How Real Estate Teams Actually Make Money | Lance Billingsley

Lance Billingsley (00:00)
Well, I don’t think you can actually become a full-time team leader or team owner until you’re virtually out of production. That’s what happens with most people, Dylan, is you and I get together and we’re doing some business and three people see us and they go, you guys are good at what you do. Let’s make a team. That’s typically how they start. And the problem with that is you and I, as the owners of the team, still need to do business in order to pay the the overhead of the team, right? We’re paying CRMs, we’re paying for posts and for transaction coordinators and all the stuff we give.

We have to produce to do that. So you really can’t get to that scalability until you move off that stand of being a producer and turn into a leader, right?

Dylan Silver (02:10)
Hey folks, welcome back to the show. Today we’re joined by Lance Billingsley, a Real Estate Investor, educator, and realtor with more than two decades of industry experience across Arizona and Texas. He’s also the vice president of development at Navi Title, Lance, thanks for taking the time here today.

Lance Billingsley (02:29)
Yeah, yeah, I appreciate it, Dylan. Thanks for having me on. I love it.

Dylan Silver (02:31)
Now when we talk about scaling title, there’s so much that goes into even one title transaction, but at scale there’s even more moving pieces and the industry is changing. What does it look like to manage so many transactions?

Lance Billingsley (02:48)
Yes, big. We actually launched in January of 2021 and we now have ⁓ nine locations in Arizona and two in San Antonio with expansion to Dallas and Houston coming right behind it. scale has not been easy. It’s all about partnerships, is really what we have learned. in our market, in the Phoenix market, we’re partnered with six of the largest seven teams in all the market. So we actually we don’t close, but we actually account for partnerships to almost 25% of our market.

So we’re we’re we’re pretty deep into partnerships. Clearly at that be at a hundred percent capture rate, Dylan. But if we’re at forty, fifty, sixty, it’s about where we live with our capture rate. But but we didn’t even expand to Texas unless we partnered with the largest team in in Texas. So it’s all about the partnerships. And then we get in there and scale up that team. We coach that team, we mentor that team, we help them with recruiting, retention, all of that and revenue. we that’s kind of where I come in and and

Gosh, Scale is is not is not easy. We have one hundred and fifty employees now, five years in.

Dylan Silver (03:49)
Let’s talk about these partnerships because it I I’m genuinely curious about this for myself almost selfishly because I know, you know, as as wearing my agent hat or my wholesaler hat, everybody has their preferred title company. So when you’re coming in and you’re looking at, you know, partnering with a a local title company, what is the arithmetic that goes into deciding who to partner with?

Lance Billingsley (03:51)
This is

Yeah, so you really have two methods, Dylan. You can go with an MSA, which is basically a sales agreement that you and I have that says, Dylan, if you’re using our company X amount of times per month, ⁓ we can actually, you know, help you with some kind of payment of one of your one of your whether what whatever bills that it is that you have. I tend to stay away from those, those in our state, and and Texas being the same way, are are very are very very closely watched by the state and the AD and and I try to stay out of those.

Where I come in is joint ventures, right? Is the key thing that you have right now, whether in you’re a small team, a large team, a small like we have all these independent brokerages now that are that, you know, the cool word before was team rages. Now it’s now it’s boutique is really what they call themselves, even though they’re a team that just started their own. ⁓ when you have all of those, ancillary partnerships is really the only way to scale. It’s the only way to have the money that can help your team scale. ⁓ anybody that has

The team that I ran before had two hundred agents on it. Running teams is not a money making business. It’s all the ancillary partnerships to that business that are what make the money. So I’m the person who comes in and helps with ancillaries, Dylan.

Dylan Silver (05:20)
Now on the agent side, you mentioned a two hundred agent team. It it feels like there’s a lot of people who who scale teams because they enjoy the team building aspect of it and being able to to mentor. But also you hear the story of ⁓ I I I pouring myself into these people and they’ll take time away and then they’ll get good and then they’ll

Lance Billingsley (05:43)
And real leave me. Yeah.

Dylan Silver (05:44)
Right, a and so ⁓ you scaled a a a really substantial team there. How how did you manage, you know, folks who would become top producers and and keeping them, you know, tied in and feeling valued and valuable?

