Most of us have heard that it's not about what happens to you or around you; it's how you react. That discipline may be the single most important quality a person can possess when it comes to success. Talent is overrated, and luck is out of our control. Grit, on the other hand, is a superpower. Despite what some might think, nobody is born tough; a strong mindstance is learned. A 2-minute video by the former Navy Seal turned author, Jocko Willink, gives me chills every time I see it. In the video, Willink says, "When things go bad, don't get all bummed out, don't get sad, don't get frustrated; just say 'good.'" Think about that for a minute. It's a simple concept, but deeply profound, especially when you understand the off-the-charts discipline it takes to have that mindstance. By the way, I am consciencely using the term mindstance rather than mindset. My cousin Matthew Fernandez, a licensed mental health professional, enlightened me on the term, which is similar to mindset but with greater emphasis on adaptability. In addition to having a strong mindstance, the following is my outline for dealing with adversity. Uncertainty is ExcitingWe are all creatures of habit, and most don't like change. However, change creates opportunity. The best investors wait for downcycles to find the best investment opportunities. Entrepreneurs are similar. People become complacent when times are good. It's human nature. Affluence is dangerous because it breeds complacency.Conversely, desperation is a powerful drug. It heightens our awareness and makes us sharper. Andy Grove, the founder of Intel, wrote a book that became a staple in Silicon Valley titled "Only the Paranoid Survive." The best time for disruption is when people feel a sense of urgency. The fight or flight instinct prepares our bodies and our minds for action. It also separates the winners from the losers. If you are feeling a little uncertain about the market and the direction of the industry – Good! Use the juices only fear can produce to catapult yourself to an even higher place. Know Your Strengths You are your most valuable asset. It's not your business, the money you have in the bank, or the real estate you own; it's you. What makes you great when you peel off everything else as yourself? Is it your leadership skills, salesmanship, or expertise in a particular subject? Understanding your strengths (and weaknesses) becomes your foundation to do as Willink says and reload, recalibrate, and reengage. You can lose everything, but you can't lose your most valuable asset, which is you and what you have in your head. Use it! Emotional Intelligence and Cautious Optimism When times are tough, people gravitate to those who remain calm and can think clearly. Emotional intelligence is more valuable in business than cognitive intelligence. The people who can take a step back and analyze with minimal emotion will not only make good decisions, but people will flock to them. Being positive is critical. However, positivity is not delusional. People who respond to adversity by spouting platitudes aren't taken seriously and shouldn't be. The best leaders are cautiously optimistic, which means they have the ability to remain optimistic while recognizing legitimate threats. They can play out various scenarios in their mind and can choose the appropriate path forward. Emotionally intelligent people know when to power through something and when it's time to pivot.     The Chinese FarmerLast year, I blogged about the Chinese farmer parable. The story goes that a farmer lived alone with his son, and they had one horse. One day, the horse ran away, and later that evening...

This week's big news in real estate was the settlement of the class action lawsuits directed against the National Association of Realtors (NAR) and several of the largest brokerages and brands in the industry. NAHREP released a statement yesterday in response to the news. At the center of the settlement was an agreement to eliminate any reference to broker cooperation on MLS systems nationwide. Broker cooperation is a century-old practice in which a listing agent who represents the seller of a property shares their commission with the agent who brings them a successful buyer. Despite what you may have heard from the media, if the settlement is approved, this would be a modest victory for both realtors and homebuyers. The lawsuit's deeply misguided proponents, including Steve Brobeck from the Consumer Federation of America, have been calling for an outright ban on broker cooperation. In that regard, they didn't get what they wanted. Brobeck and company believe buyers should pay for their real estate agent services out of pocket rather than through seller