The stakes are high, as Brian has pointed out. You yourself have been smart enough to build a Web 2.0 marketing strategy, but now you’re faced with the possibility that your broker, with or without the help of the brokers’ cartel, the National Association of Realtors, may try to take it all away. Here are some things you can do to pursue independence now:
- Get rid of the licensing laws. A minimum standard enshrined in law becomes the de facto maximum standard. Consumers have been deluded into thinking that the fog-a-mirror license denotes quality, so they don’t dig deeper for the added-value you bring to the marketplace. Even better, if there are no licenses, there are no brokers to tell you what you can and can’t do.
- But: That won’t happen, so work in your state to get rid of the broker level of licensing. This is already the law in a few states. Every agent can fly his or her own flag as an actual entrepreneur. Even if you should elect to affiliate with a Keller 21Max franchise, you’ll be at liberty to take flight whenever you want, since all your contracts will be your own.
- But even that is probably a long-term proposition. What will happen if your broker tries to shut down your weblog tomorrow? You need your broker’s license now — or as soon as you can get it — if your state still makes the distinction between salespeople and brokers. Even then your contracts aren’t your own, but you will have the ability to plan an orderly exit. And, having that mobility, you will have the power to negotiate with your broker as an equal.
- I mean no slight to our vendor friends, but take and keep control of your marketing technology. Of particular importance: If your broker controls your marketing, your broker controls your business.
- I despise laws, so I have complete contempt for “reforms.” The only reform that matters to me is repeal, which never, ever happens. Even so, a “reform” that would make a remarkable difference in the way the real estate brokerage business is conducted — even if nothing else is changed — is the repeal of the real estate broker’s “safe harbor” exclusion from IRS income-reporting rules. In other words, if brokers were required to report income like all other employers, they would stop recruiting every random idiot with a pulse. The reputation of our industry would improve overnight, and your broker would discover that you are a business asset difficult to replace and dangerous to piss off.
I’m nobody’s idealist. I have a lot of ideas for how things could be improved, but I don’t get invested in things that depend on other people agreeing with me. On this list, the two most important things you can do are to get your broker’s license and to control your own marketing technology. The others require the cooperation of other people, which may or may not be forthcoming. You need to be able to control you own destiny regardless of what other people might choose.
Technorati Tags: blogging, real estate, real estate marketing
Brian Brady says:
The “Nick” interview is appropriately revealing of the way business is done (third link in the paragraph)
October 17, 2007 — 8:29 am
Russell Shaw says:
I am not in fear of NAR or my broker and I do not see any upside to getting rid of either of them. I have been with the same company since I started in real estate in 1978. I have always felt there were valid reasons to have a broker. There is a world of difference between “having a broker” and in “having a good broker”. There are things our broker does for us that although we could do them ourselves, the broker does them better – much like a FSBO hiring a Realtor.
We are not in the same business the brokers are in and I am glad to have our broker’s viewpoint on various issues. Learning about limiting liability isn’t a bad thing.
Likewise, I do not want to eliminate the NAR or the state or local associations. Do they irritate me? Yes, but so do some traffic laws. That doesn’t prompt me to get rid of all of them. I fully intend to get a few things changed and it should be obvious from my posts that Realtor.com is one of those things. I am not just “complaining” about Realtor.com, I will be effective in bringing about those changes – no matter how long it takes. I am not simply “protesting”.
The NAR is not an “opponent” of mine.
October 17, 2007 — 10:37 am
Greg Swann says:
> I am not in fear of NAR or my broker
What would you do if your broker told you you had to stop posting here?
October 17, 2007 — 10:50 am
Russell Shaw says:
>What would you do if your broker told you you had to stop posting here?
Pretty much the same thing I will do if NAR or Realtor.com tries to tell me I can’t say the things about them I am saying. Say them more. Say more things. Say them louder. Say them to more people.
But my broker isn’t ever going to tell me to not post here.
When I did comedy it was obvious that there was a double standard for comedians. A “name” comic could pretty much say anything he or she wanted from the stage or on TV. Not so with a comic on the way up (unknown). Totally different set of rules. The reason the clubs (and TV shows) had such a “rule” was simple. If an unknown comic made an inflammatory statement from the stage or on the Tonight Show it was “someone on the tonight show” who said blah blah blah. If it was a name comic, the remark would be attributed to that person. I don’t have a problem with any broker not wanting certain communication attributed to them and there are blogs and websites where the public could tend to think, “the Re/Max agent’s website”, etc. In my case I wouldn’t be thought of as “that guy from John Hall & Associates”, and my broker understands that. 🙂
October 17, 2007 — 11:09 am
Greg Swann says:
> In my case I wouldn’t be thought of as “that guy from John Hall & Associates”, and my broker understands that.
1. You understand that the Interview with the vampire is real, yes? I made up the dialogue, but the events depicted really happened to a number of agents in California. Jim Cronin reported on it at the time. Others are hinting that it’s going on right now, and Brian knows of at least one specific case involving a lender.
2. Is there anything in my list of suggestions that you consider to be bad advice? Should agents not get brokers licenses? Should they not control their own marketing?
