There is an ongoing argument as to the value of a real estate agent in today’s real estate market. It can’t be settled with rhetoric and mantras. In order for there to be an effective resolve, the Realtor industry must reach out to the American consumer and seek to validate the need for their existence in a transaction.
This should not be a hard feat. However most agents, for some unknown reason, find it to be beneath them to quantify their “value” much less dollarize it. When posed with the notion that they may be required to actually prove their worth, many ignorantly say that doctors and lawyers and professional athletes don’t have to justify their fees so why should they. Oh really?
Is that the answer you want the Consumer to walk away with? If you are not willing to justify yourself to the Consumer, how about justifying your commission and worth to yourself?
Would you hire yourself? Be honest. You know what you have done…lately. Don’t tell me, the Consumer or yourself that you USED to be great. At one point Carl Lewis was the fastest man in the world. At one time Bear Stearns was a respected fixture on Wall Street. At one time you may have been a high performing agent.
Banks only allow appraisals going back 6 months, some are only allowing data that goes back just 3 months. In doing a realistic appraisal of yourself, it’s not accurate to say what you have done. The Consumer wants to know what you have done LATELY.
So let’s assess ourselves accurately, shall we?. In order to do so we’ll need to collect actual qualified data. Not just a self-adulating pat on the back. So let’s ask ourselves some questions and come up with a dossier as to why we would even entertain hiring ourselves.
1. Experience:
a. How long have you been a real Estate Agent?
b. When were you licensed and has your license been continually active?
c. Please explain any interruptions in service since the time you were first licensed
d. What, if any, continuing education or niche specific training have you taken and completed since you obtained your license? (Please be specific with course descriptions, length of courses, certifications conferred, and date of course)
e. Have you ever had any complaints lodged against your real estate license? If yes, please explain
f. How long have you been with your current broker? If you are a broker yourself how long have you been a broker?
g. Have you ever been sued by a former client? If so why? What was the outcome?
2. Sales Experience:
a. How many listings have you had in the last 24 months?
b. How many of those listings have terminated, for any reason?
c. How many of those listings were cancelled by the Seller?
d. How many of those listings expired unsold?
e. How many of those listings that expired were re-listed by another agent?
f. How many of those listings closed successfully?
g. Of the listings that closed successfully, what were the average days on market? (including any re-listing of a property..please include total days on market)
h. Of the listings that closed successfully what was the average ratio between original list price and closed sale price?
i. Of the listings that closed successfully how many of those closed sales did you also bring the buyer to the table?
j. How many homes have you listed in the last 24 months are within a 2 mile radius of MY home?
3. Marketing Experience
a. Do you have a blog outside of participation on a social network?
b. Where does your site / blog rank in Google in MY specific city or neighborhood area?
c. What is your Alexa traffic ranking?
d. How often do you post to it?
e. Do you write about issues specific to MY neighborhood?
f. Will MY property be featured prominently on your blog?
g. If I list with you where will you syndicate my listing?
h. What newspaper advertising will you do on behalf of my property?
i. Please detail the size of the ad, frequency, reach, duration, and cost of the ad (if the ad is shared by the advertising of the agent and other properties please amortize cost specific to proportional display)
j. What brochures will you be designing, if any?
k. Please detail the size of the brochure, distribution, quantity, production proof, frequency of distribution, and cost of the brochure (if the brochure is shared by the advertising of the agent and other properties please amortize cost specific to proportional display)
l. What, if any other marketing will you be executing in the sales effort of MY property? (Billboards, Radio, Television, Postcard Campaigns, Video Production…etc)
m. Please provide a detailed explanation along with verifiable costs in support of your answer to this question)
n. With the dollar being so devalued, what if any marketing do you do to attract foreign buyers?
4. Infrastructure & Team Support
a. What are your business hours?
b. Will there be someone live that will answer a call from a prospective buyer if you are unavailable?
c. Do you have a virtual assistant? Or any assistant? How do I contact them?
d. Do you have an e-fax or direct fax so that no offers go unattended to?
Now that wasn’t so hard was it? By asking yourself a couple of simple questions and answering them honestly, you now have the basis for truly validating your value to the Consumer. Or perhaps the results were not all that great and you don’t want the consumer to know. Either way, this kind of information would help a consumer determine AND understand your value in a transaction.
