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Side’s Spencer Krull on brokerages, Los Angeles real estate

Today’s HousingWire Daily continues the Houses in Motion, a miniseries hosted by Senior Real Estate Reporter Matthew Blake that looks at U.S. real estate. In this episode, Blake is joined by Spencer Krull, managing broker of Side’s Southern California offices and veteran of brokerage management. 

During the episode, we pressed him on the modern-day purpose and economic viability of a brokerage, and what Side’s distinctive model specifically offers. We also discussed the lively, combative world of Los Angeles real estate sales. 

Here is a small preview of the interview, which has been lightly edited for length and clarity:

Matthew Blake: What should people know about Los Angeles real estate?

Spencer Krull: We have a huge celebrity culture here. Whether or not somebody is a celebrity or isn’t a celebrity, I think they want to be treated as a celebrity. There’s a certain deference that they’re expecting from their agents in the luxury markets. And additionally, we do have celebrities. We have attorneys, business managers, and even sometimes entertainment managers that for whatever reason want to inject themselves in the process.

And a lot of times you have an attorney — not a real estate attorney — that’s injecting themselves into the process without understanding the process. So that’s one of the things that becomes a little bit difficult, because now you don’t just have your client, you have all these other people that want to service your client. 

HousingWire Daily examines the most compelling articles reported across HW Media. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. Hosted by Matthew Blake and produced by Alcynna Lloyd and Elissa Branch.

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Below is the transcription of the interview. These transcriptions, powered by Speechpad, have been lightly edited and may contain small errors from reproduction:

Matthew Blake: Hello, and welcome to the third episode of “Houses in Motion,” “HousingWire Daily’s” weekly look at the world of residential real estate. I’m joined this week by Spencer Krull, Managing Broker of Side‘s Southern California office. Spencer has spent years now on the managerial side of brokerage, while living and working in Los Angeles. He’s been a director, broker of record, productivity coach, training director, general manager. If anyone can justify the purpose of not just a real estate agent, but a real estate brokerage, it’s Spencer. Spencer can also tell us what isn’t essential about a brokerage. Spencer, welcome to the show.

Spencer Krull: Thank you. You know, that is such a great introduction. I think we should end right now. I think we should end before I disabuse anybody of that. Thank you. That’s a great intro, Matt.

Matthew Blake: That would be easy, easy on everyone, especially the people editing this podcast, but I’m going to press on nonetheless.

Spencer Krull: All right.

Matthew Blake: So, you have been working in Los Angeles for several years now. I was in Los Angeles for several years. I’m actually right now in Chicago. What should people know about the LA housing market? Like, obviously, there are a lot of expensive houses, a lot of celebrities live in LA. But what would you say is distinct about the housing market that somebody in say, the Midwest or South, may not know?

Spencer Krull: I think when people talk about the Southern California market, just because of the focus on Los Angeles, people think about Los Angeles. So they immediately think, and when they think Los Angeles, Beverly Hills, obviously, in the Los Angeles area. So I think they immediately think about high end real estate. So when people look at Southern California, they’re just thinking immediately the high end. And we have a lot of high end areas, right? So we have Beverly Hills, we have Bel Air, we have Pacific Palisades, we have Santa Monica. And then further down the coast, we have the coastal cities. And we have La Jolla down in San Diego. So we have some very, very expensive areas in Southern California, including wineries and whatnot in the Inland Empire, Temecula area.

But I think what a lot of people don’t realize is we have a lot of not, well, everything is expensive in California, right? So it’s not like anything is really cheap, but we have a lot of areas that aren’t luxury. So I think that’s one thing people don’t get whenever I tell people, you know, I work out of the Los Angeles area. I work in Southern California. They’re like, oh, you know, million dollar homes. And it’s really true. There’s a reason “Million Dollar Listing” is a TV show, and I think, probably, “Million Dollar Listing” describes a lot of things that really, you can’t get for a million dollars anymore. So they might want to change it to, you know, “$5 Million Listing” or something, to make it more exciting. But I think that’s the main thing people need to know about Southern California, is we have a lot of different regions, and there are a lot of different styles in the way that people do business here.

