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All Things Being Equal… You’re Not Even Close

I was working with a group of agents this week on their 2011 business plan.  We were going through various forms of marketing and the expected returns when one spoke up and said: “The problem is, I hate calling people.  I can send letters and even emails, but I don’t want to call anyone.”  She is a very good agent as far as real estate agent activities go: she works well with clients, she shows homes well, she negotiates well and so forth.  She just doesn’t want to call people.  At all.  

“Okay,” I told her, “that’s not the end of the world.  If you’re not willing to call clients you can still be an agent, you just need to join a team that provides the clients or partner up with someone who has more clients than they can handle.”  That’s where the conversation got interesting.

Turns out this agent has tried my suggestion in the past and is looking for the right relationship right now.  ”But,” she says, “the agents I’ve found so far are all so greedy.  They want a big piece of the commission.  All they do is hand me the name and then I do all the work.  I’m trying to meet an agent that understands our roles are different, but we both equally are growing the business.”

This is the problem with many self-employed people and real estate agents in particular.  They seem to think their value is tied to their time.  “All you did was give me the client’s name.  I did all the work so I think we should split 30/70 my way.”  This couldn’t be further from the truth and the faster you understand “value” in an open market economy, the smoother your business life will become.  Your value is not tied to the time you contribute.  It’s tied to the value you bring.  Hmmm, your value is tied to your value.  Can I get a big “Duh” from the Jeff Brown camp?

Apparently this comes as a surprise to some agents, but you are not all equal.  As a matter of fact, I’d estimate that 5% to 20% of you (and I’m being generous here) are important and the rest of you are not.  Why?  Because the only important agent is the agent that makes it rain.  I know, I know; I can hear you through the internet: “If I don’t show the homes and negotiate and write contracts, what good are the clients your precious rain maker generates?”  Here’s a simple way to understand this:

If the rain maker takes time off from the business, would you still be in business?  No.  Without clients you’re just another agent standing around the copy machine, complaining how difficult the market is.  What about the reverse?  If you take time off from the business, would the rain maker still be in business?  Yes.  She’ll just find another agent to do what you were doing.  There are hundreds and hundreds of them out there.  And there’s your understanding of value: are you replaceable?  If the answer is yes, you’re not the primary value in a business relationship; you’re a cost.

Last year I wrote about the owner of a local Single A baseball team and his quote: “It’s hard for me to answer questions about everyone who works here as a whole.  I see them as two very distinct groups: there’s those who create revenue and then there’s everyone else…  everyone else being a cost.”   He was dead on; there are two personnel components to any business: those who increase the bottom line and those who are a cost to the bottom line.  If you bring clients through the door, you are increasing the bottom line.  If you take clients out the door to see  homes and write contracts, you are a cost to the bottom line… and you are replaceable.

Back to the workshop I was leading; I told this agent who was searching for a partner that understood her equal value that she was not equal; not even close.  If I were an agent with too many clients and I was going into business with her, I’d probably pay her 20% – 30% of the commission and I sure wouldn’t enter into any kind of partnership.  Think that’s harsh?  Think it’s not happening?  Think again.  If you’re not a rain maker, there is definitely a place for you in the real estate industry.  But if you think it’s a valuable one, you’re mistaken.  And if you want to create wealth in the real estate industry, go take a good, long look in the mirror and remind yourself:  “In business, wealth is a function of value.”  Then get out there and make it rain.

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  • 56 comments

    56 Comments so far

    1. Mike Mullin November 12th, 2010 2:06 pm

      Thanks for that Sean! I’m sure there are more “salespeople” in her camp than are willing to admit. I am. I’ve thought of partnering up with a title rep – they’re already calling on real estate agents all day long so why not just rep a loan company instead.

      I agree on the relative value issue. The “rainmaker” is at least 50% of the value to the business if not more. I’ve got to think the other value proposition for an agent is their negotiations skills. I only say that from my perspective as a lender – I see some truly crappy contracts written by a buyer’s agent who didn’t know what they were doing. Not often, but sometimes. Conversely, a poor agent representing a seller is not going to get top dollar for their home.

      In theory I think partnering is an excellent idea – if you can find the right pairings. The characteristics that make someone a good rainmaker don’t necessarily make them a good hand holder for the first time home buyer. It’s like watching companies destroy their “top producers” by elevating them to a management role. The skill sets are completely different.

    2. Keith November 12th, 2010 2:51 pm

      This is an excellent post and timing is dead on! Need to show it to my “Costs”, so they are happier knowing I already give them the bigger chunk.

    3. Curtis Reddehase November 12th, 2010 2:57 pm

      This is a people business and talking to people is how business is really won. I think the lion share should go those who are willing to ask for it.

    4. Jeff Brown November 12th, 2010 4:25 pm

      Coffee ‘n cookies are on me.

      “When you can do something more valuable than what I can train a high school junior to do in 24 minutes, you’ll get a bigger paycheck.”

      I’d complained about makin’ just $25/wk as the company’s janitor/listing printer. He waited in silence for my snappy comeback. Problem was, I was, um, a high school junior at the time. :)

      I’ve never understood brokerages hiring anyone other than rainmakers, unless it was to work on teams. Those agents attitude should be to take what they were given, and be thankful. Agents makin’ a living being handed leads often morph into faux prima donnas, completely ignorant of the fact they can be replaced as easily as a third string cornerback on a YMCA flag football team. The non-rainmaker on their own, has been clogging up the industry since the ink on my first license dried.

      The logic(?) your agent displayed, would make her laugh if used for a lawn care firm. She owns it, and through hard work, signs up 200 homeowners willing to pay $100 a month to take care of their lawns. Would she make her workers partners?

      Her reply? “Hey, how ’bout those Chargers?!

    5. Ken Brand November 12th, 2010 5:50 pm

      Your raise is effective as soon as you are. A golden quote from Marilyn Eiland.

    6. Benjamin Ficker November 12th, 2010 6:15 pm

      I had to explain this to someone who knew the ins and outs of loan mods (which would supposedly translate into negotiating short sales) and thought that since they had their license for literally 1 week they would be partners with us.

    7. Teri Lussier November 12th, 2010 9:29 pm

      Dang. And they say Greg Swann is cruel.

      Gathering intestinal fortitude as I meekly ask the first dumb question and I already hear Jeff Brown laughing hysterically so be gentle but you are going to have to spell it out for me: How is the client best served by this model?

    8. Sean Purcell November 12th, 2010 10:39 pm

      How is the client best served by this model?

      You’ll have to be more specific Teri.

      Are you asking how the client is best served by the “Team” model, in which an agent is so good at running an actual real estate business that she hires one or two agents who are unable to run their own business, but excel at working with and taking care of clients?

      Or are you asking how the client is best served by the more common “Broker” model in which one agent becomes a broker and then churns as many agents as possible, hoping that one in 10? 100? will actually become a professional agent while the rest trip over a few deals before moving on. (All the while hoping none of them commits a large enough breach of their fiduciary duties to get her sued.)

      I think different clients may be best served by different traits and talents. (Which is why there’s room for so many different personality types in our industry.) Heck, there may even be clients out there that are best served by an agent who can’t pick up the phone or make rain. But that’s not the target market I’d build my business plan around… if you know what I mean. ;)

    9. Cheryl Johnson November 13th, 2010 5:40 am

      I see Teri’s point even without specifics. :-)

      An agent who is making less than minimum wage might on occasion be too distracted about getting to his second job on time to really focus on the client’s best interests.

