912: Former Keller Williams CEO Chris Heller on How AI Will Change Real Estate

Aaron Amuchastegui: Rockstar nation. This is Aaron Amuchastegui. Today I am talking to Chris Heller. Chris has been in real estate for over 30 years. He went from being the number one Keller Williams associate in North America. Now he’s a former CEO of Keller Williams. He is now doing some really exciting things with OJO Labs real estate investment technology out of Austin, Texas. I am excited to get to talk to Chris. Chris, how’s it going?

Chris: It’s going good, Aaron. It’s going really good. It always catches me off guard when I hear someone say, “I’ve been doing this for 30 years or over 30 years.” I don’t feel old, but I’m sure I look at it though.

Aaron: Isn’t that funny? It is like a mixed bag. You’re like, “I want a certain amount of experience, but not so much that makes me feel old and tired.” I don’t know what that perfect amount of experience is that you’re like, “Yes, I’ve been doing it for 10 years.” When I was only doing something for five years, I loved saying that, but then you’re right.

As it gets more you’re like, “Man, that makes me sound old.”

Chris: I was just telling someone the other day, this is the 32nd year that I’ve had a real estate team in San Diego. Actually, another funny thing happened. Yesterday I got an email from a client that I don’t know that I’ve communicated with other than newsletters and cards and everything else.

She reached out, asked me a question, “You sold us our house 30 years ago.” Here’s the funny part. I remember the house, but I remember the backyard really well. I don’t know if I could tell you what they look like, but I remember the house.

Aaron: That’s your job. Your job is to make sure you know what the house looks like and what the yard looks like, and if there’s a bathroom on the first floor or not. It’s like as an agent, those are the questions. Like, “Is there a bathroom on the first floor? What floor is the master on?” That’s the important question as people are calling in. You still have a real estate team. Where’s your real estate team at now?

Chris: In San Diego. They did a great job. They’ll sell 140, 150 homes this year. Next year should be back over 200. Like I said, they’ve been out for a long time. 2010 was when I stepped out of the day-to-day operation of that business.

Aaron: It’s still your team, you’ve stepped out. How long have you lived in Austin?

Chris: I started working in Austin in May of 2010. I still have my place in Encinitas, which is in San Diego and I go back. I was going back very often. Haven’t been back anywhere in the last couple of months.

Aaron: We have another one I’m in Northern California. I was telling you before we got started. We live in Austin and we have another home in Northern California. Me and my wife and my four kids we’re used to traveling like crazy. Every month we’re flying places. When we got down to this house in December, we’re like, “Oh, we’ll be back at the California house in January.”

Just flying back and forth once a month was no big deal. We haven’t been back since December. COVID threw a whole wrench in that. Right now, I feel like Austin is a pretty good place to be when it comes to shelter in place. We’re allowed to do more than my friends in Northern California. Although it’s starting to open up a little bit more everywhere.

Chris: This is a good place. I literally haven’t– I’ve ordered everything I need; my groceries. I really don’t have to go out. I go out once a day to ride my bike or walk, but other than that–

Aaron: Go see the weather. The weather out here is crazy because you’ve got storms, you’ve got lightning, you’ve got 80 or 90 degrees the same day. It changes every couple of hours. It’s wild.

Chris: Especially for us California natives.

Aaron: It’s very different. San Diego it’s like 80 degrees and sunny all the time and Northern California. It is a different thing out here. Your team is out in San Diego. They’re still operating. What has been the impact of shelter in place for your team? Are they still getting some sales done? What have they been doing to pivot? What’s that been like?

Chris: Absolutely. There’s, in fact, hardly felt it for a couple of reasons. Number one, I’ve been through cycles before. Now obviously, none of us have been through something with as much uncertainty as this. I’ve been through financial crisis and other economic cycles. The Gulf War and 9/11 and all these things over the last 30 years.

We’ve been in the business during times where things have come to what felt like a screeching halt or a very decisive slowdown. When you’ve been through it before, you know what to do and how to do it. The biggest issue is mindset. Very quickly, we made some decisions very early on in the beginning of March. It’s, “Okay, look, this is what’s coming. This is what going to look and feel like.”

We made decisions not just with my team, but with the current company with OJO Labs where we cut expenses, immediately came up with a plan of what we’re going to do to look for the opportunities in this. Because with every challenge, there’s opportunities. Now having been through these things before, I know that regardless of what’s going on, there’s always a certain amount of people that are still going to transact.