proceeds. I have blogged that the ban on broker cooperation would be devastating for Hispanics and other first-time home buyers. Regarding affordability, we are in the midst of the toughest housing market in U.S. history. Forcing buyers to pay out-of-pocket for an agent to represent them through the process would only exacerbate affordability challenges and put homeownership out of reach for millions of would-be buyers. Despite what Brobeck and CFA think, a ban on broker cooperation would benefit no one but the wealthiest among us. Per the settlement terms, listing brokers can still share commissions with buyers' agents, but the terms of the cooperation must be communicated outside the MLS. It becomes solely a transparency issue, and I'm not sure what that accomplishes. The terms of broker cooperation can still be communicated on broker websites, social media, or by phone. I have said all along that sellers have had the power to negotiate commissions for decades, and discount brokerages have been a thing for years. Yet, commissions have remained fairly stable for one primary reason: real estate agents provide value that equals or exceeds the price sellers pay. Full Stop. All things considered, the impact of the settlement is a setback for an industry that has operated fairly efficiently for decades, but when it is all said and done, Latino homebuyers will still be the driving force in the market. Below are ten reasons why Latino homebuyers will overcome this new obstacle.  The Home is the Center of the Family Experience Latinos have a passion for homeownership. There are many reasons for this, but family drives almost all aspirations for Latinos, and the home is the center of the family experience. This will never change. Resiliency: Latinos Have Repeatedly Overcome Tough Setbacks  Despite inventory shortages, affordability challenges, and other headwinds, the Latino homeownership rate has increased for nine consecutive years. Latinos will move to where there are more affordable homes and will often pool their resources with other family members to achieve their homeownership goals. Compared to past obstacles, this setback is a mere speed bump. Rising Incomes and Educational Attainment Latino household wealth has tripled in the last eight years, and income and educational attainment are on the rise – easily outpacing the overall population. Rising wealth and income means stronger purchasing power. Latinos Gravitate to the Tangibility and Utility of...

A surge in inflation coupled with the tightest labor market in decades is prompting start-ups to look nearshore to satisfy their workforce needs. For years, large companies have been outsourcing to India and China, but the politics with China is unpredictable at best, and India has its limitations as well. Not to mention, they are both really far away – making it especially difficult for small businesses looking for cost savings. However, Mexico and Latin America are just on the other side of our southern border, in the same time zone as the U.S., and with a talented and plentiful population of eager workers. There are also a number of companies that make the process of hiring a nearshore team practically turn-key. Roughly one-third of NAHREP’s current staff of 45 is nearshore. We have nearshore accounting, marketing, graphic design, and chapter support employees. Over the next couple of years, we expect the ratio of domestic to nearshore employees to settle at around 50/50. The money we save by hiring a nearshore team allows us to do more with less. It also allows us to invest more in our U.S.-based team, helping with employee retention. Small businesses were forced to learn how to manage a distributed workforce during COVID, and that skill set has made managing a team south of our border much less intimidating. Security has been one of the concerns with nearshore employees, but working with reputable staffing service providers can dramatically reduce the risk of data/IP security breaches. On a related note, nearshore work strengthens the economies in Mexico and Latin America. Stronger economies south of our border reduce political unrest in those nations and will eventually result in fewer refugees coming from that region of the world.   Outsourcing became a bad word to many for essentially emptying manufacturing plants across the U.S. There is no doubt the transition from a manufacturing to a service economy was painful for America’s middle class. Still, our workforce has adapted and will do so again. I fully expect that every competitive company in the U.S., both large and small, will utilize nearshoring to some capacity. The ones that do it best will have a huge competitive advantage in the coming years. 

