Buyer and Seller Moods in 2020 with Jim Brown #701

Jim Brown blog

Bruce Norris is joined this week by Jim Brown.  Jim is the owner of Keller Williams Corona and has been involved in real estate for over 30 years.  He got his start in 1983 when he began working with land development. Since then he has worked with listing homes in the Corona area as well as continuing his work in land development with large lots subdivided for new tracts.  In addition to land development and residential resales, Jim also specializes in short sales and bank-owned properties. See below for full video and resources.

Episode Highlights

  • What does he do to be able to own a dominant franchise and be a successful player?
  • How did his business do in 2020 compared to 2019?
  • What is the mood of the seller right now?
  • What about the mood of the buyers?
  • When it comes to sellers in Riverside, are they staying, leaving, or moving up?
  • For the people moving out of state, does he see this increasing?
  • Is the Inland Empire affordable for somebody under 35?

Episode Notes

Bruce Norris: Thanks for joining us. My name is Bruce Norris, and today our special guest is Jim Brown. Jim’s career began in 1983 selling new homes for several years, then owning a new home sales and marketing company that specialized in selling standing inventory for banks and savings and loans, selling homes that other companies could not sell. You entered into the Corona area in 1998, sold 55 homes his first year. As the market changed, Jim adapted and learned to sell short sales, bank-owned properties, and also has extensive experience in dealing with land. In 2004, Jim launched a very successful Keller Williams in Corona with the largest number of agents in the area, so it showed a profit right off the bat. Now he has over 350 agents.

Bruce Norris: I’ve been in your building. How does that sit?

Jim Brown: Well, they’re not all there at once. It’s like a gymnasium, you know? If everybody showed up at once, it would be crowded. We have 27,500 square feet in our office.

Bruce Norris: I guess the first question is, you know, a lot of people find it very difficult to be successful at this business. So, why are you successful, first of all, as a person, and then why are you able to own such a successful franchise as really a dominant player in our area?

Jim Brown: So I guess there’s a lot of ways to look at it. I think that Keller Williams has a lot to do with that. I’d like to take all the credit, but they’re now the number one company in the country, probably the world, but not all offices are the same, even under the same franchise. I think we’re successful, one, because we’re in a great area, and I think we treat people well. Our value proposition is, well, I’ll put it like this. I’ve been a salesman my entire life, so I wanted to create an atmosphere and a place I would be proud of and that I’d want to work. We spend a little more money than than most offices do. We have a very nice office, a nice place to be, except it’s 27,500 feet, which is a lot of burden in overhead there. We treat the people well. We try to be incredibly fair with everything, and we actually have live training literally every day as well as everything else as far as information and things like that. There are several people available at anytime for the agents that are unsure of something or they have a question. They have four or five people with more than 30 years of experience that they can call at any time.

Bruce Norris: So out of all these agents, what percentage of them do 80 percent of the business?

Jim Brown: Probably 15 percent of the agents.

Bruce Norris: Okay. So what do they do differently?

Jim Brown: They work. They work hard. That’s the secret sauce right there. I did fifty-five sales my first year. What it doesn’t say is that I work 80 to 100 hours a week. Back when I met you, back around 1990 I believe, things were going really good. Shortly after that, everything went to hell in a handbag.

Bruce Norris: It was a very tough time.

Jim Brown: So I learned how to live on very little. For a while, most of my friends lost everything that they had. At that time, I wasn’t a realtor. I was licensed, but I wasn’t a realtor. I wandered around for a while and ended up thinking, “I guess I’m going to be a realtor.” I had the license, so I just walked into a place. I didn’t know what a lot of business was or a little for a realtor to do. I just walked in and I said, “I’m looking for a job.” Oddly enough, they hired me, which I have since learned all you need is a pulse and they’ll give you a shot.

The market was pretty good in ’98, so I just worked and worked and worked. Very quickly, I figured out what made money and what didn’t. I made most of my money just doing open houses and working off of that. And then all of my experiences and other experiences taught people who came into my office. We share that information. I know a lot of places you go , everybody’s very secretive.

Bruce Norris: You have a collective pool of knowledge that helps everybody.

Jim Brown: Everybody at any time. There’s plenty of business for everybody. Those that want to work can do it. There’s some people that have shocked me they did so well, and there’s some people that shocked me with the way they are in that they don’t do anything. The difference is how much effort and intent they put into the business.