      Back in June, Jeff Brown posted this video http://www.bloodhoundrealty.com/BloodhoundBlog/?p=12284 It is a fascinating discussion of autonomy being a much greater motivator than money. But there is an essential truth at 5:03 “you have to pay people enough money to take the issue of money off the table”.

      On the other hand, San Diego home prices are quite a bit different than Dayton home prices, so Sean’s 30% is a world apart from Teri’s 30%.

      (Disclaimer: I am the broker/co-owner of a traditional brokerage. I think I pay our associates a generous split, and in return they work hard for the clients.)

    10. Teri Lussier November 13th, 2010 7:34 am

      I understand what you are saying about brokerages, Sean. I didn’t phrase my question well, although thanks, Cheryl, for explaining that better than I would have.

      “And if you want to create wealth in the real estate industry, go take a good, long look in the mirror and remind yourself: “In business, wealth is a function of value.” Then get out there and make it rain.”

      And that’s wonderful. No argument from me. Thanks for making it very clear and undeniable.

      My concern is that 30% gives the buyer’s agent very little incentive to become anything other than a grumbling order-taker. So who is going to be the biggest loser here? Not the broker or rainmaker who looks at the agent as replaceable, not the agent who is going to find another line of work or become a skilled rainmaker to avoid being a order taker, thus creating its own brand of churn, it’s ultimately the buyer who is the lowest rung on this ladder to success. Maybe I’m misunderstanding the whole thing.

      And I don’t know any way around this. The buyer is always the low man on the totem pole I suppose, unless you divorce the commissions…? I don’t know. I’m not arguing with you, being the rainmaker gives you freedom, but I don’t want to do it at the expense of the buyer. That’s not too much to ask, is it? ;-)

    11. Jim Klein November 13th, 2010 8:17 am

      This is like Hierarchy Central! Sean’s great essay implicitly notes the relationship between value, wealth and money. I’d say the correct hierarchy is in that order, top-down.

      I don’t know if this will help answer your question Teri, but the /function/ of a business is to serve the customer—”Try running your business without a customer.”

      However, the /purpose/ of a business is to serve its owner and this is hierarchically superior. Granted you can’t have this without having the former, so we say “the purpose of my business is to serve my customers” but that’s just shorthand using an implied context of the business itself. The real (unqualified) purpose of any business, like the real (unqualified) purpose of any human action, is to serve the actor’s own self.

    12. Jeff Brown November 13th, 2010 10:37 am

      This is one of the best threads of the year from where I sit. Leave to Sean.

      Hey Teri — The first conversation on this topic in my presence was held in the 80′s. Except for me, the average age at the table was almost dead. :) It was understood my presence was tolerated, as learning was the agenda. They had one thing in common with each other. If an agent they hired didn’t prove to be a rainmaker, they were asked to go elsewhere. Which was why, (I surmise so wisely) they all made six figures in the 50′s and 60′s. The median price in the 60′s? $10-20,000.

      They all made that much back then due to their stubborn insistence on ridding themselves of faux rainmakers.

      You said, “My concern is that 30% gives the buyer’s agent very little incentive to become anything other than a grumbling order-taker. So who is going to be the biggest loser here?”

      Ask yourself why the agent even wants to work for you in the first place. They’re not makin’ it. Not even close. The median home price in Dayton is barely six figures, so I take your point. Since the agent isn’t a rainmaker, let’s assume they’re scarin’ up a deal every eight weeks or so, which is about six a year. Let’s also say her Uncle Sean owns the brokerage and charges her no fees whatsoever. It’s a pure, expense free 100%. She’s makin’ +/- $18,000 — minus any marketing or other expenses she chooses to take on. Considering how much Dayton’s market sucks, six deals may be generous, considering they need to almost literally fall into her lap.

      The rainmaker hands her leads every day. Sometimes just one. Sometimes a few. But every day she rains down leads on her. Let’s assume she works hard, serves buyers well, and averages 2.5 closed sales monthly. That’s 30 deals for an agent who was given more than 10 times that number of leads, maybe 20 times.

      $100,000 X 3% = $3,000 X 30% = $900 X 30 = $27,000. That’s a 50% raise, and you took all the anxiety of making things happen from her to boot. She should kiss the ground on which you so lightly tread.

      You said, “My concern is that 30% gives the buyer’s agent very little incentive to become anything other than a grumbling order-taker. So who is going to be the biggest loser here?”

      That’s what I like so much about you, Teri, you’re one tough wench, but your heart knows no bounds. Let me be the black hat on this one.

      I’d look her naive little face dead in the eyes, then ask her, “Geez, maybe you can help me out with a math problem here. Would you rather be makin’ $18,000 on your own, hatin’ life, or be a lowly order taker makin’ $27,000 with me? Don’t rush, take your time. I got all day.”

      Nobody cares what she ‘needs’ to earn, only what she’s capable of earning. The ‘biggest loser’ here is the agent who, on one hand, realizes they’re not cuttin’ it, but on the other hand wants to be paid as if they are. Dad had a name for those folks. He called them his competitor’s agents.

      I’ll be ‘cruel’ like Sean for a second. Regardless of the geographical market or the health of the economy, those who aren’t makin’ it are lyin’ to themselves daily. They’ll never make it on their own unless it’s super boom times because they’re not rainmakers and they never will be. Those who face up to that reality can often do very well by finding a real rainmaker, happily grabbing the daily leads falling onto their desks, and grumbling their order takin’ ass to the bank. There’s the added bonus — the tellers will soon begin recognizing them when they come in. :)

      I abhor the word ‘loser’. But in the end, in this context, the only losers are those refusing to recognize the two things holding them back. 1. They’re not rainmakers. 2. ‘Order takers’ making 50-200% more than they do are happy freakin’ campers.

      Ya can’t swing a dead cat without hittin’ a real estate broker/agent who thinks the reason they’re not makin’ now is all the outside factors. They’re not makin’ it cuz they don’t pack what it takes, or they won’t do the work they know needs doing. All a bad economy does is cut rainmakers’ pay, it doesn’t put them outa business.

      Oh, and for the record, Teri. I think you’re a rainmaker.

    13. Teri Lussier November 13th, 2010 1:39 pm

      Hi Jeff-

      You’ve given me a lot to think about, that’s for sure.

      >Ya can’t swing a dead cat without hittin’ a real estate broker/agent who thinks the reason they’re not makin’ now is all the outside factors. They’re not makin’ it cuz they don’t pack what it takes, or they won’t do the work they know needs doing. All a bad economy does is cut rainmakers’ pay, it doesn’t put them outa business.

      I completely understand that and I want to be clear that I’m not trying to justify slackerdom or excuses at all. Can’t abide that myself. Whatever you are doing, just do yourself a favor and own it, be honest about it.

      I can’t see being happy as a buyer’s agent under those circumstances. I can’t see anyone being happy and that frustration must go somewhere- probably on the buyer, right? But eventually, one way or the other, the agent gets out. Which leaves the rainmaker driving around buyer clients and writing contracts instead of doing what makes them the most money- generating business? It makes no sense. And now I’m really beginning to feel like a box of rocks, so I’ll be exiting this thread while I ponder for a bit. Thanks for playing along. ;-)

      >Oh, and for the record, Teri. I think you’re a rainmaker.