Matthew Blake: Yeah. I mean, is there any sort of, like, misconception that people have? I guess, maybe one might be there’s more stuff than luxury? Or what do you think?

Spencer Krull: Well, we have… You know, that the thing, I think, that sets Southern California apart. And again, I’m going to talk about… Sorry. I used to live in New York. I lived in Chicago as well. I’ve been in Los Angeles working in real estate for close to 18 years. And I also did business in property management. So that was one job you missed in your intro. But I also did property management for a while. And I did that through mobile home parks throughout California, which are some good stories. That’s another podcast for us. And I also did a lot of stuff in Texas. Every region has a different way of doing business. So, we have the New York personality, of course, when people think about New York in a certain way. And then we have the “laid back” LA style. But when it comes to real estate in Los Angeles, and especially when you’re looking at Los Angeles proper and the luxury areas there, you have a lot of influences that have absolutely nothing to do with real estate.

So, for instance, we have a huge celebrity culture here. So whether or not somebody is a celebrity or isn’t a celebrity, I think they want to be treated as a celebrity. So not saying that we wouldn’t give people excellent customer service, but there’s certain deference that people have that they’re expecting from their agents in the luxury markets. And additionally, we do have celebrities. So we have attorneys, and business managers, and even sometimes entertainment managers that whatever reason want to inject themselves into the process. And a lot of times you have an attorney that’s not a real estate attorney, so they’re injecting themselves in the process without understanding the process. So that’s one of the things that becomes a little bit difficult, because now you don’t just have your client, you have all these other people that want to service the client.

And on top of it, we have these shows, the reality shows, I mentioned one before, that really have no bearing on the actual way people do business. Right? You don’t do a deal on the phone. And everything has paperwork attached to it. They don’t show million dollar back office, which is something I think I spoke with you about a while ago. But everything is done on paper. So this whole idea of, you know, “No, it’s going to be $5 million.” “No, I’m only going to give you $4.8 million.” “All right, we’ll do $4.9 million, and we’ll cut the deal.” “Oh, great.” You know, and that’s it. That’s not reality. But clients expect something.

I’ll give you a story, when I was an agent a couple of years ago. I was selling a condo and the buyer of the condo wanted the sellers to do something. I don’t remember what it was. It was, like, fix the windows or change the windows. And you can’t. That has to be handled by the homeowners association. So the seller herself couldn’t do it. And the agent on the other side was someone that I didn’t know very well, but we were very cooperative with each other. And he called me, and he said, “Listen, I’m going to call you with my client on the other line, and the client is going to have their business manager with them. And just ignore everything I’m saying. I know that your client can’t do anything, but I kind of have to put on a show for them.” So he called me up, he started cursing at me. You know, “You better change those effing windows and get the door fixed.” And I said, “Well, you know, this is an HOA issue.” And I’m thinking, “Wow, this guy is just losing it.” And he said, “Well, you better come up with something or we’re going to cancel.” And he hung up the phone on me. And I was shocked that the conversation got derailed that quickly.

A minute later, my phone rang, he said, “Hey, man, where do you want to have lunch?” Right? Because he needed to put on a show because his clients were expecting him to act like a “entertainment agent,” the way that if you watched “Entourage” or something like that, that’s the way that they expected an agent to act. So, you have that factor in there. And I’m not saying that’s on every deal. That’s very rare that that happens. But I think there’s an element of that that people can expect, especially on the higher end. And I’ll say high end, I’ll make that $5 million and above, because the $2 million property just kind of seems de rigueur at this point.

Matthew Blake: Yeah, back office, million dollar back office, that sounds like a good show, perhaps for Bravo to do sort of a follow up there. I guess that gets into sort of the question as to what a managing broker does. And you were just kind of, I think, describing very well there, what a managing broker does. It seems like there’s some troubleshooting involved. But what is sort of the meat of your job? And what do you sort of contribute to Side?