Bruce Norris: I just want to ask about your sales background. I introduced a guy who I used to sell electrical stuff to him, and we’ve just been friends for years and done some real estate stuff together. But he was always so entrepreneurial. And I said, “What was your first sales gig?” He says, “I sold manure door to door. I saw my grandparents, and I have to buy a big bag of manure for them, and they only use like a tenth of it. So he actually put little bags of manure together and sold them door to door, and he made enough money. He was like a six-year-old.

Jim Brown: You find a need and you fill it.

Bruce Norris: Yeah. So that was crazy.

Jim Brown: My story is a little different. My father was much older. He was 65 when I was born, and he passed away when I was nine. I really did not know him well. But my mom hadn’t been working. She went to work at Thrifty Drugstore, and so I’ve had a job since I was in the fifth grade. I have never not worked since I then. The first job was a paper route. I got a paper out with the Herald Examiner, and they said, “Here’s your route area. Here’s the three people that are currently taking the paper there.” So my job was to fill that area up. I went door to door to sell newspapers to get them to subscribe. The biggest memory I have of that is the cost was $1.90 a month for the newspaper. People would give me two dollars and they wanted their ten cents change. They’re thinking, “I put it on your porch and you can’t give me that dime.” That was my first experience then. I worked 36 hours a week. I then went to high school while selling shoes. Hardy shoes in the West Covina Plaza.

Bruce Norris: Was that on commission?

Jim Brown: $1.05 an hour plus eight cents for every pair of shoes I sold.

Bruce Norris: Now, how do you remember this? It must be either a bad memory or it’s a really good one.

Jim Brown: I did that for a long. I did that for four years of high school, so I remember it pretty well. I will also tell you that I worked 36 hours a week, and most of the full-time people were working 60 hours a week. I outsold every one of them every month. I always did.

Bruce Norris: Are you a book reader? Where’s the gift?

Jim Brown: I do read some. It just makes sense to me. You just treat people the way you want to be treated.

Bruce Norris: OK. You know, it’s kind of funny. My best friend is a guy named Alex Navarro, best salesman I have ever known in my life. He could not train anybody how to sell, but it’s inherent in his DNA somehow. He’s Cuban, and he loves people. He’s able to garner the most ridiculous support for the most amazing things. It’s like he gets people to be on his team willingly, and they go do it together. That’s starting with confrontation. So I’ve watched this guy in a matter of a minute turn ridiculous results just because he’s able to get them on his side. It’s pretty cool to watch.

Jim Brown: So I think I can tell you what he’s doing. First off, he’s treating people with respect. Wouldn’t it be a better society if everybody did that? Second off, in doing that, he makes people trust him. I think that’s an ability that I have and people say, “Well, how do you do that?” And I go, “It’s really easy. You just be trustworthy.”

Bruce Norris: Yeah. And you know what? That does come across. It does. I know in the house-buying business, that was my greatest strength. I would tell them the truth. But sometimes I would say you don’t need to sell it to someone like me. You could list it with a Jim Brown. And then if they fought back, it would be a reason. It wasn’t in the numbers. It was a desire they didn’t want. So I would end up buying that house, but I always felt like I could tell that I took the risk to give the house back. There was a element of trust that was created because they realized I wasn’t just there for me. That is a good lesson to learn.

Jim Brown: I tell all of our agents never do anything that is not in your client’s best interest. If it means money to you or not, if you want to be in it for the short term, go for the money. If you want to actually make a career of this, do what’s right for your clients. It’ll pay off.

Bruce Norris: You showed me some charts where you’re a dominant player in an area, and you just completely explained why. That’s how you build lifelong clients. You don’t lose that category because somebody else puts it on sale.

Jim Brown: It’s not always about the money.

Bruce Norris: No, no. It’s about trust. These guys that have homes don’t go through 50 homes a year. They go through one home in eight. They have a pretty good memory of who took care of them. I would imagine a lot of referral business because of that reputation that has to happen. Alex has a son named David who has followed in his foot tracks in an amazing way with the character and everything, but I saw it at age three. He was playing with his brother. I’ll tell you the story just because it is interesting that it was in the DNA. As he was playing with his brother, he wanted his brother’s toys. His brother was physically bigger. He couldn’t physically take it. So all of a sudden, it was like a light switch went on and david started playing with his toy, the one he had, and having a ball with it. Within 30 seconds, the exchange was made because he made his toy look very attractive. I went, “Oh, my God, I got to tell Alex what I just saw.” That was amazing.