Last week, I had the opportunity to keynote a policy event in D.C., hosted by the National Association of Realtors (NAR). My comments focused on what I described as the existential threat facing first-time home buyers in America. This week, in a brief to the judge of a major antitrust lawsuit known as Nosalek, the U.S. Department of Justice called for decoupling buyer and seller agent representation. If the DOJ gets what it wants, it would mean that listing agents would no longer be permitted to share their commissions with agents representing buyers, and buyers would have to pay out of pocket to have an agent represent them. The DOJ and other proponents of the “decoupling” of broker fees believe that the net result will be lower commissions and better consumer affordability. I think that is a fantasy, but I am certain of one thing: homebuyers, especially first-time buyers, will be the biggest losers. The DOJ explicitly said they believe the current system is unfair to home sellers. Still, they neglected to note that all home sellers were home buyers who benefited from broker cooperation at some point in the past. Ending that practice will effectively pull up a ladder that has helped homebuyers for more than a hundred years at a time when Latinos will account for more than 70% of net new homebuyers over the next 20 years.NAR has been a highly effective advocate for decades. In their unrelenting quest to protect the interests of their realtor® members, they have made a few enemies along the way, including some participants in the civil rights community. NAR has not always been a friend to the civil rights movement and has often opposed fair housing legislation. People in Washington, D.C. have long memories. Though I believe they understand that terminating broker cooperation will have a disproportionate impact on Black and Brown homebuyers, NAR’s track record in the area of fair housing has made it difficult to get some of my friends from leading civil rights organizations to join forces with me on this issue. I also believe the DOJ and the Consumer Federation of America have had a beef with NAR that goes back decades and have become somewhat blinded by their disdain for the powerful trade group. The fact is, NAR has made some mistakes in the past, especially in the area of fair housing, and perhaps the animosity toward them isn’t entirely without merit. However, the collateral damage from the war against NAR will be inculpable homebuyers who will either have to delay their dream of homeownership or, for those who can’t afford an agent, will attempt to go without representation - putting themselves and their families at enormous financial risk.  A career in real estate sales is one of the few occupations that allow opportunities for people without college degrees to earn a good living if they work hard and develop positive professional reputations. The notion that they are overpaid is plain BS. Agents provide an invaluable service to our economy, and despite imperfections in the system, the net result over the last several decades has been pretty impressive. Two-thirds of American households own their home, which, among other things, has provided them with a pathway to the middle class. The Biden administration should look carefully at this issue and consider the broader implications of disrupting a system that has worked well for over one hundred years. I certainly wouldn’t want to be the administration that effectively crushed the American dream for millions of would-be homebuyers nationwide.

I was in D.C. on Friday for the celebration of life for my friend, Dave Stevens.  Dave was a former FHA Commissioner under Barack Obama and an icon in the mortgage banking industry.  I was lucky to know Dave as a good friend.  Over the years, we would often speak about complicated housing issues, and if we disagreed, which was rare, he would always say, “But I get why you have to take that position, dude.  Go do what you have to do”.  When we met about 20 years ago, I had just started with NAHREP, and he was working at Freddie Mac.  He was an early supporter and went out of his way to introduce me to several influential people. The FHA Commissioner is the highest-ranking homeownership official in the U.S. government.  Dave was commissioner during the 2008 housing crisis, the roughest stretch in the housing economy since the Great Depression.  We spoke often during his tenure.  He was a phenomenal leader, and I have often said that we were lucky to have someone as astute and action-oriented as Dave sitting in such a vital position during that critical time.  Dave never turned down an offer to speak at NAHREP.  He was a charismatic speaker and a favorite among the NAHREP faithful.  After his stint at FHA, Dave went on to lead the Mortgage Bankers Association, taking an organization that was on the brink back to its rightful position of prominence and influence.  One of the things I remember the most about Dave is that he always knew everything about my family and was genuinely interested in what they were all doing.  Many people ask about your family, but it frequently sounds forced and insincere.  Their eyes sometimes glaze over when you talk about one of your kids.  Dave wasn’t that way at all.  When I would post something on social media about one of them, he would often comment with an intelligent statement or compliment.I sat with my friend Eddy Perez during Dave’s memorial on Friday and as well as we knew Dave, we were both awestruck with the number of people in the industry who clearly knew him as well or better than we did.  The dude was incredibly good at relationships.  I say “dude” because it was Dave’s favorite word!  If I am making it seem like Dave was a soft, creampuff of a guy, he wasn’t.  He was tough and highly opinionated.  He had no problem telling you when he thought you were wrong and wasn’t afraid to take on the “assholes” in Washington, D.C.  But that’s what I think makes all the sensitive stuff he did so much more meaningful and authentic.  I always knew how much of a family man Dave was, but it was still very moving to see his family honoring him with humor, music, love, and nostalgia, just the way he would have wanted it.  The only time I teared up at the event was when I hugged my friend Brad Blackwell, who opened and closed the event.  Brad was Dave’s best friend since college.  We promised to talk more frequently in the future. That’s the best thing about these types of events: you see old friends and are reminded of how important it is to stay in touch.Dave phoned me in 2016 to let me know he would not be able to fulfill his commitment to speak at an upcoming NAHREP event due to a recent diagnosis of stage 4 cancer.  I was stunned because Dave was always the picture of health, but we all know these things strike with impunity.  I remember thinking while we were speaking on the phone that he was talking about his cancer with the same degree of controlled emotion as he would about a serious housing policy issue.  To him, from my perspective, it seemed like cancer was something else that he would have to have to find a way to beat – and for more than seven years, he defied the odds and did exactly that. Last year, I wrote...

