Colleen Wood:

We will also dive into how to navigate the ins and outs of being leaders in business, and how to build a robust and dynamic team within that business and navigating the world as a career driven professional, all while raising a family.

Alicia Rutz:

Join us as we share our highs and lows in real estate, business ownership, and motherhood.

Alicia Rutz:

All right. I've got some interesting, weird, good news.

Colleen Wood:

An interesting market update.

Alicia Rutz:

Yes. All right, Zillow, let's talk about it. Okay, so what was happening with Zillow is they were going into markets, buying homes, they were either going to flip them, hold on to them, but their whole plan was to basically change the market in that area when they bought properties, and it was getting realtors out of a job, they were outbidding listing agents, and it was just bizarre.

Colleen Wood:

Yeah.

Alicia Rutz:

And a lot of agents were really worried that our jobs were going to disappear.

Colleen Wood:

Yeah.

Alicia Rutz:

Okay, now you talk to us, what'd you see? What'd you hear? What happened?

Colleen Wood:

Zillow just shut down their property flipping little scheme that they had going on. It was called Zillow Offers, and they actually were losing a shit load of money.

Alicia Rutz:

They were planning on losing money. They knew that was going to happen for the long term goal of eventually all that market, where they had a huge share, it all going up and they'd get that back.

Colleen Wood:

They lost almost $400 million in three months.

Alicia Rutz:

Yeah, $381 million. That's crazy.

Colleen Wood:

That's bananas. And on top of that, they laid off 25% of their workforce. So that's about 2,000 employees as a result of them shutting down this division of their company. And here's my thing about Zillow, I really truly feel like the need to have a personal relationship in a transaction in all kinds of transactions. I don't think that we're going to go artificial intelligence on all this stuff like Mark Zuckerberg is talking about everything going artificial. I think people are always going to want to have a human transaction.

Colleen Wood:

I don't think people love the whole Walmart self checkout thing, but Walmart and some of these bigger companies are choosing to take out the human because they figured it's cheaper for them to lose merchandise through theft because people do steal things through the self checkout. It's cheaper for them to have that than it is to pay real humans. And I think that consumers want to have a human interaction and Zillow trying to come in and trying to control these markets by buying up all these real estate only to just turn around and then flip them to try to push the realtors out and push the lenders out, I think that they're figuring out that that was a bad idea.

Alicia Rutz:

I was worried a long time ago about realtors becoming like travel agents, how they basically just disappeared.

Colleen Wood:

Yeah.

Alicia Rutz:

There's very few of them, they're still around.

Colleen Wood:

Very few.

Alicia Rutz:

But it's for more luxury type of stuff, and it's just too complex. Every single transaction is different. The human touch on it to really understand, you can't really get a value on a home just because of what's happening in the neighborhood. There are some neighborhoods, yes, maybe condos and stuff that you can get a very accurate number.

Colleen Wood:

After a lot of sales.

Alicia Rutz:

Yes, after a ton of sales in that area, but really that human touch is priceless and I think people are going to continue to want to pay for it and they won't be able to get things done. I can't remember what the number was, but I think it was more than 80% of for sale by owners end up losing a transaction if it's under contract with somebody else and end up using a realtor.

Colleen Wood:

Right.

Alicia Rutz:

In the long run.

Colleen Wood:

Right.

Alicia Rutz:

Because there are so many little tiny details that it's not just put it on the market, get an offer, and you're done.

Colleen Wood:

Yeah.

Alicia Rutz:

Keeping an offer, keeping a deal together is a big, huge chunk of the work.

Colleen Wood:

A lot of us smaller companies, smaller groups of people, we end up competing with some of these really big monstrosities like Quicken and the Amazons and the Realtor.coms and the Zillows and all of those types of things. We feel like we have to compete with these people, with their incredible tech employees and all the things that they can build out. They're so fast and they can provide all this data so much faster than a realtor can, but that's not the way to do it. The way to do it is to continue to do what Zillow and Amazon and these humongous corporations, what they can't do, which that they cannot have a real relationship with real people. It's not a genuine relationship. They don't really care about what you have going on. They have too much going on in order to be able to care.

Colleen Wood:

So if you're a smaller company out there, you're a smaller realtor, smaller lender, really, really continuing to hone in on all of those personal relationships, whether it's with other realtors, other lenders, or especially with your clients, care that they're having a birthday, care that they're having an anniversary, take the time to care their dog's names are and send them a dog collar or something. We have a client that one of my team members just told me that they have two Labrador Retrievers, and one of them's name is Margarine and the other one's name is Nutella. And so it's like one is a Yellow Lab and the other one is a Chocolate Lab.