You probably remember our transaction way back in 1990 because I had some custom homes that wouldn’t sell, and I was in the boat with a lot of people.

Jim Brown: Beautiful homes, too.

Bruce Norris: Yeah, and you came with an offer at a $450,000 appraisal on a 60-foot teak yacht. When I read it, I remember thinking, and I said it out loud, “I think this will work.” I’m surprised you even understood the offer.

Jim Brown: Things were a little looser back then, and back then we sold things that other people couldn’t sell. The way you do that is you get creative. You could be a little more creative than that, and now there are too many regulations.

Bruce Norris: It’s kind of funny that my second question did that with the transaction work today. Would a lender accept a boat as a down payment for two custom homes?

Jim Brown: Maybe if it was private money, but you’re not going to get a bank committee to do that. I’ve done deals over the years with Australian opals, Gobodo tractors and waterbeds. Where there’s a will, there’s a way to make it work. You just have to think a little outside the box sometimes, but it’s gotten much more regulated. In the last 20 years, I haven’t really done much of that because it hasn’t been needed. Money’s been pretty easy.

Bruce Norris: I want you to describe 2020 as far as the year, but I want you to first tell me how 2019 was as a somebody who owns a big real estate company.

Jim Brown: Well, 2019 was a good year. Let’s pull up some numbers here. In 2019, we increased over 2018 by 13.8% in the number of contracts written. It’s going to be very similar in contracts closed. 2019 was a good year. 2020 started off with a bang, and then this COVID thing kind of slowed us down a little bit. I’ve got a tremendous overhead with 27,500 feet and a lot of employees. So I’ve got to tell you, March, I was scared to death because the overhead that I carry could kill you in a fairly short period of time. I can’t tell you how pleased I am that our people got very creative. A lot of them started doing virtual open houses. We had amazing videos made showing the houses, and this absolutely shocked me: We haven’t been in the red at all this year. Not at all. In this month, June, I think we’re going to beat last year. We’ve done well. I can give you the exact numbers month for month. The month of May is the worst one where we were off 38 percent from last year. For the entire year, we’re only six percent behind 2019.

Bruce Norris: That’s unbelievable.

Jim Brown: That’s what you have when you have well-trained, good people.

Bruce Norris: That’s unbelievable. You look at the CAR stats, and I wasn’t expecting those stats coming out of your mouth to be honest with you. When you look at the CAR stats and you look at how sales year over year were down in the ballpark of 45, 50 percent? That’s understandable.

What’s the mood of the seller right now? Did you see a lot of people pull their listing?

Jim Brown: A lot.

Bruce Norris: That’s what I thought.

Jim Brown: A lot of people pulled their listings. In fact, the biggest problem we have right this moment is lack of inventory. Because of that, you’re seeing prices go up. I honestly thought, and everybody I talked to said prices were going to drop. They’re not. Over last year, they’re up 7.8%.

Bruce Norris: For me, you know, that’s what I pay attention to. I really play that scenario out. The thing that causes a major price change, in my opinion, is that you have to have a lot of competition from have-to-sell owners. So foreclosures. Well, there’s no mood to foreclose on anybody, right? I mean, it’s kind of a moratorium on people that aren’t making their payment?

Jim Brown: We’re actually starting to see a little bit of foreclosure, but not enough to make a difference. 

Bruce Norris: When you’re talking about going from this to this as opposed to the 90s or even the 80s when you had this crazy interest rate and a 10 percent unemployment. The REOs got to 25 percent of the marketplace. The median price never went down between 80 and 85, which is really odd when you think about the stats that were there.

Jim Brown: Back then, we got creative.

Bruce Norris: Well, you could also take over loans without a fine.

