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Ben Belack has been in the real estate industry for over ten years and is an experienced team leader at The Ben Belack Group, one of the top teams in Beverly Hills. The agency’s Residential Director also has a background in marketing and hospitality, which drives him to always keep service at the forefront of his real estate business.
Some may think that Barack is just another big name on Netflix buy beverly hillsa show starring founder Mauricio Umansky and other agents from The Agency, but he told Inman he was also passionate about helping agents understand the ins and outs of the industry, which was why he decided One reason to form a team.
In an impromptu conversation (“I’m excited,” a brief pause after a quick market analysis) fueled by his current energy drink of choice, Celsius, Barack shared his thoughts on topics like crime and delinquency. Home insurance in the Los Angeles market, Gwyneth Paltrow’s ‘dream’ home for sale and his big plans for Las Vegas in July, plus speaking at Inman Connect.
Here’s what he had to say, edited for brevity and clarity.
Inman: What is the most pressing issue facing you in the Los Angeles luxury market right now?
Ben Black: The Oakley founder just sold his Malibu estate for $210 million. Jay-Z and Beyoncé’s $200 million purchase in Malibu was our previous record. As a result, purebred properties are still traded. Ideal pricing doesn’t work. In a way, it’s like a tale of two markets: poorly priced homes are languishing in the market, but well-priced homes are looking for a way to close.
We don’t have it in stock yet. Across the country, including in Los Angeles, people have healthy mortgages. Our mortgage delinquency rate is extremely low, so there is no influx of inventory. As interest rates ease, I have a feeling they could get crazy again sooner than people hope. I think people who have been waiting on the sidelines, hoping for a correction, are now faced with, ‘Okay, I’m going to continue to put my life changes on hold and not buy a house…how long do I have to wait to pay more for less?
We definitely have an inventory shortage in Los Angeles. We don’t have vertical inventory like other metros. We are a city mostly made up of houses. So essentially we have fewer homes. [The city is] There’s a lot being done to try and unlock affordable housing – it’s all very, very small, and I don’t know if it’s going to move the needle.
In addition to these market factors, I’m sure you and your team are also dealing with the industry transition that everyone is dealing with right now, including signing a buyer’s broker agreement. As a team leader, what advice do you have for agents on your team right now to get through this transition period?
Because the new rules have not yet been established, the market has not yet been formed. What I can say is that we mostly hear questions from sellers that need clarification. I’ll make a listing appointment and they’ll say, “So we don’t have to pay the buyer’s premium anymore, right?” because of what they’re getting out of the title bait. “The 6% commission is over.” So I had someone ask me that question, and shortly after, he signed a standard 5% agreement.
Since the rules aren’t in effect yet and won’t be until August, it’s business as usual for us. I’ve heard of some properties that were priced very, very high and the sales manager said, ‘If you want this property, there are no buyers. [agent] committee.
Wow.
So the thing is, while this may be a bit of title bait, it won’t last long. I think overall the problem is that consumers think we’re just opening rooms. I think what they forget is that when there are multiple offers on a property, all of those buyers are considering spending much more than the asking price, which is something we don’t buy anywhere else but the most expensive asset. Things that a buyer’s agent does… A buyer’s agent helps the buyer cross the finish line, and the reason is that a seller’s agent always does [considered] Less reliable in the eyes of buyers because they know it’s the seller’s advocate…
Buyer’s agent turns to [the buyer] and said, “That’s $50,000 more than the asking price.” Yesterday I was comparing listings for $1.5 million. The property was priced at $999,000 and sold for $1.5 million. A buyer’s agent said, “Hey, that’s okay.”
So if we cancel the buyer’s agent, we’re going to cancel them if they can’t pay the agent fees and we’re going to be in a very sticky situation.
I mean, we can’t just have an attorney who’s not there doing the paperwork. We have to be able to look at mileage and experience to understand what the condition of a roof means, and roof inspectors get paid to build new roofs. It’s really crazy.
The other thing I would say about the settlement is, they don’t want us at the helm… but we have an industry standard. Generally speaking, everyone either makes 2 [percent] to 2.5 [percent] The buyer’s share is 3%. Therefore, when you are looking for properties, you never consider the salary of the broker you work with because that is the industry standard. Why watch it? But now, if someone drives [a client] Here, not only are they forced to look, but since there are no ads on the MLS, they are forced to call the agent and ask, “What’s the compensation?” And that person who gets nothing, no leads, is actually asking the company Paid (many companies have ancillary costs, especially high-end brands)…
Now, nearly 50% of real estate agents nationwide closed one or fewer transactions last year. They have to feed their families and children. We can’t work for free. So if we can’t get financing, and everything is very expensive because of low inventory, having to pay cash to an agent will put a strain on your reserve, and the agent commission could be the difference between whether you get the house or not. you know what I mean? Because you don’t have enough funds at closing to cover the required reserves.
