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Elevated mortgage rates, scarce inventory and all of the uncertainty created by commission lawsuits — it’s not hard for agents to find something to feed their anxiety these days.
Sharran Srivatsaa, president of The Real Brokerage, gets it. But as he looks around at the tools that are available to agents today, he’s confident that those who are willing to learn will be resilient enough to make the transition from a “momentum-based market” to a “skills-based market.”
Srivatsaa — who joined Real in 2022 with two decades of experience as an investment banker, private equity investor and real estate brokerage executive — is looking forward to attending Inman Connect Las Vegas, where he’ll be a featured speaker.
Inman caught up with Srivatsaa this week to get his thoughts on the challenges and opportunities agents are currently facing, and what he’s hoping to get out of ICLV. The interview has been edited for length and clarity.
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INMAN: We’ve heard a lot about what a tough time this is for real estate agents — do you see any silver linings in the current market conditions and the changes the industry is bracing for? Change can be good?
Sharran Srivatsaa: During COVID, we were in what I like to call a momentum-based market. Even before the agent or the consumer chose to do something, the market drove whatever transaction was happening. Everything happened much faster, and all these clients were on this raft and our agents were just keeping the raft on the river, mostly.
This momentum-based market exposed a lot of cracks in how agents do what they do, but a lot of agents never realized that. The average agent didn’t need any skills during COVID, but right now, they’re having to do a lot of very interesting things. They’re having to figure out what rate products are the right fit for the client and how to manufacture inventory, even though inventory doesn’t exist.
The crazy part is that inventory actually exists, it’s just what I like to call passive inventory. The average consumer believes that the only home that they can buy is the one that has a sign in the yard. So if an agent can find the expireds, the cancels, the withdrawns, the FSBOs, the conditional buyers, the flippers — all these pieces of passive inventory — and bring them to [a prospective buyer], we can show them that there’s so much more out there. This is the biggest difference between a skilled agent and unskilled agent.
If [a prospective client] wants to sell her home, she’s not actively going to list her home for sale unless she’s actually figured out what to buy. Normally an agent just has to walk in and put one deal together, but I think today’s skilled agent has to put several deals together to get one deal to happen. This deal-making skill, daisy-chaining deals, is insanely important for an agent right now. But no one has ever taught that to them. Or they may have known how to do it five, eight, 10 years ago, but the momentum-based market kind of crushed their skill component.
The silver lining that I see is that an agent who understands that a new skill will allow them to do better just has to say, “All right, I’m going to stop complaining that we don’t have active inventory. I have [a client] who wants to move. That will open up two deals. How do we do that?” And that’s a skill. So the more we can teach that skill, the more we can coach this skill, the more we can open and awaken an agent’s mind to that skill, I think that’s what’s going to unlock a lot more inventory for us.
AI has come a long way in the last year and there have been interesting applications in almost every industry you can think of. Are there particular applications of AI in real estate that look promising to you? What other tools are available to agents who are looking for ways to daisy-chain multiple deals together for their clients?
Number one is the amount of publicly available data that exists in the real estate world is I think second only to the publicly-traded stock markets. But if you look at all the companies that are in our space right now that are serving the brokerages and the agent population, almost all of them are centered around marketing tools.
It’s like, “Hey, let me give you a lead generation tool. Let me make a ‘transaction go better’ tool. Let me show you a tool that makes an animated GIF better. Let me do a chatbot that actually talks to a client better.” Everything is centered around helping an agent from a marketing perspective.
What people don’t realize is that [with the May 13 release of GPT-4o] if you take all the historical real estate market data in say, Laguna Beach, for the last 20 years in a PDF or an Excel file, and just drop it in ChatGPT, you can ask whatever questions you want, right? With GPT-4o, an agent can just go to the MLS, download the entire spreadsheet, load it into ChatGPT, and ask questions.
You can ask, “What’s the best price point where clients can get the best deals?” Then you can say to a client, “I’ve been looking at pricing in your market for the last 20 years and it looks like in a high interest rate market, if you buy a home in the $400k to $600k price point, you will actually get 10X the result than if you bought it in the $600k to $800k price point.”