3. I respect that you like your broker and don’t hate the NAR. By contrast, I knew from day one that I would be my own broker. If I were not required to belong to the PAR/AAR/NAR in order to get access to the MLS system, I would not belong. Even if these were benign organizations — and I don’t think they are — I don’t want to belong to anything.
October 17, 2007 — 11:19 am
Ken Smith says:
You raise a couple of interesting points, but lets be honest would you really want every new agent running their own shop. No one to train them, no one catching their errors, and so on. IMO there is no way a real estate agent should be allowed on their own until they have proven a track record of sales.
We all know the licensing classes do not teach us anything about how to market or sell homes. Agents need training and working for a broker with experience is normally the only option most agents can afford.
You say to eliminate the licensing laws, IMO they need to be way stricter. We are dealing with people largest asset and the public deserves to deal with competent agents.
October 17, 2007 — 2:05 pm
Greg Swann says:
> lets be honest would you really want every new agent running their own shop. No one to train them, no one catching their errors, and so on. IMO there is no way a real estate agent should be allowed on their own until they have proven a track record of sales.
Why would you assume that new agents would try to set up their own shops? Do new mechanics do this? New hair stylists. The opposite of government is not nothing. The opposite of government is rational self-interest.
> IMO they need to be way stricter.
How do you explain incompetent or corrupt attorneys? The barriers to entry are much higher. Why don’t they work?
Your concerns are addressed here.
October 17, 2007 — 2:11 pm
Ken Smith says:
New agents already go out and start their own shops everyday (100% legal in IL, and many other states, for an agent with no experience to start their own brokerage). By removing the need to become a broker and associated extra costs, education, and time requirements more newbies would do so.
As for attorneys and any other type of profession there will always be those that choose to break the rules. There is no way to avoid this.
October 17, 2007 — 3:13 pm
Greg Swann says:
> There is no way to avoid this.
Sure there is. Stop relying on laws as a testament of quality, since they are clearly defective. As is discussed here, if you could choose only one when buying electrical equipment, government oversight or Underwriters Laboratories’ certification, would you opt for government? If you answered honestly, you understand why licensing laws can never provide the kind of consumer protection you want — to your credit. Getting rid of the laws and building true consumer protection mechanisms — much like the UL — makes much more sense to me than trying to fix something that you know in advance will always be broken.
In fact, the laws will probably not be changed. What you can change is your thinking. If you stop believing in fairy tales that you already understand cannot ever come true, you’ll have a much better window on what can be changed.
October 17, 2007 — 3:23 pm
Brian Brady says:
“Stop relying on laws as a testament of quality, since they are clearly defective”
The license doesn’t prove expertise; we all know that. However, the public does not. The public relies on the license as an implied endorsement from a governing authority and THAT is the real danger in occupational licensing laws.
So, let’s lobby the states for higher standards so that the license does represent expertise, right? It ain’t gonna happen. The money mill associated with licensing is incentive to the state to LOWER the standards. The states also recognize that greater competition is good for the consumer.
I’d prefer they just collect $200 per annum from any interested party and “register” rather than “endorse’ the lot of us. It tells the public the truth about the low barrier being set and allows the state to fill up their coffers.
October 17, 2007 — 8:41 pm
Ken Smith says:
Greg you can pick any profession and any level of oversight and there are those that choose to break the law or provide bad service so again I say their is no way to avoid this.
Removing laws will not fix any problem, if you feel it can please provide a real life example of a profession that was governed by laws that had them removed and the consumer ended up with better service, less fraud, and a better overall experience. You are acting as opinion is fact and that is very dangerous.
Brian some states are increasing standards (and fees at the same time) as they understand that it’s better to have a more competent agent out there.
Now one thing I don’t get is why anyone thinks that a consumer automatically trusts a real estate agent. Fact is that the average Joe thinks very low of real estate agents (salespeople) and has zero trust of them until it’s earned. They trust us about as much as a used car salesman so the basis of your entire argument that consumers trust real estate agents due to being licensed is flawed IMO.
October 18, 2007 — 8:37 am
Greg Swann says:
> can please provide a real life example of a profession that was governed by laws that had them removed and the consumer ended up with better service, less fraud, and a better overall experience.
Oil, railroads, airlines, trucking. All deregulated by Jimmy Carter, all instantly and dramatically improved, especially with respect to price and performance. New Zealand did away with most of its sclerotic regulation and completely revived its economy. That we are having this conversation at all is a direct and magnificent consequence of the deregulation of telecommunications. The benefits of deregulation are very clear, being obscured only by the overwhelming number of statists in the mainstream media. The free market is a much better guarantor of consumer interests than the monopoly state. This is well-established fact.
> Now one thing I don’t get is why anyone thinks that a consumer automatically trusts a real estate agent.
Either this is false or there could not be a problem with brand new licensees setting up brokerages. Either people mistakenly trust the untrained, to their detriment, or they don’t trust anyone. Not both. No one gets to play offense at both ends of the court. The fact is that doing away with licensing would tend to make people even less trusting, which would be a good thing, since they would be that much more careful to shop for education, experience and sound reputation. This is what you want, and the law is what impedes it from happening now.