Spencer Krull: Excellent question. You know, managing broker, I think the title pretty much says it. In a traditional brokerage model, where you have different offices, the manager is a sales manager, and a transaction manager. And managers will lean more towards one side than another. And so they’re dealing with the compliance aspect of things, and also doing sales coaching for the agents. So when I was general manager, we used to have our sales meetings. And that’s where you’re supposed to kind of be rah, rah. And sometimes you’d bring in a coach or somebody else to talk about stuff with the agents. And here’s how we’re going to increase your sales and whatnot. With a managing broker role, there are… In California, we have the responsible broker for certain areas. So we have our broker of record, of course, and everybody works under that license. And in our case, that’s Hilary Saunders, who’s one of the Founders of the company, as well. And so she’s our broker of record. She’s also an attorney. And we have Casey Mcloedis, the Managing Broker of Northern California. I’m Managing Broker of Southern California. And we have Lisa Swanson, who’s kind of a Managing Broker at large, she’s also an attorney.

And we have it separated by Northern and Southern California for two reasons. So I’m talking about Side in particular here. One of them is because I am the Managing Broker or the Responsible Broker of a certain number of offices in Southern California. So it’s kind of my license on the line first. And Casey Mcloedis is one of the managing brokers for those offices in Northern California. But otherwise, we’re all dealing with California equally. Like, we will take the phone calls or answer the emails, all of us, depending on kind of who gets that email first, or who gets the phone call first. So the main part of the job is being the responsible broker. So we handle things like compliance, we handle… So let’s just say that an agent has a conflict with an agent on the other side, then we’ll get on the phone with the manager or the broker from the other office, and try to work it out. And we’ll get on with the attorney, or we will get on with the client sometimes to explain to the client, why we have to do something a certain way, why we can’t do it a certain way, why we can’t add certain language. A lot of fair housing issues come up that we need to take care of.

So that’s what we do as the Managing Brokers. One thing which we don’t do, or at least not as much, is the more of the manager part. So I’m not involved in the sales and getting people pumped up to do their sales. But what I do love doing is troubleshooting the deal with the agent. So sometimes an agent will call and I’ll have a conversation with them saying, “Well, I would frame it this way or I would frame it that way. Here’s why your client can’t write that clause in a certain way. So, how do we explain it to them? How does this sound?” And one other thing, which I love doing too, is when there’s a conflict between sides, it really doesn’t help to butt heads, right? So you don’t want to make the other region look bad, especially in front of their clients, so I always like to give them an out. And I like to be the bad guy, I like to be the bad cop, or at least looking at it from 10,000 feet, or looking down on it. So I will often write an email to my agent, knowing they’re just going to forward it to the other side. So I’ll say “Yes, you know, liquidated damages is so confusing. And here’s how I explain it.” And my agent knows this, but they’ll forward it to the other side saying, “Hey, I talked to my managing broker about it. And here’s what he said. So let me know if you have any questions.” And a lot of times, it just takes care of it. So, I hope that answers the… I don’t know if you have anything more specific on that, but I think that kind of talks about my day to day.

Matthew Blake: Yeah, it does. I guess, kind of jumping around here, since you’re basically a resource to the agents outside, I mean, how does it work to be remote? I mean, is that sort of a different challenge? Because I’m sort of envisioning, like, agents waltzing up to your office, or desk, or something, and now they can’t do that. So, how is your communication like with your agents?

Spencer Krull: I think the fact that we are remote proved to be an incredible strength during the pandemic. And I will get into my airline example of this because I didn’t fully appreciate it until I was traveling recently. But when I have been in offices, so when I was an associate manager in Beverly Hills, let’s say for a company, I was just in Beverly Hills. Now, granted, I dealt with…the way the company was structured back then, I’d also deal with our Venice office, or our Brentwood office, or whatnot. We were very cooperative that way. The managers just took calls from whomever. But if I were in the Beverly Hills office, I couldn’t be in the Brentwood office. And by being remote to start, I think people were kind of used to the fact that they could reach me, no matter where the office was, they had access to me. Whether it was on Zoom, which I think has been such a boon to have a face to face conversation with somebody.

