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Dubbed the “Money Whisperer to the Super-Rich N.B.A. Elite” by The New York Times, Joe McLean is a managing partner at San Ramon, California-based Intersect Capital, a family planning and investment office for high-net-worth individuals. He helps mega-rich athletes manage their wealth and has consequently bought and sold many luxury homes on their behalf.
This has meant working with a range of some of the highest-flying real estate agents in the U.S. More than a few have “struck out” due to what he said was self-serving conduct.
With McLean set to speak at Inman Luxury Connect next month, Inman caught up with with him to hear about the nature of his job, how he deals with real estate agents and the needs of the super-wealthy. The following conversation has been edited for clarity and length.
I’ve heard billionaires are like aliens. Are they? How are they different from ordinary people?
Even when someone comes into an abundance of wealth, that doesn’t give them a clear path as to what they want to do tomorrow and for the rest of their life. Everybody needs new milestones to achieve and goals to attain.
They have to deal with a different set of circumstances where having to say no can be a very, very difficult thing, and it’s something that most experience on a daily basis because you’re hit from the family, friends, people you’ve never even met before.
What will you discuss at Luxury Connect?
Trust is really a question that we’ve discussed over time for our company. It’s credibility plus reliability plus intimacy, all divided by self orientation. And what that means is: How do you demonstrate credibility, which is your technical knowledge and understanding of the space you operate in? Reliability is: Do you do what you’re going to say each and every time over time; how consistent are you with your process? And intimacy is getting people to open up and truly communicate what it is they want to accomplish.
Specific to real estate, it’s about helping [luxury homebuyers and sellers] pre-experience different things that help them make better-informed decisions. I divide it all by self orientation, meaning if the client thinks you care more about your business than their life, then you’re going to be sunk in the water. So the lower level of self orientation that you have creates a higher level of service over time.
What’s that search process like when you’re trying a find a real estate agent?
I’ll contact people that [prospective agents have] they’ve worked with and have conversations with them. I operate typically on a one-strike rule, meaning if someone tries to brute force a client to make a bad decision just to get a sale, then they’re done.
Have any agents ever struck out?
Yes, many, many times. A lot of it [being fired] actually is related to commissions.
Do you anticipate that luxury real estate commissions will come down over the years?
I’m still seeing commissions in the four to five percent range. I would say, it’s remained somewhat constant, certainly more competitive. And it is something that a lot of our clients question because of the online presence, they [luxury buyers] may be finding places on their own.
My experience is that if we do a deal with [an agent] they can’t look at it as a transaction … they’ve got to work on behalf of the entire family, and they’re not achieving fees through all of that. We certainly negotiate rates but also I apply an expectation that you’re going to keep working for this. This isn’t a one-time transaction.
[In contrast to real estate commissions], my fees have dramatically dropped over the last 10 years.
What’s been happening to the luxury market over the last year or so? What are some trends in the space?
It’s all situational. I’m closing on a home in San Francisco this morning and that was a situation where we got into a bidding war way over asking price. Even after we won the a home, we were still getting contacted by the other person that was bidding trying to buy it from us a week later. You see different perspectives based on what part of the world we’re operating in.
How does the closing process work for you, since you’re not one of the typical parties (seller, buyer or licensed agent) involved in closings?
All of our clients buy one of three ways: inside their trust, inside an LLC or inside a blind trust. And when it comes to owning whether inside a blind trust or an LLC, I’m typically either the trustee of the blind trust or the manager of the LLC. I’m the one that goes through the process and works through the paperwork with the Realtor, and I close on the homes on behalf of our clients.
Can you tell some sort of story relating to your clients?
I’ve seen situations where someone overbuilds in an area where they may have an abundance of wealth, but it’s not going to support anyone else in the area someday actually buying it back … That’s a big no-no in our book.
How is technology impacting the luxury market?
Buyers are obviously going online. They’re at least more aware. They’re not always more informed.
