Many of our listeners have been directly affected by the newest real estate market disruption: the NAR lawsuit. However, even if you don’t work in the real estate industry, chances are this massive (and not well-understood) change in the housing industry will affect you, too. This week, we dive a little into what this change means for Realtors, buyers, sellers, and investors, but most importantly, we break down how market disruptions in any industry, while difficult, can serve as opportunities to grow, whether that means you forge ahead or shift your focus.

In this episode you’ll learn:

• How all businesses, industries, and markets experience cycles
• How to use the cycle you’re in to prepare for the coming ones
• How to separate yourself from your fear so you can lean into the challenge
• And more!

View full show notes here.

00:04 - Adam (Host)

Welcome to the 200% Life Podcast with Adam Hergenrother and Caitlin Frotland, where we bring you weekly insights into spiritual growth and business success. In this episode, we're going to jump into the NIR settlement. What does that mean? And, more importantly, market disruption in any market, in any place, in any industry, in any market in any place, in any industry and whether you we're going to teach you how you can lean into disruption as an opportunity to grow, whether you decide to forge ahead or shift your focus.

00:38

So there's been a lot of sensational headlines specifically about the real estate world, and since everyone knows that I'm in the real estate world and since everyone knows that I'm in the real estate world, I've gotten a lot of questions about this NAR settlement what it means, what doesn't it mean? How does it impact for people? People are sent generally. People are just confused, specifically consumers. They don't really understand what it is and that's partly the way the settlement actually is. Is that it's very confusing for people, and on average. By the way, it's just so funny because they talk about this as a class action lawsuit. The people that actually are part of the class action lawsuit get less than $10 a person. Wow.

01:12

Less than $10 a person on basically $800, $900 million settlement. Wow, so it's not a financial benefit, which is what the plaintiff's lawyers basically said the entire time, which is like, oh, you're going to be this big benefit for all these homeowners and it's going to be great. Well, they get $10. And attorneys are going to get, of course, whatever it is. So there was there, you know, and it's it's. It's just a lot of misconceptions that are out there and I don't want to go use this podcast as a way of like going through each point that are there. I think there's a lot of really good articles that are out there that are already showcasing how this is actually hurting consumers, why it hurts consumers, why rates were always, and have been, negotiable. One of the things I always tell everybody is like for the last 60 years, there's been forced sale by owners. You can sell your house for free. For the last as many years as I've been in real estate 20, 30 years there's been discounted brokers that you could sell your home for $1,000, $900. You know, what's interesting is, in general, they've only represented nationwide about 5% to 8% of all transactions that have ever occurred, year after year after year. So why is it that those don't catch on more. Because that's kind of what people are saying oh, it's just discounting is going to happen, people are going to save money. It's just not true, because the reason why it is is because you get a level of service, and selling a home you're a professional real estate agent is a tremendous amount of work, it's a tremendous amount of responsibility and it takes a tremendous amount of fortitude to get a home sold through the transaction and representing and having this fiduciary responsibility with your buyer or your seller. And so people take that in light sometimes. But there's a lot that goes into this world to be able to do that and that's why people have always been willing to invest into this, because it's one of the largest assets to either purchase or sell. And on average, by the way, a professional realtor will get you a lot more percentage than you will selling on your own or with discounted brokers. So the net number actually ends up being higher with a professional realtor than it does on average with somebody. That's not Now. Of course there's individual cases. People can say all this and stuff, but it's really interesting about how the facts are out there and you kind of explain that people go oh yeah. So what does this really mean? It essentially means to me is that there's a clear line of who's paying who in the transaction. That's kind of really what this is all about, and that'll be solved and we'll go through with it.

03:31

04:11

Just like every shakeup or change, any economic disruption or market disruption that happens. It's a cycle that things go through, just like there's a cycle for in Vermont we live here. There's very clear distinct seasons. Right. There is fall when things start to decay, and it's got its own beautiful smell, right. I always love the smell of fall, but it's actually the aroma of actually leaves dying. You ever know if you ever noticed that, but like that's what starts to happen, people say, oh, it smells like fall.