You know, you and I, right now, we’re talking on this. I can see your facial expressions and all that. And it just helps because so much gets lost when you don’t have the visual contact. And we started off that way. So when the pandemic hit, the fact that we were virtual still allowed me to serve a certain number of offices, right? So people have their office meetings, let’s say, and I could Zoom into those office meetings when they were still having office meetings in person. So they put me on the screen in their office, and that was it. Well, now, everybody’s on Zoom. So they would do virtual office meetings, I could still be in that office meeting. And I think more people attended those office meetings because they were virtual, they didn’t have to drive in or whatnot. And they could avoid the temptation of having bagels, or doughnuts, or something like that. That’s always my trap, is the carbs on the table there. But I think that we were uniquely positioned to pivot when the pandemic hit, because we already had this resource. And the great thing is, I was able to attend five office meetings a day, let’s say, right? So Tuesday, people are going to have their office meetings. I didn’t have to drive from La Jolla to Temecula, to wherever. So I think we were positioned really well that way.

And I’m going to give you my airport example. I was flying recently, my flight ended up because of weather. I had a connecting flight, I missed the connecting flight. And I got off and I realized, oh, right now I have to talk to a gate agent. I have to find the gate agent to then hook me up with a hotel room tonight and book me on my flight the next day. And there was nobody there. But then I saw that there was a line, I was told I should go on this line over there. And I saw this very long line of people. And the line was moving really quickly. And what I realized, they had large video screens at the head of the line. So they had maybe 10 video screens. And people went up and had a video conversation with a remote gate agent. And you would think that that’s kind of a nightmare. But I realized here is where… This is where I think Side is brilliant, is because we don’t have to have… They didn’t need 10 gate agents at this airport in Houston. They were able to have their resources where, hey, we’re needed in Houston right now. And by the way, we also have a delay in Chicago, so we have gate agents able to meet there without having to have the physical presence there.

And having this video call was fantastic. The line moved so quickly. And I got personalized service on it. You know, they saw who I was and they helped me with it. Everything was solved really quickly, I think much faster than it would have been had they only had one, or three, or however many gate agents they would normally have there. I’ve been in that. Normally, it’s a horrible experience. This was really fast. So I think that when the pandemic came, the fact that we were already set up that way… And I think that also has to do with how we’re different than other brokerages, if you want to go there. But we were perfectly positioned for this. It was a very, very easy pivot for us.

Matthew Blake: Yeah. So, Side does not lease offices the same way that other brokerages do. What else is distinctive about Side? What should people… I mean, I think that people have started hearing about Side a lot now. It’s been in the news for raising money. But for someone maybe not as familiar with Side, what is distinctive?

Spencer Krull: I think two things. I think part of the brand is the fact that you won’t know us. You know, we’re the company that you don’t know because that’s not our business model. Our business model is to provide kind of a private label or a white label service to people, so that they can have their own brands. So, we bring on top performing agents, which is, again, one other way that we’re very different from other brokerages. You have to have a certain performance level, if you’re going to be coming on board as one of our brands, and then we build your business for you. So we provide a back end. And that, I think, is the biggest difference. We handle all the stuff that people don’t want to deal with. You’re talking about million dollar back office. When I’m on recruiting calls, talking to people about what it is that we do, the brokerage part comes up, right? So they talk about the technology that we have, and I’ll get into that in a moment, and the marketing aspect that we have. And then they say, “Well, what do you want to know about brokerage?”

My part’s usually three or five minutes, let’s say, right? I’m slotted for 15 minutes, I’m usually done in 5, maybe 10 minutes. Because most people don’t think about the back end. And there was a…I don’t remember where this is from, and I want to say it was some old “Saturday Night Live” sketch with Hal Holbrook playing Superman, the one man show. But he makes this thing, he says, you know, “No one ever called Superman to say, hey, Superman, there’s no cat caught in a tree, there’s no train about to be derailed, you know, there’s no bomb you need to cover up.” We’re the invisible part, you know, on the brokerage end of it. Right? So Side handles the back end for agents. So we have a technology platform, which is built from the ground up, it hasn’t been hacked together by buying other technology companies and trying to make them work. The whole idea of the brokerage is, the real estate side of it and the technical side of it from the founders of the company. They were developed at the same time, and kind of built upon each other. So what do you need technically? What do you need from a brokerage? And that’s a constant conversation that we’re having. And I think that that’s a big difference.