Alicia Rutz:

That's cute.

Colleen Wood:

I love that we know that. I love that we know that and we're going to definitely use that to help get closer to that client. And it's because we love dogs too.

Alicia Rutz:

Right.

Colleen Wood:

And we want to be able to have a genuine relationship with our clients. We look for reasons to celebrate them and to help them mourn too, when they've lost somebody. Amazon.

Alicia Rutz:

We do that too.

Colleen Wood:

Zillow.

Alicia Rutz:

No, never.

Colleen Wood:

They can't do that. They will never have that.

Alicia Rutz:

Exactly. What we started doing is anytime we see somebody on Facebook who lost a dog or family member, had some bad news, what we do is bring them this really cool box of teas. We had a bunch of assortment of teas.

Colleen Wood:

Yeah.

Alicia Rutz:

And it's really pretty and looks kind of luxury for teas, and it also made me feel good. Because what else can you do? There's nothing in those moments., And it's nice to let them know that we do care.

Colleen Wood:

We do care.

Alicia Rutz:

Yeah.

Colleen Wood:

We see them.

Alicia Rutz:

Yep.

Colleen Wood:

And we see them and this is a people business.

Alicia Rutz:

Yes. And so these big ... Yeah, these big companies coming in and doing what they're doing, it just wasn't working. And I'm on a lot of realtor Facebook group things.

Colleen Wood:

Sure.

Alicia Rutz:

And just hearing a lot of the stories, there were a lot of agents that were getting outbid by Zillow to get a listing, and ...

Colleen Wood:

Well, clearly that wasn't working for them if they lost ...

Alicia Rutz:

Exactly.

Colleen Wood:

$381 million in bad investments.

Alicia Rutz:

Exactly. So what was happening too, is Zillow would come in, offer to either buy the house that was listed or sell their house, but when they would offer to buy the house, they'd go in at asking, have an inspection, cut them down probably 25% on the price, and then they had all these extra fees on top of it so that it ended up just not being a deal. But once you're that far down the line if you have to move, a lot of the times, the seller would continue on just because they're like ...

Colleen Wood:

Right. They'd have to put the property back on the market.

Alicia Rutz:

Yep.

Colleen Wood:

And then everybody's like, "Oh, you have such a black eye because your property is back on the market, and everybody is going to want to know why."

Alicia Rutz:

And if they're under contract on something else and have to sell.

Colleen Wood:

Sure.

Alicia Rutz:

Yeah, it was one of those things. But I think this is good news. I'm glad to hear it.

Colleen Wood:

I don't ever want to be ...

Alicia Rutz:

I don't want to see the ...

Colleen Wood:

Excited about somebody having a humongous failure. That doesn't feel like good juju to me but ...

Alicia Rutz:

Right. And the people losing their jobs, that makes me sad.

Colleen Wood:

That's really awful.

Alicia Rutz:

That makes me really sad.

Colleen Wood:

Maybe the people that lost their jobs should come work for us.

Alicia Rutz:

Yeah, you're always hiring. I could use another agent.

Colleen Wood:

Yeah.

Alicia Rutz:

You're always hiring.

Colleen Wood:

I just think that this is a win for smaller businesses. This is a win for smaller teams. Smaller meaning like not thousands of people, right? I have a big team here locally, but we're still focused on the customer. We're still focused on the customer experience and not just through the transaction, but after the experience, what they see going forward. And those handwritten cards and sending flowers or sending teas or knowing what somebody's dog's name is going to make you win.

Alicia Rutz:

I agree.

Colleen Wood:

So keep pounding on that.

Alicia Rutz:

A quick question for you, do you think they're going to come back in some way and try something like this again? Or is this too big of a failure that they learned their lesson?

Colleen Wood:

I think we'll see Zillow coming back at something.

Alicia Rutz:

Yeah.

Colleen Wood:

But I'll tell you what, realtors out there and lenders out there buying leads for realtors, you really need to think about where your money is going, think about what you're supporting, and I know it seems like an easy way for a lender to get a relationship with a realtor to buy their Zillow leads, there's other ways that are more effective. That's just the easy way.

Alicia Rutz:

We've talked about it. It's really a hard struggle, and knowing that the money we were giving them was allowing them to do this.

Colleen Wood:

Yeah, we're funding it.

Alicia Rutz:

Exactly. And it was making me sick to know like, "Oh, we're probably getting ourselves out of a job by paying them.

