Michael Bell on Expired Listings, Realtor Mistakes, and Seller Strategy

Scott Bursey (00:00)
Absolutely.

Michael Bell (00:00)
It’s, look, if you’re

a real estate agent listening to this, you’re not going to like this podcast. So, so I’ll tell you this, the, the, the little bit history of this book and myself. So, about 10 years ago, I was really questioning why the industry was telling us to do certain things to sell a house. just kind of didn’t seem like open houses and the real estate signs and the print ads really worked.

Scott Bursey (01:59)
Hi everyone. And welcome to the real estate pros podcast. I’m your host Scott Bursey.

And today I’m joined by someone I’ve really been looking forward to chatting with Mike Bell, who’s been making serious moves in the residential listing specialist space. Mike is a broker at Sotheby’s international reality with their Beverly Hills office. He has been servicing the greater Pasadena marketplace as a residential broker for the past 30 years.

He has been a frequent guest on newscasts podcasts discussing his number three Wall Street Journal bestseller, Seller Mistakes, What You Were Never Told About Selling Your Home and Why It Should Matter to You. It’s available on Amazon. This book has sold almost 40,000 copies. Mike, welcome to the show.

Michael Bell (02:46)
Thanks, Scott.

Scott Bursey (02:46)
I think our audience is really gonna take something away from your data-driven approach to expired listings. You have this incredible ability to step into a situation where a home has failed to sell and identify the exact friction points, whether it’s the marketing, the narrative, or the price, and turn it into a, turn a no into a closed deal.

Make less day wins, shall we?

Michael Bell (03:13)
Sure, actually I appreciate you saying that and trying to figure out why a house didn’t sell. I hate to say it, but the number one reason is usually the realtor.

Scott Bursey (03:21)
Hey, I’m with you on that.

Absolutely.

Michael Bell (03:25)
It’s, look, if you’re

a real estate agent listening to this, you’re not going to like this podcast. So, so I’ll tell you this, the, the, the little bit history of this book and myself. So, about 10 years ago, I was really questioning why the industry was telling us to do certain things to sell a house. just kind of didn’t seem like open houses and the real estate signs and the print ads really worked.

And lo and behold, the National Association of Realtors puts out a questionnaire every year to people that just bought and just sold a house. And they send it to 160,000 people. And it’s 135 questions. I think it’s up to 140 questions now. And it’s a data rich analysis of what works and what doesn’t work in real estate. And any real estate agent can…

Anybody in the world can buy it for 20 bucks if you print it’s gonna it’s gonna print up a user an entire ream of paper and it’s loaded with amazing information and I just was completely shocked so I I love statistics and I think the devil’s in the details and I started reading it and I thought I would just expose the industry ⁓ what I wrote the book hoping to sell 200 copies because

On Amazon, if you sell 200 copies, you’re a best seller. The book kept selling, it sold 35,000 copies five years ago. It’s up to 40,000 copies. hit the Wall Street Journal best seller list first and probably the last book. I may do a revision in a few years, but I think what’s resonated with this book, what people have been kind of shocked is that our industry is telling realtors to do things, to sell a house.

that don’t necessarily help the seller, it actually helps the real estate agent.

Scott Bursey (06:11)
Hey, makes perfect sense. Thank you for sharing that. What caught my attention about you was the way you’ve been able to resurrect properties that other agents couldn’t move. You know, that’s not easy, especially in this climate. What’s been the key to keeping your machine running smoothly?

Michael Bell (06:11)
I’ll make it.

Well, you you only get one chance to make a good first impression. And so if you wind up being the second realtor, the third realtor, it’s difficult. I’m selling right now a historic home in South Pasadena where I’m the third real estate agent hired. The first realtor was a commercial broker. I don’t know why the seller picked a commercial broker to sell a residential home. I don’t know, but it didn’t sell. And then the next realtor they hired,

is somebody that it was an hour and a half drive to get to the property. I don’t know why. And I asked him, why did you hire these people? I literally live like an hour away. I specialize in historic homes. And I told him, you don’t need to hire me. Just don’t hire somebody like that again. And that got his attention. But the hard thing about being the second realtor, the third realtor, and I’ve been the fifth realtor,

that’s been hired is really capturing the magic. The magic is when you first put a property on the market because your best buyers come in the very beginning. you have a listing that’s what we call in the industry a retread, it keeps popping up, it keeps popping up. It’s really hard to capture attention, it’s hard to capture enthusiasm. And when somebody sees a listing that’s been on the market for a long time,

or that’s been on the market with multiple realtors, this is just the way people think. They think there’s something wrong. There’s something wrong with the house. There’s something wrong with the price. There’s something wrong with the seller. Maybe there’s something wrong with title, but there’s something wrong. And it’s really hard to get those buyers, even though there’s new buyers always going into the market, it’s really hard to get them to want to spend the time because…

