Don Stewart posed an interesting question this morning about whether real estate is changing top-down from the broker or bottoms-up from the agent. In a post about how Redfin sees the real estate industry changing, Don suggested we had focused too much on the laws, the brokers, the MLS data sharing rules and the system by which sellers pay buyer’s agents:
I think that many agents are becoming more client focused, less afraid of discussing value for money, and are happy to be judged by their performance. They are not just trying to grab commissions, they want to build a professional practice. Real change happens from the ground up, not the top down and I see some very encouraging signs.
Don’s right. When I first got into this business, Redfin focused on structural ways we could make real estate better: by surveying customers and publishing responses, by paying agents at least in part based on survey results, by sharing as much data as possible with consumers.
But the most profound change has probably come from our agents. I’m not sure if we attracted the most progressive agents, or if those agents were in fact what made us progressive in the first place. But the longer I’m in this business, the more I’ve come to realize that what I think doesn’t matter as much as what our agents do every day.
What do you think? Is change coming via the agents or the brokers?
Ed Daniels says:
A part of me over my 12 years in the business has felt like there are big picture brokers and the “grunts on the ground” Realtors making sales, with enough room in this world for both. I love the unique features of Redfin but not sure if the consumers are ready. Consumers still seem to need connection with their agent, and working by referral is still my bread and butter. As the internet generation grows, I think there is a growing segment who would appreciate the tools offered by the Redfin-like concepts.
February 8, 2010 — 1:17 pm
Greg Swann says:
> Is change coming via the agents or the brokers?
That made me smile — even though I’m technically a broker.
The change that is happening to real estate is being driven by good marketers who understand that deceptive practices, cute stunts and appeals to personal loyalty are dead letters in the age of the internet.
Ignoring commission models, the kind of supervision Redfin effects over its agents is a critical component to the success of that kind of transparent marketing, I think. It doesn’t matter how lofty the broker’s ideals might be, if the agents are still free to run roughshod over their clients. What will make the difference, going forward, is a consistently honest marketing profile backed up by consistently honest performance. When we get that right, the bums will be thrust back into the gutter — where they belong.
February 8, 2010 — 1:48 pm
Don Stewart says:
Hi Greg – I don’t know, but I suspect that Redfin agents are employees – more likely to have signed up for a particular way of doing things and likely to execute as asked. Brokers don’t have as much control over agents that are independant contractors.
As more information about agent performance becomes easily available to everyone it will be harder for the agents that behave badly to continue to get away with it – and it will be easier for agents that do it right to be rewarded.
I like how the judge put it – sunlight is the best disinfectant.
February 8, 2010 — 2:08 pm
Greg Swann says:
> Brokers don’t have as much control over agents that are independant contractors.
Wanna bet? If you want to work under my license, profiting from the reputation we are building, you’ll work my way. This is the duty of supervision that is required by law. That brokers have been too greedy to supervise their agents doesn’t mean they can’t. Good brokers will and the rest will get jobs they can actually handle.
February 8, 2010 — 2:35 pm
Jeff Brown says:
I understand the bottom up sentiment, I really do. My experience however, isn’t that by a long shot. It’s the golden rule up ’till now — that is, those with the gold, make the rules. And that means broker/owners in large part.
Greg is right, but notice the industry hasn’t followed his lead, again, for the most part, wrongheaded. Greg’s way works, though not by any means the only ‘right’ way.
Without the capital to implement changes, change, real change, simply hasn’t happened. The changes I’ve seen since first licensed has mostly been top down. I’ll grant some of it may been initiated at the idea level by agents, an obvious factor. But the real world, rubber hitting the road changes haven’t become real without it coming from on high.
With all due respect, there are no more (or less for that matter), agents doing the right thing then there was back in Nixon’s first year in office, when I first reported for duty. I think we often mistake having access to more data as being more in possession of what’s happening and how’s it’s been made possible.
Make sense?
February 8, 2010 — 2:35 pm
Don Stewart says:
Greg/Jeff – I think you will agree that (sadly) Greg, you are not the same as most Brokers in this area. My point is that being a professional is a choice – it can be reinforced by the broker, association, or whomever helps you stay on the right path, but you need to want to do the right thing yourself. I think it is personal and although a Broker has influence, it’s you that ultimatley decides how you will act in any situation.
