There’s always something to howl about.

Zillow creates the end of the world as we know it, and I feel fine

Perhaps it’s cabin fever; Dayton is dealing with a late winter blizzard. The city is shut down giving me plenty of time to put on my own little version of a big-thinking cap and ponder away the what-ifs. Call me foolish but today, with a fresh cup of coffee at my side, I’m taking on the subject of repealing real estate licensing laws. Oh my. First things first: I’ve never read Ayn Rand and I don’t study the finer points of Capitalism. I truly love freedom, but I don’t philosophize about it. Now that we have that out of the way…

Let’s do a little time traveling. Step into the Way Back Machine and return to that point in time when you decided that real estate is what you wanted to do with your life. Do you remember that moment? You want to sell real estate. Forget what you know now and concentrate; remember then? You want to sell real estate. Consider what would have happened if there was no licensing. How would you have gone about breaking into the business? Don’t tell me you would have simply hung up a sign, c’mon, you know you wouldn’t get hired! Really think about this a moment- what would you have done?

Is it reasonable to think that you would have spoken to someone who was already in the business? Would you have picked just anyone in the business, or would you have carefully considered the reputations, the business models, the success rates of different brokerages? I know we wouldn’t have brokerages the way they exist today, but for our purposes, we’ll stick with that terminology. So. Would you have looked- really looked- at the other agents working at that brokerage? Would you have sought out past clients to get their opinions and comments?

Use your imagination and stay with me here. This is how you are going to feed your family. What are you going to do to make sure that you can put ramen noodles on the table? What if you want an occasional steak? You are working where you live, or in close proximity, right? You have a reputation in town, you’d like to keep that reputation as clean and shiny as ever, so you are very very careful about picking a brokerage. You want to find a brokerage that will train you to become the best little real estate professional you can be. Training becomes paramount to you, because remember, since you haven’t been licensed, right now you are in the learning and training process. This means two things: You need to learn the business of real estate from somewhere (other than your ever-so-useful licensing classes), and your broker needs to really teach you something. Now we are getting to the meat of this, but don’t jump ahead of me yet.

You have done your research, you have found a brokerage with which you want to work. Now your brokerage is going to research you. How do I know this? Because if they are going to take the time to train you and put their reputation at risk, they are going to make sure the people they take on are worth the bother- it’s their time and mostly their reputation at stake- there is no licensing to hide behind. If you are serious about real estate as a profession, you are going to make sure that your resume is in order and you are prepared to interview for a job.

I don’t philosophize about Capitalism, but Greg does:

This is what Zillow is doing — national, verified reputation management for loan originators. It’s really, really nothing for now, not much beyond a pulse check. And yet it is everything, because it is the free-market asserting its natural right, its sacred obligation, and its uniquely-inescapable power to police itself.

Do you understand? Where markets do not self-police — as with Craigslist.com and, more importantly, as with state occupational licensing laws — endemic, epidemic, pandemic corruption is the only possible outcome. These results, which we patiently observe almost without exception, all the while insisting that they are only temporary aberrations — these results are the only possible outcomes of arbitrary decision-making systems.

Perhaps consumers will be disturbed by this, perhaps not. Maybe consumers will decide that they are only willing to work with real estate professionals who have some sort of college degree, then you will have to go to college, but for now, in our Way Back Machine, the broker will have to train you, your training will be their responsibility and their reputation. This also means that all the ‘secrets’ of real estate must be shared in order to make sure you have the skills necessary to become an effective agent. The environment of the real estate brokerage will change. You may spend time as an apprentice or an intern as you learn the business of real estate from someone who has a real and well earned reputation for doing and being the best in the business. How did they get that reputation? It’s a reputation based on truth and honesty, not on a few classes, a test, and a paid entry into a trade association. 

This is not a frightening world to consider. This a world where real estate agents will have to prove themselves where it really matters- with clients and consumers. That’s not a scary thing, is it? Are there losers in this world? Absolutely! The incompetent and unscrupulous. Who really wins? Everyone else. Finally the clients have some protection against the people who would do them harm and harming the reputations of us all. It may be the end of the world as we know it, but we should all feel fine.