04:34

And it's actually I'm paraphrasing a little bit, but it's basically death. Right, it's what it is. It's the leaves, it's the natural progression. Now, death may not be the right word for what it is, but that's essentially what's happening. Things are decaying, things are going through their change, and then, of course, winter comes and it's braille and it shows up and there's a blanket of snow. That's there, it's colder, it's got its own season, and then everything comes back to life in the spring and, of course, blossoms in the summer, and that's the kind of people who harvest Disruptions in marketsplaces have done this in countries, in industries, for as long as people have been tracking any of this and that's part of the beauty of this is that during economic increases, people expand, they spend more money, they invest in the R&D, they take more opportunities, they take more risks and it all kind of opens up, just kind of like.

05:19

05:56

So in any market disruption, that is the first advantage of doing a do this. But before you can take advantage of that, you have to understand where am I at with this. If anybody is still fighting any type of disruption or cycle that's actually happening, you'll never be able to get the advantage or the benefits of a disruption itself, because if you're still going, oh man, why did that happen, or how come this had to happen, or how come this feels harder, it does feel harder. I've shared that many times in podcasts that I've done not just on this one, but on this topic. The real estate market is supposed to feel harder. In fact, you and I did one that there's no easy button. Right, there is no easy button. That's out there. It's not. And when markets contract and things get harder, it's supposed to feel harder. That's the whole point of why, when you wake up and he goes, wow, this feels a lot different. Yeah, it does, it's harder.

06:47

07:41

And 200 different products 200 different products, yes, products. And so finally he came back and said narrowed down the 10. And they took the 10, they said narrowed down the one, which is what we know, which is the Apple iPod. And that's what they focused on. And, by the way, when they did that, they also eliminated I don't remember the exact percentage, but a tremendous amount of employees positions, because they just didn't need them, because they got focused on what they do. And then, of course, then from that disruption, from that hardship, they then refocused, made the iPad and then have grown and actually have repassed all the people that they had to let go and rehire into the size they are now, because they got focused and able to actually grow from where they are Now. There may be another shift and be able to do it, but you can see how that over time, how that works right.

08:25 - Caitlin (Host)

Yeah, I mean, it just kind of occurs to me that it's almost like just focusing energy, Like when you have all this energy dispersed over 200 products. I mean taking that and obviously you have to let some divisions go and whatnot, but even just leadership getting incredibly focused on that one thing I mean that just obviously is going to propel and create momentum.

08:45 - Adam (Host)

Yeah, I mean, if you take a magnifying glass and you hold it up to the sun, you get a lot more power from it, and it's the same thing when you're business. When you take it and you put a magnifying glass on your business, you get a lot more strength out of it. That's actually just the difference. Remember, leaders. Their work product is being able to make these tough decisions. You want to call them about what to focus on as a company, and that's really what you're doing is you're taking everyone's magnifying glass and you're actually paring it down, so you're all looking at the same thing. That's how energy goes into it. That's how small teams can accomplish a lot, because they get really energized.

09:19

You know who does this very well. Whether you like him or don't like him, Elon Musk does this at such a high level. It's actually astonishing of how small his team is. Think about ex-Twitter, right, Whatever it is Now, of course, people can. You know I'm not talking about his delivery or his ethics or his morals. I'm not going to debate that right now but from a productivity standpoint, I think they're at 10 or 15% of the employees that they had originally with Twitter and they are doing, if not more than what they were doing before.

09:49

So again, it's, it's. It's. It's powerful when you get the right people there or take like a Navy SEAL team in the military, or you take like your top players of how much they perform versus the other player Again, so you just take it's all that Pareto principle right.

10:04 - Caitlin (Host)

Right, and on the last podcast we were just talking, you were sharing your experience in like corporate environments and how much energy and focus is wasted. So then, when you have somebody at the helm who's really keeping everyone on track or seeing the vision, yeah, it's a game changer, that's exactly right.

10:20 - Adam (Host)

So the first step in any market disruption as people are listening to this again, we have a lot of real estate listeners is number one is accept the fact that things change. Accept the fact that our industry is going to change, which is great, it's wonderful. Now is it going to create some chaos and disruption? Of course it is. That's the whole point of it, and it's the people that can stay through that that end up on the other side more powerful. Now it's a choice, right?