In the 1987 movie, Wall Street, Michael Douglas’ character, Gordon Gekko says, “It’s a zero-sum game; somebody wins and somebody loses. Money itself isn’t lost or made, it’s simply transferred…”.  If you’re not familiar with the Sitzer class action lawsuit against the National Association of Realtors and several of the largest real estate brands, it centers on how real estate agents are compensated. The lawsuit claims that the practice of seller and buyer agent cooperation or sharing of commissions is an anti-trust violation and has resulted in inflated commissions paid by consumers. While a jury in Missouri has already sided with the plaintiffs, the judge has not rendered a final verdict. Some proponents of the lawsuit, including one very influential consumer group, are hoping the verdict will ultimately end the practice of seller and buyer agent cooperation, and that the net result will be lower real estate commissions across the board. On the surface, this may sound like a victory for consumers, but a closer look clearly shows that, even if the proponents of the lawsuit are correct and real estate commissions end up being reduced, the money won’t be divided equally, and first-time home buyers and lower-income consumers are likely to shoulder the largest burden. The following is my assessment of the most likely winners and losers of the Sitzer Class Action Lawsuit. Winners  Home SellersBecause it is customary that the agents for both the buyer and the seller are paid from seller proceeds, in the short-run, eliminating that practice and requiring buyers to pay for their own agent representation, will benefit home sellers.   Deep Pocket Buyers Buyers who are short on cash will still be able to ask sellers to cover the expense of their agent as a seller concession. However, this would put that buyer at a further disadvantage if their offer is competing against wealthier more experienced investors and institutional buyers, who don’t ask for the concession.   Class Action Lawyers Class action lawyers, such as those in some of our favorite movies like Erin Brockovich and The Insider are rare. More often than not, class action lawyers are far more self-serving than they are portrayed in movies. The class action lawyers in the Sitzer case are poised to make hundreds of millions of dollars, while some experts believe that the actual plaintiffs (home sellers in Missouri), will be lucky to receive $200 apiece.LosersFirst-Time Buyers First-time buyers with modest wealth are likely to be the biggest losers if proponents of the Sitzer lawsuit get what they want. In addition to the down payment, closing costs, and reserves, buyers will now be saddled with the additional cost of having to pay their real estate agents. Some say this is where commissions will be driven down the most, and they may be right, but is that really a good thing? Buyers who are on the margin in terms of their wealth will have a few options, none of which are better for them. They will either delay their home purchase to save more money to pay for their agent, or they will try to go with a discount agency or without representation altogether. Delaying their purchase will likely mean they will end up paying more, perhaps substantially more, for their home down the line. The more likely scenario is they will go without representation and attempt to fend for themselves. Some people believe this is fine but that’s because they don’t understand the critical...

Let’s face it, we never believed the DEI movement was going to help Latinos. I have written many times about how the powers that be privately hated the ethos of diversity, equity, and inclusion – especially the equity part. It was never going to work. Perhaps some of the fault lies on us, with too much focus on the negatives (prejudice and discrimination) and not enough focus on the positives (prosperity and economic growth), although I’m not so sure it would have mattered. At the end of the day, DEI was about power and no matter how well we sold the virtues of DEI, nobody, especially in this country, will ever willingly give up power.In social media, DEI is now being blamed for everything from poor corporate earnings to the war in Israel. As a result, many corporations are now retreating from their DEI commitments faster than you can say George Floyd.    Ok, so now that we have that out of the way. Where do we go from here? Frankly, I don’t think anything changes. For those of us who care about the success and prosperity of the Latino community, progress is always going to come from within. As with anything, we need to focus on the things we can control. But before I get into what needs to change, let me set the table with some indisputable positives. Latinos are the youngest demographic in America, with the highest workforce participation rate. We are young and we are not afraid of hard work. Our dedication to God, family, and country is of the highest level. We contribute a lot to this country, but I’m not afraid to say, we are still vastly underachieving as a community. So, what needs to change for our immense capacity to reach its full potential? Alignment We all know that Latinos are not a monolithic community. We come from more than 30 countries with a full spectrum of political and social perspectives. However, when it comes to our values and