Jim Brown: The very first house that I ever sold was in Rancho Palos Verdes. I remember the interest rate was 23%, and that was amazing. So we got creative, went to the bank. Several companies had this track of houses to sell, and they were just still sitting there. They’d been through three or four different brokers and they hadn’t sold any of them. Everybody kept telling them to lower the price, and these were homes that were owned by American savings and loan. We finally got an interview with them. We went in and surveyed the situation and went to them and said, “OK, we can sell these, but we want to raise the price.” They were about a half million dollar home, which was a lot back then. We said we want to raise them fifty thousand dollars in price.

A lot of people may not understand, at least back then, when you had three or four sales, you set your own comps. So we went in and we raised the price fifty thousand dollars. The bank was asking if they were going to make that much more money, and they said no, they were paying it in points. They’re going to buy down loans. They did things like buying the house that came with a new car in the garage. This happened around 1982/1983.

Bruce Norris: And you just got started. Honestly, you’re just one of those people that I think are extremely creative because that’s not a normal transaction somebody just starting their business would think of.

Jim Brown: Well, in that business I had a partner, and he was very experienced in new homes. I’d like to tell you, that was all my idea. It was mostly his. As a matter of fact, you know him. That’s Pat O’Brien. He’s creative to the crazy extent.

Bruce Norris: What about the mood of the buyers in 2020?

Jim Brown: I think a lot of people are saying “I’d better buy a house now because the interest rates are so low.” Most of the sellers don’t realize what they have, or they think it might be difficult to sell. If you listen to the media, they saying things are going to crash, and this is terrible. But as you mentioned, a lot of people put their houses up on the market in March. When it comes to the mood of the sellers, after spending a couple of months in a house with somebody, they realize their house isn’t big enough, so they they want a change. So I think the attitude going on right now is a lot of people think it’s the right time to move up.

Bruce Norris: The biggest question I had was where does the seller of a Riverside house go. Are they staying, leaving, or moving up?

Jim Brown: Two things. In my experience over the last several years, this is what has been going on. If they’re tied to the area, they move up. If they possibly can, they move out of California. If you’re close to retirement or you’re gonna retire or if you have a job where the company will let you move to. I think half my past clients are in Arizona and Texas. That happens a lot. Also, I’ve seen a lot of movement towards Tennessee, North Carolina, South Carolina.

Bruce Norris: Do you see that increasing, and what’s the reason for it? Is it a math function.

Jim Brown: It’s both. It’s a math function and it’s a political function. A lot of people are very tired of the taxes, tired of the way the government – I don’t want to get real political, but a lot of people are very tired and concerned about the way things are going.

Bruce Norris: OK. That makes perfect sense. In Riverside, I don’t know what percentage of people are 35 and under. I don’t really know. Is the Inland Empire affordable for somebody that’s 35 and under? Is that typically still okay at the interest rates that we have? I’m trying to pick somebody that might actually be married.

Jim Brown: Well, that’s interesting. I am at an age where almost everybody seems like a kid to me. So I sold a house last week. It’s supposed to close on the 15th of July. The house sold for basically $2.4 million. The kid’s 32 years old, makes three hundred thousand dollars a month. I’m looking at this kid going, “Where did I go wrong?” Obviously, I’m not doing something right. Then you talk to a lot of 35-year-olds or 32-year-olds that are still living at home. I don’t know about you, but when I was 18, I was ready to go.

Bruce Norris: I was married at 17, so I had to go.

Jim Brown: How ambitious are you? There’s a lot of income out there for the people that are ambitious. There’s always going to be the majority of people who think life is like a map that they are stuck on. They’re stuck on this road and this is all that they’re worth and all that they can get. Well, you’ve been in my office. We have a couple of huge signs that say Think Bigger. It’s there. It always will be, and it always has been. You just have to decide you’re worth it and that you deserve it. Then you have to work your butt off to go get it.

We have the best training around, so we do get a lot of new agents. I’ve had people that started with this and they make a half a million bucks their first year. That’s unusual, but it certainly happened. We had a lot of people who said, “I’ve got my license. So where’s this business? Why hasn’t it fallen on me?” Well, it’s just not going to work out. Go get your job at Wal-Mart or whatever it is that you want to do. You’ve got to push that limit, and you’ve got to know that you’re worth it. I think self-image is the biggest factor, so we work on that with our people a lot. It just depends on if the drive is there. I’ll take drive over intelligence any day, too.