Lance Billingsley (06:45)
Yeah. So we’re we all still we forget when we get into leadership, Dylan, that the person on the other side of the desk has a ten ninety-nine mentality. Right. They they’ve left corporate, they’ve left structure of a normal nine to five, you know, gig to go be a ten ninety nine entrepreneur or self-employed. But they also have to remember that every single day, as a realtor, Dylan, if you didn’t close a house today, you’re unemployed. You wake up every day unemployed when you’re ten ninety nine.

So what we started to do was really empower those people who wanted to be empowered. So I was proud that when I left and we went and started ⁓ Navi Title, I was proud my retention, my my my my rate of of losing agents was under five percent out of a team of 200 agents. So that was that was pretty substantial, right? My attrition rate, sorry, I was looking for the word on that one. ⁓

But what I started to do, Dylan, was say, hey, Dylan, what is it that you like to do? You are a 1099. You’re always going to do what you like. If you’re not a door knocker or a phone caller, I’m not even going to train you on that because you’ll just resist it. So hypothetically, Dylan, you say, you know what, I am really good at being on the phones with online leads. Let’s just take that one. Awesome. I’m going to partner you with this person and this person. They’re the best we have at that. And now what I’ve been what I’ve started to have happen is.

Those people that I’ve assigned them to feel strong and part of the team because they’re paying it forward. And Dylan, you’re you’re not like the job of the coach of any team is not to run the plays, the job is to give the plays. So if I give you the play, Dylan, I go, hey, we’re really good at closing online leads, it’s not what I do, it’s what those two do the best on our team. You now have this synergy of what a team is really about, right? Unfortunately, so many people j join these teams.

And then they become independent agents paying team fees, right? Right. They just I wanna go do my own thing. I’ll I’ll I’ll show up to the meetings when I want. I’ll call in when they need something. Good, but that’s not the reason for being on a team, right? that that’s what helped me a lot, Helen. It was just empowering that that mentality.

Dylan Silver (08:45)
when we talk about t teams not not just as ⁓

Realtors and on the brokerage side, we could look at teams ⁓ as investors and wholesalers. We could also look at teams in in a title company. Part of the expectation is that the team around me will lift me up. You mentioned, you know, you could find yourself on a team where they’re really just taking your commission and your your solo agent. One of the challenging things, and there has to be some level of reciprocity there, is when you’re on a team, you expect to get something from the team.

Lance Billingsley (09:09)
You’re a sharp.

Dylan Silver (09:20)
Maybe it’s financial, maybe it’s an education of some kind. But also when you’re you own a team, you expect the people on the team to be producing, right? And how how do you strike that balance? Because sometimes it can be ⁓ a butting hits.

Lance Billingsley (09:34)
Well, I don’t think you can actually become a full-time team leader or team owner until you’re virtually out of production. That’s what happens with most people, Dylan, is you and I get together and we’re doing some business and three people see us and they go, you guys are good at what you do. Let’s make a team. That’s typically how they start. And the problem with that is you and I, as the owners of the team, still need to do business in order to pay the the overhead of the team, right? We’re paying CRMs, we’re paying for posts and for transaction coordinators and all the stuff we give.

We have to produce to do that. So you really can’t get to that scalability until you move off that stand of being a producer and turn into a leader, right? ⁓ and if you if you take John Maxwell’s five, you five levels of leadership, the first one am I a leader because my manager tag is on, or am I getting you to the fifth level, which is Dylan, I want to train you so well that you can go do it yourself and go and go be productive. That was always my goal. And that was very clear to the agents who were on my team.

And it really kept them around. And to so to your point of how do I get from this this side to this side is really again, I’m gonna lean into it. I’m going to empower the people who are best at what they do on our team. And then my job is to coach them, right? Is you’re struggling with this, let me help you with that. To your first part of the question, Dylan here’s what I’ve realized in in growing massive teams or growing a substantial im ⁓ title company is

First of all, I mentioned you will only do what you want to do, right? But I’m only going to embellish and and put into what it is that you want to do. And hopefully that is a skill that is not mine. I always believed our partnerships are best when I hire and put people in place that are better at something than I am and not as good as I am at what I do. Right. Is I like any relationship, you date your opposite, right? You marry you you don’t marry a twin of yourself because you’ll never get anything done.