aspirations, our commonalities overshadow our differences and we need to get better aligned as a group. I’ve said many times that Latino immigrants don’t come to this country because they like the food, music, or culture; Latinos come to America for one reason and one reason only – economic opportunity. Despite what some idiots think, Latinos don’t want a handout or something for nothing. Latinos simply want a chance for a better life and are willing to work as hard as it takes to make it happen. We don’t have to agree on everything, but on issues that affect our abilities to prosper economically, we need to share the same talking points and we need to get better aligned. Connections to PowerPeople with power talk about how we live in a meritocracy. In other words, they would like us to believe that all success in America is earned. It may be truer here than in many other countries, but almost everyone knows that in America, success is primarily a factor of two things, what you know and who you know.  In my last blog, I wrote about self-selecting industries. Some of the most lucrative and prestigious industries in our economy; finance, media, tech, professional sports, and entertainment, are self-selecting industries.  In other words, they are very difficult to break into if you don’t know somebody on the inside. Most major corporations, also function this way. To climb the corporate ladder, you typically need a sponsor or an advocate who is in a position of power within the company to pull you up to the higher positions. Latinos have historically lacked the connections to break into the majority of the most prominent positions in our economy. The only way to break this cycle is for Latinos who are fortunate enough to break through, to open doors for other Latinos. We need to hold each other accountable for this. When one Latino is appointed to a corporate board, the

If you have been following the news on the recent resignation of the President of Harvard over her unfortunate congressional testimony on antisemitism on college campuses, you might have read Bill Ackman’s post on X (formally known as Twitter) which essentially blamed everything on Diversity, Equity and Inclusion (DEI) policies on college campuses. Ackman’s post was reposted by none other than Elon Musk, the owner of X, who wrote, “DEI is just another word for racism. Shame on anyone who uses it”. Musk’s over-the-top response prompted Mark Cuban to jump into the conversation by defending DEI and calling it smart business. Cuban has since challenged Musk to a debate on the subject. I have been a critic of DEI which I think has been poorly executed. However, equating DEI to racism is ridiculous. I will withhold my personal views on Elon Musk and instead focus on the issue of DEI in more wholistic terms. At the center of Ackman’s DEI manifesto on X is the notion of “equality of outcomes” versus “equality of opportunity”. It’s an important distinction and a fair issue to debate. It’s whether we define equality as a society in which everyone, regardless of status or background, has an equal chance to succeed (hence, equality of opportunity), or in which, all things being equal, one group is consistently less successful than other groups. In the latter case, we can assume there must be some biases within the system (equality of outcomes). Ackman claims he supports equality of opportunity and provides proof of this by highlighting how his firm has supported smaller banks (well, ok), but Ackman calls policies that strive for equality of outcomes anti-American. In this regard, he is not totally wrong. A society that requires equality of outcomes at all costs, is not capitalistic, because it disregards innovation, risk, and hard work. But things get muddy when determining how to deal with the difference between the two in practice. I agree that the idea of a society that is equal in terms of opportunity for all is the correct goal. However, does that mean we shouldn’t consider outcomes at all? We know that some people are born poor and others are born rich. Some are born sick and others are healthy. We know that it wasn’t too long ago that it was legal to preclude minorities from certain jobs, housing, or bank loans, and the remnants of those policies still exist today.  So how do we define equality of opportunity and where do we draw the lines? Musk and Ackman were both born into wealth and privilege. They both attended Ivy League schools and have had access to every possible resource available. So whether it’s intentional or because they lack certain life experiences, they both fail to address the complexity of the issue fairly and as the intelligent adults they are. Here is my take; whether it is attainable or not, the goal should be to create a society of equal opportunity. However,  if we are truly committed to that goal, then we must also realize that a review of outcomes is the most dependable metric we have available to us, and therefore it should always be part of the analysis. On the subject of DEI, Mark Cuban says, “If companies aren’t smart enough to realize that diversity is good business, then great, there will be more talent out there for me”. Good for Cuban, but diversity does have broader implications for America. As our country, especially our workforce, is becoming increasingly diverse...