Yeah, we handle the stuff that the agents don’t necessarily want to deal with. And the fact that we are virtual, we don’t have the overhead of staff. It’s not just renting a space, you also have to staff that office. And now you have a manager that you need to put in there. And again, a lot of the times the manager isn’t… You know, a lot of times, it’s not like people were in my office constantly when I was an in-house manager, but then it would get very busy at times. We’re very scalable that way, similar to what I was saying about the airport example. And you don’t have to have an individual marketing person or have to have an individual office administrator in those offices. So, again, I think that keeps us nimble.

Matthew Blake: Yeah, no, that’s very interesting. I mean, it sounds like a somewhat different conception of a brokerage from, say, Home Services of America, which is known for its training or some of the real edgy brands that have big office space, sort of their own branding. Do you think in general, that… I mean, obviously, you’re working for Side, you’re sort of pitching that Side is a different kind of brokerage. But do you think, like, generally, how we conceive of brokerages is changing now in terms of, like, kind of what the purpose they hold for agents who do perform, and who do close sales and generate commissions?

Spencer Krull: Yeah, I’m going to answer one question that you didn’t ask first, and get to that question. Because I didn’t want you to think that we didn’t have training or we didn’t offer sales. It’s just, as the manager, that might not be my strong suit. But we do offer training. So we have two different types of training. One of them is compliance training we do every other week. We have a broker town hall, so we’ll go over one topic that might be trending. I don’t know, something about a new form that’s come up in California, or some issue that might be happening nationally. We’ll talk about those. And then we have an open Q&A for agents to ask those questions. In terms of other training and business and sales, we have a whole business department. We have a business management department. And their job is to… I’ve seen these dashboards that they have that show where people are getting their leads, and where they’re making the most money, and what sort of sales they’re doing. And they coach them on that. So we do have a coaching and education component as well. So we are like any other brand that does those things. Again, we just do it in a very scalable manner. Because I can be in, like I said, five meetings a day with our with our different offices. You know what, and I’m now forgetting the second part of the question, and I apologize. I just wanted to get to that one first.

Matthew Blake: Yeah, no, Thanks for clarifying that. Yeah, I didn’t mean to imply that Side didn’t have training programs. My question is sort of more than just the virtual aspect, because I think a lot of, you know, brokerages, eXp is one that comes to mind, are sort of moving to mostly virtual or all virtual, along with Side. But just, I guess, conceptually, like, is the brokerage more going to be sort of the backend or just an administrative type of glue as opposed to something that’s more like a consumer-facing brand going forward, do you think?

Spencer Krull: That’s a really good question. Most people don’t care who their agent is with. I mean, it’s kind of a dirty secret, right, or a well known secret. Is that, I have friends that have changed brokerages several times. And they might email their clients saying, I’m now with, you know, X, or Y, or whatever. And their clients don’t care because they know that my agent is Spencer Krull. So it doesn’t matter what company that I would be with as myself. Some agents do need to have a larger brokerage name behind them, because they might need that for marketing. When I was an independent agent, I had my own brokerage for a couple of years, when I was doing property management. And I was working in an area where I had a lot of competition. And I was talking to a coach about what I needed to do, and he said, “You know, one of your main problems is you don’t have a brand behind you. You’re walking up a door, and no one knows what that means.”

What Side does is that they develop the brand for the agent. And the agent, like I was saying, people are generally agnostic as to what brokerage they’re with. I mean, it might help to say, “I’m with, you know, this large brand that you’ve heard of.” But these agents are building their own brand. They have their own client base. And I think that that’s the more important part, because people like to work…they like to know the individual. And I think if you’re choosing maybe a doctor or something like that, one of the first things you do is you look to see, is your doctor on this medical plan. So instead of saying, “Well, I’m just going to use a doctor on my medical plan,” you might say, “Well, no, I’m going to get the insurance that my doctor is with.” And I think agents are kind of the same way. People do build a personal relationship, because it’s an incredibly emotional process, as well as a very big financial process. So you have to find someone that you trust, is one of the big ones, and you have to find someone that can handle the emotional aspect of it and the financial aspect of it.

