2nd-Home Real Estate: Lessons for All Agents from COVID-19

While the coronavirus is forcing many real estate agents to use video when talking to clients or conducting virtual showings and open houses, agents in 2nd-home markets have been working with clients virtually and remotely for years. But video isn’t the only thing agents in traditional markets can pick up from agents in 2nd-home markets.

In this episode of The Walkthrough, Maui agent Tom Tezak tells us how the pandemic is affecting real estate there, and shares some 2nd-home market tips that agents everywhere can use — from picking up “hidden referrals” to new apps and more.

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If you enjoy this episode, please subscribe to get future episodes delivered automatically: Apple Podcasts/iTunes | Spotify | Stitcher | YouTube

Links and Show Notes

• Lifestyle Maui Real Estate Team
• Wailea Realty
• Facebook group: Resort & 2nd Home Agent Community
• 2ndHomeAgents.com
• Selling the Dream podcast
• Marco Polo app
• HomeLight’s Agent Resource Center
• Subscribe and listen to The Walkthrough: Apple Podcasts | Spotify | YouTube

Full Transcript

(SPEAKER: Matt McGee, Host) Over the last few weeks, the coronavirus pandemic has forced real estate agents like you to change how you do business … and it’s not going away. It seems like every couple of days, more states issue stay-home orders for residents and limit how businesses can operate. You’ve had to adapt — to find new ways of working with buyers and sellers.

One of the fastest changes we’ve seen is a shift to using video for many of the things you used to do in-person — virtual open houses, virtual showings, virtual appointments, all done via video now. And some agents quickly noted, “Hey, this is how agents who work in second-home markets have been doing things for a long time, so let’s learn from them.”

Well, it turns out video isn’t the only thing agents in traditional markets can pick up from agents in second-home markets.

This is The Walkthrough.

(INTRO MUSIC)

Hey, everyone. I’m Matt McGee, editor of HomeLight’s Agent Resource Center. On this show, you’ll learn what’s working right now from the best real estate agents and industry experts in the country. At HomeLight, we believe in real estate agents and we believe that by helping agents like you be even better at serving your clients, the entire industry improves. If you’d like to reach me with feedback, ideas or questions about The Walkthrough just send an email anytime to walkthrough [at] homelight.com.

You’ve probably heard another agent say this within the last few weeks: “Everybody needs a home.” Maybe you’ve said it yourself. It’s why a lot of buyers and sellers and agents are still moving ahead and doing business as best you can despite living or working under quarantine in many cases. Officials in many states and counties are realizing that some people might end up homeless if real estate transactions can’t close. “Everybody needs a home.” It’s true. But not everybody needs a second home and that’s a particular challenge for agents who work in resort or second home markets.

On today’s show, I am speaking with an agent in a super-desirable second home market, his name is Tom Tezak. Twenty years ago, he moved his real estate career from Joliet, Illinois, to Maui. (By the way, my favorite place on earth and maybe yours, too.) Anyway, Tom is the broker-owner at Wailea Realty, and also leads the Lifestyle Maui Real Estate team. He is creating a community specifically for agents that work in second-home markets.

Now a couple of weeks ago, I had the opportunity to listen in as dozens of second-home agents hopped on a Zoom call to talk about and help each other with the unique challenges they’re facing right now. So that prompted me to ask Tom to talk to us here on The Walkthrough. As you listen to this episode, pay attention for Tom to talk about things like why the pandemic is likely to hurt second-home markets harder than traditional markets, how agents in all markets are missing out on what he calls the “hidden referral,” and the apps that Tom and his team use to connect virtually with clients around the world. I’m pretty sure there’s at least one you may not know much about.

Tom also invited us to share his direct contact information with listeners, so I’ll do that after the conversation — along with takeaways and a few shout-outs to agents who’ve been in touch with the show via email this week.

So are you ready? Let’s do this. Here is my conversation with agent Tom Tezak.

(BEGIN CONVERSATION)

Matt: The way I’ve beginning each of our recent podcasts in the last couple of weeks is just with a check-in. Let me ask first, how are you doing and feeling? How’s your team doing and feeling? Is everybody healthy and safe?

