charisma all day long. And two grit. This business is a roller coaster. It is incredibly difficult to survive and if you can't wake up and shake it off and have the memory of a goldfish, you are never going to last.

Gene Marks (28:50)

Tracy Tutor is a top real estate agent, best-selling author and entrepreneur with 24 years' experience in luxury real estate sales in Los Angeles and now in Texas, Tracy appears on the top-rated TV show Million Dollar Listing Los Angeles which airs every Wednesday at 9:00 Eastern Time on Bravo. Tracy, you're awesome. Thank you very much. I'm a big fan. Learned a lot from this conversation, so thank you.

Tracy Tutor (29:15)

Thank you so much for having me, Gene.

Gene Marks (29:16)

Do you have a topic or a guest that you would like to hear on THRIVE? Please let us know. Visit payx.me/ThriveTopics and send us your ideas or matters of interest. Also, if your business is looking to simplify your HR, payroll, benefits or insurance services, see how Paychex can help. Visit the resource hub at paychex.com/worx. That's W-O-R-X. Paychex can help manage those complexities while you focus on all the ways you want your business to thrive. I'm your host Gene Marks and thanks for joining us. Till next time, take care.

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