As the Thanksgiving holiday approaches, we are reminded of the importance of expressing our gratitude for the blessings we have in our lives. It’s a positive message that most of us embrace, but the concept of gratitude can be deeper and more powerful than most people realize.I have seen lots of videos and memes that discuss how everyone should affirm their gratitude daily. Tony Robbins and Gary V are both big proponents of how focusing on the good versus the bad is the key to both success and happiness. I think that is a great way to live if it works for you, but it also seems a little superficial to me. It assumes that we all have a comparable amount of good and bad in our lives. We have all been exposed to stories about people who are physically disabled or who have experienced debilitating tragedies in their lives yet maintain a positive outlook on life and are still able to achieve great things. Those stories force us to put our own lives in perspective, and while hearing those stories has an impact for a while, it doesn’t always last. Why is that? I think it’s because it often forces us to take a balance sheet approach to life. It’s supposed to make us look at all the good in our lives and compare it to the bad. I’m not sure that works for everyone because we all prioritize things differently. Happiness is subjective; What may be a small thing to some people may be a big deal to others. Things also change during the course of our lives. Tragedy is a part of life. Failure is a part of life. It's unavoidable. Most of us will deal with abject failure and unspeakable tragedy in our lives. At certain points in our lives, the bad might legitimately outweigh the good. Then what? Being told that we should be happy just because other people have it worse, doesn’t quite get it done for many of us. I think if you are truly a grateful person, you have to be grateful for everything – the good and the bad. How many of us are capable of that? Because that’s a much more difficult mindset to acquire. That is the epitome of being mentally strong. I’ll be honest, I’m not there yet, but it is something I strive towards because it’s the only mindset that transcends the ups and downs that we all experience. It is the only mindset where happiness isn’t fleeting. The happiest and most mentally strong are grateful for the good AND the bad in their life. They are grateful for the triumphs and the setbacks. When things go wrong, they say “thank you” in their minds, because they know that with every bad there is good. There is opportunity. There is the opportunity to get better. There is an opportunity to find a solution. The bad is what makes the good worth pursuing. You can’t experience joy if you don’t experience sadness. If you can say “thank you” in the face of tragedy, to feel honest gratitude, when things are going bad, that’s when you can’t be beaten. That is when you are truly able to appreciate life in its fullest sense. Gratitude is a powerful concept when it is understood holistically. 

I believe deeply in taking the high road; it is rarely good to lose your cool, especially in business. It’s part of what we call emotional intelligence. We all know people who can’t walk away from a fight. They take everything personally and can’t deal with conflict without getting emotional. Most of us try and avoid people like that. Then there are those who always hold it together, even when everyone else around them is in a state of panic. They can think clearly when everyone else is falling apart. We admire people like that. We call them distinguished and polished. We promote them at work because we’ve been taught that leaders are always cool under pressure. However, it’s not always best to walk away from a fight. There are some things worth fighting for, and for the right reasons, it’s also ok to lose your cool once in a while. You have to choose your battles wisely, but if our leaders are never willing to fight for us or if we have never seen them throw a punch (metaphorically), then over time we lose respect for them as well. I think I have a pretty high threshold before I am willing to stoop to the level of a street fight, but if I see anyone abusing my family or my co-workers, there is a different side of me that comes out. I think many of us are that way, but not everyone realizes that it’s also important to do it professionally.  The real estate industry as we know it is in the middle of an existential threat. Several of us have read about the verdict in a lawsuit in Missouri that many believe could upend the way residential real estate is bought and sold in America. NAHREP is hosting a virtual town hall meeting with NAR on Monday, November 13th to discuss the details of the verdict. I won’t get into it now, but I can say that the outcome of the verdict would disproportionately impact Latinos and other minority homebuyers. What is disappointing is that some of the largest consumer groups are on the wrong side of this argument and are advocating for an outcome that might help some consumers, but would definitely hurt many first-time buyers and buyers that are the least affluent.Historically, NAHREP has been friendly with consumer groups. We have not always agreed on everything, but I respect them and have worked hard to have a good relationship with them. But that may change. My job as the CEO of NAHREP is to create an environment where our members and their clients have the best chance to succeed. Our mission is to advance sustainable Hispanic homeownership, and if I see a major threat to those objectives, it’s time for me to take the gloves off and fight with impunity, no matter who I offend along the way, even my friends. If you want to listen to the town hall meeting on Monday, you can register here. Be a statesperson at work, but when threatened, fight back and fight hard. People on both sides will respect you for it.