Tom: We’re all healthy and safe it’s a little bit chaotic, our island. So I live on an island and they literally have, you know, not literally, but essentially have shut the borders down and told tourists don’t come here. And our life flow, for the most part, is tourist business. And so it has been really flat — we’re evolving into, you know, new ways to do business, but we’re all healthy. You know, our team is holding together, we have team meetings every day just to try to all stay on the same page. So we’re doing good, thanks for asking.

Matt: I saw a stat and it may have even come from you, Tom — as you said, that’s a huge tourist destination and typically like tens of thousands of people would be arriving every day in Hawaii, every day on Maui specifically, and now it’s less than 100, right?

Tom: We went from 30,000 people a day, I think it was to, 8 and 12. And I think our population of tourists incoming into the area is picking up, it was up to 108, I think, yesterday into the whole state. So it definitely is different. You know, there are rental cars parked as far as the eye can see around the Maui airport as they’re usually up on the road and they’re just all sitting idle. So pretty ominous sight to see that.

Matt: Tell me then what is the status of buyer-seller activity for you?

Tom: My agent that works with me, Jordan, he has been active. I think he put three things together, two listings and two sales over the last couple of weeks. So he’s been working to market. And what we projected from our perspective is, for our market, the first markets that are gonna develop and continue are the local residential markets for buyers and sellers that need to buy and sell in a traditional market. The resort markets pretty much, that rental investment property, that second home, they have pretty much gone flat. We’re not seeing a whole lot of activity in that and that was a market that was just going crazy, you know, two months ago.

Matt: Let’s dive in a little bit more on that. You did a video, I want to say it was maybe a month or so ago, about mid-March or so, you did a video on Facebook and you said this was just as the pandemic was really starting, I would say, to hit everyone’s consciousness and I think that’s when we were all realizing this is gonna be a real thing we have to deal with. And you said in this video that you thought it would impact the second-home market, second-home agents more than agents in traditional markets. What made you say that?

Tom: Well, I think that, you know, as everybody hunkers down, you know, that’s what we’re being told to do, that’s what we’re doing, that’s whether you believe that’s the right thing to do or not that’s what’s happening and we’re being required to do this. So all of our second home buyers — not all, most of our second home buyers are somewhere else and they’re really focused on their family, on their job, on all the things that are immediately around them. And second homes and our second home buyers and sellers are distant and so it’s hard, you know, they’re really focused on what’s right in front of them. And as this unravels and we start to come back to some degree of normalcy, there are gonna be working on that space immediately around them instead of thinking about that distant space.

You know, part of what we’ve done as a team, we’ve sent a memo, notices and Facebook, we sent out postcards and “Hey, we’re here to help you.” We are not trying to sell. I think right now to try to sell overtly or blatantly is not a good move.

I think there are buyers that are gonna be starting to show up that are seeing the opportunity. I think, you know, it’s one of the things I said I just posted in my meeting is crisis and opportunity both are based on one’s perspective of the same situation. So, you know, we need to be aware, but we need to be respectful and that’s where our goals are at right now. And I think those people that are somewhere else really focused on their home and their families and what’s going on and immediately around them.

So that’s why I think that the resort market, the second-home markets are sort of ancillary — unless they’re currently experiencing, unless they bought a property that they’d been renting out through Airbnb or VRBO and now it’s empty and now it’s creating some financial stress for them and that’s what I believe we’ll start to see coming up in the next 30 to 60 days because nobody really knows how long it’s gonna last. And that’s a concern I have in all of this for our resort clients.

Matt: The uncertainty. Are you hearing from those clients, the folks that have homes that are sitting empty right now — are you hearing from them and what are they saying?

Tom: Not a lot. You know, I’m talking to some of my agents, we’re starting, and this was one of the parts of our office meeting that I said, “Guys, be aware, you know, when you’re talking to your clients, be aware if they need help, be aware if they’re saying, ‘Hey, I’m struggling.’ Be aware. If they’re saying, ‘Hey, I want to buy more.'” But I’ve heard three or four agents right now, two agents that said, “Hey, I’ve got buyers that have said they’re ready to step in the market, they’re flush with cash.” And then I had two agents who have said, “I’ve got sellers that are starting to get nervous.”