So I think that…there’s always going to be some presence for the big brands, right? I mean, there’s always going to be something there. But there was a saying years ago that nobody ever gets fired for buying IBM, which was… Now, I think you’d get fired for buying IBM. So, you know, things change, right? So Apple came along, and suddenly people made fun of Apple. And now, you know, we run our whole business on Macs. So I think that the national brands will certainly have their place. There will be a place for the IBMs. On the other hand, I think if they don’t change, if they don’t introduce more stuff for the agents and don’t come up with a scalable model, I think they’re just spending more and more resources for money that they could use to improve the agent experience.

I was at a conference once and someone said, “You know, who are your clients?” This is a real estate conference for brokerages. And people said, “Oh, we handle high end individuals. We handle first time homebuyers.” And the guy said, “You’re all wrong. Your clients are your agents. And if you’re not servicing those agents, if you’re not servicing them as your client, you’re going to lose agents to other people.” And so from the brokerage point, I think it’s really, really important that the agents feel they have the resources to then service their clients. And going back to that scalability thing, we’re available. And, you know, I’m on a Zoom call right now, okay? So I have my notifications turned off, because I don’t want to constantly be looking at something and losing the train of thought. But I know that there are three other brokers in California that are looking for any questions that might come across on email, or on phone, or on our Slack channel, or on Salesforce. And our agents are getting answers that they need. And I think that is the key thing. Because if I’m on this phone here, and I am a brick and mortar manager, that means that there’s no other manager there that’s servicing the clients.

Matthew Blake: Yeah, that makes a lot of sense. I think that’s a really lucid explanation for how a brokerage can still serve a purpose right now. So we’re recording this at the end of…very end of July and it’s sort of earnings call season right now with brokerages that are publicly traded. Side is not publicly traded. There are some rumors it might become publicly traded. You don’t need to address that unless you want to. But basically Realogy reported a slight profit, Compass is about to report its results. Compass has been losing a lot of money. RE/MAX is barely profitable. eXp is barely profitable. We’re in, like, an incredible housing market right now. Like, this is the biggest housing boom since 2006, and these brokerages… You know, I’ve only been reporting on brokerage for a couple years, but these brokerages, I would think would be making a killing, and they’re kind of not. So I guess my question is sort of, like, are there any efficiencies that can be figured out here or? I mean, it seems like, you know, the leaders of these brokerages are trying stuff. I mean, how can a brokerage kind of consistently make money and be both profitable when there’s a housing boom and also stable when there’s, you know, a housing bust, or at least somewhat of a downturn?

Spencer Krull: The brokerage model, I think, the traditional brokerage model, I don’t want to say it’s broken, but it’s certainly limping along in certain ways. There used to be…your splits used to be 50-50, right? So if you look at commercial brokerage, and compared to a residential brokerage, commercial brokerages, because they basically control all the leads, or at least that’s the model for many commercial brokerages, they can have a 50-50 split, or maybe a 60-40 split with an agent. And they can be profitable that way, because they’re getting 40% or 50%, of that commission. And there has been an escalation in commission splits in the residential area. So when I started, I remember I had a 50-0 split with my company. And then I was able… I sold a certain number, and I was able to get a 60-40, I think, is what I moved up to. And so that really hurt when I looked at the check. And then I got my broker’s license, so I automatically got a 60-40, and then could move up to a 65-35. And it wasn’t this great thing. And then I went out on my own.

And I was really frightened being out on my own, because like, “Wow, who am I going to go to? I don’t have a manager to talk to.” And then I got my first check, and I had zero split. I was like, “Okay, I’ll figure this out.” And I think that the brokerage model, because the splits have gotten, from a brokerage perspective, worse and worse. You know, they’re giving agents these 80-20, 85-15. And there are people coming in… I was talking to a manager last week, and he said, “You won’t believe, I had an agent come in and they haven’t done anything. They have a couple of family contacts, but they haven’t really sold anything. And he wanted an 85-15.” I mean, can you believe that? And chances are, that agent will probably get that somewhere. Because a lot of brokerages, the model is, well, we’re going to get desk fees, we’re going to…the errors and omissions insurance is actually a profit center for some brokerages.