      Not yet by a long shot, Jeff, but oh hell yeah. :-D

    14. Jeff Brown November 13th, 2010 2:14 pm

      Teri — Step back and read what you wrote: “I can’t see being happy as a buyer’s agent under those circumstances. I can’t see anyone being happy and that frustration must go somewhere- probably on the buyer, right?”

      YOU can’t see it cuz you’re a rainmaker at heart. The starving agent who won’t get into the trenches, will be happy as a stud on Ladies’ Night at the local bar. The buyer won’t suffer, cuz the agent is actually happy knowing they have a never ending source of folks to whom they can show ‘n sell homes. They were frustrated only when PRETENDING they were rainmakers. They’re too happy to be around once they’ve given up that fiction, find a rainmaker, and begin making a lot more money.

      Where do ya think I’ve found most of my assistants? They’re failed real estate agents who love doing the behind the scenes work, with guaranteed slices of what I earn. They love being behind the scenes, and without them I wouldn’t be nearly as effective as I am.

      There are those who sell brick walls, and there are those who lay bricks.

    15. Teri Lussier November 13th, 2010 2:35 pm

      I feel as though I’ve been channeling Emily Litella. Again. :-D

    16. Sean Purcell November 13th, 2010 3:20 pm

      Teri – I’d like to echo something Jeff has said in response to you saying: “I can’t see being happy as a buyer’s agent under those circumstances.”

      Believe me, I get what you’re saying. All my life I played sports. And all my life I saw guys on the team who were never going to start (heck, some of them were hardly ever going to even play). They knew they were never going to start or even play much; yet they joined the team and came to practice. I saw the same thing when I was a competitive thrower. Guys would go out for an event and there was no chance they’d ever even place, never mind win. But they did it anyhow.

      I never understood those people. I just don’t get it. If I joined a team and it turned out I wasn’t going to play… why in the heck would I continue with the team? If you don’t have a shot at being one of the best; or at least ranking among the best… why in the heck would you play the game? I can’t fathom it.

      But lots and lots of people do get it. Lots and lots of people do things for their own reasons, reasons I’ll never understand. But we know it’s true. I’ve heard stories about a certain listing agent; someone we’ll call a SUPER rain-maker who pays his agents 20%. He was asked how he gets anyone to go that job for 20% and his reply: “I’ve got ‘em lined up around the corner.” Why do you suppose that is? I’ll tell you what I think: I think a 20% commission on his volume of leads generates a lot of income. I think he says to potential agents: “I’m only going to pay you 20%, but I’ll put a new client in your car every day and you’ll make over $100,000/yr with me. Now, sign here and push hard, you’re making three copies.” That’s what I think. :)

      When you say you would not work for that split, with the implication being you wouldn’t then offer it to anyone else, you’re making the same mistake so many salesmen make with their clients: they think to themselves that they’d never buy X or Y, so why would the client. YOU are not the client (or, in this case, the potential new agent hire). Stop selling to yourself and start selling to the person in front of you.

      If, in your market, there truly is no one who will take a rain maker’s leads and work them for 30%, you know what you’ve just engaged in? Price discovery. Raise the split to 35% and start again. But I’ll bet dollars to donuts you won’t have to… ;)

    17. Jeff Brown November 13th, 2010 3:26 pm

      What Sean said, cuz he said it way mo betta than I did.

    18. Sean Purcell November 13th, 2010 3:27 pm

      Cheryl – I like the video you mentioned a lot. Some parts of it are counter-intuitive to be sure. But I’m not sure it’s applicable here. That video lends itself to a discussion of how to motivate your agents and how to get more productivity from them. But it’s not a video on how to set up a real estate business which, as Jim Klein made very clear, is a matter of purpose vs function.

      If anything, that video helps me with my point. It tells us to stop offering money as a reward and start offering autonomy, the potential for mastery and a purpose. Autonomy, concern for mastery and even purpose… these all sound like the kinds of traits one would find in a Team structure where everyone has some accountablility for their actions.

    19. Damon Chetson November 13th, 2010 3:58 pm

      There’s nothing particularly noble, awesome, great, good about a “rainmaker”. It just happens to be someone who through some combination of talent and ambition has been able to bring in business of whatever kind. And they can be people of any sort. There’s no “type” per se – No Alec Baldwin in Glengarry Glen Ross.

      Again I say a rainmaker “just happens” to be such and such person to emphasize the luck of it all. If you’d called me a rainmaker a year ago, I would’ve laughed before crying. I’m not a particularly gregarious guy. I certainly don’t look like Alec Baldwin. But clients hire me. More often than not. Go figure. Sometimes we don’t know what we are until we’re forced to try things.

      I don’t know about other people who are able to generate business, but for me it takes a lot of work. I’ve got some good friends who are excellent lawyers. But doubt I’d partner up with them. And it’s not because they don’t work hard when they’re at work. It’s that they think of work as something that happens between 8:30 am and 7:00 pm, Monday through Friday. Which is to say, they work longer than average hours. But they work “hours”.

      I’m sitting in coffee shop right now… working (my wife is at a horse show this evening). If someone calls me on the phone with an emergency, I will spend the next hour talking to them about their legal issue. And if they hire me, I will spend whatever time it takes tonight to begin working on the case. And so forth. And I’ll do this whenever I’m not otherwise immediately occupied with some other activity.

      Many of my lawyer friends probably wouldn’t do the same. And that’s fine. But I’d make half of what I made this past year if I had the philosophy that work is only what happens between 9 and 5 M-F. Which is not to say I want to be doing this necessarily when I’m 65 or 70. But that’s what savings are for.

      But here’s my point: 1) There’s nothing special about a “rainmaker” 2) But “rainmaking” is not just a matter of having clients appear at your door. Or generating leads automagically. It’s hard work. 3) Consequently, when talking abou the value proposition, it’s – to reiterate the point of the original post – don’t be fooled into thinking that just because we don’t use the labor theory of value, that there was no labor that went into the “rainmaker’s” value.

      That said, being a “rainmaker” may let you extract higher rents than others in the value chain because as a rainmaker you’re being compensated not just for having generated the clients/leads… but also for the fact that you control access to those clients/leads.

      Still, a “rainmaker” who undercompensates his associates in the transaction is a fool. If you’re a “rainmaker,” then you need to understand that there’s a difference between short- and long-term value. And it’s long-term, repeated value that you want to generate. That makes you wealthy. And you can only accomplish that by providing excellent service to clients. Not just in getting them to hire you.

      If you’re not a “rainmaker” but you want to associate with one, then you want to make the “rainmaker” understand both what the “rainmaker” brings to the table, and also what he or she does not. And what, by extension, you contribute. And how valuable that is.

    20. Jeff Brown November 13th, 2010 5:35 pm

      Hey Damon — So good to see you here. I have so much respect for what you’ve accomplished, building your practice.

      Though I’ve never claimed nobility, I do think it’s pretty cool when a rainmaker makes it possible for low income agents to make much higher incomes. There’s hard work in any successful endeavor, but surely you don’t mean for me to infer there’s any real luck involved. If hard work, and “some combination of talent and ambition” alone generated rainmakers, the real estate industry wouldn’t have such a colossal turnover rate, even in boom years.

      The idea is wholly without merit on its face, in my opinion.