So it’s the same thing in businesses. Let me hire the weaknesses. Let me let me give them more strength, more power, pay them better. It’s not about how much we make every single day. It’s how much they make every single year and empower them to grow.

Dylan Silver (12:13)
It’s really an exercise in trust and and not just trust of others, but trust of yourself. Because I’ve spoken with quite a number of of ⁓ high producing agents who become burnt out. And they’re solopreneurs, and really you think, well, man, you made twenty million for X many years, and that’s you know, a sizable like like total transaction volume. Your commissions must have been pretty good. You know, you automatically think, like, well, what what happened to it? But I think also too, you look at, well

Did this person ever try or desire to scale a team? And sometimes people think about all it’s just a bunch of headaches. But it’s like choose your headache, right? Because you can you can mentor people and sure some of them might might leave. But the other side of it too is by this point you’ve probably become like a lead generating machine and you just don’t want to handle the day to day of it. Well, now give those people the leads and and you know, school them up.

Lance Billingsley (13:07)
Yeah, and and and remind them they’re always paying for everything in arrears, right? There no one’s paying me anything up front.

So I think it’s really important that they understand everything that I’m giving you is quite literally giving it to you. And if I take on one of your listings, Dylan, and it doesn’t close, I’m not coming back for for you know the thousand dollars you owe me for all the things I’ve poured into it, right? So I I think that’s that’s really important. The team that I ran for the last four years I was there, we did over 4,000 transactions annually and over 1.2 billion annually for four straight years.

And people weren’t going to leave that amount of volume, right? We had we had really exclusive partnerships with with Zillow at the time. ⁓ helped them launch. I don’t know if you knew Zilla Offers when they were buying homes, they launched that with us. and then Zilla Flex, which is their big flagship for lead generating, they launched with us. So there was five of them and five of us doing it. So those partnerships scaled us really quickly to the point, Dylan, that I was interviewing 10 people a week and was only bringing two of them on because

I knew what that loyalty meant and I knew what the direction was that we were taking this. So your point’s absolutely valid is if I’m showing you I’m giving arrears, but what is it I’m giving you up front that you can’t get anywhere else?

Dylan Silver (14:19)
⁓ pivoting to back to to title Lance, ⁓ when people have their title company and they say, I want to go to this title company, this can be such a source of contention. I’ve seen deals fall apart because of you know people not being able to agree on title. What is this? Is this people’s ego coming in? Are title companies truly that different from each other? What’s happening here?

Lance Billingsley (14:44)
Well, I think the it’s different from lending, right? Most d most transactions, like if you represent someone, Dylan, and they you’re doing five deals a month, just hypothetically. If you’re probably having five buyers with five different lenders, with five different people that you’ve got to go through, maybe, maybe four different at the most. The likelihood though is you’re five, if you’re loyal to your title company, you’re with that same escrow team five times a month. So what that creates for you is predictability in the transaction.

Right. We know that the consumer is begging for three things right now, no matter where you hear it, whatever you read, through the NAR, through all the Zillow Zillow sources that they do. ⁓ Compass has done the same thing. The consumer wants your knowledge, your experience, and transparency. I am providing consistent transparency and reliability and predictability with my escrow team. So for me to be a new escrow company and come in and try and talk you out of a relationship that you’ve been in.

With someone for five years, six years, ten years, however long you’ve done it. The analogy is always, hey, Dylan, it’s nice to meet you. I’m asking for you to have an affair, is is is really very is is very appropriate, right? You’ve been in a relationship, but I’m begging you to come try something new. So when I talk to people in that kind of tone, it’s very important that you understand what it is I’m giving you up front is the best service and the best culture and the best things. That’s the that’s the baseline. That’s entry.

Right. You should expect that from my company as an entry point. It’s all the other things we’re doing that create that predictability for you and your client as you go through this. Now back to your original question. Why do people fight about it? Typically it’s tied to money, some kind of an MSA agreement or a joint venture agreement where, hey, we need to use my title company because I’m being compensated on it because I’m part owner in it, or you know, I have a partnership somewhere down the line in it. ⁓ so that that’s where that happens.