Residential real estate, as you know, is very emotional. It’s different than commercial real estate. Commercial real estate is mostly about the numbers. Residential real estate is all about emotion. You’re going to be living there. It takes a lot to write an offer. People think that it’s super simple. It actually is. But the process for the highest paying buyer, because the highest paying buyer at the end of the day, that’s your target, right?

your highest paying buyer is going to be an emotional buyer. They’re going to be looking at this house like right now the National Association of Realtors says the average buyer is going to be living in that house for 15 years. When I got into the business 20, 25, 30 years ago because I first started flipping houses but when I got into the industry the average person owned their home for five to seven years. was just you know prices were a lot cheaper. People just didn’t hold on to their properties that much. There was more supply.

These days, it’s more than 15 years. And buyers know that because they know we’re going to be in this for the long run, so they’re going to spend their time and emotion to put this together. Most buyers in the residential realm are really looking at spending maybe 10 hours just to write an offer because you’ve got to go back and forth, sometimes with your spouse, figure out the schools, figure out the neighborhood, making sure that this is the right fit for you before you really jump in.

Scott Bursey (09:49)
Awesome.

Michael Bell (09:49)
So there’s a lot

of challenges that a lot of people don’t realize.

Scott Bursey (09:53)
Absolutely. And I find your no-nonsense approach refreshing. And I, for one, respect it. Now, Mike, every operator I know has a moment where, you know, things got real. Maybe a deal went sideways or a time that you had to pivot fast. You mind sharing one of those moments with us?

Michael Bell (10:45)
Yeah, I’d love to. So when I got into the business, I’m a little bit of a data nerd and I learned in the business that the number one complaint people have about real estate agents is lack of communication. That’s the number one they don’t hear from their real estate agent. So I feel I’m really good at communication. I’ll ask my clients, how do you want to be communicated to? Do you want a phone call? Do you want text? Do you want email? Do you want all of them?

Do you want it once a week? Do you want it when something happens? Do you want it, I mean, when something happens, of course, that’s, you I communicate. But you tend to not have those crazy moments in a real estate transaction if you’re communicating. Because most issues are solvable if you plan ahead and you communicate and you’re upfront with, for example, like disclosures.

Disclosures is a great way to blow up a transaction. What I’m saying about disclosures is like a late disclosure. And what I regard as a late disclosure is say for example, you go into escrow and then 10 days into escrow, the seller decides to disclose that, say there was a fire in the house or the seller discloses that they have some sort of a violation or electrical violation or

you know, something like that. Again, when it comes to communication, what I do, which really alleviates a lot of problems, and it’s no big secret, but it takes a lot of work, is get your disclosures done upfront. I always counsel my sellers to get all the disclosures done upfront, and when we receive offers, I give all the disclosures to the potential buyers.

And get this, I don’t expect them or tell them to sign off on all the disclosures. I just tell them everybody else is. And guess what? They sign off on everything. Because there’s no other time that a buyer loves a property more than the time they write the offer. That’s, you know, of course, they’re the most excited at that time. And they really want the property. And so if you give them all the disclosures, they will usually sign.

And you know what? If there’s something in the disclosures that’s a deal killer, hey, kill the deal early. You’re better off with a fast death than a slow death in real estate.

Scott Bursey (13:04)
Absolutely. That effect of communication is key and I can see why it’s been effective from your perspective. Let me ask you this, any opportunities that you feel you may be able to pounce on here within the next six to 12 months?

Michael Bell (13:23)
Well, I think every market is different, of course. I’m here in the greater Pasadena area. I’m in Pasadena, which is north of Los Angeles, of course. And the market’s different here than it is in, I don’t know, I don’t want to beat up on Joshua Tree, but Joshua Tree has two and a half years of inventory. Pasadena has two and a half months of inventory. I’m blessed to be in an area with,

low supply and so we don’t have the market gyrations that other, you know, localities have. If you’re reading the newspaper, I mean, they’re saying that real estate is down most places. It’s and even probably half of the places in LA, it is down, but not in Pasadena or the greater Pasadena area. And there’s a number of reasons for that. I mean, one is just short supply. The other thing is we had these horrible fires a year ago where we lost 6,100 homes in Altadena.