10:42

Some people are going to say I've had my runs in real estate, which I've already. I've already heard that from people right, like I just don't want to go through this. That's fine, there's no wrong with that, there's no right or wrong, there's no. I always think it's funny too. Like people are like I need to go be successful and like you're going to be successful because you have money. Like you're going to be successful because you can see yourself through this. I get what. Just take a step back sometimes, right, and just be like I got to go make it. Like what does make it mean? Right? Like hey, I gotta go. I gotta go do this. I gotta go have certain number of viewers on your podcast. I have a certain number of people or I have to have a certain amount of money Like what does that even mean? Right, and people just get caught up in this. I gotta be able to see myself through there. So I only say that don't want to go through there and that's okay, great. It doesn't mean you're a quitter, it doesn't mean you're not good. It doesn't mean anything. It just means your path is going to go differently at this point. So, again, I think there's a group of people that will will share in that, and there's another group of people that wake life and allow all of this as a way to kind of work on me. Right, it's like what I don't like about this? I get to release.

11:52

Remember, anytime there's disruption that's happening, you're going to get disturbed, which is going to create opportunities for you to go. I get to let this go. I get to let this go. So that's from a spiritual, personal growth standpoint. I always like to look at any disruption of being like this is going to be great. Well, how is being fired going to be great? Whatever, it is right.

12:10

Well, I don't know, maybe I'm going to do something completely different. I don't know what it's going to be show up over here, what opportunities are going to be there. But I just know that everyone does. Life's going to continue to go on. It's not like your heart's going to stop beating or your pancreas is going to stop secreting because all of a sudden you're no longer in real estate, or that you get into real estate because you want to do this. It doesn't mean it's going to change either.

12:31

So in any disruption, you first just you get clear and centered of going. This is going to be. I can accept and appreciate what this is going to be. That's kind of the first step. The words I would use, like I can accept and appreciate, because if you can't, you're going to be fighting yourself the entire time. And what does accept and appreciate mean? It means that it's going to be challenging. It's going to be things that I don't know. It's going to be things that I learn and I'm just going to lean into this and raise this as much as I absolutely can.

12:59 - Caitlin (Host)

I have noticed too, that when people have that response to something like this, I mean it's an instant trickle-down effect or inspiration. It catches on and you hear other people chime in and it's yeah, it's really an infectious type of response that motivates other people.

13:11 - Adam (Host)

Yeah, so that's like your kind of like. Your inner growth or your interstate first is like am I okay? Can I handle this? That's why you know we've talked about this many times which is all of spirituality or personal growth is really just handling life. So if you can't handle the change, then you're not going to help. You're just not going to help the situation If you can handle it, even though it doesn't mean that you like it or your personal self likes it. But can you handle it? Yes, you can handle it. So that's when you show up and go I can handle this. What do I need to do? How do I need to show up? That's when the clarity starts to kick in.

13:44

So in any market disruption, the first thing you do I can't get my head out of this and I'm actually too fearful. Then that's where you start. I mean I'd much rather somebody come in and say look like I'm really struggling with this, like I'm really and I know there's probably people listening doing that Like I'm really struggling with this, I'm really fearful. It's been a tough year already for a lot of people in real estate. They're already having financial impacts on that, and now you're adding this in there. I'm really afraid of what's going to happen? Okay, great, then I would first go. Well, who's afraid? Right, the words I would use is and we were doing this in our coaching session and project the other day which is I am experiencing my self-concept to be afraid of this, because you, who is in there, is actually not afraid. And just a little side note, for that's the first wording that I always change, cause I feel fear sometimes and when it shows up and I go, go, go afraid, my self-concept is look how afraid it is and what, just by doing that, it gives you this separation to go. The fear is something I'm experiencing. It doesn't mean it's me and, by the way, the fear is going to go away, just like confidence will go away at some point, just like every emotion you've ever experienced will come and go. So you just go. Oh, self-concept I like to use the word self, personal self. It's easier than sometimes calling it ego, because I think people get lost in that word. Oh, look, how scared it is. So that's the first thing you recognize is I'm somebody in there experiencing this fear. So, okay, great, can I handle the fact that I'm experiencing this? Well, of course you can. You don't know what you're doing, but that's what you can handle. Then from there you just start taking some level of action. So it's progress compounds on itself. So then you go okay, well, what can I do right now, in this moment, to start preparing for something that's there? Well, I can take.