But how many agents would be willing to do this? Many answer the worth question with an inane comment that the customer does not ask them to justify their commission. Should they have to ask? Shouldn’t you be willing to prove yourself to your prospect? I for one don’t think a performance based businessperson should rest on their laurels and expect their clients to blindly accept that they can still perform.
You may have been a box office king or queen at one time, but how do I know you can still bring it? How does the consumer know you still have the goods.
I believe that the real estate business is relationship oriented as many agents do. I believe that the consumer who is entrusting a very valuable asset to an agent would have much more confidence in an agent who disclosed this type of information willingly.
Why nonsensically brag that you are priceless and of extreme value if said value can not be measured. In this age of transparency, you are going to have to be willing to show the consumer fact instead of fiction. The consumer does not want to “take your word for it”.
To survive in today’s real estate market, an agent must expect that they will be called upon to show in advance that they can still perform. You had better get ready to show and prove your worth under the spotlight of disintermediation.
Otherwise you may end up being the Norma Desmond of real estate agents.
Are you ready for your close-up?
Greg Swann says:
Utterly, utterly excellent. A grand slam on your first at-bat…
March 22, 2008 — 6:18 pm
Eric Blackwell says:
Barry;
I have never met you and we have never talked…but I am gonna use this stuff with the agents in our office. VERY Nicely done! Welcome to the pack.
Money quote:
“Now that wasn’t so hard was it? By asking yourself a couple of simple questions and answering them honestly, you now have the basis for truly validating your value to the Consumer.”
By answering them honestly, you also get a roadmap to get to where you are irreplaceable and priceless to the consumer IMO…
Again Barry–way to come out of the gate at full steam!
Eric
March 22, 2008 — 7:14 pm
Mike Farmer says:
Yes,straight forward — I like it. Thanks.
March 22, 2008 — 7:21 pm
Bawldguy Talking says:
Congrats Barry — you’ve just eliminated 90% of the agents currently active in the business. 🙂
Welcome aboard!
March 22, 2008 — 7:57 pm
Mike Lefebvre says:
Barry,
Enjoy the radio show. Can’t believe this post is your maiden voyage here. Is that true? Extremely well done! Love your pull-no-punches style and I can’t wait to ask my colleagues what their Alexa rankings look like! Please keep up the phenomenal work! You’re doing the industry a solid!
Mike
March 22, 2008 — 8:06 pm
Allen Butler says:
The only problem I see here is simply this: many consumers simply don’t know, or don’t care to know. The whole thing about being “transparent” is great ad copy. However, while we are waiting around for the internet to change our lives, your average Joe is simply looking for one more way to have to actually do less research and less work. The conveniences of modern shopping have led to very lazy consumers. Maybe a Redfin customer would have the gumption to search out the facts & such. Most will not. Real estate consumers fall into two distinct categories: buyers and sellers.
The buyers will end up with an agent through sheer happenstance because they don’t know and don’t care.
The sellers will go with whomever is “recommended” to them by a family member of friend. It is usually not until they have exired a few times that they actually start to pay attention.
In a market like ours, the listing agents who get the job done will remain in the game. Those who don’t. . .well, most are already gone.
Gonna go out on a limb here (flame retardant suit loosely fitted to allow breathing room) and say that all this talk of disintermediation and having to prove your value in this new “web 2. . . .world” will not pan out. The consumer is too lazy.
Then again, I’m wrong occasionally.
March 22, 2008 — 8:37 pm
Matthew Hardy says:
OK. Keep this guy. I’m mean… this is so freaking practical and a fine addition to the esoteric doctrines of The Book of Swann. 😉
March 22, 2008 — 8:46 pm
Jack LeVine says:
I think 95% is more accurate. Of course the listings sold in the last 6 month number has faulter dramatically, but the sellers knew I was out there plugging every minute of of every day.
March 22, 2008 — 8:52 pm
Barry Cunningham says:
Thanks for the comments. Greg and the gang have set a very high bar here and I only aim to keep up…and learn from the best of those in the business.
March 22, 2008 — 9:52 pm
Brian Brady says:
Barry,
You’ve pretty much outlined a consumer-focused presentation for practitioners, right here. Answering these questions, establishes competence and expertise, in front of a consumer.
March 23, 2008 — 1:12 am
Brian Brady says:
“With the dollar being so devalued, what if any marketing do you do to attract foreign buyers?”
