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There’s always something to howl about

Individual success is not a collective endeavor

What’s the issue here, really? I am speaking of the anti-NAR revolution at hand, of course. Is it:

  1. The public’s poor perception of the profession and the professional? While some may argue that NAR, in their ongoing (and I will argue) oft-misguided yet well-intended attempts to be supportive of its members, has done more damage than good to our collective credibility, it is all too convenient to place blame entirely on their shoulders.
  2. The standards, ethics, and professionalism of many agents which we find substandard and a drag on our consumer’s perception of value? Guilty-by-association is certainly a concern, even a reality, yet this applies to any career class.
  3. Licensing standards which by their very nature serve not to limit entry to those who are competent but serve rather as an open invitation to anyone who can fog a peep hole? The tricky part here is that the skill sets which the truly great agents must possess are not testable; Entrepreneurship, moral and ethical resolve, devotion to hard work, business acumen, commitment to personal and professional evolution, a right-brain which not only coexists but works in harmony, with the left, and compassion for the client are all attributes which can only be demonstrated once given the opportunity to perform.

Lest I am accused of just having made a case for sending agent licensing requirements to the guillotine, let me assure you that this is not the case. I have had some pretty hideous plumbers in the past, and have even been to some really terrible doctors. While I will consequently not give my business to these poor performers again, I will still expect my next plumber or doctor to have met some minimum training standards. And I understand that these “credentials” are not a guarantee that they will be spectacular at what they do, but it is a starting point.

Ask not what your profession (or professional organization) can do for you. Maybe it’s time that each of us who has more than a casual concern for our reputation and our future survival ask instead what we can individually do for the profession. No cooperative of those claiming to be ethically, skillfully or attentively superior will serve to sway public perception. It will always be the lowest common denominator in this or any profession which is most visible and as a result will tend to define the whole.

The biggest single impediment to a profession populated with only qualified “professionals”, I still submit, is the broker. Knowing that relatively few who arrive at the new licensee table ready to eat will actually enjoy a meal, hiring has become (has always been) a numbers game. Some initial vetting, a true we-the broker-are-qualifying-you, interview process prior to showing them to their cubicle would minimize the cluttering of the industry with people who will only serve to propagate a tarnished image. “Come one, come all, may the best man” win is not in the broker’s, in the consumer’s or in my best interest.

Of course, this is not a realistic proposition. One broker having taken a stand will just result in another offering up their guest room to the Most Likely to Not Succeed Crowd, and we are back to where we started. And where we started is in a very unique, very hybrid career, one that will never require seven years of secondary education to enter, because there is no education which can entirely qualify you to succeed. The qualities of the successful agent are intrinsic, inherent, and to be validated only through performance.

What we can do as individuals, not as members of a the whole, is start making our own distinctions. You are an exceptional agent? Prove it. You are more committed to ethics and to consumer experience and service than the Average Bear? Show me, Yogi. There will always be some “underqualified”, ill-prepared bonehead posing as a your neighborhood specialist and getting the business of those who could have been your clients. So, you know you could have done a better job for them? Forget about it.

It is not reasonable to expect to overhaul an entire industry through an organizing of rebel armies approach. The closest we will come to effecting true change is through the use of the weapons of discourse, debate, and ultimately higher learning which we employ here, and apply there – in our actions. 

My father-in-law had a fabulous saying about social gatherings. It’s not about who didn’t come, it’s about who did, and in this case, who did come are your clients. Provide an exceptional experience, and I suspect they will be talking a whole lot more about that experience than anything the collective lesser agent, or NAR, might be up to.

 
More viewpoints, pro and con, on supplanting the NAR:

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  • 12 comments

    12 Comments so far

    1. Malok August 31st, 2007 9:55 am

      The high and constant turnover in this industry creates an overwhelming amount of inexperienced persons claiming to be “professionals”. When you see numbers being tossed around like 50% of Realtors haven’t sold a single home within the past 1 year, and 80% of people getting into the business are getting out within 1 year – you end up with a large majority of people that don’t do enough deals to be able to adequately represent their client’s best interests. This results in the client’s feeling that they were poorly represented, and that their agent was overpaid for the work he/she did do for them.