15:23

There's plenty of training classes that are happening now on how to increase your buyer representation and your value of what you're doing. Livian's doing a ton of different trainings, keller Williams is doing a ton of different trainings and they're available to anybody for free. Right, you can start taking any of those. So get on that ship right, start getting your. I can handle this. And even if you're going, adam, I can't handle this, go fine, I can't handle this, but I'm going to still show up for this class. Then just take one class and see where it goes, cause then that will start progressing on itself and building this. So then you'll start getting it.

15:51

Then you realize I just got to connect with my database. I got to connect with people. I have to share with people what I do and how hard I work for them, and showing the value of what realtors do and how this is such a profession for a lot of us that we take so much pride in this because of how hard we work for our clients. Then you just start taking one step. And you take one step and it to build on itself and knowing throughout the whole time there's going to be challenges, there's going to be things that don't go your way, there's going to be other curve balls, but that's in any industry.

16:17

By the way, sometimes I've heard I talked to somebody the other day and they're like well, I wonder if this is easier for me to get out of real estate. I go, maybe for a few months. So, remember, I've always said that you can't duck pain. You're going to have pain from mediocrity, you're going to have pain from growth. That's what I explained to them. I go like well, you're going to have pain and you may be getting out of the immediate pain right now, thinking you don't have to do that, but there's going to be a pain in the future and, by the way, in six months, when everyone looks to be like I wish I stayed in real estate. It's just so. What do you want to endure? Right? It's just it's sitting in there realizing you can do that, and I think that's part of any disruption.

17:00

By the way any industry you go in at some point is going to certain percentage, and it was two, three percent for managing money and different stuff, right. And now that's down to half 50 basis points. Or you can buy the index fund directly, right? Like, think about all those things that if you're back then thought they were going to you know when you could. When the Vanguard fund came out and you could just invest directly into an index, they thought, man, it was going to be like all over for financial advisors. No, they've grown completely strong.

17:35

In fact, there's been iterations from it. There's now financial advisors that will do it on a monthly retainer or a yearly retainer and they'll take care of everything for you. So it's not even being paid on any of that stuff. And so, again, all these different entrepreneurs just started allowing themselves to iterate from new origins of business and that's continued to tweak the loan officers, tweaked. I mean you're going to see the same thing happen in Medicare and Medicaid, right, for different things. You're going to see it happen in the airlines, by the way. You're going to see industries constantly go through change. You're going to see it in real estate and it's just going to be those different things, and it's just knowing that you can get through these different things.

18:10 - Caitlin (Host)

Do you think disruption is just a natural process of evolution? Really, I mean, aren't we all disrupted all the time, isn't your?

18:17 - Adam (Host)

every like. What is it? Every certain amount of months, you're all 25 trillion cells in your body are completely, like, gone. In fact, there is I forget what they call it, but the cells in your body and we can close the show notes, the cells in your body, and we can close the show notes, the cells in your body, if they, if one of them, actually starts becoming dysfunctional. It actually I think it's called entropy Is that the word? We'll have to look at it.

18:41

But like, basically turns on itself so that it doesn't become a weak link for the rest of them. It basically removes itself and gives its energy to the rest of the cells to regurgitate. Now come to find out. Your body does that, and so don't trees. When they did? The secret life of trees underneath this? If a tree finds itself so in a situation where it knows it's not going to make it and trees don't die like instantly right, they die over time but if it realizes that it's got too much fungi or too much fungus or disease in there, it actually starts giving all of its good resources back to the central system, to all of their trees.

19:15 - Caitlin (Host)

Wow, yeah, and I remember too when it first needs help.

19:18 - Adam (Host)

All the other trees contributed to nutrients, which is incredible, yes, and so again, all those, all those things happen again. So disruption is already happening, all at different times. We just, well, we're really saying, and, by the way, if it happens in the industry that you're not a part of, you don't care, right?