And Altadena from Pasadena, like my house to the the burn area, that’s it was eight blocks away. I mean, we were evacuated. We were out for a few weeks. We thought our house was going to burn down. mean, it just it was just nuts that night. And so that, of course, is that created a lot of demand. got 6,6100 families that were looking for housing. Now, a lot of those people just decided to accelerate their retirement plans.

And a lot of them bought condos. So the condo market picked up here in Pasadena and the surrounding areas. But a lot of those folks just decided to move out of state because it was just, you know, for them it was accelerated and they just decided they don’t want to rebuild. There’s a lot of people that just don’t want to rebuild here. There’s a lot of people that want to stay and rebuild.

Scott Bursey (15:49)
Thank you for that. And this might be a little bit off topic, but I gotta know, you know, how do you maintain that drive? It’s easy to pound the pavement and get out there and close the deals when you’re broke. But when you reach your level of success, what keeps you going in the direction that you’re going?

Michael Bell (16:13)
You know what, this might sound hokey. I would say 95 % of the time I work with a client, wanna be friends with them, good friends, sometimes really, really good friends. And 5 % of the time, and this sounds bad, but I never wanna talk to them again because there’s some toxic people out there. When you get into the foxhole with somebody,

That’s what we say in real estate, when you’re in the middle of a transaction and there’s some stress, there’s always going to be stress no matter how good I am maybe, or how good the transaction goes, people react differently and you really kind of see the ugliness and the prettiness of people really. ⁓ there’s that, there’s certainly as a job, this is a great job. I mean, I don’t.

Scott Bursey (16:56)
Sure.

Michael Bell (17:04)
I don’t have a boss, but I kind of do. Right now I have eight listings, so I kind of have eight bosses, but I don’t have to ask them to go to the bathroom or go on vacation. You know, but you got to stay on top of it. I think most realtors have a little bit of ADD. I do. So this is a great business for people like that because there’s always a lot of moving parts. There’s a million little things to do. I like the chase. It’s exciting. You know, I had my own brokerage.

for years and I thought I would be a really good manager and I had 10 agents underneath me and we were very successful but I was unhappy I just hated it I hated managing realtors. Do you remember that Super Bowl commercial? was for Yahoo and it these cowboys out on the range and they were lassoing kitty cats and I remember seeing that this was

This is about 25 years ago. It was a really famous commercial, at least for me it was. And I kind of thought, that’s me. That’s what I’m doing right now is lassoing all these kitty cats and they’re all over the place. And it’s just, was, I just didn’t really care to manage real estate agents. And so I sold my brokerage at the time it was to Prudential, which is now Berkshire Hathaway, but I sold it. I went over. I was only there for a few years. Didn’t I bounce to another.

international firm and now I’ve been with Sotheby’s for the last 12 years. But ⁓ yeah, that’s basically my story and I’ve kind of, I never thought I’d be a good real estate agent. I’ve always thought I’m not a cheeseball. I don’t think I’m a fast talker. ⁓ I think I provide a lot of value. I just had a listing appointment yesterday and I don’t show up to listing appointments with contracts. I told the lady,

that interviewed me, I said, she wants to hire me and I said, you can’t hire me. ⁓ We’ll do it tomorrow with the paperwork. I want you to make sure that this is the right decision for you. I’m not a cheese ball. I’m gonna treat you the way I want my brother or sister or my mom to be treated. She’s gonna hire me. But that’s just the way I do my business. And I look myself in the mirror every day and know that I’m doing a great job for people.

and I’m not pushing people.

Scott Bursey (19:19)
You are, I concur, and Mike, you’ve found your true calling. Now, I know a lot of our audiences either earlier in their journey or looking to level up, perhaps, and I think they benefit from hearing this from you. When it comes to building relationships and growing your network, what’s made the biggest difference for you?

Michael Bell (19:40)
Building relationships and building my network. I think Zig Ziglar said, your net worth is based upon your network. And I learned that early on. And you just need to get out there and meet people and just be a real person. Every day I make sure I have lunch or coffee with somebody. I’m a, you know.

I feel like I’m an introvert. force myself to be an extrovert. It’s not natural. It’s easier now than it was before. And I think that’s probably surprising considering my numbers that I put up on the board. But I think just getting out there and being a real human being, the funny thing about real estate agents, it’s very easy in our business to hide behind a computer or postcards.

and it’s very easy for you to just post all this stuff on Facebook and all this other stuff. It’s funny, I pick up the phone and call people all the time. No agenda. I don’t do cold calls. I’m not one of those guys. I just don’t have it in me to cold call people. I like to have what’s called warm call people and just check in. Oftentimes I just tell them there’s no agenda. I’m just touching base. Most people just love it.

