What’s in a name? For TRELORA Real Estate’s founder Joshua Hunt, there’s plenty. Created by mixing up the letters spelling “realtor,” it is a sign of what TRELORA aims to do to Denver’s real estate scene.
I spoke with Mr. Hunt at the recent Real Estate Connect conference in San Francisco, which is one of the largest gatherings of real estate professionals in the United States. Mr. Hunt and I spoke in the lobby, one floor beneath the exhibit area sold out with companies promoting a variety of products and services to the hundreds of agents in attendance.
At the beginning of our conversation Mr. Hunt nodded in the direction of the trade show area. “Everybody here is about the agent, what does the agent need and how can we help them. We have advanced into a system where everything we are about is the customer and giving them control.”
Consider Mr. Hunt a disruptor, as TRELORA sells any home at any price point for $4,700. “This could save a home seller anywhere from $12,000 to $85,000 on the transaction,” Mr. Hunt said.
Prior to starting TRELORA, Mr. Hunt was one of the top-performing real estate agents in the Denver area, “and this is where I saw real estate was a damaged business.”
Most people, if they do not personally know an agent, will do a search for a local name brand agent from a company they recognize, so brand plays a role in the selection, but in Mr. Hunt’s mind, that is where brand stops having an effect.
“There is not one consistent brand,” he said, when speaking of how agents, even under the same brand name, interact with each other. “They run around trying to compete with each other.”
“If you are buying a home through a particular agency in Winnipeg, Colorado or San Francisco the experience is different every time.” The name brand agencies take in fees from their agents who essentially act as franchises, with little or no oversight into day-to-day performance.
TRELORA does not sell franchises but runs the operation out of a central location in Denver. Mr. Hunt has sought to increase the value of the TRELORA brand by paying close attention to every aspect of the home-buying experience and providing quality service from trained real estate agents, each of whom serves in one of 16 distinct roles in the process.
That specialist mindset is itself disruptive in an industry where one agent typically takes care of every aspect of the transaction. “We are the only industry that operates this way,” Mr. Hunt conceded. “You walk into Chipotle and it takes eight to 11 people to make a burrito.”
By taking the specialist approach Mr. Hunt discovered entire new pools of talented people who play crucial roles in the transaction, provided they are still under consideration after.
“My smartest and best agents don’t have the most sales because they are not necessarily that social type that thrives in that situation, so we place them in roles where they process transactional aspects,” he said. “The detailed people are placed in negotiations, those who are socially comfortable become lead listing agents, and the super social ones are buyer’s agents.”
And those people do quite well for themselves. All staff are salaried employees but also receive bonuses, company cars and 401 K’s. “The person who answers the phone makes $38,000 a year and it goes up from there,” Mr. Hunt said, before adding that many of his employees comfortably make six-figure incomes.
Working at TRELORA also comes with scheduled days off and holidays that actually allow people to relax. “Most of these agents here are independent contractors and they can never turn it off,” Mr. Hunt explained. “Our staff have set days off and coverage when they are away. If a deal falls apart while a traditional agent is on holidays, they are back at work.”
The volume of transactions TRELORA staff are exposed to provide an excellent foundation in an industry that requires surprisingly little education in order to work in the field.
“It takes 120 to 210 hours to get a license to enable you to help people make what for many is the most significant financial transaction of their lives,” he said. “Cosmetologists need 1,200 to 3,000.”
“A good agent, I mean a real killer agent, can do maybe 15 listings in a month,” Mr. Hunt added. “My top pricing agent may be in 100 homes per month and take 80 listings.”
The sheer repetition helps his people generate a significant knowledge base in a fraction of the time, and as years go on can make them industry outliers.
“We are number one in Colorado in transactions per agent,” Mr. Hunt said. “One of my agents was part of more transactions in their first month than most agents are in their first five years.”
By bringing in so many people into an organization TRELORA risks becoming top-heavy on personnel, which is the most significant line item for many a business. How do they incorporate that many people while maintaining a successful business model?
There is only one way and that is by sales volume. “This business model is insanely profitable because of the volume we can do,” Mr. Hunt said.
A look at the data suggests that TRELORA is not making many friends in the Denver real estate community, an assertion confirmed by Mr. Hunt. “We are highly despised by the industry in Denver.”
“In 2013, $1.4 billion in commissions were paid to real estate agents in the Denver area,” Mr. Hunt said. “I would have saved them $940 million with full service.”
One imagines TRELORA having to deal with traditional agencies on a strong percentage of transactions. Are some of those interactions a little frosty?
“I warn my agents that 30 to 40 percent of agents will not want to deal with you,” Mr. Hunt admitted. “I was just in an ethics hearing because another agent said I won’t show your listings, and they can’t do that. We have launched defamation hearings because agents are claiming we are not full service.”
In an ironic twist, Mr. Hunt has found out that these refusniks are actually driving people to his business.
“Agents have a fiduciary responsibility to represent their clients,” Mr. Hunt explained. “As a home buyer, how are you going to react if you call your agent and say you want to look at a TRELORA home and they say no?”
Mr. Hunt later mentioned that when dealing with an outside firm, if TRELORA is offered 3 percent, which is common, they keep $3,000 of that and put the remainder back in the transaction, which gives the two parties added room with which to negotiate.
Most home seekers would not react kindly to being denied access to a property, especially at a time when technology and culture conspire to make many people much more active participants in the search for their next home.
“Seven out of ten people know a home is the one they want to buy before they see the entire property,” Mr. Hunt offered, as we discussed characteristics of the modern home buyer. “People don’t want to be sold a home. They want to be represented and served.”
With the ease of technology, including smart phones and industry-specific developments such as 3-D cameras that allow people to remotely view a home, consumers can easily take more control over the process.
“Today’s customer wants to touch, to control, to interact.”
America is just beginning to remove itself from the worst recession in the last 80 years, one rife with tragic tales of many families losing their homes and simply walking away. As prices begin to rise, the country is at risk of seeing more people fall underwater on their mortgages. What has this extra money meant to some of the TRELORA clients Mr. Hunt has spoken with?
“We had a lady who sold with us and her proceeds check was three dollars. I’ve never seen somebody so excited to get three bucks in my life.”