Memeo to SoFla, AZ, and CA agents: That’s a VERY good question you must be able to answer.
March 23, 2008 — 1:14 am
Broker Bryant says:
Hi Barry,
Just stopping by to welcome you to BHB. See you just can’t get rid of me. I’m a stalker:)
Anyway well done. I think this list should be given to ALL sellers that they have the right questions to ask when interviewing for an agent. This would certainly help them to pick the right person for the job.
This is also very helpful for the practitioner to sit down and go through this exercise. It would be good for them to see how they stack up.
The only question I wouldn’t answer is 3 M. My cost to do business is no ones business but mine. Other than that one fire away!
I actually already provide most of this info to my potential sellers. Most is in my pre-listing email I send when links to every thing they may want to know. We don’t discuss it all at time of listing because they have already seen it. Of course I will answer any questions they may have.
Being salespeople it’s also just as important to know when to shut up and start writing the deal up.
Sellers don’t want to hear me talk about me they want me to listen to them and then respond according to their needs. And that’s different with every seller.
March 23, 2008 — 5:49 am
Dave Phillips says:
Thanks Barry for some great content. I’m going to link to it for our local agents. Last year’s Swanepoel Trends report said something close to 85% of agents have no previous sales experience. I’m not sure if that is a real problem or just sounds like one.
March 23, 2008 — 6:52 am
Barry Cunningham says:
Bryant, Hi…you’re everywhere…question 3M is absolutely pertinent. One of the first statement that a realtor says in response to justifying their commission is saying they have so much expense to recoup from marketing. I used to work for an advertising agency, still own a marketing company, and deal with advertisers everyday as a part of the radio show.
Clients are entitled to receive air checks, tear sheets and invoices showing what they are being charged for.
It’s not “your business” if someone else is paying for it, either directly or indirectly via commission.
If it is “your business” then you should NEVER include that you are executing any paid marketing on behalf of the homeowner. Then by all means, “your business” is “your business”.
I would love to see your pre-listing email and your listing presentation. Why don’t you post them on your website / blog or shoot me an email?
March 23, 2008 — 6:59 am
Norm Fisher says:
Barry,
This looks like an excellent exercise and one which I personally intend to start this week. I think that it could be an excellent tool. Thank you.
Question for you. As I get older I find myself favoring companies who demonstrate some kind of a social conscience in a pretty mixed up world. They’re not all that easy to find but I do feel better about doing business with those who give something back to the community. Do you think these types of initiatives have any place in this kind of transparency exercise or is that just going to come off as gratuitous backslapping?
For what it’s worth, I think you undervalue the role of a seller’s agent. Any fool can buy ads and expose a property to buyers, though there’s no doubt that some can do it better than others. To my way of thinking, this is just the gravy that adds a little flavor to a full plate. An agent’s true value is in his or her ability to serve as an advocate to the party they represent.
Does this person actually care about the outcome beyond the commission check?
Does this person have enough knowledge of contract law to keep the seller out of bad situations?
Does this person know enough about disclosure requirements to provide appropriate advice to the seller?
Do they know their market well enough to provide pricing advice that will help the seller achieve fair market value, or better?
Do they have enough integrity to say, “I think you can do better,” even when the seller is ready to sign?
Do they have the integrity to provide proper exposure of a property instead of bringing his own buyer through the back door for a “double end?”
Do they have the integrity to say, “Let’s list your house next month instead. Inventory seems to be declining and the market is heating up?” (not such a big deal where you guys are, but it is in my market)
Do they have an ability to solve problems effectively?
Do they actually cooperate with other agents?
Are they respected in the real estate community to the extent that they can actually influence their colleagues?
Clearly, some seller’s are very capable of managing a transaction by themselves and I respect that. Some would become prey without strong representation. Perhaps it’s a matter of perspective. I work in a market where a competitive commission on a $500,000 home is around $15K. If I look to the items above and I can say that I’ve been true, I don’t feel that a 50% cut is unfair at all. Is $7,500 too much on a half million dollar transaction, assuming that the agents actually cares about the things I’ve outlined?
FYI, I’ve just stumbled upon your blog as a result of your involvement here. I’ve enjoyed your last few broadcasts and I appreciate the challenges to my thinking that I’ve found in them.