They just love to like, hey, chit chat about the kids or whatever. Invariably, they talk about the real estate market, which is fine. Most of the time they talk about the real estate market. You know, this notion that people will hang up on you and tell you to go to hell and scream at you.

I don’t know if I’ve, I think I maybe have had that twice in my whole career out of I don’t know how many phone calls. So, sorry that just doesn’t happen. At least that’s not my experience.

Scott Bursey (21:22)
Thank you. Thank you for sharing that. Is there anything else you’d like to add about your story and your journey?

Michael Bell (21:30)
⁓ not too much else. if I have this book.

The yellow book, if anybody is listening, give me a call, ⁓ send me an email, I’ll be happy to mail you an author copy, I’ll sign it for you. The author copies are really inexpensive, you don’t need to buy it on Amazon. And I’d be happy to send you a copy of it. The audiobook is actually free on my website, so if you feel like listening to me for three hours, go for it, knock yourself out. You go to my website, michaelbbell.com.

It’s chock full of data. It’s chock full of… I mean, we haven’t even really had a chance to chat about it too much, but if you’re a seller and you’re thinking about selling your house, you don’t need to hire me, but you should hire somebody who believes in these principles. And if you read this book and understand this, you’re gonna be able to really screen out the realtors that are actually gonna work for you.

or they’re gonna work for themselves. Because everybody knows in this industry, in the residential industry, we are taught by managers that every listing and every buyer should generate at least two good leads. That’s just the industry average. So we are taught and trained to work you, you the home seller, you the home buyer, to get more leads for ourselves. And if you read the book,

or just at least read the, or listen to it, or read the conclusion, you’re gonna start hearing things from other realtors. You’re gonna realize maybe they’re not looking out for my best interests. Maybe I need to talk to somebody else. You will find somebody like me who believes in really what’s called, I’ll tell you, the title of the book, I haven’t said this before, but the original working title of the book was High Level Fiduciary Sales.

My publisher hated that. A lot of people aren’t gonna understand what fiduciary is. As you’re probably aware, a fiduciary is a relationship that two people have. Like an attorney has to their client, a doctor has to their patient. It’s essentially, it’s different in different realms. I’m not an attorney, but it is basically a high level of confidentiality and trust.

And if you’re going to hire a real estate agent to sell your house, you should have somebody who understands that and really regards their job in a fiduciary function versus just a sales function. You’re going to probably make more money. You’re probably going to have less headaches and you’re probably going to have a good relationship. And you’re probably going to refer that realtor if they do what’s in your best interest. And it’s all in the book.

Scott Bursey (24:17)
And Mike, what are some of the core lessons of your book?

Michael Bell (24:21)
Great question how do you avoid seller mistakes? If you read the book and really the first chapter really goes into something very, very basic. So these are some crazy statistics, okay? These are not my statistics. They’re from the National Association of Realtors. Look, the book was written five years ago. I read the stats that come out.

even with COVID and stuff, and the stats haven’t changed. So 75 % of all home sellers interview one agent, all right? 10 % of them ⁓ interview three or more, okay? And then there’s like another small percentage that can’t help themselves and they just, they’ll interview like a dozen people. What’s interesting is that 75 % of home sellers do not and will not use the first realtor

that they hired. And it’s usually just because they don’t interview more than one. And so you’re probably wondering, okay, well how do they, what got them to that point where they interviewed that one agent? So residential real estate is a relationship business, right? Most people, when they get into the business, they don’t get into the business without any customers. The average person that goes out and gets their license

The industry knows that that person is probably good for two deals. Mom and dad have promised them their listing, a friend just got married, promising them a buy side, whatever. They know a few people that are gonna be selling, so they figure why not jump into this, I can make 20, 30, $40,000. This is gonna be great, this is the way we’re gonna start. But you can see what the problem is, is that like I said, that most of the time they never get rehired again.

So you wanna hear a crazy stat. This is all in chapter one. According to the National Association of Realtors, 87 % of agents that get into the business will be out of the business in five years. Again, 87 % of all agents that get into the business today will be out of the business in five years. It’s an open door. It’s kind of crazy.

But they come in thinking they’re gonna make a bunch of money. They’re usually good for one or two deals. And then they just realize it’s hard. You gotta get out there. Like I said, you gotta be a normal person, people person, be of service, know your craft, understand the marketplace.