Colleen Wood:

Yeah, we're paying for that. And so I mean, it's also where do you put your money? Thinking about where ... I mean, are you shopping on Amazon? Are you supporting that big bazillion dollar organization or Zillow? Are you shopping locally for your things that you can get on Amazon and maybe you're going to have to go downtown in order to do it, you're going to have a tiny bit of inconvenience. Or maybe you're choosing to work with a local realtor or a local lender because you're supporting smaller businesses instead of these humongous conglomerates that ... Honestly.

Alicia Rutz:

And it comes back. Truly, every cent, what is it? Every cent comes back seven times, or every dollar you spend comes back seven times within that hour. So it really is worth it if you buy local, it comes back around. It keeps the community strong.

Colleen Wood:

It does.

Alicia Rutz:

It keeps businesses going. And I feel that in Bozeman.

Colleen Wood:

So do I.

Alicia Rutz:

I feel like that is the value here that we do support our great restaurants and coffee shops and boutiques. I think we do a really good job of that, and I think us realtors are pushing almost every transaction we do, we're pushing to use local lenders.

Colleen Wood:

Yeah.

Alicia Rutz:

Because they just get the deal done and they understand the market.

Colleen Wood:

It's really nice that that realtors have ... Not everyone was really on that bandwagon for a long time.

Alicia Rutz:

I think it really flipped when things got so competitive that now people are countering that they have to use a local lender.

Colleen Wood:

Yeah.

Alicia Rutz:

Yep.

Colleen Wood:

Yeah. How do you feel about if somebody goes under contract with say, my prequalification letter and the seller has my prequalification letter and it says that they're using me and the seller picked the offer because it was a local lender, they know our reputation, and the payer of them looked to them to be a strong offer. And then the buyer turned around and goes and starts shopping with some online never going to see them or talk to them type lender that might have a tiny bit, an eighth better difference in the rate or something like that. Do you feel like it's a breach in contract?

Alicia Rutz:

Yes.

Colleen Wood:

Do you feel like you need an amendment to send the seller?

Alicia Rutz:

So I don't think we actually need ... Well, it depends on how it's written. If they say it's pre-approved with this person, I feel like that should absolutely have an amendment because if that happens, if I'm under contract, if I have the seller ... I'm representing the seller, but I see you on the other side and I know, "Oh, she's going to get this done for that buyer, even though I have nothing to really do with that buyer." I'm way more likely to want to accept that offer knowing that they're pre-approved.

Colleen Wood:

Right.

Alicia Rutz:

And so forth. And then if suddenly halfway through the transaction, they start shop. It happened to one of our buyers.

Colleen Wood:

Right.

Alicia Rutz:

Recently where we were about ready to close and he started shopping again.

Colleen Wood:

Right.

Alicia Rutz:

And it's just an absolute breach of contract, and we had to extend it. I can't believe the sellers did extend it for us, and I'm embarrassed. It's embarrassing for me that they went and did that. And yeah, it sucks.

Colleen Wood:

And the seller can say no.

Alicia Rutz:

Right.

Colleen Wood:

The seller can say no, and the seller's agent can coach the sellers to say no to be like, "Hey, they're swapping from a local lender that we trust and we know to some Joe blow in a call center in Puerto Rico."

Alicia Rutz:

Right.

Colleen Wood:

That just because their margins are lower because they're not paying people Bozeman wages, and they're paying ... they're just going to get an eighth better in the rate, and I think it's wrong. I think it's wrong because it's my prequalification letter that got you under contract and we know that.

Alicia Rutz:

Right.

Colleen Wood:

And that's the feedback that I get from realtors. It's like it's because it's your prequalification letter.

Alicia Rutz:

I think our next podcast should just be all about the problems I've had, the crazy story after crazy story from out of state lenders, thins that they've required out of nowhere.

Colleen Wood:

Yeah.

Alicia Rutz:

That I've never heard of before or crazy delays for no reason or ...

Colleen Wood:

Just not communicating.

Alicia Rutz:

Just not communicating or just being ... Yeah, it just goes on and on and on with issues you've had from out of state people.

Colleen Wood:

We should talk about why you should pick a local lender, why it matters.

Alicia Rutz:

Done. Next one.

Colleen Wood:

Okay.

Alicia Rutz:

All right, see you next week.

Colleen Wood:

Okay, bye.

Alicia Rutz:

Thank you for joining us today.

Colleen Wood:

Tune in next week for another episode of Leading Ladies of Montana Real Estate.