People have life events, they need to move, and regardless of what’s happening, they still move. Now the majority of people and the majority of buyers that were in the marketplace prior to the pandemic put things on hold, and said, “Whoa, we’re not going to go through with our plans.” There’s still a big chunk of people that were.

In San Diego, we saw sales literally dropped to 50% from March to April and into May. As I told my team, even with 50% fewer sales, there was still like 1,800 sales, 1,700 and some sales. That’s way more than we can handle anyways. As long as we’re getting our share, unless sales dropped by 95% or 98%, there’s no reason why we should be impacted if we have the right mindset and we’re doing the right activities. That’s a long answer to your short question, but the team is doing well.

Aaron: It’s a good answer because during growth times we are– Four months ago, three months ago, all of our businesses, we were investing a ton of money in outbound marketing and growth. We were spending profit for growth because everybody was growing and you have to grow as fast and especially in some of our online avenues and courses and things like that.

When there is a slowdown, it’s really easy to go, “Okay, we can actually cut those expenses and just focus on what we’re good at.” Maybe we’re not going to grow with that same level, or maybe we’re not bringing in some of those clients, but we can focus on the ones that we’re good at. By cutting the costs, it really can be a wash. A lot of the agents we’ve talked to, it’s really been a wash. They just had to do stuff a little bit different.

Chris: Really most of the things they had to do, some of them were probably things they should have done anyways. Because when you’re in that growth mode and the market is doing great and you’re doing great, it’s really easy to keep spending or keep spending on things because you’re banking on that return. When we really operate, when we’re in a crisis as such, and we’re cutting all the things that aren’t necessities and just focusing on, and that’s the other thing too, narrowing the focus, instead of trying to do a bunch of things fairly well, doing a few things really well and concentrating on those.

Aaron: Being able to find that niche. Whenever we focus on something, we get better at it. You focus on something, it grows. I think there’s going to be a lot of opportunities to come out of this, and so it might be tough to choose one or two. Where do you think the biggest opportunity or the biggest couple of opportunities that are going to come out of this whole new lifestyle, the shelter in place, the COVID, the results of it, where do you think that big opportunity is?

Chris: It’s hard to say what the big opportunity is and if anyone knows what the opportunity is and-

Aaron: Give us a call.

Chris: -give us a call, but I think there’s got to be a lot of opportunities. Some of the ones, Aaron, is for agents and brokers, if they’re doing the right things now, there is going to be the other side of this. When we get to the other side of this, there’s going to be a lot of pent-up demand. For the ones that are doing the right things now, there’s an opportunity for them to really capitalize it on the other side.

Another opportunity is going to be from an investment standpoint. Anyone would have a hard time convincing me that there aren’t going to be opportunities to purchase real estate at lower values, whether it’s a full-blown recession, whether it’s just as the domino that then knocks over the forbearance domino, that then knocks over the foreclosure domino, time will tell. There are people that unfortunately are going to be in tough situations, but again, need to get out of their properties. For everyone who’s in that tough situation, that means it’s an opportunity for someone else.

Aaron: As sad as that news is, the amazing fact right now is so much of the US has equity in their home, and a lot of equity in their home. When this happened back in 2006, 2007, 2009, back in California especially, we saw people that were so upside down.

Their loan was three times the value of their house. The only solution was foreclosure and to lose everything and what happens with that. Today, if somebody is really struggling financially and they decide they need to sell their house, most people that own houses have a significant amount of equity.

Chris: They have the ability to do it. They have the ability to sell.

Aaron: Yes, they can hire an agent and they can walk away with some money. That’s a much different scenario than getting foreclosed on, the getting to walk away, and go,” Hey, I sold it for a little less than I wanted to, but now I’ve got this, they still have a nest egg.” Pretty amazing.

Chris: I think another opportunity is that I don’t think anyone would disagree that there’s probably more agents than there needs to be. This will be the reason that some agents get out of the business, because the newer agents or the inexperienced agents that aren’t doing the right things now aren’t making any money, and they’re the ones that are the biggest risk of getting out of the business and into something else. That means for the ones that are in the business, there’s more opportunities, less competition.

Aaron: I think that would make the same answer, works for any businesses out there. The economy was obviously super incredible, unemployment was at an all-time low. That also means there were a lot of people in jobs that maybe they were there just for the job or just for other reasons, or not everybody was necessarily in their best use and the best job for them in the best place and what was the best fit. Things like this push people into it. Someone that was maybe being an agent wasn’t supposed to, they can now focus on the thing that they really want to.