      To address this negativism, I believe we need to get the persons that are in this industry, more committed to it. I’ve been told 3 times so far this week that “real estate isn’t my real job, I’m a “. Its far too easy to do 1 or 2 deals a year, “play real estate” – and all the while be viewed in the eyes of the public as a real estate professional.

      Make testing/education much stronger and longer. Perhaps even do an apprenticeship where newly licensed agents must work with an experienced licensed person for X amount of time before going on their own. This would ensure that they get some real world experience under their belt before they are turned loose – and that they have a much stronger commitment toward real estate being their “real job”.

    2. Kris Berg August 31st, 2007 10:08 am

      >Make testing/education much stronger and longer.

      I used to sing this song. My thinking has shifted. As I wrote, you can not “teach” the skills that differentiate the good from the bad.

      >To address this negativism, I believe we need to get the persons that are in this industry, more committed to it.

      Precisely, but stricter licensing requirements will not accomplish this. Only the brokers as hirers can, yet there will always be brokers out there who are happy to allow Dave from the Home Depot to hang his license in the off chance he may accidentally sell a house in his free time.

      Which brings us back to it being incumbant on us as individuals to do it well, to do it best, and make our own difference.

    3. Malok August 31st, 2007 10:25 am

      How do you attract persons that are committed to this business? I think you have to make it more difficult to get in, in the first place. Its too easy to spend a little time, a few hundred bucks and bam “you are a real estate professional”.

      I believe the testing/education should be PART of a solution – not THE solution.

      The apprenticeship concept seems like a winner all around in my eyes. I mean, even for people that are first learning to drive a car, they must be accompanied by someone that is licensed for a bit.

      And while I do agree, that ultimately it falls to the individuals and brokers to determine an agent’s own success or failure – I think its far too easy for persons to coast in this business.

      I think there is no magic bullet of 1 solution is going to fix everything. Its going to take comprehensive efforts from all in the industry to straighten things up.

    4. Daniel Rothamel August 31st, 2007 11:52 am

      Kris,

      Well said!

    5. Ron August 31st, 2007 11:58 am

      How can you argue that this industry is not fundamentally broken? Just because you folks hate Redfin doesn’t mean that they aren’t preaching something with a grain of truth in it.

      Does any other industry have such a structure? If you are a buyer, you have someone representing you whose interests are at odds with yours. For example, you are looking at a property that might work but isn’t a slam dunk. More due diligence would indicate problems. And yet, which buyers agent is going to tell you to walk and keep looking? They don’t get paid if you do this; their interest is to make a so-so deal go forward.

      If you are a seller, your agent has a strong incentive to get a deal done quickly, even if it means you leave a few thousand on the table. After all, the extra ninety dollars ($3000 times 3%) won’t move the agent’s needle, but getting the deal done and the commission in the bank is very important.

      The agent’s interests don’t line up with either the buyer or the seller’s, no matter how much obfuscation is posted on this blog.

      I have read posters on this blog compare RE agents to doctors, lawyers, and now plumbers. But doctors require extensive preparation for many years. Even a “bad” doctor has had a truckload of preparation. A lawyer may have less prep, but still three years of law school on top of good grades in college, then the bar exam. And of course they are hourly so there is a connection between work and the money they take. They take their fee whether the deal closes or not, so they don’t have a built-in incentive to push you to go forward on a bad deal. Finally, while a bad plumber can cause a lot of trouble, the majority of plumbing calls are for “average” problems that the majority can handle. And they charge hourly for the work.

      In contrast, an “average” house sale may still have unique needs and the agents are still taking 6% of the deal.

      I just can’t see how this isn’t a broken industry. Clients don’t believe they get value for the money, the barrier to entry is nonexistent, and the fees paid are high.