February 8, 2010 — 3:05 pm
Greg Swann says:
Quality results emerge from the barrel of a sever form. The good news is, if I’m right, the market in tis turn will sever the lazier brokers.
February 8, 2010 — 3:29 pm
Don Reedy says:
Glenn,
This is interesting, since as I work with a large broker, but am an innovative agent, I think I see the answer fairly clearly.
If the import of your question is change, then it’s pretty clear to me that that change will come as a result of two paths converging in the woods. Those paths will be those of the innovative agent, working belly to belly, creating and innovating marketing ideas, systems and high standard quality controls on his or her own.
Then, change, since I suspect you mean industry change will come as both Jeff and Greg describe. That is, strong and innovative brokers will align themselves with the above mentioned innovative agents to create the shift that is needed in any true changing environment.
Real industry change can only come from the top down ultimately, even if the feet on the ground are successfully implementing and changing their own destinies.
February 9, 2010 — 6:50 am
Mark Madsen says:
“What do you think? Is change coming via the agents or the brokers?”
The brokers may implement some changes as a result of the innovation and evolution happening on the individual agent level, but I believe that positive and lasting change will require strong leadership and management at the broker level.
I’m not exactly sure what the future holds for the real estate industry, but independent mortgage professionals are being impacted right now by changes that are influenced by government regulation and big banking policies.
Basically, mortgage consultants / originators are quickly finding themselves in an employment situation where they are simply an order taker directed to give a particular rate and closing cost structure that is dictated by their bank on a daily basis.
Personal marketing, client and referral partner relationship building and other community outreach activities are discouraged or forbidden if you work for certain banks. (For good reason too, so I don’t want to have that debate on this discussion)
However, in our world, the broker/branch manager controls change since we take our marching orders from bank owned politicians.
Question – When the Banks >> Government own most of the real estate and start pushing change on the real estate community, how is this conversation going to change?
February 9, 2010 — 12:08 pm
Carl Ericson says:
I think the change initially comes from the agents, but like others have said ultimately will come from the top down.
In my opinion, it is easier and less risky for an agent to try something new and innovative on an individual basis than for a broker to implement the change to an entire brokerage. The innovative and adaptable brokers then do a good job of taking the successful changes their agents have made and implement those changes in the brokerage. Sometimes it is the brokers identifying the changes and implementing them. Other times it is the individual agent pushing the broker to change and improve.
February 9, 2010 — 2:12 pm
Jim Klein says:
>I’m not exactly sure what the future holds for the real estate industry, but >independent mortgage professionals are being impacted right now by changes >that are influenced by government regulation and big banking >policies.
[…]
>Question – When the Banks >> Government own most of the real estate and >start pushing change on the real estate community, how is this conversation >going to change?
Oh, that’s easy. Then everyone will realize that it’s not influence!
February 9, 2010 — 9:43 pm
Russell Shaw says:
I believe I am going to side with Jeff Brown (again) on this one. What exactly IS the change that is happening to the industry? Not what change is coming – what meaningful change has occurred?
Other than technology, what is happening in the industry now that wasn’t happening 10 or 20 years ago?
February 10, 2010 — 12:08 am
Sean Purcell says:
Hmmm, is change coming more from the agent on the street or the broker in charge? Not dissimilar to a common question in the war on drugs: is it better to round up more street dealers or go after the cartel leaders? Both questions are misleading and the answer to both is the same: Neither.
If you want to effect a change in some behavior the only lasting result stems from a change in demand. Remove the demand for drugs and you’ll have neither street dealer nor kingpin. Remove the demand for poorly executed, part-time, unscrupulous real estate assistance and you’ll remove… a great many agents and brokers.
Greg has espoused the answer to this dilemma for some time now: raise the level of expectation of the consumer. Whether the change in demand is brought about by agent, broker, informed education or just open access to free information is irrelevant. The industry will not change bottom-up or top-down but rather outside-in. (Such change, however, might be hastened by a radically new model in real estate structure…)
February 10, 2010 — 11:12 am