March 23, 2008 — 12:52 pm
Barry Cunningham says:
Hello Norm and thanks for the comment.
You wrote: Do you think these types of initiatives have any place in this kind of transparency exercise or is that just going to come off as gratuitous backslapping?
If we are to believe the stats, most agents have no formal training or business management training and left alone to devlop those skills in my opinion retatrds growth. Accordingly I believe a strong pertinent sales building exercise is definitely needed and will increase the overall productivity of the business.
I think that the average Listing agent is a mere listperson rather than a true “salesperson”. Finding a listing agent who can perform at the level to answer your questions is going to reduce your pool of potential agents to probably 10% or less.
However we all know they exist. I think where the problem comes in is when the inexperienced and unsuccessful agent is left to flounder and almost becomes cancerous.
Not only unable to answer your questions but unable to answer the client’s questions with any degree of veracity.
It’s clear that most Seller’s need some form of representation. But who is best suited and most protective of the Seller’s interest.
An experienced agent who truly is professional and knowledgeable, could provide that representation but we’re going to be right back to the beginning. How do you quantify the number associated with that representation?
Listing agents who do not bring the buyer are going to have a hard time defending their commission in a deal.
But that’s my opinion and what I was hoping to bring to light in this post. The Consumer wants to know what a Listing agent does that is worth the commission they are paid.
You mention “managing a transaction” as a point of reference for listing agents. I hear that a lot and when I ask for clarity I get mumbled to and nothing beyond paper shuffling is described.
Perhaps if agents could articulate their position in a cohesive manner it may be better received, but as it is now, most can’t.
Thanks for listening to the show and visiting the blog.
March 23, 2008 — 1:45 pm
Matthew Hardy says:
> Perhaps if agents could articulate their position in a cohesive manner it may be better received, but as it is now, most can’t.
Utilizing a trusted system where everything is documented and reportable some do.
March 23, 2008 — 3:06 pm
Broker Bryant says:
Barry, I would never justify my fee by my costs to do business. Personally I feel anyone that does that just does not “get it”. I’m not a fee for service REALTOR(R) and I don’t offer a menu of services.
Now if the seller would like to cut me a check up front for advertising I would be happy to give them an itemized list and would even go so far as to reimburse them at closing. But that’s not the way I handle my business. My costs for doing business are my costs, including whatever advertising I may choose to do. The seller is not baring these costs.
Providing your advertisers invoices is a completely different thing than what REALTORS(R) do. Your advertisers are paying for advertising. Do you reimburse them if they don’t get business from it? Of course not. Just as I don’t expect my sellers to reimburse me if their house doesn’t sell. Nor do I expect then to reimburse me if they cancel their listing. I don’t charge cancelation fees. And I bet you don’t charge by the month. I would assume you have a 6 month or a one year minimum. Why? Because you want to make sure you get paid.
In order for your business to work like mine you would have to let your advertisers advertise for free and then only pay you if they get business directly from those ads.
My business costs are mine and mine only. If a seller needs an itemized list of my expenses involved in selling their house then they need to pick a fee for service agency. They are paying me for results and results only. I get paid when they do….at closing. No closing, no pay.
March 23, 2008 — 3:42 pm
Broker Bryant says:
Barry, After reading this post again it brought to mind, if your “Rock Star Agent” get’s asked any of the questions under #s 1 and 2 there could be a problem.
March 23, 2008 — 4:53 pm
Greg Swann says:
> if your “Rock Star Agent” get’s asked any of the questions under #s 1 and 2 there could be a problem.
How about a response like this?
Barry’s questions are excellent. We we do about them is salesmanship.
March 23, 2008 — 5:28 pm
Barry Cunningham says:
Thanks for the comments Greg and Bryant…
Bryant I have to say that I kind of sandbagged you on that one. I knew that would be a question. Was not sure it would come from you but Greg absolutely was spot on.
That’s the whole team and “Business” aspect of what most agents do not have. Stefan Swanpoel in his RE trends book says that 85% of agents have no business background or prior sales background.
New and experienced agents would have to rely on a business team to succeed and I don’t think that’s a bad idea. I am not sure why in most offices there is not a support staff and team willing to compliment a new agent’s endeavors.
When I was a stockbroker there were all kinds of people in the office I could and would turn to for help Often times, and I mean often, we would go on appointments together to pitch clients.