But nobody has concerned … on those sellers that are starting to get nervous, we’re not seeing agents pounce on them to say, let’s listen to us. Listen. I think it’s a much more delicate space that we need to be respectful. But I do believe, being in this market for 20 years and in the business for 30 years, that we will see some degree of desperation come out of this and some degree of opportunistic actions come out of this.

Matt: Tell me more about how you’re communicating with people in those situations. I think you kind of just hinted at that a little bit, but are you just making yourself available to your clients that have their second home on the Island? Just saying, you know, “How can we help you?” Are you like going out to check in on their homes, make sure everything is functioning?

Tom: So a couple of things. One is, first process is — pick up the phone and calling them right now. So again, my market is high end typically CEOs, CFOs, busy people, people that have a lot going on. What’s interesting, they’re not so busy right now. So when you pick up the phone, call them, the first thing they think and say is, “Wow, thanks so much for thinking of me.” And then the conversations instead of being what would typically be a 3- to 5-minute conversation with an A personality becomes a 10, 15-minute conversation because they’re tired of talking to everybody that’s in their house and they’re just happy to talk to somebody else.

And you get these amazing relationship-building opportunities that are happening right now. And I really believe that and you’ve got to go into it with no agenda just to say, “Hey, I’m here,” and then part of that is, “Can I help? Do you want me to check on your house?” And that’s my question to him and said, “Hey, I’m here, I know you’re not, and do you want me to go check in your house?” And then a lot of times say, “I’ve got a manager, I’ve got somebody else. And so I’m happy to be a second set of eyes just know you can call me.” So that’s the first thing we’re doing.

The second thing we’re doing is I went out on Facebook, we’ve sent out an email to our database and said, “Hey, we’re here for you if we can help, let us know.” And then we put out a print piece of postcard that just — literally black and white — that says, “Can we help? We know you’ve got a substantial investment…” This I sent to my entire firm and it says, “We know you’ve got a substantial investment on Maui, if you’re concerned and you have nobody to take care of or check on it, please feel free to call us. We have a list of our existing clients that we’re already checking on their properties, happy to add you to this list, no strings attached, no fee, just want to be here to help.” So those are the three different ways we’re trying to approach it and truly all from a sincere heart where we want to be able to be that resource. We’ve got an amazing business for the last 20 years — I have, and my team — and we just want to be a resource for everybody.

Matt: Is it different for you Tom because you are, you know, a five-hour flight away from the mainland, whereas other agents in second-home markets, you know, their clients may be just, you know, a couple-hour drive away. Do you find that you’re in a different situation because of the distance and because you’re out in the middle of the Pacific?

Tom: I think it definitely…it changes that perspective for agents in island markets like we’re in. You know, we’re not the only one — you sort of get to the Florida Keys and it’s sort of the same thing. Well you can drive there right now they are not letting anybody yet. But yes it definitely is different than someplace like Vail where, you know, maybe somebody lives in Denver and they’ve got their second home in Vail or Crested Butte or something. So it is definitely a different perspective. But, you know, people are still supposed to be staying home. I know that I’ve got a friend in Crested Butte and she’s just said, “Man, all of these people are coming to the second homes because they want to get out of their big metro markets.” And we’re telling them, stay where you’re at. So we all experienced different unique challenges in this scenario.

Matt: So what are you hearing from the other agents that are in these different parts of the country? What questions are they having? What are the common struggles that they’re facing right now?

Tom: It’s interesting, I’m gonna be doing a podcast, I’m gonna be interviewing a pretty prolific coach next week. And I reached up to the community and said, “Hey, what do you guys want to know? What do you want me to ask?” And, you know, it’s been, “How do we reach out to our feeder markets ahead of the curve gracefully? How do we let the feeder market know we’re in business and, hey, there’s opportunities?” That was the number one question we had. We also, you know, trying to figure out how to connect with them.

So, you know, we knew have additional real estate market. You go on to Facebook, you do your 5 or 10 or 15-mile radius, whatever it is, you blast it out. But when a client come from all over different metro markets, it’s a little more difficult. So they’re trying to say, how do I tap into those folks to find them? How do I market to them? How do I advertise to them?