      True rainmakers are few and far between. If it merely required hard work, and some skill, there’d be tons more rain in the real estate business. My partner for a decade was a real estate attorney. I witnessed firsthand, those who consistently created business for law firms were rare indeed, and very valuable on the free market. But for their presence, many attorneys in that firm would be unemployed, or makin’ less somewhere else. There were attorneys who were more talented, and those who worked at least as hard as the rainmakers. Why weren’t they valued equally?

      The answer, as it always is, is results. The rest is happy talk.

      Nobody I know thinks there’s no labor involved in being a rainmaker. Speaking only for myself now, it’s usually the beneficiary of the rain who complains about the cost of being handed business on a silver platter — not the rainmaker. This was pointed out in the post, first hand, from Sean’s student’s own words.

      Look at what you’ve accomplished in such a relatively short time in your law practice. It’s been nothing short of phenomenal. You have, IMHO, what rainmakers have that others often don’t — balls. You made it happen. If you chose to become a rainmaker, my judgment would be it’d come pretty naturally for you. But, we disagree on one thing. It doesn’t ‘just happen’. Rainmakers ARE NOT born. Courage isn’t in the genes, it’s a choice. And my experience is, most real estate agents simply won’t make that choice, even when they covet the results.

      Finally, by definition, compensation finds its own level. Paying too little can only exist temporarily before it becomes too ‘expensive’, re: turnover etc. My experience is that those choosing between an income of $100,000 at 20-30% vs $60,000 at a much higher split, generally opt in favor of more dead presidents, not the split percentage.

      Am I making sense?

    21. Sean Purcell November 13th, 2010 8:03 pm

      Damon – Jeff has already responded to your thoughtful comment pretty comprehensively, but I wanted to go a little deeper into the lawyer analogy.

      I have no doubt that you are hardworking and committed to your clients. These are admirable traits and I would guess they’ve done you well. And if you are sitting in that coffee shop and someone slips on a wet floor, I don’t know that they could do better than you for their lawyer. But that’s not the point of my post. The point of my post is this: when it comes to running a business, it’s not important that you would be the hardest working attorney that person lying on the ground has ever met. What’s important is that you went to that particular coffee shop because you knew their floors were often wet…

      You also said:

      …being a “rainmaker” may let you extract higher rents than others in the value chain because as a rainmaker you’re being compensated not just for having generated the clients/leads… but also for the fact that you control access to those clients/leads.

      This is a dangerous piece of confusion and I wish to clear it up before some young agent thinks it true. A lead generator “controls access” to leads. They get paid on a per lead basis. They are faceless and uninvolved with the transaction. That has nothing to do with being a rainmaker. A rainmaker is not compensated because they have control over a list of potential clients; as if to suggest that were only the list to become free, agents everywhere would be enjoying beer and skittles. Far from it. The rainmaker creates business, they don’t buy leads and they don’t sell leads and they don’t control some list they were lucky enought to get a hold of before the next guy. What they control is their ability to face failure, talk to strangers, network with enthusism and follow-up with sincerity. Or, as Jeff would put it (if he were standing with the boss and didn’t want to say a word like “balls”): they control their ability to take action despite fear.

      This very enjoyable discussion reminds me of my neighbor when I was much (much) younger. He had started a very successful business. It went from him alone, to him and a couple employees to him and a fleet of trucks and contracts all over southern Cal. His wife and he decided to divorce and his wife’s attorney went after everything he had with the kind of zeal particular to certain soul-less bastards who often practice their trade in divorce courts. She demanded half the company. My neighbor’s reply was priceless: “No, but you can have all of the company. Here’s the keys.” With half the company she gets the full benefit of his value as rainmaker. With all of the company she simply had a warehouse, a bunch of trucks and some employees. In other words, she would lose the one thing that increased the bottom line (him) and end up with everything that was a cost to the bottom line… She took a cash settlement instead.

      Understanding that story and the relative value of the owner vs everything – and everyone – else would go a long way toward helping agents understand their relative merit in the real estate business. You might be well compensated for driving a truck or calling on clients or showing homes or whatever; but if the person at the top – the rainmaker – disappears (or loses everything in a divorce :) ), you won’t have anywhere to drive your truck, nor any clients to drop in on, nor any reason to show a home.

    22. Cheryl Johnson November 13th, 2010 8:29 pm

      Sean, if your gal is interested in moving to Northeast L.A., have her contact me. I think I could make room for an agent that “works well with clients, shows homes well, and negotiates well.”

      And, since I personally detest receiving telephone sales calls, (I don’t think there are words to describe how much I detest receiving those calls… Sorry, Jeff, Brian and Sean :-) ) I certainly won’t be expecting her to make cold calls.

      I would, however, expect her to be a stand up member of the community, since thats kinda how business is done around here.

    23. Greg Swann November 13th, 2010 8:37 pm

      I like your argument best, so far, Sean, as a further elaboration of Jim’s. Ultimately, you’ve made an excellent ostensive ontological defense of free-market capitalism — which could just as easily be called Entrepreneurism, since, as you imply, capitalism is the causally necessary economics of political individualism — its consequence, actually.

      Consider these plausible validations of capitalism:

      1. Free-markets produce greater wealth for everyone.

      2. Entrepreneurs create innovations that not only increase productivity, they result in real improvements in everyone’s lives.

      3. The greater the coercion in an economy, the fewer of either of the above benefits.

      4. If entrepreneurs are not permitted to pursue their own ends and to retain their profits, they won’t do what we want done.

      5. Acting upon people as they are yields better result than trying to defy human ontology. (cf, That most excellent divorce negotiation!)

      6. As a self-conscious being, I have the philosphically-defensible right to be free of your domination regardless of any impact, positive or negative, my liberty may have on your life.

      Are there others any you would add?

      Which would you choose?

      Other people? What say you?

    24. Greg Swann November 13th, 2010 8:37 pm

      (You know what? This is the scenius we’ve been looking for. Happy Thanksgiving!)

    25. Sean Purcell November 13th, 2010 9:09 pm

      Cheryl – this agent would no doubt enjoy your mentoring and be the better for it. But I believe you misunderstand; I’m not talking about cold calling, I’m talking about picking up the phone and calling people.

      I understand very few have what it takes to cold call all day. I’m not suggesting that is a requirement of a rainmaker (though it wouldn’t hurt!). But I come across agent after agent who will not pick up the phone and call a warm lead: a referral, a lead from a rainmaker, a sign call. I’m sure you’ve seen this too. I wrote about it quite a while ago and I can’t remember the name of the post to reference, but the problem is one of potential vs fear. When a name sits on her desk, it has the potential to be a big fat deal (or even a little skinny one). But if she picks up the phone, the person on the other end might say “no”. Better to keep that name a “potential” deal than take a chance on it becoming a “no”. This is, of course, the very opposite of what Greg and Jim and others discuss here so fluently: egoism. But we see it time after time after time. Fear wins.

      So again, I restate Jeff’s point: a rainmaker is the most important value in a business because they have what it takes to break through their fears and take action. In our industry, surrounded by so many who simply can’t or won’t do it, this leads one to become a rainmaker, the most important aspect of the business of real estate.

      If you bring clients through the door, you are increasing the bottom line. If you take clients out the door to see homes and write contracts, you are a cost to the bottom line… and you are replaceable.