When I was new I brought a vet with me who could answer any questions I could not. Made for some great sales!
March 23, 2008 — 6:11 pm
Broker Bryant says:
Barry and Greg, This actually gets back to what I have been saying all along……salesmanship. Without it folks will fail. No ammount of bullet lists, tools or team members will matter if you can’t sell yourself. People hire me because I’m a salesman AND I have the proven results and the tools to get the job done. The most important part of the equation is the sales ability.
Bringing an experienced agent along is the way to go. I’m a huge fan of mentoring and apprenticeship. Of course for them to be able show results they would have to be in that market.
Greg’s response is actually very good but it would fail if we were competeing and I COULD show results based on the above questions.
Barry, you didn’t respond to my comment above where I explain why my costs are nobody’s business but mine, based on my commission at time of closing biz model.
March 23, 2008 — 6:29 pm
Broker Bryant says:
Barry, I also want to point out that for the reasons you have mentioned MOST newbies work with buyers. Anyone can pop a buyer in their car and show houses. The team members can do the mortgages, the marketing plan can attract the buyers and the newbie can show the properties. Houses sell themselves. Not much salesmanship required on the buying side. It also requires a lot less market knowledge. BUT by working with buyers a newbie can get market knowledge and can also build a track record.
Most REALTORS(R) that have been in this business a while work with sellers. We have the exprience and knowledge necessary to price homes properly. A newby competing with an experienced listing agent would have a very hard time.
March 23, 2008 — 6:40 pm
Brian Brady says:
Great discussion. Experience is sometimes a negative when making certain decisions:
http://www.nelalive.net/2007/10/why-experience-.html
March 23, 2008 — 6:52 pm
Broker Bryant says:
Brian, After reading the post you linked to it makes you wonder why the question the buyer ask is “what’s the rate?” Just like sellers they shop costs instead of ability. The consumer needs to be educated on what’s important. And in your business just like mine it’s results that are important.
March 23, 2008 — 7:05 pm
Broker Bryant says:
Barry what’s ludicrous about it? Do you rebate ad costs if they don’t get business from it? Do you outline to your advertisers how much it costs you to run your business? If not why not? If you sell print ads do you outline your wholesale costs to them? Their ad money is helping pay for your business. Shouldn’t you break that down for them?
Is my way of doing business ludicrous because it works? Or just because it doesn’t fit your perception of how I should be doing it?
What is it exactly that you are trying to teach me? How many properties have you personally listed and sold for sellers where you were working as a licensed agent? Let’s start there.
March 23, 2008 — 7:19 pm
Bawldguy Talking says:
Broker Bryant — Why on earth would you bring RESULTS into all this? 🙂
March 23, 2008 — 7:41 pm
Broker Bryant says:
Bawldguy, I’m a glutton for punishment. Or an idiot.:)
March 23, 2008 — 8:02 pm
Bawldguy Talking says:
Those who produce results are the TARGETS of all those searching online and elsewhere for a broker.
The rest all this? It will float your balloon amongst the clouds next Sunday at Del Mar magnificently.
March 23, 2008 — 8:12 pm
Russell Shaw says:
I absolutely LOVE the question, “Would you hire yourself?” Don’t answer yes because you want the commission but really, would you hire yourself? If an unqualified yes, you will also be able to convey that to a home seller. If no, you won’t. There isn’t much of a sales pitch to a home buyer (per Allen Butler’s spot on comments), it is more a matter of chance. But sellers will sort of “interview” an agent.
I believe an agent should know the answer to each of the questions you posed but if any seller ever tried to ask me that many questions or get me to give them that much data to hire me (yes, Broker Bryant – I totally agree with you too!) I would decline their business. Period. Here is what Seth Godin has to say on that subject: http://sethgodin.typepad.com/seths_blog/2008/03/why-bother-havi.html. I don’t charge by the hour, I get paid for the results I produce.
Welcome to BloodhoundBlog, Barry! Glad you’re here.
March 23, 2008 — 8:18 pm
Bawldguy Talking says:
Thanks Russell — Results are what always rule the day.
March 23, 2008 — 8:50 pm
Allen Butler says:
Jesus H. Christmas! How cantankerous is this gonna get? Glad I’m not a realtor!