So one of the key lessons here is the likelihood is that if you’re hiring somebody that’s only been in the business for five years, there’s a good chance they’re gonna be out of the business. I just don’t think you should hire somebody like that. Anyways, there’s that, there’s another interesting nugget in the book and it has to do with what’s called dual agency. So dual agency is when you hire a realtor and they also represent the other side. So you could,

And this is actually legal throughout the United States, except there are nine states that actually ban dual agency. And that’s when the buyer and the seller are represented by the same agent. Now, not to get into the rabbit hole about all of this, but it’s also if the same brokerage represents both sides. But let’s talk about when the same realtor represents both sides. So you have a seller that’s selling their helm.

and they hire a real estate agent and then the real estate agent brings in their own buyers. That’s, know, for some people, you know, realtors are professional salespeople. They may make it sound like this is really good. Hey, you know, I got the buyers, nobody else is bringing these buyers. I got this great buyer, let me tell you all about the buyer. They’re qualified. I don’t know these other people that are writing offers on your property.

Let’s work with these people. Now the agent is usually going to get a double commission. So that’s one of the chapters is to be careful about dual agency. How do you make sure that doesn’t happen? Well, if you’re in one of the states that forbids it, you’re doing pretty good. In California, ⁓ they allow it as long as it’s disclosed.

It really is, in my opinion, the scourge of our industry. It’s something that a lot of realtors get upset with me about because a lot of agents, like the dual agency aspect. But how do you get away from that? I’ll tell you how you get away from it. Whoever you interview, they should tell you upfront within the first few minutes of an interview that what makes them different is that they won’t represent a buyer on your transaction and that they’re going to represent you.

from beginning to end, even if somebody comes in and they say they don’t have a real estate agent. Let me tell you something that’s kind of crazy. I get these phone calls all the time. I get a phone call from somebody saying, I saw your list, hi Mike Bell, I saw your listing at 123 Main Street. I don’t have a real estate agent. I’m really interested in the property I want you to represent me. Can we talk? And then I’ll say, you know what, I have an agreement with the seller, I can’t represent a buyer on this transaction.

I’d be happy to tell you everything you want to know about the property and I’ll find you a real estate agent. Scott, guess how many people have taken me up on that option in the last 10 years?

Scott Bursey (29:40)
Not a lot, it would be my guess.

Michael Bell (29:42)
None of them. They all

have a real estate. They all say the same thing. ⁓ I was hoping to go directly through you so I could get the property. I wanted you to make a double commission. I heard that you’re a great guy, all this other stuff. But I already have an agent. It’s my mom, it’s my brother, it’s my neighbor. Or they say, they give you a war story. They say, you know what? I have this realtor and we’ve been writing offers like crazy.

and it just seems like I keep getting bid out by the listing agent’s buyers. And so I just kind of thought, I’ll just play the same game that they’re doing and I’ll go directly to the listing agent. You have to ask yourself, well, a few things, is that really good for the seller? So this is the thing. When a listing agent who’s representing the seller has a buyer, they are legally obligated

to tell that to other buyers and their agents. So if I’m writing an offer for a client, I’ll call the other agent, I’ll ask the agent, do you have a buyer for this? Sometimes, unfortunately it’s only sometimes, sometimes they’ll say, I don’t do that. I don’t represent both sides. Or they may say, I don’t need to tell you that. Well, they’re supposed to tell you, but I’m not interested in having a fight with somebody when we’re writing an offer.

But when they tell you, they don’t have to tell you, they’ve kind of told you, haven’t they? Or they’ll just tell you straight up, yeah, I got a buyer, but you know, we’d like to see your offer anyway. Guess what that does for that seller? It makes it so that I don’t want to write an offer. I mean, why would I want to write an offer? Or it’s not maybe I don’t want to write an offer, but my hopes are not going to get up too high to write an offer and feel that I’m getting treated fairly and I’m going to get.

an opportunity to buy the property just because in a way I’m an outsider. This happens over and over again. It’s the dirty secret of our real estate business. I think it needs to end. But in California, they’re more focused on creating more affordable housing and all this other stuff rather than dual agency. Our legislators have been told by the California Association of Realtors and the National Association of Realtors

And that it’s not fair for somebody who’s trying to get housing that they shouldn’t be able to go directly to the agent that has their name on the real estate side.

Okay, it sounds like a good argument, but it’s really, I don’t think it’s a very good argument. And case in point, there’s nine states that have completely banned dual agency, so you have to wonder who’s right. Anyways, you can read that chapter in my book and see what you think.

Scott Bursey (32:32)
Absolutely. And thank you for the Cliff Notes version, Mike. And thank you for being on the show here today. This has been sensational. And for those of you who are tuning in, if you found value in this show, please make sure you’re subscribed. Mike, thanks again.

Michael Bell (32:36)
Yeah.

Thank you.