Chris: There’s a lot of really good agents that happened to in reverse. They got into real estate because they got pushed out of whatever they were doing and into something else and they figured out how to make it work. I agree with you totally.

Aaron: There will be swaps, there will be changes, and we get out there. When were you the CEO of Keller Williams?

Chris: I became the president of Keller Williams worldwide, which was the division that expanded Keller Williams outside of North America. I was responsible for opening up Keller Williams and a bunch of different countries around the world. I did that from spring of 2010 to the end of 2014. January of 2015, I became the CEO. I was the CEO till I left in April of 17, so about two and a half years.

Aaron: All right. Now OJO is your new business. Did go from Keller Williams straight to OJO?

Chris: No, I actually I was familiar with OJO. In fact, when I left Keller Williams, I became an early investor in OJO as a company. Then an advisory board member and then ultimately a board member. I joined OJO full-time last July. In between 2017 and July of last year, I took a position with Loan Depot and became the CEO of a sister company called Mellow Home.

Loan Depot is the fifth-largest lender in the country, the second-largest non-bank lender behind Quicken Loans. We started a new company called Mellow Home which was a real estate arm of the company so that we could help a Loan Depot customers who had real estate needs connect with a real estate agent and started to do some other fun stuff there too.

Aaron: That’s a whole another business that I think continues to jump off. So many lead companies are out there right now. UpCity was an Austin based business that just got bought by realtor.com, maybe it was a year ago, that merged into realtor.com, but that was similar, trying to match up leads with agents and things like that. Maybe not similar but a part of the practice.

Aaron: What is OJO? You were an early investor. Your shirt says,” OJO knows.”

Chris: OJO knows. OJO is a company, a technology, a service, a platform for consumers to be able to get their questions answered, thus OJO knows. If a consumer wants to ask questions about real estate, about properties and just through SMS on their phone, they can not only look at properties. We acquired a company called Wolf Net, which is the largest aggregator of MLS in the country were a licensed broker in 50 States.

We have all the inventory. As consumers interact with OJO and OJO learns about the consumers, their preferences, their kitchen styles, they like their commute times, or any other things that characteristics about a home or a neighborhood, OJO then is able to start to share back with the consumer properties that are better fit for what they’re looking for.

We also have the ability to answer a lot of questions that a consumer can’t get answered other places.

If you or I go on to Zillow and looking at properties, we can certainly see the bedrooms, the photos, the neighborhood, and that. If I want to know if there’s a view from the secondary bedrooms, the only way to find that out is to call the listing agent or the seller. As a consumer, I may not want to engage with an agent at that point. I just want a question answered.

That’s where OJO comes into play, where consumers can ask questions and get answers and not necessarily have to engage with a human. When they are ready to or want to engage with the human, then we have the ability with our technology to quickly add a live transfer, connect them with a real estate professional or a loan officer, or a service professional.

Aaron: It’s like realtor.com. It’s an information exchange to be able to maybe turn them into a lead later for someone.

Chris: Yes.

Aaron: Kind of.

Chris: Yes. The artificial intelligence that we’ve built and continue to build is what allows OJO to learn about the consumers and to then feed them back information that fits their preferences. We all look at properties, it almost different looks of properties online whether it’s vacation places on FSBO or properties on Zillow and stuff on Amazon and everywhere else. Some of these companies are getting very good at taking what your preferences are and then serving you back products or services they think you’d like. OJO does that with real estate and real estate properties.

Aaron: That’s actually fascinating. People don’t want to call an agent and say, just what we said at the beginning of the call, “Is the master bedroom on the first floor or not? Is there a bathroom next to that? Is there a room next to the master for my baby?” People have those questions. I think that a lot of time they don’t want to bother the listing agent either. If somebody says OJO–

Chris: Even if they have an agent that they consider their agent, a lot of times they won’t call. I know myself, and probably a lot of the agents that are listening to this, have experienced, a customer says, “Oh, I just didn’t want to bother you. I thought you were so busy.”

As an agent, you want to say, “No, that’s my job. Bother me. Ask me questions.” Most of the time people don’t. Then also, people are always a little apprehensive of salespeople. They don’t really want to engage with the salesperson until they’re ready to be sold or to transact.

Aaron: Is the OJO interface a mobile website? Is it an app? Is it like a Zillow where they go see listings and then they can say, “Ask this question”?

