Bay Area Realtor Shaking Up Business By Removing Commissions

Bay Area Realtor Shaking Up Business By Removing Commissions


GOOD TO SEE YOU, THANK YOU. A BAY AREA MAN AT THE TOP OF HIS PROFESSION IS NOW DISRUPTING THE OLD BUSINESS MODEL WHEN IT COMES TO REAL ESTATE. ONLY ON “5” KIET DO LOOKS AT A MOVE THAT CHANGES HOW EMPLOYEES ARE PAID. REPORTER: JUST ANOTHER $7 MILLION LISTING. AT THE MOUNTAINTOP OF BAY AREA REAL ESTATE. JUST ANOTHER $7 MILLION LISTING BUT A BEAUTIFUL ONE. REPORTER: THERE’S NOT A LOT OF ROOM FOR MODESTY. I JUST FEEL CONFIDENT SAYING WE’RE THE BEST BECAUSE IT’S SIMPLY THE BETTER BEST MODEL. — THE BETTER BUSINESS MODEL. REPORTER: KEN DELEON’S FIRM HAS BEEN NAMED BY THE “WALL STREET JOURNAL” AS THE NUMBER ONE REAL ESTATE TEAM IN THE COUNTRY. WHEN WE FIRST MET KEN THREE YEARS AGO HE HAD JUST BEEN CROWNED THE NUMBER ONE INDIVIDUAL AGENT IN THE COUNTRY. PEOPLE ASK ME HOW TO ACHIEVE SUCH SUCCESS. I SAY THREE THINGS. NUMBER ONE, UNDENIABLE GENIUS. REPORTER: DOING IT ALL HIMSELF USING MARKET ANALYSIS TO APPEAL TO CLIENTS COMBINED WITH SLICK MARKETING LIKE A LIMO BUS TO SHUTTLE AROUND WEALTHY ASIAN INVESTORS. WE CALL HIM THE STEVE JOBS OF REAL ESTATE. NOW THAT WHOLE ONE MAN BAND APPROACH SEEMS SO 2012. KEN HAS TAKEN EVERYONE IN THE FIRM INCLUDING BUYERS AND SELLERS AGENTS OFF COMMISSION AND PAYS THEM A SALARY. HE NOW HAS 42 EMPLOYEES AND RUNS THE COMPANY LIKE A LAW FIRM OR HOSPITAL. THE PROBLEM I FOUND WITH BEING AN AGENT WHERE YOU’RE TRYING TO DO EVERYTHING INDIVIDUALLY IS NO ONE PERSON IS GREAT AT EVERY COMPONENT. REPORTER: NEED LEGAL ADVICE? STAFF FOR THAT. IF YOU NEED FLYERS, THAT’S STAFF FOR THAT. HELP WITH INTERIOR DESIGN? THERE’S EVEN STAFF FOR THAT. BY HIRING THE PEOPLE WHO ARE THE BEST IN THEIR FIELD AND THEN PLUGGING THEM INTO THE ROLE THAT MEETS THE NEEDS OF THE CLIENT YOU CAN ELEVATE THE LEVEL OF THE SERVICE BEYOND WHAT ANY INDIVIDUAL AGENT CAN DO. REPORTER: IT’S WORKING. DELEON REALTY BEAT OUT THOUSANDS OF OTHER AGENCIES LAST YEAR BY RAKING IN MORE THAN A HALF BILLION DOLLARS IN TRANSACTIONS. SO WE GOT TO ASK. IS THE BAY AREA IN A HOUSING BUBBLE AND IF SO, WILL IT BURST ANYTIME SOON? I STILL THINK THAT WE HAVE NOT HIT THE RECEIVING YET. I BELIEVE THAT THE BAY AREA HAVING 7 FIGURE NORMS FOR THE MEDIAN HOME PRICE OF ALMOST ALL THE CITIES IS THE NEW NORMAL. I JUST THINK THAT FUNDAMENTALLY THIS AREA IS SO IN DEMAND WITH SUCH FEW FINITE DEMANDS AVAILABLE THAT THE DEMAND WILL ALWAYS OUTSTRIP SUPPLY. REPORTER: PEOPLE DON’T WANT TO SELL THEIR HOMES BECAUSE THE CAPITAL GAINS TAXES ARE HIGH. AND ALSO, AGING HOMEOWNERS ARE HANGING ON TO THEIR PROPERTIES BECAUSE THEY ARE ENJOYING THOSE LOW PROPERTY TAXES THANKS TO PROP 13. DID I HEAR HE SAID WE HAVEN’T HIT THE CEILING? WHEN IS IT GOING TO STOP? REPORTER: WE HAVE BEEN ENJOYING DOUBLE-DIGIT GROWTH OVER THE PAST COUPLE YEARS AGO. DELEON SAYS FOR AT LEAST THE NEXT TWO YEARS LOOK FOR GROWTH TO BE IN THE NEIGHBORHOOD OF 5 TO 15%. BEYOND THAT, HE WOULDN’T SAY. LIVE IN PALO ALTO, KIET DO, KPIX 5. ALL RIGHT. THANKS, KIET.


One thought on “Bay Area Realtor Shaking Up Business By Removing Commissions

  1. He is still a commissioned Real Estate salesperson. Just because he pays his employees a fixed salary, doesn't change that.

Leave a Reply

Your email address will not be published. Required fields are marked *