We had a lot of truly great posts this week. I’m not the kind to pick three posts for first place and six for second place, but I do understand the temptation. Steven Groves, for instance, has much to teach us with MLS2.0 – What is the future of real estate listings? Is the market turning? There are good reasons to say no, but what if it is? Then Patrick Kapowich has news for you with Deja Vu ~ Many Qualified Buyers Sit Out the “Sweet Spot” of a Buyer’s Market, Then Enter The Market in Droves, When the Scales Tip. There are other truly outstanding posts in the short list of entries, and the truth is, I could go on about them all day.
But: There can only be one best. This week, that honor and The Odysseus Medal go to Michael Cook with Does the Real Estate Industry Need Realtors? I know many Realtors reading here disagree with Michael’s argument. That’s fine. The question is, what are you doing about it? It were well if you were able to defend your value proposition well enough to best Michael in a fair debate, but you don’t have to set the bar the high. Here is what you do need to do, though, and what you need to get better and better at doing: You have to create and be able to defend your value proposition with your own clients. What is it that you are bringing to your transactions that exceeds your cost in sales commission? If Michael’s post — and others like it — lead you to internal turmoil, that’s a good thing. Pain is nature’s gentle way of letting you know there is a flaw in your thinking. Ruminating on the challenges a thoughtful man like Michael Cook puts before you will make you better at what you do — and better able to defend your value to your clients.
And if that’s not unsettling enough to our sensibilities, The Black Pearl this week goes to Carl Drews with How real estate commissions work. Drews is not a professional, he’s just a guy who bought a house with his eyes wide open. He makes a few errors of fact, but the fact is he catches out every one of the sacred Realtor poses. How do we look to a smart client? Read his post — and weep.
Here’s The Black Pearl:
The standard listing contract states that the real estate commission is paid by the seller. In our earlier example, the buying agent received $11,200 of that commission. Colorado has a required notice to clarify the relationships, saying that the buying agent is working in the buyer’s interests, and the selling agent is working in the seller’s interests. Nice to know. So our poor seller is paying the buyer’s agent $11,200 to negotiate intentionally, deliberately, and professionally against him! That is Weirdness #2. The seller pays the buyer’s agent to work against him and against his best interests. I am not making this up.
[….]
The buyer and the seller should each pay for their own services rendered to them. This practice of the seller paying the buyer’s agent is just nuts.
Indeed. Nobody wants to hear this. Nobody wants to think about it. But Drews cuts right to the quick, possibly without knowing it: The seller paying the commissions in a state with buyer agency is unknowingly contracting to an agency violation, a complete inversion of the listing agent’s fiduciary duty to the seller. When an attorney figures out how to argue that before a jury, we’re all sunk. It seems more intelligent to me for us to change our ways now and then to pray incessantly for forbearance.
How do you measure popularity? Jeff Turner suggests that Alexa.com may not be the best way in The Problem With Alexa Rankings – Accuracy. There is a meta-debate here. If you don’t know about it, you probably don’t want to know about it, and, if you do know about it, you’d almost certainly rather didn’t. I’ve done everything I can to stay out if it, having swatted at the bee’s nest in the first place. Things got really ugly last week, in a way that might matter if anyone gave a rat’s ass about principles. In any case, Jeff Turner, at least, exhibits an admirable ability to take on a piece of this issue without getting tarred by it. He also very sagely organized a popularity campaign for his own post, even though he would have won The People’s Choice Award without it. Jeff’s post is a fun read, and the comments are the very model of civility.
We have a problem writing to disk from PHP. I’m thinking this is the only lingering problem with the server swap. Everything is working, but you will have noticed that BloodhoundBlog is loading very slowly. Everything else is rock solid and very fast, so we should be mere hours away from dragster speed. When this problem goes away, I plan to write an in-house entry form just for The Odysseus Medal. There’s a lot more great stuff out there that we’re not seeing, so I want to make it as easy as possible to nominate posts.
Thanks for your participation — and your patience — and congratulations to the winners.
Technorati Tags: blogging, real estate, real estate marketing
sherf says:
“What is it that you are bringing to your transactions that exceeds your cost in sales commission?”
Well, this is THE question. Are most people in sales capable of answering it with the depth necessary to convince an experienced asker down to a co$t level? It will require the answer to a few “whys” for each item on the value prop list to get there, but once there, it’s a slam dunk list that will get the gig every time.
Thanks, Greg for this little tweak.
August 21, 2007 — 6:59 am
Michael Cook says:
Thanks for the nod Greg. I think this site does a great service to realtors and consumers alike. For consumers the ability to ask why or question the value they receive for their hard earned money is eye opening. For me, the most eye opening thing is what I should be getting from my services. In the brief time I have spent here, I have learned to expect more from realtors.
In that same vein, I think realtors benefit from the consumer perspective. It is rare that realtors get feedback when the deal is done. They either get referrals and repeat business or nothing. Straight talk from consumers will hopefully drive more business to realtors and help consumers get what they really need.
I loved Carl’s comission article because of that very fact. While there are many reasons the status quo is what it is, many consumers have neither the depth nor breadth of understanding realtors do. At face value we see a very different world. If both parties can take a step in the other person’s shoes, everyone might be better off.
August 21, 2007 — 8:27 am
Greg Swann says:
> While there are many reasons the status quo is what it is, many consumers have neither the depth nor breadth of understanding realtors do. At face value we see a very different world. If both parties can take a step in the other person’s shoes, everyone might be better off.
I agree. I was writing in a different context last week, but I think it’s valuable for all salespeople to take on the perceived defects in their offerings, to explain why what might seem like a drawback is actually — or at least potentially — a benefit. The mere fact of being open about what is going on will be refreshing to our clients!
August 21, 2007 — 9:09 am