      My question for you then Cheryl, as the broker, is this: how will she create any business with you when she’s not doing so already? Or maybe the more important question – from a business standpoint – is this: Why would you want such an agent?

    26. Sean Purcell November 13th, 2010 9:29 pm

      capitalism is the causally necessary economics of political individualism — its consequence, actually

      This is, in 12 words, the truth of the entire conversation…

      Greg, I’m struck by #4. “If entrepreneurs are not permitted to pursue their own ends and to retain their profits, they won’t do what we want done.”

      They won’t do what we want done?

    27. Damon Chetson November 13th, 2010 9:47 pm

      I have no doubt that you are hardworking and committed to your clients. These are admirable traits and I would guess they’ve done you well. And if you are sitting in that coffee shop and someone slips on a wet floor, I don’t know that they could do better than you for their lawyer. But that’s not the point of my post. The point of my post is this: when it comes to running a business, it’s not important that you would be the hardest working attorney that person lying on the ground has ever met. What’s important is that you went to that particular coffee shop because you knew their floors were often wet…

      You’re confused, which may be my fault. I don’t sit around coffee shops hoping someone slips and I don’t practice personal injury law. I was sitting around a coffee shop on a Saturday evening because I was doing marketing work on WiFi. My point in that vignette was simply to say that I am on call at any time, including having gotten hired 30 minutes ago on a felony, and to say that “rainmaking” is neither easy nor labor-free. That was my limited defense of the role of the rainmaker and the value that that person might get.

      Also, I wasn’t under the misapprehension that rainmakers bought lists. Rainmakers bring business (“create”) into a particular firm/practice/organization. To the extent that they produce that, they may be able to extract higher rents than might be economically justified. And that seems to be the (understandable) concern that Teri has.

      But here’s where I think the whole thing runs off the rails: where Greg Swann wants to call this an ontological defense of free market capitalism.

      I think what you’ve described is the way real estate may work in certain situations in 2010 in the United States, which is to say contingent on a whole bunch of rules that are arbitrary and generate particularly nice outcomes for people called “rainmakers”.

      People want to think that they’re their own masters, and that by sheer dint of hard work nice things will accrue to them and theirs. And that’s a nice story. It kind of keeps the world moving along. It helps the wealthy say to themselves, I earned mine. And it helps the less wealthy say that if they just work harder, it’ll come to them too.

      So maybe it’s a pretty good story. But that’s all it is.

      Luck has more to do with it than most of us would like to imagine. That, and massive subsidies that go to certain industries – the mortgage interest tax deduction and the bar.

    28. Teri Lussier November 13th, 2010 9:51 pm

      Been out, and the conversation has moved on, but I do want to sneak back here just to thank you Sean, for this:

      >When you say you would not work for that split, with the implication being you wouldn’t then offer it to anyone else, you’re making the same mistake so many salesmen make with their clients: they think to themselves that they’d never buy X or Y, so why would the client. YOU are not the client (or, in this case, the potential new agent hire). Stop selling to yourself and start selling to the person in front of you.

      I’ll remember that one forever and believe me, it will stop me (okay maybe just slow me down) from making that mistake again.

    29. Russell Shaw November 13th, 2010 9:56 pm

      I love this brilliant post and this thread.

      A rainmaker is simply someone who is so effective at lead generation (marketing or prospecting) that they can’t personally physically handle all the business they can generate by themselves.

      Of ALL of the important skills involved in successfully running pretty much any type of business – THE most important one, by far, is the ability to get and keep customers. Be good at that one thing – getting and keeping customers – and all the other “important stuff” can usually be resolved.

    30. Greg Swann November 13th, 2010 10:16 pm

      > They won’t do what we want done?

      I am enumerating validations for capitalism that people have actually made, ones current in the political and economic conversations going on in the larger culture right now.

      Do you object to #4? Any others? Any you like?

    31. Sean Purcell November 13th, 2010 11:01 pm

      Damen – you said: Rainmakers bring business (“create”) into a particular firm/practice/organization. To the extent that they produce that, they may be able to extract higher rents than might be economically justified.

      How can someone who creates the business be of greater value than is economically justified? That is illogical on its face. They are of exactly their economic value… at least, in a free market they are – which answers your question about Greg’s point.

      People want to think that they’re their own masters, and that by sheer dint of hard work nice things will accrue to them and theirs.

      I don’t know that anyone here is claiming hard work is all that’s needed to gain wealth. Much the opposite as a matter of fact. You can work your bottom off being a super-duper buyers’ agent, or an 80 hour/week attorney on the partner track of some law firm. (And yes, I also know you’re not working for a law firm – like the coffee shop, these are analogies.) So what?

      Wealth, as I said, is a function of value. We don’t measure perspiration and we don’t log hours (much to the chagrin of many real estate agents… and hourly employees). Look at my neighbor’s company. My neighbor’s income was 10x? 100x? that of the guy in the warehouse attaching hoses to boxes. The guy in the warehouse certainly worked harder physically. My neighbor (no longer) attached any hoses.. he doesn’t have to because he can always hire someone to do that. What he can’t hire is some to be him. Without the guy in the warehouse… well, nothing happens really other than maybe losing a day’s production while they hire a replacement. Without the rainmaker at the top? Everyone who works there would end up with the same thing his ex-wife would have ended up with: a big sucking hole where there once was wealth. The rainmaker, however, will just move down the street (or to the new brokerage, or his own law firm) and start again. And he’ll most likely succeed again because he knows how to do the one thing that matters in business: create business.

      “Luck” and “subsidies”? That’s the kind of talk I hear around the copy machine when I walk by the agents not making a living. Goes hand in hand with “bad market” and “people just aren’t buying/selling… breathing.”

      People want to think that they’re their own masters. The unfortunate problem is not that you are right, but that you are wrong…

    32. Sean Purcell November 13th, 2010 11:13 pm

      Thanks for the compliment Russell. Some of my points are taken directly from how I understand your business to run. And seeing as your business runs so damn well, it carries more than a little weight.

      BTW, are they still “lined up around the corner?” :)

    33. Sean Purcell November 13th, 2010 11:24 pm

      Greg, I don’t object to any of the others and I’m not sure I object to #4, but it certainly sits uneasy when I read it.

      “If entrepreneurs are not permitted to pursue their own ends and to retain their profits, they won’t do what we want done.”

      Sounds manipulative, though it’s perfectly valid that in a free market they may do what I wish them to do in exchange for some value I give them, or for no obvious reason at all.

      Still, the statement seems (I don’t know the latin for it): dependent. “I’ll permit you to retain your profits if you’ll do what I want done”…

      Once allowed to pursue their own ends and retain their profits, entrepreneurs will do that which they perceive to be in their best interest, yes? That I benefit from it at all means only that my interests and theirs align.

    34. Greg Swann November 13th, 2010 11:30 pm

      #4 is Reaganomics — Arthur Laffer, actually. Lower taxes produce higher tax receipts. What’s the objective?

      What’s the objective of the others?

      A better way of getting to the truth: Who is the beneficiary of each one of those plausible validations of capitalism?

    35. Sean Purcell November 14th, 2010 12:10 am

      I am.

    36. Sean Purcell November 14th, 2010 12:11 am

      …if I am part of the society.

    37. Sean Purcell November 14th, 2010 12:14 am

      I think #6 is the only one completely defensible from an anarchistic agora point of view. The rest seem to imply a betterment for the whole, which is not in and of itself the goal. Though it might be a side benefit.