19:32

Like it's like, oh, it's not a big deal. It's only when you start to feel personally from it. And again, every industry is not immune from this, which is why you just wake up and go. Disruption is part of life, yeah, and I'm going to enjoy the disruption. Why? Because it's a great time for me to learn clarity. You can get a small team, you can hire people. It's all part of the process, because from contraction allows the expansion into the next phase.

19:58

Every time a good cycle has come, a contraction has happened. Every time a contraction has happened, guess what? A good cycle has occurred. It's the same pattern. So we know what we're going to expect.

20:11

So, when we're in a really good run and we know that at some point that run is going to over, it's going to be hard. Now, when we're in a really hard run, we know that the hard run is going to be over and so we're going to hit another economic boom, at least for each different industry, like real estate is going to hit an economic recession faster than anything else has. It's been there for the last 18 months, so we've already been there. So now we're starting to kind of work, work our way out of that in the next couple of years.

20:32

This year may not offer a tremendous amount of reprieve in real estate, but towards the end of the year will. So every day you get a little closer and closer and then it starts becoming an easier market again and a better market again, and all of these things are going to contribute to it. But what you do during these times is sets you up so that you can then get your unfair share of market share later on, when things start to contract and expand again. It's just surviving the times that are really difficult to take full advantage of the good times.

20:58 - Caitlin (Host)

So, thinking about inner and outer here, what are the let's start, I guess, all right, inner. What are the inner steps that somebody who's experiencing disruption right now, whether it be in real estate or just another area of their lives, what can they take?

21:17 - Adam (Host)

Yeah, first step is is can I handle the situation, can I handle reality?

21:19 - Caitlin (Host)

That's your first inner work and be honest with yourself. If you're going, I can't handle it.

21:21 - Adam (Host)

Then you go why can't I handle it? Just have a conversation in their journal about this. What is it that's preventing me thinking that I can't handle it? And what you? A lot of times you'll find out it's just because why don't want to do that. That's really what it is. Well, I don't want to have to do that. Well, that is a definition of ego, right there. Right, it's like I'm above that all of a sudden for having to do this type of work or something along those lines. But that's the first inner growth is can you handle this? And the answer is I can handle this. Then it becomes yeah, I can handle this. It doesn't mean it goes away instantly.

21:48 - Caitlin (Host)

It sounds like you're really shifting at a deep level from the personal reaction to it to this is completely impersonal. That's exactly right. Yeah, that's exactly right.

21:56 - Adam (Host)

And then the outer growth is progress compounds on itself. So just take each day. Again, I like to think of when things get challenging. What can I do in the next hour to set me up for the next hour, and that may be I'm going to get in touch with 10 of my clients that I've helped sell homes for and just have a conversation with them. I'm going to call people that I know that maybe I've never sent homes to and just ask them about their life. Just, I'm going to start building momentum in what I'm doing. So that's you want to first start on your outer side is what can I do today, this week, this hour that is going to just build some progress for it.

22:29 - Caitlin (Host)

I loved your example of the class too, because I feel like sometimes picking up the phone and actually like doing something where you're connecting with somebody else can be a hurdle, like if you have to dive right in.

22:38 - Adam (Host)

But get building up momentum with a class where you're seeing a pathway forward can help Well you know what A lot of people suffer in their head, way more than the actual suffering that's needed. And just a simple example of this is like I saw this with my kids. Like one of my kids is like hates getting a shot and for like they're like it was happening to be like 10 days before the shot, approximately Sarah was like oh, we have to go get your shots and they're like I don't want your shot. And then every day I could tell they're thinking about getting a shot and it's like suffering, like oh my God, i's over and I can't like oh, that wasn't that bad.

23:18

It's like you just spent 10 days suffering, worrying about this, when the reality was the shot pain actually lasted for what'd you say? 40 seconds a minute. Maybe your arm becomes sore and then it's done. We create so much of our own suffering and that's that's what part of you handling reality is you. You're not suffering before you even realize it. That's why, picking up the phone or taking action and going to a class, you realize this isn't that bad.

23:38 - Caitlin (Host)

Yeah.

23:39 - Adam (Host)

This actually isn't that bad, and you go I can do this, and that's when the voice starts to drop away. And then you get in the action. You.