Bruce Norris: Well, it’s interesting because you said a lot of your business came from open houses. That’s not a given because a lot of times people were there eating cookies while taking a look at the house. You’re capturing them as a client. They’re not likely to buy that open house. Not often, but it happens. You’re taking them to the next house.

Jim Brown: I would say that in an open house situation of less than two minutes, I can tell you if the person’s a buyer or not. Is it a neighbor that wants to see how it’s decorated, or is it a legitimate buyer? Basically, back then if they’re buying a house, they were buying it with me. I had to capture them. You would learn to capture it. First, you would identify it and capture it, and then you would learn that if they’re not really a buyer and you’re spending too much time with them, you’ve got to learn how to fire a client. You can be very nice about it, or you can hand them off to somebody else, but times all you got. I’m not going to tell my agents to think this way, but a buyer to me was someone who wanted to buy a house today. A seller is somebody who wants to sell the house today. Everybody else goes into a different file, and that was all right with me if somebody else dealt with them. If somebody else had put them in their thing and they have their monthly reminders,that wasn’t me.

Bruce Norris: 1980 was the first time I was ever a realtor. I got hired as a buyer. I had a real estate license. We bought too many houses for the company to deal with, so I had to hold open houses to try and sell houses. That’s my first experience ever with a customer in my car. So I’m driving to Riverside. They told me what they wanted. We had four or five that matched it. So I showed them all. I get back, and this is Friday, and I don’t work on weekends. So she said, “Well, what time tomorrow?” I said, “Yeah, I’m not going to work on Saturday or Sunday.” What you said you wanted, I showed you the inventory we have. So it’s not one of those. It’s just not going to work. So I went back inside, and five minutes later they came in and said, “We’ll take No. 4. I thought, OK. Was that a close?

Jim Brown: It’s called the takeaway. What I would tell people back when I was hustling, doing all that is, and I tell my clients and my agencies all the time, it is absolutely key to know the inventory. You’ve got to know what’s out there. I would tell people one of the advantages of working with me is I do this every day and I do this long time, every day. So I know what’s out there. I’m going to show you the three best houses for what you’ve told me you want because I know where they are. I would tell them that one of the advantages of working with me is for every minute you spend with me, you would have wasted an hour with somebody else. So I would take them out and show them the three best deals for what they told me were right, which, and believe me, people don’t always know what they really want. Right. But they for what they told me, these are the three best deals. And then I’d say, which one do you want? They would say, “Well, we need to see more houses,” because some people just think, “Well, I can’t just buy the first one I saw.

Bruce Norris: It’s like going shoe shopping with your wife. She buys the first pair she saw after ten other stores.

Jim Brown: Yeah. I told you I sold shoes for four years? I sold men’s shoes for four years. I sold women’s shoes for three weeks. I said, “No, this isn’t working.” A guy will come and go and say, “I want this style.” Then they try them on, they buy it, and they walk out. Women will try on the entire store and then they leave. It’s like, “No, that’s not working.”

Bruce Norris: The only open house I ever held, because I obviously I haven’t done the realtor hat, I’ve been on the buyer side, I had an open house one time. A lady comes in, I fix the house, and I was sitting there. She said, “Well, we would really like it to have a nine-foot ceiling.” I said, “It’s very unlikely to get one.”

Jim Brown: You’re being honest with them.

Bruce Norris: I don’t think I sold that house, but that was also the last open house because I don’t have patience. It’s funny. You know, how I’m built is I used to wholesale houses. I like people to deal with numbers. I’ve got this $200 grand house tied up for $110. I’m going to flip it for $125. It needs as much work. “Yes or no? Done.” That’s the kind of side I want on. When you get somebody that’s like that, it’s repetitive business.

Jim Brown: Just tell me what you want. I know where it is. This is what you can do. Boom.

Bruce Norris: Yeah. Once trust is established, that makes it really easier. In Stephen Covey’s book the Low Cost of High Trust, it says that is extremely important. Or the high cost of low trust – that’s a very painful thing to have as a business owner.

Jim Brown: Well, that’s what happens when you don’t tell people the truth. It’s not just telling the truth. You’ve got to do things in their best interest. I’ve had people buy things that I didn’t think they should buy, and I would generally tell them that. I didn’t think it was the best value on the market, but my job’s to tell them that can buy whatever they want to buy, it’s their money.

The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go and click the Hard Money tab.


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