Paradigm Shift? Not Quite Yet

by Jeff Brown

Real Estate Investments Broker

Author website

In just the past couple weeks alone I’ve read over a dozen blog posts declaring a paradigm shift in real estate — specifically in what it takes to succeed as an agent. Before I continue, it’s not my intention to offend anyone in any way whatsoever. Seems about 2-3 times a year I manage to step in it big time, causing some sorta perfect $#%storm of wounded egos and/or encroached empires of ideology. This should be filed under, ‘Hey, I’m just sayin” and leave it at that.

Look at the history of the car, beginning at the turn of the 20th century. Going out on a limb, I’d say far less than 1% of the population had seen one, much less owned one. Now look at today’s car. A paradigm shift? Not in my thinking. They still require gas, a driver, a drive train, and brakes. A 1908 Ford got you from point A to point B faster and more comfortably than a horse — and so does the 2008 model. Yet many would say due to the myriad improvements over the last 100 years there’s been some sort of paradigm shift from 1908 to now.

Show me. Where is it? Does the ’08 version fly? Does it drive itself? Does it make its own fuel? No, it gets us from A to B faster and more comfortably than a horse. A paradigm shift was when the car replaced the horse.

Segue to real estate brokerage.

It was Saturday in the middle of a cloudy October in 1969 when I first stepped into a real estate office as a licensed agent. Not much has changed in the ‘paradigm shift’ kinda way.

Before you start your enraged fingers racing over your keyboard, read on.

Sure, there were no computers, no internet, no 2.0, not even 1.0 — hell we were barely 0.0 back then. Still, we did then what we do today. We seek opportunities to get in front of qualified prospects in order to make our living. We took listings, represented buyers, used the MLS, had to deal with contracts, dealt with lenders, escrows and the like.

Hey, wait just a doggone minute. Isn’t that what we do today too? So where’s the so called paradigm shift we keep hearing about? This doesn’t even address the fact that more agents working the old school way are making six figures than those traveling on Hiway 2.0. In fact for every 2.0 expert doing six figures there’s probably 100 old schoolers doing the same, probably better, and right in their backyard. Ouch, betcha that hurt.

I’d be willing to go out on a limb and guess that 80-100% of all house agents making a million bucks a year pre-tax are old school — and laughing all the way to the bank. Paradigm shift my old school ass.

Will there eventually be more of those mega-producers via Hiway 2.0? Sure — I’d even go as far as to say it’s inevitable. Even when it happens, if it hasn’t already, it won’t be evidence of any paradigm shift. Like the Fords, agents will still be gettin’ themselves in front of qualified prospects in order to make a living. Where’s the big change? It’s marketing hype put out from those selling websites, SEO gurus, and blogging wizards.

A paradigm shift is science figuring out the universe doesn’t revolve around our irrelevant little planet. Or that the earth is round instead of flat. Those are paradigm shifts.

Segue to Hiway 2.0 and my favorite urban myth.

There are some bona fide experts out there. I know there are because I’ve met some of them in person. They’ve successfully designed their websites and blogs to generate leads. Some of them are quite adept at it. If you want the real story though, you’ve gotta look below the surface. Let’s use baseball as a metaphor.

(Baseball purists — please allow me to ignore the difference between plate appearances and at-bats. Thanks.)

Every time you come up to the plate, it’s called a plate appearance. Hint: Ballplayers aren’t paid by how many plate appearances they have. We’ll call that a lead. If the batter gets a hit of some kind, his batting average climbs. If he makes an out it falls. We’ll call a hit a converted lead — or more succinctly a closed escrow, enhancing the agent’s bank account. The big hitters in baseball make the big bucks, as do the agents closing dozens if not hundreds of transactions yearly.

See where this is going?

Let’s just skip to the bottom of the 9th, alright?

If agent Alfred relies on his old school ways and closes on 30% of his leads, and generates 600 leads a year, he closes 180 transactions.

If agent Martha, who relies virtually entirely on good ol’ Hiway 2.0 and generates more leads per month than Alfred does in a year, how does it all wash out? Let’s do some numbers.

Martha generates 601 leads a month, yet closes on less than way less than, 3% of them, closing about 100 transactions a year.

Where’s the beef?

The point here isn’t that websites and blogs aren’t generating leads and closed transactions, ‘cuz they are. That’s beyond debate by any rationally thinking person. Hell, I do it all the time. Still, everyone raise your hand if you know of one agent out there generating leads that are generally worth more than a used Snickers Bar? Don’t answer, its’ a rhetorical question.

Are there champion bloggers out there kickin’ ass and takin’ names? You bet. I’ve met them online, in person, and/or via phone. Their stories are almost canned they’re so similar. Their leads are legion but their batting averages suck beyond belief. That said, they’ve devised such ingenious systems, they’re still managing to laugh all the way to the bank.

Most won’t admit it, but they’re hoping one day to actually produce as many deals as the old school agents. So far all they’re doing better is generating mostly worthless leads.

And there you have the latest urban myth — these blogging Kings/Queens are walking up to the plate 10-20:1 times more a year than their old school counterparts. They just haven’t figured out yet how to make as much money.

How might the agent reading this benefit from the above truisms?

How ’bout combining the old school with Hiway 2.0 for the best of all worlds? That’s not a new thought by any stretch, but you’d think it was as you read about all the paradigm shifting going on. A lead worth less than a used Snickers Bar is actually quite expensive in terms of time wasted. They’re not leads at all, just dolphins caught in the tuna net of blogs and websites — exciting to watch but worthless in the end. In fact, at least a used Snickers Bar offers good taste and a dollop of useable energy.

How one might combine the two different approaches can be learned this coming May. Until real estate’s online presence rises, relatively speaking, to the level of changing the perception of earth’s shape, let’s back off the hyperbole, ok?

Paradigm shift indeed.