Dylan Silver (16:35)
There’s a lot of people who are now looking at all different ways to do real estate remotely and certainly title is no exception to this with mobile notaries and and really I’m sure things that I’m not even a ⁓ aware of. What are some of the ways that you’re seeing this work right now?

Lance Billingsley (17:33)
It’s tough in our state. ⁓ it it we have to you we still have to have wet signatures on every document that closes. So I can’t do sign a title, a title commitment, right? And now in other states where there’s just the attorneys that are involved, that absolutely can be AI to some extent, right? A lot you’ve seen that a lot. Blockchain when it kind of, you know, we all know what blockchain does. It goes up and down in in its in in everything with crypto and all that stuff.

That will create consistency. But until you’re at a spot in my state that you can’t, that you don’t have to have wet signatures, it does it does inhibit that that growth. Now, everybody is looking for ways to automate. Now, what we have done is the relationship an agent has, we were the first in the state of Arizona to run a complete AI assistant program on the backside. So at any point,

Your first contact is my escrow officer, but then from then on, the AI is the one who’s working with you and talking with you and running is running your file until we get to the end. So we have been able to replace salespeople with AI. We’ve been able to replace escrow assistants with AI. And that’s going to do nothing but grow with us. So to your point, technology is here. The actual transaction, what’s hard to get around because of the wet signature part. So we have decided let’s use technology where it’s at.

To replace staff, and that generates, you know, that that generates a better, higher, better, a better bottom line for us, no doubt.

Dylan Silver (18:57)
You you’re also involved

in your local MLS. So we were talking in the green room about this. ⁓ what should agents be expecting from their MLS, right? What what is a the the role of an MLS and what should agents be expecting?

Lance Billingsley (19:11)
Well, there probably isn’t a bigger fight in the country right now between the largest brokerages, the largest brokerage in our comp in our country, I don’t have to say their name, but very adamant about private listings. Well, the MLSs and the NAR and a lot of other powerful brokerages that exist do not want that. So what should you expect from your MLS when you have these two things going on? The

Is you should expect the honesty and transparency for them not to just make adjustments real quickly, right? Agents don’t realize that the brokers are the ones who own the data for MLSs. So whatever brokerage you’re at, Dylan, they are a part of that MLS in that region that you’re at, right? They’re also a part of the the state, the the state association and and the local association. So if

All the brokers started take going, hey, you what? We’re taking our listings off MLSs and we’re going to put them on something and we’re going to do that as a group, that would break an MLS. Most agents don’t understand that. So at about 65%, MLS has become irrelevant. So if I don’t have 65% of the data that’s running through a local market, I could go out of business as an MLS. So you, as an independent agent, you should re should expect.

Transparency on how we’re doing the best tech we’re not a technology company, but we can give you the best technology that we can. ⁓ and and the ability to know that the data that you’re being provided, Dylan, all the way back of the thirty or forty or fifty years of your market, that should all be accessible on your MLS. And if it’s not, that’s when you get upset.

Dylan Silver (20:45)
One of the common frustrations, and I I have to say I am frustrated about this is you see these MLSs and it’s like, when was this built? Like in two thousand two? And it’s like, how is it that we’re pouring every agent is pouring somewhere between a thousand and two thousand dollars a year into this MLS and it’s so ⁓ for lack of a better word, it just looks old. What what would you say to that?

Lance Billingsley (21:10)
Well, that’s a lot in leadership. I I think what you have what you have in our country. Well, let’s be let’s be blunt. You have over 500 MLSs in a 50 state United States, right? So just simple math tells you that’s 10 per state. That’s not healthy for the agent, it’s not healthy for the broker, it’s not healthy for the consumer. ⁓ if in our state you could go to a small city and they don’t want anything to do with a Phoenix, they don’t want anything to do with a Tucson because those are the bigger cities. Every state has

Small town versus big town, right? It’s always been that. ⁓ so to to to the origin to the original point that you’re that you’re asking is in the MLSs, you have they’re called AEs. They’re they’re the CEO of that MLS that is holding on to their little sixty thousand, seventy thousand dollar salary that gives them their relevance. So that’s why you see so much diversity in so much of these groups that don’t work together.