One of the things that I look at is — I’m now more concerned, or more interested in connecting with the agents that are in the feeder market because if I can connect with an agent that has a database of a thousand and I connect with five agents, there’s 5,000 people that essentially I’ve just connected with, whereas if I just run a Facebook ad to connect with buyers, I’m shot-gunning so much — where I now educate agents. “Hey, have you asked your database? Are they thinking about buying or selling their second home?” My reach has exponentially grown.

But that education is really difficult, I found. Agents, they very infrequently asked their clients if they’re thinking about buying or selling second homes, what happens is their clients come home and tells their agent, “Oh, guess what? I just bought a second home,” and the agent is sitting inside of themselves saying, “Oh shoot, I didn’t get a referral on that.” And that was something. So my whole point to our agents and the whole market is, “are you educating the agents in your feeder market to ask the question?”” And I call it the “hidden referral” in those traditional markets database because it’s huge.

You know, can I give you some stats? They’re all just stats, but they’re really powerful.

Matt: Sure!

Tom: So two years ago then now are used to do a study about second home buyers, resort buyers and investment buyers, there’s over a million transactions a year that are done in resort second home or investment property, that’s huge. So I started looking up my personal business and three years ago before I started trying to do this education and connection, I did about $35 million in sales, $27 million of it was in resort and second-home properties. And of that, I had two referrals, that’s it. And it was about $25 million worth of sales were to buyers and sellers that essentially had realtors in their primary market that their realtor didn’t ask them if they needed help. You know, it’s mind-boggling how many opportunities agents miss by not asking the question.

You know, so now this year I had as I realized, wow, what an opportunity, I’ve started to really work my network and I think this year I had 18 inbound referrals which I love because those are the best business you can — you get referred with authority, you get referred with trust already built in.

So, you know, I didn’t close 18, so don’t get me wrong, but still the fact that I had that many is enormous. So I think it’s for those agents work in second-home markets, you need, I think it’s important, educate your feeder-market agents. And then for those feeder markets or for an agent who works in any market, that’s a traditional market that household income of over $85,000 to $90,000, about 6% of that market will be buying a resort or second home or an investment property in the next few years. So if you have a thousand people, that’s a lot of people that are making those investments.

Matt: I saw a lot of comments over the last, I don’t know, three, four weeks as this again started to become more of a more of an issue, where agents in traditional markets were saying … okay, we need to do more video, we’re gonna do virtual tours, virtual open houses. And there was this sort of underlying theme where people were saying, “Hey, this is how agents in second-home markets have always been doing things because they had remote clients.” So I’m curious to know now that I’m speaking with a second-home market agent, do you feel that you were better prepared for this than, say, traditional market agents?

Tom: Without a doubt. Thank you for asking that question because that’s one of the things I’ve been, again, back to my office meetings, like, “Guys, we have been doing this for a long time, we have been doing FaceTime showings, we have been doing Zoom showings, we have been doing, you know, WhatsApp showings for years.” I mean, I sold my first property, I think it was 17 years ago with pictures, pre-video, with photos of the property and sent it to the people and they bought it. And yet, ironically, that was the first buyer I ever did, I still never met that buyer. It’s sort of weird.

But anyway, so we’ve been doing this for years, we always preferred, as secondary market, resort market agents, to have the people live and in person. We felt better, everybody felt more comfortable. But we’ve been doing it and it wasn’t like, as I said, our second choice, it’s now become a first choice. And what I think is so amazing about this is as I see the really the big silver lining for secondary market agent — some buyers were capable of doing it. I personally, just so you know, I bought a property sight unseen as well in a resort market years ago. So I mean … I’ve walked the talk and do it myself.

But, anyway, the silver lining in it is that now we have our high-end buyers, our second home resort buyers that are typically high-level management, CEOs, CFOs, and what have they all been doing for the last three weeks? They’ve all been doing all of their business on Zoom, FaceTime, all different digital mediums because they’re stuck at home. So the question that I put to my team is … guys, they’re getting comfortable with this because they have to now.

So what does that tell me in 6 months or 12 months? When they want to buy real estate in a remote market? It’s gonna be way easier for them to be a remote buyer than it ever has been before. Yes, it’s gonna be hard for the next six months, I get that. But if you’re not on Zoom right now, if you’re not on FaceTime, if you’re not on a Whatsapp, if you’re not on Marco Polo, all of these mediums will allow you to do this. And I think that there’s gonna be a huge opportunity for the second-home buyer, resort buyers that are really embracing the technology. And I think you should be comfortable with all of them because you want to be on the platform that your buyer or seller is using. If they’re using Zoom, you should use Zoom, if they’re using WhatsApp, use WhatsApp, if they’re using FaceTime, you use FaceTime. You know, Skype is another one that sort of lost some traction to Zoom.

