‘Unfiltered’: Why the ‘trust factor’ is key to brokerage leadership 

Editor's note: The Real Estate Insiders Unfiltered podcast explores the people and forces that shape the real estate industry. Check out our top takeaways and watch the latest episode from NextHome co-CEOs James Dwiggins and Keith Robinson.

The views, thoughts and opinions expressed in the Real Estate Insiders podcast belong solely to the podcast creators and guests.

On this episode of Real Estate Insiders Unfiltered, John L. Scott Real Estate Chairman and CEO Lennox Scott said that, after 49 years leading the brokerage his grandfather started in 1931, he's noticed real estate is actually "very predictable."

"It runs in 10-year cycles," he explained, which follow "in alignment with the U.S. economy." Scott, who is now embarking on his fifth loop, has watched the Seattle-based company's agent count soar from 260 when he became CEO at age 25 to over 3,000, with more than 100 offices across four Western states.

On Rocket and relationships: Rocket's recent acquisition of Seattle-based Redfin "is major for the real estate industry because they have the resources for major marketing power," Scott said — but "relationships trump everything."

"Just because they have the systems doesn't generate the business. Because we're in the neighborhoods, we're with our clients — and we look out for their best interests."

Private listings versus 'full exposure': Scott weighed in on the debate over office exclusives — which John L. Scott doesn't do — noting that "there's no marketing until active, live in the MLS. There's no 24-hour rule — why would we have a 24-hour rule in today's technology?" 

The reasoning behind that approach? "We believe in 100% seller representation," Scott said, "and for sellers, it's full exposure in the marketplace." The brokerage already has a "celebrity privacy rule" in place for the handful of listings that need it each year, but in general, he said, the privacy issue "seems like a lot of distraction out in the marketplace right now."

The importance of the 'trust factor': Scott remains actively involved with the business and its agents, who share their personal databases with the firm for marketing purposes — an unusual practice. They're willing to do so, Scott said, because he's established a foundation of trust. 

"I wrote a letter, and I signed it with my commitment to them of how this was going to work. The contact belongs to them — only their contact information and photo — and I'll never reassign it to anyone else," he explained. "We've been in business 94 years. And so there is that trust factor."

Taking pride in NAR: From the commissions lawsuits to NAR's controversial Clear Cooperation Policy, it's been a tough few years for the trade organization. But Scott, who has been involved with various NAR committees over the course of his career, said he remains "proud to be a Realtor."

"I believe it's a world-class organization," Scott said. "We are so lucky to have NAR — not just for our industry. It's mainly involved with homeownership across the nation, and societal issues. I've really stepped into that over the last couple of years."

Looking ahead, NAR is "moving forward," he said, but still has "a lot of work to do."

"They're going to have to get this figured out, because the world is going to go right over the top of them in this new AI world — especially in MLSs."

The 'burden' on indies: Consolidation has been a trend in the MLS world over the past two decades, but sizing down further would be beneficial — and technology can help, Scott said.

"I believe we spend $1.8 billion a year as an industry on MLSs and Realtor associations," he said. Though he recognizes their value and thinks the industry "would be toast" without those organizations, the associated costs are still a lot for smaller companies.

"Let's get that burden off the independent companies out here that have websites and use the technology for that and the industry," he suggested. "We should be putting more money into governmental affairs."