Yeah. In in states and in regions, because you have people holding on to the relevancy. And until you go, hey, we can’t have five hundred MLSs, we probably need somewhere between fifty and seventy five, fifty and eighty is probably appropriate. Not necessarily one per state, but how about two? Right? Somewhere in there is probably the best for everybody. And I don’t know that we’ll ever get to that for the reason I just explained it. Yeah.

Dylan Silver (22:30)
I mean that seems to be the thing, right? I mean, let’s take Texas where I’m licensed as an example. Everyone knows the four metros, San Antonio, Austin, Houston, D FW. You’ve got to have four different MLS subscriptions. So if I wanted to go put my home or or or you know, represent a a seller and list a home in a market that I’m not like now I have to go Yeah. And so it’s like, Well, I’m a Texas realtor, but am I? Because I’m in

Lance Billingsley (22:49)
Gotta join.

Dylan Silver (22:55)
Austin and I can’t do this deal in you know DFW i i it just becomes a a whole set of obstacles. And I’m sure there’s something similar happening in Arizona.

Lance Billingsley (23:05)
Absolutely. And and ⁓ and let’s be clear, you’re sp you’re preaching to the choir, right? I don’t work for an MLS. I’m the chair of the board for MLS that we have here. When we make decisions and and you know, we’ve we’ve changed our structure just in the last month. That’s how things are managed. But it’s always going to be that way until Dallas, Fort Worth, and in your case, ⁓ Austin go, hey, you know what?

Let’s combine our resources, let’s combine our power, let’s combine our advertising, let’s it let’s put this together. But then when you have that, Dylan, the problem is is you have a board of directors that no longer matters. You have a CEO that no longer matters. And one of them, when you have the these big cities, an Austin and a DFW, one of them has to be the main marquee. So who’s that going to be? I mean, just the simple semantics people say, you know, instead of saying, hey, this is not what’s best for.

Everybody in the line, broker, agent, consumer, but I’m still gonna fight like hell for my my local and my MLS. That’s that it’s the same thing. Like you’re like you said, it’s the same thing here. That just that that challenge is not going to go away. You have a better chance, I think where we probably have the better chance in the United States is states working together, not cities. So when you said you probably have the same thing here, I was about I spent three years trying to get our state to unify into one MLS.

And I wanted to have one public-facing MLS that the consumer at all times could go, hey, I want to see a listing in Austin, even though I live in San Antonio and I don’t want to pay anymore for it. I just want to see it. And then I would take that and I would lead it to Dylan because he’s the listing agent and say, these people want to buy in your place and you’re the one that we’re clicking on. That’s a great lead generating. It still didn’t pass anything because no one wants to give up that small town control. Yeah.

Then what am I gonna do? Where am I where are you gonna go work if you’re used to this kind of a deal, right? If if if we move to the states where, you know, in your case, Texas decides to do something with Oklahoma or something with, you know, a Dakota that’s in their region, like their section of the country in as far as the NAR is concerned, that’s the best opportunity that your consumer will have to see the benefits of unification while the little cities still b bicker up with each other.

Dylan Silver (25:16)
Right. You know, the it very interesting conversation there. And I’m sure a lot lotta agents are listening to this thinking, Yeah, I’ve had that same thought too. we are coming up on time here though, Lance. Any new projects or activities that you’re you’re working on or anything you’d like to mention directly to our audience?

Lance Billingsley (25:32)
Yeah, I’m super proud actually. On May first, I I wrote a book called The 13%. I have a podcast called The 13% on supposedly top ten percent real estate podcast in the country. ⁓ The 13%. it’s on all it’s on all, you know, sources, you know, Spotify and Apple and all that, YouTube. And the book ⁓ on Amazon has been number one in real estate, real estate investing, and self employment. It’s just The 13% on Amazon. The audible comes out next week.

I’m just super proud of what it’s done. 2,000 purchases and downloads in the first 60 days and just rocketed into to people wanting people wanting to read it. So been blessed for that. If there’s any people out there that want to read it, if you’re not a realtor, it’s very much built for a 1099 mentality that you can take out the word realtor and put in any word there and it will work for what you do.

Dylan Silver (26:21)
Lance, thank you so much for your time today. Thanks for joining.

Lance Billingsley (26:23)
Thanks,

Dylan. Appreciate your time. Thank you.