Again: If you stop believing in fairy tales that you already understand cannot ever come true, you’ll have a much better window on what can be changed.
October 18, 2007 — 8:53 am
Ken Smith says:
>Oil, railroads, airlines, trucking
All industries that require a heavy level of licensing and laws to regulate them. Being deregulated and not being governed by laws are two very different things. Plus the government has had to pump billions into these industries to help bail them out over the years.
>Either this is false or there could not be a problem with brand new licensees setting up brokerages.
What I said was it doesn’t provide instant trust. Now can a new agent generate trust via creative marketing, smooth talking and other? Naturally, but ti still doesn’t mean that there shouldn’t be someone looking over their shoulder in the beginning.
>Again: If you stop believing in fairy tales that you already understand cannot ever come true, you’ll have a much better window on what can be changed.
The only fairy tale I see is that people left to their own actions will always do the right thing. It has been proven far to many times that even good people will do bad things when there are no rules.
Economics is a topic I can debate for a long time with plenty of knowledge. The fact is that any economics expert will admit what works one time does not always work the next time. The same models will not always have the same effect from one company to the next, one industry to the next, or one country to the next. There are way to many variables for this to be as cut and dry as you want to make it.
Just to be clear, we both want the same thing. Better educated agents and consumers to have a positive experience when buying or selling a home. We will just have to agree to disagree on how to get there. Sad, but either way I don’t think either of us will get to see things that way we would want them 100% anytime soon. Way to much money tied up in this mess for it to ever change quickly.
October 18, 2007 — 11:55 am
Greg Swann says:
> The only fairy tale I see is that people left to their own actions will always do the right thing.
No one has ever said this. Again: The opposite of government is not nothing. The opposite of government is rational self-interest. If the state were not mis-managing quality control in real estate representation, better means of achieving that goal — akin to the Underwriters’ Laboratories — would arise.
> It has been proven far to many times that even good people will do bad things when there are no rules.
And this is surely false. Bad people who pretend to be good will betray their pretended principles in certain circumstance. No honest man need ever fear other honest men.
The moral foundation of capitalism is far more important than its economic or social benefits: Capitalism rewards and enriches men of principle and penalizes vice. The purpose of government is to invert this ethical hierarchy, which is one of many reasons why government solutions to attested problems never go away, even though they seem never to work: The actual problem that is being solved is the difficulty criminal-minded mediocrities have competing in free markets. The purpose of real estate licensing laws is to generate easy money for real estate brokers, not to protect consumers.
All of this is beside the point. I said at the start that the real estate licensing laws will not go away. As a people, we are too much in love with the tender loving lies told by Big Mother to wake up to reality. Even so, if there are Realtors reading this weblog who want to discover how to achieve as much independence as they can in our current circumstances, this post is a useful blueprint.
October 18, 2007 — 12:17 pm
Chuchundra says:
This is just so hysterically wrong that I just wanted to draw it out and highlight it for everyone to enjoy.
October 18, 2007 — 4:48 pm
Greg Swann says:
> Author : Chuchundra (IP: 130.199.3.130 , httpvipoutside.bnl.gov)
Ahem.
October 18, 2007 — 4:57 pm
Ardell says:
It’s really as simple as everyone needs to be “a Russel Shaw”. Professionals such as Russell and I have never been told by anyone that we can’t serve our clients well or run our business as we choose, regardless of whether they’ve been with one broker like Russell or many like me.
Lemmings will always be lemmings. Leaders will always be leaders. Those who blame their timidity or inaction on NAR or their Broker are just looking for excuses.
October 19, 2007 — 2:07 pm
Bob in San Diego says:
Greg,
>Get rid of licensing laws –
Like you said this is never going to happen. Although, some laws do change. For instance, in California we have an “18 mo. conditional” license. This is going away at the end of this year.
>Get rid of the Broker level of license. –
Your right this may not ever happen either. What is the point in having multiple levels of licensing? In Fact, can anyone make a valid argument as to why every agent should not be held to the same standards as a broker? All requiring only one license would do would give Brokers less leverage. Which is why this is not likely to ever happen in my state.
>You need your Brokers license NOW!
Amen Brother. Course work completed. Waiting on the test date.
December 12, 2007 — 3:40 pm
Greg Swann says:
Bravo! Good on ya!
December 12, 2007 — 3:47 pm
Ken in Chicago says:
>What is the point in having multiple levels of licensing?
None, I wish everyone had to take the same level of coursework and was held to the same standards as brokers. It would be a good first step towards making agents responsible for their actions.
>In Fact, can anyone make a valid argument as to why every agent should not be held to the same standards as a broker?
Every broker could…they would say they wouldn’t make as much money lol.
>All requiring only one license would do would give Brokers less leverage. Which is why this is not likely to ever happen in my state.
Your state, my state, not any state. There is to much money in this for things to drastically change.
December 13, 2007 — 10:40 am