No one has done that. Which is so crazy to me. Because even until eight weeks ago, we couldn’t talk — we couldn’t interact with this kind of data the way we can today. The agent doesn’t have to crunch any numbers. I see amazing opportunities for us to utilize AI when an agent can just drop pieces of data [into ChatGPT] and interface with them.
On top of the changes that the commission lawsuits and the proposed NAR settlement may bring, there’s still the possibility that the Department of Justice will jump in and push for even more dramatic changes. It seems like at this point, one problem for the industry is that after years of litigation, there’s still a lot of uncertainty. Is it important to have some certainty at this point, whatever the outcome? Or should the real estate industry be prepared for this to drag out for months or years?
I have two quick thoughts around that. Number one is I have a very strong belief in the resilience factor for real estate agents because, in a lot of ways, you could not define entrepreneurship in a truer form. Which is, “Yeah, I am going to find my own clients. I’m going to get my own business. I’m going to have to do the uncomfortable part about marketing myself. I’m going to have to do all the hard work. I’m going to have to wear numerous hats. And then I’m going to put all this work in and only possibly get paid if this deal closes at the end as a result.”
So the resilience component of an agent is the number one reason why I’m in this business. Because they understand that they know how to do this, but I think agents are forgetting their resilience. I think they’re forgetting their innate ability to be resilient [in times of] change. We saw this during COVID — you needed new forms, you needed new workflows, you needed new ways of working with your client, you needed to manage the offer process. Well, we did. We learned all of that in like a three-week period.
Now we’re going to get new forms, new rules, etcetera and learn all that again. I’m not really worried about it at all, because agents are going to be resilient. Everyone’s making a big deal about what this new buyer broker agreement presentation is going to be like. But by January, this is going to be old news because everyone’s going to have learned how to do it.
My second thought is I think the DOJ, and in some twisted way [the lawsuits], are trying to make it better for consumers. And I’m a big fan of that. Because if they don’t do it, someone is going to end up doing it at some point. Now that we’re in this mix anyway, let’s just figure out whatever’s better for consumers. If it’s best for consumers, we just figure out our role.
If it’s not [best for consumers], there will be some kind of revolt from somewhere, and we’ll figure it out. I am less worried about that. What I’m more worried about is the apathy of the agent, the agent who says, “Oh, I’m, I’m used to doing it this way, and I’m continuing to do that.” That agent will fail. Because there is a new world not just because of the new rules, but because of what the consumer is asking.
The apathy is actually more concerning to me than the market conditions [in terms of] the skills that people will need to learn. But I don’t expect agents to be exiting the industry in droves. Maybe over time that may happen. But this is not going to be the seismic incident that suddenly makes agents leave the industry — that’s not going to happen.
What are you hoping to get out of Inman Connect Las Vegas this year, and how?
Last year was a very wonky year in real estate — no one knew where demand-supply was going. Last year was all about giving people hope, giving people camaraderie, giving people a path that “Hey, this too shall pass.” I think one of the benefits of being together in a conference is, I like to use this phrase: “Live events change lives.”
I think that we’ve come a long way since last year. This year what I’m really really excited about is [sharing ideas about] innovative ways to do simple things. What little skill can I learn that can move the needle a lot? What small hinge can swing a big door?
That may be dropping a document in ChatGPT, learning how to get a buyer broker agreement signed, or how to find passive inventory. Or maybe how our chatbot can automatically talk to my clients, what kind of nurture needs to happen so that I don’t lose my client to some other agent.
I think we’re in a “small hinges swing big doors” world right now, where there’s so much innovation, but if we don’t know the big door, we’re not going to be able to find the small hinge. So when folks come to Inman Connect, I really hope they’re coming in with this idea of, “What is the big door that I want to open?” Maybe it’s working with investors, maybe being comfortable with my buyers, maybe we start a team? And what is the tool that can solve that?
So I’m walking in with that filter of, “What small hinge can I find that will swing a big door?”