Chris: It’s actually just a web app. The communication is through SMS, and then they get weblinks if they want to see a specific property. Then once they’re in OJO through the web app, they can start to– We do a lot of fun things with the swipe left, swipe right, thumbs up, thumbs down to learn their preferences and then to show them properties in an area or the style that fits what they’re doing. You can view properties on your phone on an app. One of the many things OJO does is that it ranks the homes for you in terms of the best match to your preferences.

Aaron: Based on Do you guys call the listing agent and say, “Hey, is there a view from that bedroom?” or are you using a different technology to do that?

Chris: That’s a good question. OJO is constantly learning. The AI is constantly learning. The way the machines learn is through lots of data and a lot of repetition. We have a group of our employees called AI trainers, AITs. They’re constantly teaching the machine in addition to the consumers that are interacting with it. They’re tagging photos and phrases and words. Should a question come through that OJO doesn’t know, then that AI trainer has the ability to quickly contact the listing agent.

Call them on their cell phone or send them a text, and say, “Hey, we have a consumer that wants to know if there’s a view from the upstairs bedroom.” Most agents are going to respond to that because it’s their listing and they know there’s someone who’s interested and they want to know that. They’ll respond back and then we’ll answer the question to the consumer.

Aaron: Got it. AI technology, where do you think it’s going to head with real estate? I think what you guys are going to try to do is say, “Hey, this person wants a house. We’re going to spend a little bit of time with them. Within a short amount of time, we’re going to figure out that they like light tile colors and they like light paint colors. They like yards that look like this.”

Then maybe the consumer doesn’t even know that it’s a certain style that they like. OJO picks it up, helps them, and says, “Hey, here’s the house for you.” Then they like it. They link up with one of your OJO agents. What else? What’s the future? Is that the longest-term plan for OJO?

Chris: No. Real estate is certainly a vertical that we’re focused on now. We can imagine a lot of different applications that are available. Also, thinking of homeowners and homebuyers and shoppers and their needs, when some of the buyers are selling their home, it’s not just the home they’re buying or selling, many times they need a mortgage, or they need a mover or they need insurance.

That’s something that OJO would be able to connect them with too if they’re communicating with OJO and say, “Hey, what do you recommend for this.” OJO says, “Gosh. Congratulations on your new property. We noticed you bought. Do you need any help with X or Y or those types of things?” There’s a lot of possibilities.

Aaron: That’s one of the biggest real estate upsale opportunity issued. There’s different industries that have started to try that and say, “Hey, we can help with utility concierge services, or moving, or things like that.” You’re absolutely right. As soon as you are moving into a house, you need so many different things.

When I moved into my new house like two months ago, the day I moved in, a guy from ADT comes knocking on the door to try to sell me alarm service because he was looking somewhere to figure that out. At the same time, there’s a lot of room for some technologies to go, “Hey, this person is moving. They need, this, this, this, this, and this. They need all these extra services, especially if by then you’ve already figured it out. These are their preferences. They’re going to want an alarm because that house doesn’t have it or anything else like that.”

Chris: Right now, we’re just trying to help people make better decisions by giving them the information that they need or they’re asking for.

Aaron: For our agents listening out there, is there an opportunity for them to become OJO partners? Do they sign up to be possible referral agents? Do they send their customers to OJO to ask questions? What’s that possible interaction like? What’s your plans to link up with agents out there?

Chris: Sure. Let me tell you where we’re at now and where we’re going. Where we’re at right now is we have an enterprise relationship with

Realogy, the Realogy brand. We’re helping them with someone shopping on cibi.com and they want us to get information on a property. That comes straight to OJO where we triage, incubate, nurture if necessary, and then connect them back with one of their agents.

For the second half of this year, we will start working on launching the OJO select network which will be a network of top agents that we will use outside of Realogy leads for consumers that want to be connected with an agent. For anyone who is listening that is a top agent, someone whose experience is very good, not relocation type of business but the type of business you get when you’re interacting with a digital customer in a digital lead, there’ll absolutely be an opportunity to work with OJO.

Aaron: The last couple of questions to wrap it up. This is super fascinating for me with a lot of our different software and tech that we’ve been working with. I think the sky is the limit with what can happen. What do you think the long-term impacts we’re going to see on the real estate marke or the way people do business with shelter-in-place? With what we’ve seen in COVID, how is real estate going to change?

Chris: First of all, no one knows for sure, but there’s some things– [crosstalk].

Aaron: Absolutely, yes. Everyone is guessing right now for sure. [crosstalk] I want to hear your guess.