And then there’s another one I mentioned that probably a lot of people don’t know about it and that’s Marco Polo, and that’s a unique app in the sake that it’s more like a walkie talkie. Remember when we were kids, we had walkie talkies and, you know, you’d push the button and talk, and I couldn’t talk until you released the button. Are you familiar with Marco Polo?

Matt: I know the name. I have never used it.

Tom: So it’s just like a walkie talkie, but it’s video. So you, you hit your Marco Polo and you’d hit the record and you record a message and shoot video and then you let the button up and then it gets sent to the person receiving it or the group receiving it. And then they can do the same thing back. It’s like, “Hey, Tom, can you show me a picture of a kitchen cabinet?” Sure. And then they let go. And the reason why that one works is if you’ve ever been in a place where you were trying to Zoom or FaceTime and the bandwidth sucks, right? You just, nothing is working, Marco Polo is another alternative, it uses way less bandwidth because it’s unidirectional. So, you know, those are the kinds of things we know here that I think that are opportunities. And so that might be an app that you need to teach your client about, but it’s a simple download and once they get it, it’s really easy to use. You know, and the other thing too we’re using is BombBomb, I think that’s a, you know, asynchronous video versus synchronous video and there’s a whole another bunch of ways to use that but I think people are familiar with that.

Matt: So it sounds like from a technology perspective, being a second-home market agent, you and your folks are really comfortable with what a lot of traditional market agents are just getting comfortable with now. But let me ask you then, what are you finding is a struggle these days with your business?

Tom: Well, again, I think it’s back to in-person is still better. And I think the other thing is that second homes are a luxury and they require, you know, a disposable income. And today, I think a lot of people are just focused on what do I need, not what do I want. And so that’s really the struggle, the mentality of getting the buyers’ heads in the, “Geez, I want to buy a second home.” I think we’re gonna start seeing that in when we start coming out of the tunnel and people are gonna say, “You know what? Screw this saving all my money, I want to live because I could be dead next week.” And I think there’s gonna be a release of some of that anxiety from people that are gonna go out and start buying stuff.

But I think there’s also gonna be on the other side of the coin, I think there’s gonna be the degree of people that own second homes that maybe couldn’t afforded them were relying on rental income and they’re gonna be coming out of that tunnel saying, “Oh, man, I’m so jammed up, I need to unload it.” The question that we’ll find out is what side of that pile is gonna be bigger and it’s busy? Is it gonna be then a buyer’s market or seller’s market?

And I think, too, another thing that’s important to look at is we have different — in many secondary-home markets, we have the high-end markets where the buyers are most likely financially stable and they’re just gonna ride it out like nothing happened. And so that market is gonna be less affected. That lower-end entry-level, second home market, I think we’re gonna see more turmoil in that market.

Matt: I mean, it could go as you’re saying a couple of different ways, how optimistic are you about what the second-home market is gonna be like six months or a year from now?

Tom: Six months I think it’s gonna be challenging. A year I think it’s gonna be amazing.

Matt: We mentioned a couple of times during the conversation that you are developing this network of agents in second home and resort markets across the country. How best can listeners find this network? How can they connect with you?

Tom: So there’s a couple of different ways. So I do a podcast twice a week. And on Fridays, I interview just either top agents or industry rock stars. And on Tuesdays, I do a little tip or an inspirational short podcast, so it’s twice a week, but it’s called “Selling the Dream” and it’s on all the podcast platforms. We also do it via video, so you can find it on YouTube, so you can just search “Selling the Dream” and Tom Tezak and it should populate in whatever place you like to watch or listen. That’s one of the things I’m doing.