      Just because a few high achievers make money doesn’t mean anything. Kris or Russell Shaw could go sell enterprise software and make a truckload of money there, too. But, in that case, the customer knows which side the sales rep is on, and understands who’s watching out for whom.

      This industry is going to have a lot of problems in the coming years.

    6. derherold August 31st, 2007 1:18 pm

      @Ron, i think you described two different problems: the agent is not able and/or the agent doesn´t want to “help” the customer.

      The second aspect is called “conflict of aim” and is normal between customers and suppliers – not only in the real estate business.

      Therefore the motto “customer comes first” is nonsense. We don´t sell and we don´t buy: we´re “trading” and the customers chose if our service is “good” by transaction.

    7. Jay Thompson August 31st, 2007 1:37 pm

      I am on the verge of opening my own brokerage. The business plan right now is to expand from my wife and I to five, count ‘em five other agents.

      The requirements to hang your shingle will be simple. Minimum three years experience – preferably more (real experience, as in making a living at it), technically astute, and willing to agree to do more with continuing education than go through the “crash course” 48 hours before your license expires. There are other requirements I won’t go into here, they relate to having a similar philosophy along the lines of dual agency, unlicensed assistants, customer service, ethics, etc that I hold.

      I don’t want, nor need 20, 50, 500 agents working for me. I want quality, experienced, dedicated agents.

      Who knows if it’ll work. We’ll find out soon enough.

    8. Greg Swann August 31st, 2007 1:42 pm

      > The requirements to hang your shingle will be simple. [...]

      We don’t hang licenses yet — ADRE rules allow us to work without a P&P manual with two or fewer agents. But our E&O policy requires either a broker’s license or advanced designations — GRI, ABR, CRS. Filters for seriousness.

    9. Daniel Rothamel August 31st, 2007 2:08 pm

      To Jay and Greg,

      Our office is simple– myself, my wife, my mother-in-law, and the transaction coordinator. That’s the way we like it. We have had two other agents at one time or another, but had to let them go. At least we can guarantee the quality of our work and representation; plus, customers and clients know they will be dealing with quality people.

      To Ron,

      What you are describing is merely a difference in philosophy between the good agents and the bad. Bad agents view their interests as being divergent from those of their clients. They have a fundamental misunderstanding of what it means to be a fiduciary. Good agents, like those found here, know that their clients’ best interests are theirs as well. People who go around screwing their clients usually don’t get to work for very long, and that holds true in every industry.

    10. Michael Cook September 2nd, 2007 7:09 am

      What about turning the ideas on their head? Instead of having some crazy criteria to get people in, why dont the best of you form your own organization, with your own designation? It would be much easier to create a new acronym and promote the best agents in a class by themselves. You all lose because the hurdle is so low for entrance. Since you are all already established, creating an organization that promises the best of the best service, would allow you to differientiate yourselves from others. I really think this would catch on fairly quickly too. Create your own membership requirements, then simply promote the heck out of it locally or nationally. You could even go as far as creating your own MLS with the money you save from not being in the NAR. I would love for someone to tell me why this wont work, because it just makes so much sense. Look at organizations like the CFA or ISO, they have taken the best of approach and it really makes a difference. You can charge more and clients will seek you out. Then you can leave the bad mouthing of the NAR to people like me, who arent members.

    11. [...] There has been a lot of talk about how to fix the National Association of Realtors or even how to supplant the organization completely.  As an outsider looking in, I have one simply question:  Why are realtors paying good money to an organization that they hate?  As an investor I cannot not think of a more egregious instance of throwing good money after bad money.  I have said more than my fair share of bad things about the NAR and realtors, so I think it is my turn to be solution-oriented. [...]

    12. [...] An issue with which I struggled was whether brokers should be included in infrastructure or as the owner’s representative.  I ended up putting brokers in the infrastructure camp because the agent is the one with the direct connection to their client and, as so eloquently emphasized by Kris Berg, ultimately provides the service.   Kris appears to be the epitome of someone who takes the duty to represent another seriously, and that human element is fundamentally separate from the infastructure that comes after. [...]