    38. Bunny Carringham November 14th, 2010 1:30 am

      I think it’s #6 because Gregg Swan always uses more big words on things he likes.

    39. Teri Lussier November 14th, 2010 8:25 am

      Damon-

      >Rainmakers bring business (“create”) into a particular firm/practice/organization. To the extent that they produce that, they may be able to extract higher rents than might be economically justified. And that seems to be the (understandable) concern that Teri has.

      My concern was that higher rents were not economically justified to me personally and that that might reflect on service to buyers. Jeff and Sean both pointed out that to some people this is a perfectly acceptable situation, makes them happy as a stud on ladies night, with no reflection to buyers. Okaythen. Rainmaking might be a lot of luck, I disagree, but even then, luck then would still be something that has to be acquired somehow and because so few people are willing to put themselves in the position to acquire that particular Rainmaker Luck. You and I don’t have to like it from the receiving end but the price is and should be WTMWB.

      I wouldn’t think that 30% would work in Dayton, but the more I consider this, if I could create the business to bring in one or two solid qualified buyers a day? It might. That would take a lot of luck, and I’d would need to get really good at being lucky, but this is a worthwhile goal for everyone involved. At any rate, it would be kind of fun to find out what the market would bare. ;-)

    40. Sean Purcell November 14th, 2010 8:28 am

      I think it’s #6 because Gregg Swan always uses more big words on things he likes.

      LOL

      Greg, I nominate Bunny for most clearly reasoned comment of the year… :)

    41. Sean Purcell November 14th, 2010 8:50 am

      Teri – First, what is WTMWB?

      Second, you say you don’t think 30% would work in Dayton, and you certainly know your market, so let’s look at a different scenario.

      I recently met with a buyer’s agent that is a Rainmaker with a capital RAIN! He generates 1000s of leads and they close 100s of transactions/year. I asked him how he would set up his business if he were starting out right now, but still knew what he’s already learned. His answer: “I would hire part time agents and pay them $15/hour to show homes.” My mouth dropped open but he just looked at me with a straight face. You know what? I think a lot of agents would jump at that opportunity, and that’s the crux of what we’re talking about here. Most agents would rather be paid hourly and not have to worry about generating business, than become their own little makers of rain and be paid untold wealth.

      So, tell me about Dayton, Teri. Jeff’s numbers ($100,000 X 3% = $3,000 X 30% = $900) equal 60 hours of work at $15/hour. I don’t believe it takes 60 hours to show and close a property, though in the current market it’s pretty darn close! Do you think you could find an agent in Dayton who loves showing homes, is good with people, knows how to negotiate a fair price and doesn’t want to risk becoming a full time agent? Do you think they’d work for $15/hour? If not, why not? (And just so you know, if indeed you do think not, my next comment is going to be a suggestion you run an ad on Craig’s List, just to see what the response is…) :)

    42. Teri Lussier November 14th, 2010 9:17 am

      WTMWB= What the market will bare. Bear? Bare?

      Anyway.

      >Do you think you could find an agent in Dayton who loves showing homes, is good with people, knows how to negotiate a fair price and doesn’t want to risk becoming a full time agent?

      >doesn’t want to risk becoming a full time agent?

      That’s funny, and a whole post in itself, isn’t it?

      >Most agents would rather be paid hourly and not have to worry about generating business, than become their own little makers of rain and be paid untold wealth.

      >So, tell me about Dayton, Teri.

      Yeah, no. I slept on this. My eyes are opened. I’m completely behind it as long as no buyers get hurt. Very very few agents want to prospect. Cool. That creates real value for those of us who are willing to do that.

      Tell you about Dayton? Well, I will tell that I have been referring out business to people who tell me they really like to show houses and write contracts and do I have any more leads. I’m embarrassed to tell you the split, so let me generate business (get lucky) on a more regular basis, rectify my idea of value, then I’ll get back to you. ;-)

    43. Jeff Brown November 14th, 2010 9:47 am

      I love the whole ‘luck’ thing. Seems I’ve been lucky since I was a teenager. Dad was a rainmaker in two industries. We should did his lucky ass up, grab some DNA, and do some serious research.

    44. Dan Connolly November 14th, 2010 10:26 am

      I think that it does take a different skill set to generate leads than it does to show and sell homes. There is definitely a skill involved is showing and selling homes and following the transaction through the process from the offer to the closing, in a way that doesn’t get anyone sued. The idea of turning this part over to people who are willing to work for 20-30% of the commission doesn’t make sense to me. There are two issues. One is that that the smart person will not remain for an extended time, they will jump out on their own when they have “caught up” financially and realize that the market isn’t dead and there is business out there. The other issue is that the person who is willing to settle for an hourly wage or a 20, 25 or 30% split in my opinion is probably not going to be as effective at showing and selling, and IMHO will probably be more likely to make mistakes that will lead to lawsuits.

      For me it goes to the “you get what you pay for” theory, and if you want to get someone who handles the clients professionally and competently, you have to pay them a decent split. I think that model will result in more sales in a shorter time and higher profits for the rainmaker.

    45. Jeff Brown November 14th, 2010 12:09 pm

      Hey Dan — What if at 20-30% they’re making well over $100K? You’re an alpha dog, Dan, so you can’t figure out why some highly skilled buyer agents would opt for such a split. They can’t make things happen, and every time they try, they fail. Or they’re not built to take anxiety, or the fear of failure. The list is endless. They don’t think as you do.

      I get where you’re coming from, cuz I used to wonder the same things. It’s like Dad explained to me one day. There were two lessons I learned in one quick session.

      First, there are the legions of people who were happy to work all day long 5-6 days a week making Fords. Meanwhile, Henry Ford made millions, paying more in taxes in a month than any 10 of his workers made in a year. Those workers were grateful for the job Henry had created for them. Lesson: Henry wasn’t replaceable, though his workers had a dozen people each, just waitin’ for them to screw up.

      There’s as much honor in being an excellent man on Henry Ford’s line, as in being Henry Ford. Money doesn’t ever equal honor. It’s about a job done well and honestly.

      Second, courage, intestinal fortitude, guts, balls. However one wishes to define it, most opt for the lower pay, less risky job. In real estate that means they don’t hafta make anything happen. They show up, get handed leads on a silver platter, show a buncha homes to a buncha leads, get a contract, get paid, rinse, repeat.

      Being the ‘go-to’ guy/gal is the aspiration of many, but the attainment of few. And that’s why rainmakers are rare, and special.

      Those two lessons have been priceless in my development.

    46. Sean Purcell November 14th, 2010 12:17 pm

      Dan – agreed: the skill sets may be different (which is not to say that the same person cannot possess both).

      The problem I have is with your next, two-part point. You state that

      the smart person will not remain for an extended time, they will jump out on their own when they have “caught up” financially and realize that the market isn’t dead and there is business out there

      My premise is that some (most) agents cannot generate their own business and thus, are of much less value in the business of real estate. Your claim is that this is false, and by way of proof offer that these same agents will go out and generate their own business rather than take the small split. This is known as petitio principii or, more commonly: “Begging the question” and is a logical fallacy. (It is also one of the most misused statements in our comomon vernacular…)

      If your agent, upon “catching up financially,” can go out and generate business of her own, why isn’t she doing so now?