So I think that when you have physical structures, you have actual office space and infrastructure that you have to build on. And I was mentioning this before, you have to pay for a manager, perhaps an associate manager, transaction coordinator, a marketing department or marketing person. You also have phone lines and equipment that you have to pay for. So you have your rent, and then you have that other infrastructure there, it becomes very expensive. And if you have two or three offices, I mean, there are some companies that have three offices in Beverly Hills. So they may be cannibalizing each other. And because sometimes there are the “superstar agents,” they need their own office, right? Now, however they work that out, those agents might be paying for the office space, or they might be getting an advance from the company and then pay the company back based on whatever they’re doing in commissions. I think that that’s the biggest suck on profitability that I can think of.

And again, the fact that we are virtual, I think that there will have to be something with scale. Now, I was with another brokerage a couple of years ago before, that has several offices in Southern California. And they tried to implement a virtual centralized marketing department, but you had to do everything out of New York. You know, everything had to get okayed through New York. It took a couple of days sometimes just to get a listing presentation done by them. And that’s just not something that agents are used to. Where I think we have a difference and where there might be space for other brokerages to come in is, we build the brand. We build the brokerage for the agent. We’re the back end, they handle those expenses and those costs. And again, we have the scalability and we’re able to pivot for them so that we are always doing this for people. It’s not a new thing. And our agents, our partners are used to this process, because they see it working, by the way. And as we’re growing, we’re hiring more people on the back end. But it’s working for us, obviously, from the way that we’re growing and our retention of our partners.

Matthew Blake: That’s helpful. One quick question. With technology, you mentioned technology a couple times, what matters to the agents you talk to about technology? Because it’s kind of a buzzword and maybe can you give folks some specifics as to sort of what an agent actually cares about?

Spencer Krull: Sure. It’s kind of funny because what an agent cares about might not necessarily be what I care about until they want to get paid, right? So, you know, we need to get the files. We try to get our agents paid as quickly as possible, same day or the next day after close of escrow. And one of the ways that we handle that is with a complete file. So most brokerages, the agents will deal with… You know, California Association of Realtors has their forms, and they use zip forms, let’s say, to fill out their forms for them. And then it’s up to the agent to then get them to the transaction coordinator, or to get them to the office administrator, or whoever it is that maintains the files, so they can then have a complete file. One thing which we have, we have the app. And the app actually works. And a lot of brokerages talk about their app. Most apps that brokerages are talking about are consumer facing. So, oh, here’s how you can search for properties or whatever.

That really doesn’t help the agent. I mean, it might help the agent, you know, oh, they looked at three properties on my app, and so I can…you know, maybe I can call them and see if they want to see them or something like that. So they might get a heads up of what they’re looking for. The app, from our perspective, is handling the transaction, it’s handling the marketing, it also handles the questions. So we have a function, we have a chat function called Intercom. And it’s basically a chat function in the app. You have a question, put it in your com, and it will get to the right person to answer it. So you have a question about marketing, goes to the marketing department. You have a question about a brokerage issue, either the people in the chat can answer that immediately for them, or they’ll send it to the brokers. I mean, that’s how we get alerted to stuff and then we have a competition to see who’s going to answer it first. We’re very competitive that way, in a very good way.

So, the technology that we have there, I think, really does make a difference, because you want to write an offer there. I can do it on my phone, I can do it on my computer using the app, but it brings up the template of what I need. And you’re in San Francisco, great, you put in San Francisco, here are the San Francisco forms. Because San Francisco has their own purchase agreement. You’re in the peninsula, here are the peninsula forms. And those are different. You’re in LA, well, it’s also going to bring up the local LA disclosures. So it works…it really streamlines things so the agents just basically have to fill out the cover sheet, and put in the loan amount or whatever, the purchase amount, all these different things. And then they can generate the forms and send them out for signature all through one app. They don’t have to then go into DocuSign, it automatically happens for them through the app.

