Jennifer Allan's post, "Good for you, let me know if you need anything." led me to think of Real Estate as an industry and the story of the emperor's new clothes.
While every industry has it's problems, I believe that the Real Estate industry has created some unique issues for itself that few wish to discuss openly. And probably because those in a position of power to change it are the same ones that financially benefit by the dysfunction.
One of the suprises for me as I learned more about the details of the Real Estate business in the last few years was how many real estate brokers are primarily in the business of renting desks and collecting a "piece of the action." Not all. But too many.
With all due respect, in some offices there are similarities to the mob. You have to be party of "the family." The law says so. You've got no where else to go but another "family." In time, you may can start your own "family."
And you are going to pay a piece of the action to the "family" on each deal, whether the "family" helps you out or not. In fact, you usually have to "prove" yourself to the "family" before you get much help. By then, if you survive, you may not need the help but that's cool. The "family" won't have to make the effort then either.
Why do they not help much in the beginning? They want to know if you "got what it takes" before they show much interest in helping. Survival of the fittest.
And there are turf wars over neighborhoods and customers, not only with other "families" but those in your own "family" too.
The old-school guys don't always see value of the young guns taking too much "action." Sometimes "killing a few off" preserves turf.
We deal with many agents and brokers from a different vantage point than agents, brokers and customers. It has been very revealing. In more cases than not, we found brokers that not only did little training and support but even "charged" a fee in some quasi-hidden way for any third-parties to have access to their agents for any reason, including educational.
I want to be clear. This is not all brokers. There are some that have figured out that they can increase their income from "pretty good" to "very good" by investing in their team and growing a great team. These people are a benefit to all those they interact with, including the public, their agents and even the economy.
But the majority we see don't bother building a real team because they make enough money with their own listings, buyers and renting desks to agents. It's enough money so why work any harder.
Attitudes are a reflection of leadership. And the leadership that could change this is the very same group that most benefits from it. Thus, they are not only incented to avoid change, they are incented to fight change. Thus, like George Orwell's Animal Farm, "All animals are created equal, but some animals are more equal than others."
Despite all this, there also remain Realtors surprised that the general public does not think highly of most the industry. This surprise to me is how many agents that are that out of touch with solid business concepts and/or consider all of the public as "lesser intelligence." And this serves no one, not even the agents.
I'm not sure there is an action point to this post. I don't see the model changing except to be gradually overwhelmed by a better informed public that will increasingly find ways around such dysfunction. The smart business people in this industry already know this and are making plans to be a part of these changes, for their benefit and to benefit the customers.
For the most part, the current business model rarely serves the customer best. However, history tells us bad business models and the market both self-correct over time. Tick. Tock.
Hey - maybe they like paying fees sort of like a cheap hobby!
Glenn,
It is true.
I was with Prudential up until January of this year. In my part of Los Angeles, all of the Prudential offices from Pasadena through Santa Barbara were founded by John Aaroe. Over the years they were sold off to Prudential, who in turn sold them off to Berkshire Hathaway.
It was at that point that the offices became very "corporate", and slowly the offices that used to be "no fee" became major fees to the agent.
After becoming frustrated with what Prudential had done, John resigned as a consultant and a couple of years later opened up his new brokerage. As soon as I found out, I immediately went over to his new brokerage. He is a brilliant man and truly knows the value of customer service and creates an environment that is conducive to agents.
I think you answered your own question. Start your own family and create the environment you are trying to find.
GLENN..it is like tribes..start your own..but unfortunately..it takes money..something that is lacking in todays economy...but i love your an
ology..It is so true..wonderful blog..Thank you
HELPFULHANNAH
Glenn - thanks for the mention - and your post is timely in other parts of my world right now! In fact, I talked with Mollie Wasserman the other day (creator of the ACRE program) about how nothing will change unless/until the consumer demands it. She and I (and you, too) have some lofty aspirations as to how to professional-ize our industry, but if the general public doesn't ask for it, we ain't changing.
Love the analogy... hey, I'll be in Birmingham in a few weeks... let's do our rain-checked coffee!
Hi Robert! May be.... but not sure it is cheap! Thanks!! G
Hi Ralph! Sounds like you've "lived it" and found one of the ones doing it right. The thing is, I'm not sure that in the long run that doing it right is much harder. Glad you are with a good one!! G
Hi Richard! Yes, I think the good agents do finally gravitate to the good brokers or become a good broker. At least, once they see the light. I know I started one of my first businesses because I saw some people doing it sloppy and making lots of money. I figured, hey, at least I should be able to make a living! G
Hello Hannah! Yes, tribes is a great analogy. The trick as I see it is not just money, but also understanding. And often the information to understanding can be withheld by the "families" And any new tribe has to still be able to compete with established families. The challenge of fighing against the entrenched forces I suppose! Thanks for reading and sharing!! G
Hi Jennifer! I think the public is at least questioning more and more every year. The information age has made this possible. I think that is why we are seeing more FSBO (even if they do it wrong), more questions on commissions, more publicly shared horror stories. But change of this type will take time. And the "powers that be" have little to know incentive to change yet. Of course, the same was said about all the powers that failed over history. Birmingham coffee! Yes!! Let me know when!! Also, I may send you some info on some things I'm working on outside of real estate that I'd appreciate your feedback on (good and bad!)! Thanks!! G
The industry will never change unless AGENTS are better informed and better prepared to run their own businesses. And that is something brokers seem to forget to mention in many cases. Who pays the price? The consumer.
Would you set up a pizza shop on the corner without being sufficiently capitalized and knowing there were already 3 pizza shops on the same block? Without knowing how you were going to attract business and differentiate yourself?
The big disconnect is so many folks get their licenses and then walk into a brokerage expecting it to be like any other job when in reality, they are running their own businesses and need to act accordingly.