      I agree that she may “realize” there’s business out there, but she is unable to acquire it. She can’t bring herself to pick up the phone and face rejection. It’s like the old joke: “Everyone complains about the weather… but no one does anything about it.” Rainmakers do something about it; everyone else (the less important people in real estate) just complain.

      The agent in my post is a perfect example of this dynamic. She is not earning any money this year and her pride? ego? ignorance? won’t allow her to see the problem, which is: she is not going to do very well in a self-employed business if she can’t either

      - generate business, or
      - accept the business of someone who can

      Once she accepts the latter point, all that’s left is what will she earn working for someone else’s business (as a COST to the bottom line) and it’s my contention that she’ll not earn much because she doesn’t bring nearly as much value to the table.

      Your other issue concerns the ability and liability of someone willing to “accept” such low splits. I put it to you that the true liability is in having agents out there who don’t know how to run their business and don’t have the honesty required to look in the mirrow and recognize their value. When I started in this business (more than two decades ago…), no one I knew earned more than 40% – just wasn’t done. The broker took a very large split, but in return the broker provided everything: computers, phones, office space, marketing, up time, etc. Didn’t provide leads, though you could eke out a little business just working the phones. Now, the agents all want 80% splits and the brokers provide virtually nothing. Okay, but that means you’d better be able to run your business and the first rule of business is make rain. If you can’t, there is a modern version of the old game: The teams. The rainmaker creates a team, provides the leads (maybe the computers and phones too) and the agents who didn’t have what it takes to go it alone can make a living… at the same relative rate they’ve always received: 20%-40%.

      You say an agent that shows up for 25% won’t be that good; I say an agent expecting to earn $100,000/year (in my market) had better be damn good and expect competition to boot! In Dayton the income might be $50,000/year, but then the costs are a lot lower too. The point remains the same.

    47. Jim Klein November 14th, 2010 12:37 pm

      “I would hire part time agents and pay them $15/hour to show homes.”

      Sounds simple, but he left out the implicit condition, “…and I’ll keep doing exactly what I’m doing.” That’s where the value is. Most RE agencies, like most insurance agencies, are really selling nothing but security and comfort for the buyer and/or seller. That’s a huge thing, of course, the most valuable thing there can be for a home buyer or seller.

      The RE industry seems to be divided into two camps. The first wish to get their slice of the business because the service is basically required to be bought, once again like insurance companies. The other camp, most visible here, truly seeks to offer the security and comfort that really has value to the customer. This is the value of which Sean spoke, at least to the customers. A RE agency creates wealth by fulfilling that value, whereby both sides of the transaction receive more than they brought to the table…the agent his money and the customer her peace of mind, and success in the transaction of course. Kudos to those of you who seek to create that; that’s why you’re called rainmakers!

    48. Damon Chetson November 14th, 2010 1:03 pm

      Sean:

      I don’t know what you mean by “illogical” when you talk about economics. Economics is not logic. It is the study of how people behave in aggregate and given various rules.

      So I happen to think that people “may be able to justify higher rents” than would otherwise be economically justified because of other factors involved in the negotiation process. For instance, psychology. And I used the word “may” to stress that what I’m saying is not necessarily true in every instance, but may be true. I don’t know what the answer is.

      “Luck” and “subsidies”? That’s the kind of talk I hear around the copy machine when I walk by the agents not making a living. Goes hand in hand with “bad market” and “people just aren’t buying/selling… breathing.”

      Well the real estate industry benefits from massive subsidies. Correct? I mean, what’s the mortgage interest deduction but a massive subsidy funneling more money into the real estate industry than would otherwise flow that way given a different tax system. Which is to say, at least part of the money you make is the result of a political process – political rents. And there’s some luck in how we get where we get. Unless you’re going to claim we pick our parents, and on down the line.

      So, yes, luck and subsidies have a lot to do with where we land.

      And while you object to the water-cooler whining about “bad markets” etc., I object to the talk that links wealth with “earning”.

      In other words, I think free markets are worthwhile because because they generate better outcomes. But there’s nothing morally necessary about them.

    49. Greg Swann November 14th, 2010 1:25 pm

      > I think #6 is the only one completely defensible from an anarchistic agora point of view. The rest seem to imply a betterment for the whole, which is not in and of itself the goal.

      This is what to watch for, going forward, to determine if Americans have truly turned the corner on slavery. If the validation for a make-beleive liberty is the good of the collective, the philosophy being propounded is a form of collectivism — and the pretend freedom won’t last long. This is true of every flavor of Marxism, of course, but it’s true also of Adam Smith, of Arthur Laffer, of Milton Friedman, etc. Argument #6 is the only validation of capitalism in that list that is rooted in political individualism and ethical egoism. Ayn Rand’s formulation, in this argument, would be slightly different from mine, but this was one of Rand’s most significant achievements, the moral defense of laissez-faire capitalism.

    50. Sean Purcell November 14th, 2010 1:38 pm

      I don’t know what you mean by “illogical” when you talk about economics. Economics is not logic. It is the study of how people behave in aggregate and given various rules…
      …So, yes, luck and subsidies have a lot to do with where we land

      1. Economics in a free market is logic personified: rational people engaging in price discovery toward their own best interests. One cannot “justify” price discovery and it is illogical to presume otherwise. (I assume we are discussing a free market as opposed to a command market. If you prefer the latter, you may feel that economics can be “justified” but you will still be wrong; witness the black market.)

      2. Subsidies are a problem for the entire industry as well as my freedom as a living person. But they do not operate on the individual level: some agents become rain makers and some can’t face the fear because… of subsidies? Please.

      3. Luck, the great panacea of losers. You are right, I can’t pick my parents. I can’t make myself taller or better looking or whatever else is supposed to bestow luck upon me. But then, I’ve met more than a few rainmakers who didn’t come from a silver spoon and weren’t particularly attractive and didn’t have the best education and on and on. I’ve also met agents who should literally own the business in their area with all their genetic “luck”… and they still can’t bring themselves to face rejection.

      Damon, when you start discussing the “justification” of earnings and the “luck” some people are born with that gives them an unfair advantage, the implication is this: if only we could equalize everyone’s opportunities and have some kind of authority that would keep “unjustified” earnings out of the marketplace, everything would be better. Whether you consciously intend to or not, you’re discussing collectivism (Socialism, Communism, etc.). It’s been tried! It doesn’t end well!

      Rainmakers bring more value to the business equation than non-rainmakers. Wealth is blind: it accumulates to those who bring the most value. That’s why it can be taken away (taxed, stolen, confiscated) and end up right back with the people who had it before. One’s options are simple: overcome your fear and be a rainmaker, or make a very nice living under the auspices of someone else.

    51. Sean Purcell November 14th, 2010 2:02 pm

      Greg – I agree with you. I agree whole-heartedly. But I think we are a long, long way from seeing it. People are not ready to embrace their own responsibilities. When I hear people speak, I hear a burning desire for less federal intrusion on their lives, but not for none. And when I try to discuss the idea of self-reliance, true open-markets (owning roads, for example) I am met with the look of someone who thinks I’m a bit daft and would benefit from a nice cookie and some milk.