Yes, I know what you mean.
But we’ll see – it might just be the way we advertise, the market might not change. We’ll have to see what happens. I think there will be some compression on commissions, but probably not… when the market is slow, or like they were in a rush to sell before the ULA measures went into effect, they’re like giving away cars. or [saying]”, “We will pay 5% or 5.5% to the buyer as a bonus for ULA.
So if market conditions cause them to run into trouble because interest rates are higher or the house has been on the market for a while, I think we’ll still see the normal compensation requirements to incentivize people to walk customers through the transaction.
What trends do you see for Los Angeles home buyers and sellers this summer?
Our police are severely understaffed, and because of that, crime in Los Angeles has really gone up. There are a lot of people, especially those looking for a home more family-friendly, who will never move above the Sunset Strip. [Now,] They were retreating north of Sunset. That’s not to say there’s no crime here, because there is, but it’s much more difficult to commit crime here. That’s where I live, in the Hollywood Hills.
Smashing and grabbing is a little more difficult here than in an apartment, where you can quickly travel to different roads and things. So I think we’re seeing people really trying to escape, even like my old neighbor [of Beverly Grove]I think this is the best walkable neighborhood in Los Angeles but I can’t wait to get out of there because of the crime and homelessness sadly. I was robbed there and it was really sad and jarring.
I also think that as the planet continues to heat up and we’re facing crazy heat waves and crazy weather, there’s something going on. People are more wary of the cost and capabilities of insurance. We had big names like State Farm leaving California. This is a big deal. They are really tough on car insurance and everything here.
When you go out and take a look, you’ll see that they are not the evil insurance companies you read about in Instagram posts…but because our city government has responded so poorly to this, the insurance companies don’t want to lose everything.
So everyone thinks, ‘Oh, they took all our money and then they got out of here.’ For insurance companies, part of their model is: ‘What is the infrastructure? So if something bad did happen, how affected would we be by how much support there was [the government gives]’ — I just think they feel like they don’t have the support of our city government.
I would also say that as the planet continues to warm, I feel like people are moving to the west side of Los Angeles, which is why we’re seeing these huge records. In the past, big spenders actually spent money in Bel Air and Beverly Hills. The Beverly Hills apartment reveal is incredible. These homes are transacting for $15 million to $30 million, and you can walk right to the front door. So I think people are trying to achieve some kind of separation.
It has become so high too [priced] Now – we just saw a $210 million sale in Malibu – if you’re an Angelino and you’re committed to Malibu, it’s very far removed from the rest of civilization. It’s almost like, if you’re there, you stay there, because even though it’s about 20 miles from my home in the Hollywood Hills, it takes me an hour and 10 minutes to get to Malibu. too crazy.
But I think because our coastal cities are cooler from a temperature standpoint, I think we’re getting more people doing big business out west, I mean Brentwood, Palisades, 210 million dollar sales [in Malibu]Kendrick Lamar just bought a $40 million house in Mandeville, on the border of Brentwood and Palisades . Grace Paltrow is selling her house [in Brentwood] $30 million.
I actually went to see it – it was amazing.
It looks good in the photos I’ve seen – I’m glad it looks good in person too.
I actually showed it to a client. marvelous. I almost asked my girlfriend to say, “She’s my assistant,” but I’m glad I didn’t because the expectations for me would have been too high.
Ha ha!
I’m telling you, this place is like perfect, but also a little bit – how do I put it – like OCD. Nothing inappropriate. So that’s awesome.
Good to know. It’s all very interesting. Finally, is there anything in particular you’re excited about for Inman Connect Las Vegas in July?
Is it about Inman or is it about Vegas?
anyone.
Well, I’m excited because I’m going to stay one more day; we’re going to The Sphere to see Dead & Company.
Okay, great.
I might eat some mushrooms [laughs].
So, the truth is, I really, really enjoy helping agents, and I generally have an opinion and am not afraid to express predictions or how I feel in the trenches. I am primarily a listing agent and I personally only work with a handful of buyers, although my team works with buyers and I built my business from the ground up as I am not from [LA]. So I do a lot of prospecting so I hear what people have to say. So I’m excited to share my thoughts on my mission [at ICLV].
I think that’s probably part of the reason I was invited to come to Inman [Connect]Apart from [my role on] buy beverly hills, I’ve been posting a lot of educational content for a while just to help agents. I think starting a team was probably not the most lucrative option for my career, but I did get a lot of personal fulfillment from helping agencies with things because there really was no coursework.
So I’m excited to be a part of Inman, whatever that means. If an agent takes something from me and goes and gets a listing, or they get a price reduction, that’s what excites me.
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