And the reason I mention in terms of agent satisfaction and getting paid, is this helps us have complete files. And we have an auditor that… The files get audited, like, three times before close of escrow. And by the way, Matt, this is where everybody has just turned off the podcast because they don’t care. But I do. And so any other managers out there, thank you for still listening on. But, you know, the agents saw that agent satisfaction as well, right, because they’re our client, and that’s the way that we look at things. So, the auditors get to go in and say, “Hey, you know, you’re missing this file.” Or, “This isn’t done correctly.” Or, “You know what, the other side is missing this document, which means you don’t have to remove contingencies.” Right? So we’re always letting them know what’s going on. That’s because we have the tech, we’re tech-based for how we fill out our forms and how we handle the back end of the trends. I’m telling you, million dollar back office, man, it’s going to be huge.

Matthew Blake: No, that’s a very good specific rundown. I liked the Intercom example. Looks like we need to go, but before we do, anything that you wanted to mention about yourself? I know you’re a very polished in audio, sort of do some stuff in addition to your managing broker role, if you want to mention that or anything else you want to say in closing?

Spencer Krull: Sure. Thank you. Yeah, you know, I do voiceover. I’m a professional voiceover artist. I do a lot of corporate narration and I have a couple of TV commercials running right now. I do a bunch of podcast intros. So if you want a new podcast intro, Matt, I’m more than happy to send you those. You know, one thing which… I’ve always wanted to do a podcast on the agents’ bad experiences, right? Like, basically the worst stories. What are the worst things that have happened to you? Because those make the best stories. And can I share one with you? I don’t know if we have time, I just want to talk one of my worst clients.

Matthew Blake: I really hope we do because [crosstalk 00:34:37]. So, go ahead, yes.

Spencer Krull: All right, so I will bleep myself. But I was working with one seller one time and we got a request for repairs, and the seller was just angry and it was when the market was going down. And we got a very, very reasonable request for repairs. And he got very angry and he said, “You tell that buyer to go F themselves.” He didn’t say F, he actually said the full word, but, you know, family podcast.

Matthew Blake: Thank you.

Spencer Krull: So I went back to my office, and I went back and I typed up the form. And I went back to his office, and I gave him a form that says, “Seller instructs buyer to go F himself.” And he said, “What are you talking about? This is going to ruin the deal.” I go, “I know. And now that you got that out of your system, here’s where you’re going to sign that you’re going to give them the credit that they’re asking for.” And that was it. So, anyway, I’ve always wanted to do a podcast of stories like that. I have a ton of them, having worked in Beverly Hills and with entertainment attorneys and whatnot. I had someone once threaten to kill me. And then they were going to defile my body because they didn’t like the way that I wrote an offer when their wife was trying to buy a condo. So, anyway, if you know of any agents that are interested in doing…or if you want to do the podcast with me, man, let’s do this together. Let’s do agent horror stories together.

Matthew Blake: I think agent horror stories is a good one. Yeah, I think we should sort of progress up to the killing and defiling of the corpse. But I think that the Beverly Hills ecosystem, which I covered for a while, is definitely very interesting. I really liked what you said earlier about how there’s always some real estate attorney, entertainment attorney, some looming presence in these deals that always seems to pop up.

Spencer Krull: And divorces, by the way. Man, I used to have an attorney as a client, he used to give me divorce cases. I mean, those are great, too. And that’s a whole other podcast, if you want to talk about those.

Matthew Blake: All right. We’ll discuss family law in subsequent episodes with Spencer Krull, Managing Broker of Side. Spencer, thank you so much for your time. You were really good. Thank you for answering all my questions. Really appreciated it.

Spencer Krull: You got it, Matt. Always a pleasure to talk to you. Thank you. Thank you, everyone for listening. And I look forward to talking to you again.

Matthew Blake: All right, take care.

Spencer Krull: All right. Bye-bye.

HousingWire Daily

Hosted by the journalists behind the headlines, HousingWire Daily examines the most compelling mortgage, real estate, and fintech articles reported from the HousingWire newsroom.

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