      I am not as optimistic as I surmise you to be…

    52. Greg Swann November 14th, 2010 2:27 pm

      > I am not as optimistic as I surmise you to be…

      I’m not optimistic or pessimistic, but this is a fun reflection for me to make on my birthday: The number of people who understand at least some of what I am saying has at least quintupled since we were together in Orlando two years ago. That’s real progress — at least if you don’t count the actual heads under discussion. ;)

      > I am met with the look of someone who thinks I’m a bit daft and would benefit from a nice cookie and some milk.

      Pay attention to how Jim Klein debates. He’s better than anyone since Socrates at cutting the ground out from under irrational positions.

    53. Jim Klein November 14th, 2010 5:26 pm

      Holy moly; I’m relieved that you’re likely prone to hyperbole on your birthday! Thanks an awful lot and I hope you have a happy one. The real “sickness” is, I almost agree!

      Following is my original comment written earlier that I scratched because it wasn’t particular enough to the other comments. Still isn’t, but it’s worthwhile nonetheless, I suppose. No debate, just some facts.

      —————-

      Classic thread if ever there were one; thanks y’all and sorry if this goes off-topic. The great thing about foundational philosophy is that nothing ever goes off-topic!

      Damon, I’m learning up on the so-called principles of the law of property. I always thought ours was as opposed to the feudal system; I never so fully realized that it’s the codification of it! And people wonder what (their version of) anarchy would look like, not realizing that this is them accepting its formalization, especially in its most fearful part…the plain, brutal force. The kind you have to wear black hoods to commit, the kind where every neighbor has to fear every other neighbor. Talk about self-fulfuilling prophecy, huh?

      It’s the Endarkenment because individuals are seeking the Dark Ages, a world full of enemies and threats (the intentional sort and the, ahem, “natural catastrophic” sort), and we are but monkeys swinging from tree to tree as the dangers come.

      You wrote this…

      >>>People want to think that they’re their own masters,

      Actually, they don’t…want to think that, I mean. If they did, there’d be nary an excuse coming from any of them. And yet that’s all we hear, about how incapable and powerless we each are. And worse, that there’s something good about not deciding for yourself.

      But that just addresses the want. It’s the FACT that matters, and we ARE each our own masters. That’s the end of it, and I believe this is the intended use of “ontological.” I know of no way to expand on this definitionally, since there are no counter-examples.

      Indeed, a pretty fair case can be made that the entirety of inter-personal relations, has been built on trying to evade this simple fact. Codification-wise, this seems beyond debate. Great talk is made of the “will” in all corners, yet the conclusion nearly everywhere is that the will is insufficient and we should therefore proceed as if some other mechanism can replace it.

      Good luck with that. There may have been reason to suspect this early in human development, but there isn’t now. Until John comes back with an ingestion that nourishes another, or an explanation of how matters of the will are somehow different than matters of nourishment with respect to the life of the human organism, then there is just nothing else to say about this fact—that volitionally we each control ourselves alone, and that volition is the cause of the manner in which we move our bodies.

      The epistemological point is merely that acceptance of this, as the accepting of all facts, is a foundational description of who we are. We are beings that identify and judge, and move our bodies accordingly. That we might choose to move our own bodies, gang up with others who might also so choose, and stop somebody else from physically moving is true enough, but quite insufficient to defeat the fact. Besides, facts can’t ever be defeated by words alone; this is the real epistemic point!

      Egoism is a three-year-old’s understanding that he’s got his life, that he’s only got his life, and that this is the case for every human alive.

      And then we throw him to the wolves, to teach him of exactly the opposite. See why I hate “public” education?

      >>>and that by sheer dint of hard work nice things will accrue to them and theirs.

      THAT’S the want! That’s what we’re seeking and ethical egoism is merely the willingness to shout out this fact, and recognize that it’s ALL that the good is. At least reduced, it is.

      And when we realize that EVERY rational person is likewise situated…well, I guess we ought to get along really well then.

      At least the rational ones, right?

    54. Sean Purcell November 14th, 2010 7:57 pm

      Greg – My birthday present to you, for what it’s worth, is my own stroll down memory lane to our first head-to-head discussion on the topic of self and egoism. I look back and realize sadly, how little I understood then… and now I am blessed to look forward, and know how little I understand still. Be that as it may, I lay claim to being among the quintupling and I thank you. Please tell your lovely wife (who was concerned at the time over your tone and temperament) how much I have come to appreciate your words… even the difficult ones.

      You were right… you were right in how you addressed me and you were right in how you challenged me. She was concerned… but you were right. My gift to you is my recognition of your infinitely more important gift to me: recognition.

    55. Sean Purcell November 14th, 2010 8:04 pm

      Teri, you said: Very very few agents want to prospect. Cool. That creates real value for those of us who are willing to do that.

      I am so sorry I missed that on first pass. You have just captured my entire point in two lines. Brilliant…

    56. Greg Swann November 15th, 2010 10:43 pm

      Bless you, Sean. I went back and read the comments in that thread. I don’t know that I was right in the way I dealt with you then, but I thought I had to do something different to change the game. I told you later, privately, that I thought if I kicked you all the way outside, you would discover an unsuspected universe. That was deeply intrusive, but I thought it would be good for you, even so.

      At home we call that The Batman Fallacy. This is the argument people are looking for when they chastise me for bitching about meaningless crap: Batman is nuts.

      I liked my arguments if not my demeanor in that thread, but I think Teri was in perfect form: Clear, logical, calm, gentle — and immoveable. I loved her arguments, and I love them every day in real life.

      She said something in a comment last week about me not censoring myself, and that clobbered me in two ways: I want never to edit my self for other people, and I hate it that I still do — or that I have in the past. That’s funny, because I try to be so public about everything, but I know that I’ve held back entirely too much — here and everywhere. That’s not fair to other people — whether they like or loathe what I have to say — but it is a vicious injustice to me. I have the moral right to be who I am regardless of how anyone feels about that.

      All that is by way of saying this: I’m a much different man than I was a year ago. I want for people to understand what I’m talking about. Or, at a minimum, if they don’t understand it, I don’t want for that to be because I have withheld it from them — not the substance and not the validation.

      You’re right about the stories, if you’re reading them as philosophy and not as stories. They’re all didactic, of course, and I have no idea why anyone puts up with them. Except I do understand, I think, because I love them as stories precisely because they explore difficult ideas. But they’re not time-efficient, and they’re not defended as arguments.

      I enjoy writing fiction — or poetry, or sunlit, dancing prose, for that matter — but I’m doing what I can to record what I think I know uniquely or in a unique reinterpretation while I am on top of my game. I love having Jim Klein around for every reason, most especially because I love to watch him strut. But I love having him around right now because I am going through this stuff in greater and greater depth and Jim can spot the bullshit that dropped off a fly’s eyelash. I want always to say what I have to say in words and phrases that resonate within the mind — “Art is the stuff that sticks with you, art is the thing that won’t turn you loose.” But I never want to lead anyone — especially me! — into error.

      My hat’s off to you, Sean. I’m very grateful to you and Teri and Brian and many people here just for letting me be my self without raging to burn me at the stake, but I’m grateful to you, in particular, for the way you’ve picked up this ball and run with it. Your understanding of what I’m talking about is not proof that I’m right, nor is my praise of you any validation of your thinking. But I’ve lived my whole life in a world almost no one can see, and it’s very nice to have people to talk to, for a change. I’m betting Jim feels the same way.

      And so: Just this: Thanks, Sean Purcell. I’m proud to know you, and I’ll try to do a better job of living up to your friendship.