Chris: Here is what my guess. I think we’re going to see a couple of things. Number one, there’s a lot of people that are sheltering-in-place that are absolutely coming to the conclusion that they need a different type of home or a different size of home on a different area, because there’s a certain percentage of people who are going to continue to do this work from home.

I use myself as an example, I have never worked from home. I have never been the type that even want to work from home. I had never been the type that even want to work from home. I get up early, I get out of the house early, and go work. I actually didn’t sit here now after two months going, “I can work from home.”

Now, my condo that I’m in and the guest room in the condo is probably not the best situation. If I was going to make the decision to do this for the foreseeable future, then I’m one of those consumers that might go, “You know what? I need to buy the one next door and break a wall down,” or “I need to go buy a new place.” I think there’s a lot of people that are re-evaluating normally the type of property.

There’s also people re-evaluating where they live. People that made decisions to buy properties based on the commute and their proximity to their place of work. If that place of work changes– I think Facebook announced today that they’re giving their employees now the opportunity to choose to permanently work remotely if they want to.

If they were working in downtown Austin and were living close by so that they could walk or scooter to work, and now they can live elsewhere, they might move back to where their family is or somewhere else. I think those are some of the changes that we’ll see. I also think everyone, consumers and agents, in the last two months, have gotten comfortable doing things digitally than they ever have before.

I had never ordered grocery, my wife has. I had never ordered groceries before. It’s like, “The Whole Foods is a mile away. I’ll ride my bike or walk there.” Now I don’t need to do that. I just order in the morning and it’s here tonight. People that have created new habits and those new habits will also bleed into our industry where people are going to become more accustomed to knowledge viewing properties online from a different perspective, but also starting to transact.

We’ve had clients in San Diego that have bought and sold homes without physically going in them. Will that stay that way? No, people will still want to go see homes, but I wouldn’t be surprised if we see fewer showings from buyers before they make decisions, which also changes what agents are doing.

Aaron: Chris, I think those last four or five things that you’re thinking, I think that is gold. I think that is a lot of the similar stuff that I’ve been thinking and there’s a lot of thought that you put into that. I think values could change with those habits.

The consumer habits are changing, and yes, there were pent-up demand for people to say, “Hey, my new lifestyle is now I’m a homeschooler, and so I want a room that, say, has a classroom for our kids. Now I’m going to work from home, I need this. Hey, I don’t need the expensive real estate downtown anymore. Prices could increase in some of those suburban areas, the demand could be going up, demand could be going down.”

There’s all sorts of stuff that will change. Then once groceries start getting delivered, once you start doing all these different services, it’s tough to realize. Now, there’s part of that experience with getting to go out and do it, but then you go like, “Yes, I was spending an hour a week doing that, when I could spend an hour a week doing this now instead,” or whichever.

I think people actually have the opportunity to be more productive than they’ve ever been if they can find happiness and balance in that new lifestyle. Some of our workers are desperate to get back to an office because they love office lifestyle. Others of our workers have said, “Yes, we absolutely don’t ever want to go back to an office if we don’t have to. We love doing it like this.”

Chris, that is some awesome stuff about what you’ve been doing, some advice for agents out there. What if people want to reach out to you, if they want to ask you questions about OJO, or if they want to– What’s the best way for people to reach you? Any final thoughts that you want to share to make sure people know?

Chris: Sure. My email is cheller@ojolabs.com. You can message me on Messenger or online. I’m easy to find on social media. I’m happy to answer questions or help out in any way that someone needs help or wants to get a question answered. For the agents out there, as things are starting to open up, and we’re coming into the summertime, I think agents will start to get back into a routine they were in.

The really good agents are the ones that really never got out of those routines. Sure, there was a little piece of time there where it shook people and like, “Oh my gosh, what’s going to happen?” The good agents and the good business owners said, “Okay, what do we need to do? What are the opportunities going to be?”

There’s going to be, as we talked about earlier, a lot of opportunities. For the agents that are building new relationships, and especially deepening the relationships they have with the people in their sphere and in their database, those people will remember you if you do a good job of doing that now.

Aaron: This is awesome advice to finish up. Everybody, that was Chris Heller from OJO Labs. OJO is spelled O-J-O. Go check him out. Go reach out to him. He’ll be happy to answer some questions. Chris, we both live in Austin. I’m sure we’ll bump into each other sometime soon. Thanks for coming to join me today.

Chris: Hey, Aaron, thanks for having me.

Aaron: All right. Bye now.