I’ve also got a group on Facebook that for all resort, second home…for all agents for that matter, to join. You have to answer a few questions and I make sure that they’re Realtors. We don’t want, you know, people selling stuff in this group, we don’t want people, you know, trying to, you know, get VAs — it’s really just a group for agents to connect, and that’s Resort & 2nd Home Agents is the group on Facebook. And just search on Facebook for Resort & 2nd Home Agents and you’ll find that it’s got a picture of like a really electric picture of a boat and a sky, so, you’ll know that you’re in the right place.

And then lastly, I’ve also created a website, it’s called secondhomeagents.com and you can either put two ND or spell the word second out and will take you there and we’re just building that right now. And that’s a place where you can go sign up, become a member, you know, post your region and your district and talk about it. And that’s where the podcasts will also live as well. And again, I’m just trying to create the space for agents to all come together in a secondary market.

Matt: Let me ask you to close this way, one of those short podcast messages that you did, I really liked, and this was within the last couple of weeks. You talked about, are you the lighthouse or are you the wave? Why don’t you close us with that message there?

Tom: I get inspiration from everywhere and I was at my local church and the minister was talking about being a lighthouse. And I started thinking about a lot about that and I thought, you know, are you the lighthouse, are you a wave? Are you the beacon? Are you the person that stands tall and leads the way to protect the boats that are out at sea and those boats are clients, those boats are our teammates? Or are you the wave that just recklessly blows in around the lighthouse and throws stuff, rocks and coral and shells and fish all over the place?

And, you know, I see that I made that connection between realtors that I know. And some of them come just barreling in without a clue what they’re doing and just scatter things everywhere. And some of them are sort of a beacon that you look up to. And I want to be that beacon for my agents, I want to be that beacon for my clients on. So my goal is to be the lighthouse, not the wave.

(Speaker: Matt McGee, Host) I love that so much. Be the lighthouse, not the wave. I mean it’s a great message anytime but especially in times like we’re in right now. Tom invited us to give out his direct contact information, I will do that, I promise, before we wrap things up.

Right now, let’s do our takeaways segments. Here’s what stood out to me from today’s conversation.

Number one, Tom said, amazing relationship-building opportunities are happening right now, so he’s calling his sphere just to say hello and he said, what would have been a 3-minute call before is now a 10 to 15-minute call. People are looking for connections, so why don’t you be the one that they’re connecting with?

Number two for second home agents specifically, he said, go after the hidden referral. Rather than blast ads to residents in your feeder markets, connect with agents in those markets and educate them about your market. Ask if they’ve asked their database about plans to buy a second home and then when the answer is yes, you may have a new referral coming your way.

Number three, that advice also applies to traditional market agents, too. Tom is saying you’re missing out on referral opportunities by not asking your clients if they’re thinking about buying a second home.

Number four, Tom did say that he and other second-home agents were probably a little more prepared for all of this virtual real estate that’s spreading across the country. He mentioned apps like Zoom, FaceTime, WhatsApp especially for international clients, and then one called Marco Polo. If that last one is new to you, he described it like using a walkie talkie, but with video. Again, it’s called Marco Polo and it works on both iOS and Android, so check it out.

And then last take away, we finished by talking about mindset. Tom encouraged all of us to be the lighthouse, not the wave. Be strong and steady, not the person who’s contributing to the chaos.

Now Tom also talked about the Facebook group and website that he has created for second-home agents. I’ll put links to those in this episode’s show notes, which you can find on Apple Podcasts, our website, and other podcast players. Tom also invited any listener to contact him directly. His email address is tom [at] tomtezak.com, pretty simple. Tom is spelled T-O-M, no H, and his last name — five letters, T-E-Z-A-K. Again, it’s tom [at] tomtezak.com.

If you want to get in touch with me, my email address is walkthrough [at] homelight.com. Questions, suggestions, feedback are always welcome.

I promised some shout-outs because you guys are sending some of the nicest emails with great feedback about The Walkthrough. So thanks to Abby Walters in Strasburg, Virginia … Nicholas McGuire in Atlanta, Georgia … Amanda Kroll in Lebanon, PA and Lori Kurvink in Sioux Falls, South Dakota. Lori especially enjoyed the takeaways from last week’s episode with Barb Betts, so thank you all for listening.

That’s it for this week’s show. Thanks to Tom Tezak in Hawaii for joining us and thank you for listening. Please stay safe and healthy everyone. Stay in and sell some homes. We’ll talk to you again next week. Bye-bye.