March 23, 2008 — 10:52 pm
Broker Bryant says:
Barry, Don’t assume I charge 6%. I’ve never said what I charge. You are the one by the way that started comparing how you charge and justify for advertising… with real estate. I agree that is a ludicrous comparison. Thanks for proving it.
Also, thanks for pointing out that you have never once acted as an agent in a real estate transaction.
The last time I asked what you did you said you were a full service brokerage. Then you clarified that you were the “backer” for a brokerage. So I’m just trying to find the truth amoungst all the mumbo jumbo.
Which truly brings me back to “You just don’t get it”.
Results are everything. Whether you believe it or not it’s still true.
I’ve told you what I do. I sell houses. If you want to find out how get out there and do it for others. Then come back and tell us how your plan worked.
My sellers are far from being ignorant. They are real people with real problems that are smart enough to hire me to solve them. My motivation is not money and never has been. That’s the difference between you and I and it is evident in everything you write.
We are from different worlds my friend. Enjoy yours as I will mine.
March 24, 2008 — 4:55 am
Barry Cunningham says:
Sorry Allen,
No more from me on Bryant’s business practices. What works for him is fine.
March 24, 2008 — 5:00 am
Chris Johnson says:
What are you doing daily to improve the experience your customers have?
What is your list/sale price from INITIAL ist price.
etc.
March 24, 2008 — 6:24 am
Barry Cunningham says:
Chris…that is spot on what I have been trying to ascertain…it’s not a difficult question but quite telling..thanks for the comment
March 24, 2008 — 6:34 am
The Lovely Wife says:
I’m just here to follow the conversation 🙂
March 24, 2008 — 7:16 am
Greg Swann says:
Gentlemen: I need to ask you to dial this down. Debate about ideas is what we’re all about, not attacks on each other. I’ve let this go farther than I normally would, both because it’s an emotional topic and because the contestants are larger-than-life personas. But we’re starting to generate more heat than light, a sure sign that emotion is winning out over logic. I’m not singling anyone out, I’m just asking you to leave the barbs outside.
March 24, 2008 — 7:33 am
Barry Cunningham says:
Done!
March 24, 2008 — 7:55 am
Barry Cunningham says:
Greg,
I’d like to apologize to your readers. You gave me an opportunity here and I don’t want to abuse it. I removed my back and forth comments with Broker Bryant. Not because I do not stand behind them but rather this is your dawghouse and I choos not to litter it with asn ActiveRain, Jerry Springer, Housing Panic type of commenting. I should have thought better in advance.
However, my beliefs are as they are, I am proud to be a profit seeking Capitalist and my quest continues to have an open forum discussing commissions beyond the inanity of ambiguity which has been offered to me both on and off this blog.
March 24, 2008 — 8:09 am
Greg Swann says:
You’re a prince, beyond all doubt. I didn’t need for you to kill your comments, but I think your point is well made even so.
Cathy and I were talking about your questions yesterday. We don’t have huge quantities of listings to tout, but, because we are so careful about the homes we will represent, our DOM and SP/LP numbers are very strong. Salesmanship is playing to your strengths, so every question is an opportunity to take the conversation where you want it to go. We take food right out of the mouths of some of the biggest lions in our market — not by being bigger but by convincing our clients that our way of marketing a home is better.
The questions you raise are of huge value to Realtors — not because anyone can come in first place in every category, but because, having thought about your answer to every one of those questions, you’ll be prepared for them when they come up.
Believe me, I would much rather talk about custom yard signs and elaborate single-property web sites — and all the other stuff we do that nobody does — but if I can’t take away all of the seller’s objections, the listing is going to someone else. We are never reluctant to pass on houses — or sellers — when we are not 100% confident about our prospects for doing the job. But we hate to lose listings we want, and we want to learn everything we can to cling by claws to the homes that matter most to us.
March 24, 2008 — 8:29 am
Mary Pope-Handy says:
The list is quite good, but doesn’t include the hard-to-measure things, like, “how many of your clients would re-hire you?” and “what percentage of your business is repeat and referral business?”. This is the stuff of testimonials. They are priceless. The client may not care how many great sales you’ve done – he or she WILL care how you’re going to treat him or her, and how dedicated to getting the best deal for them you are.
There are intangibles that are harder to measure. Some agents are great at selling and closing, but at the end of the day, the client may feel manipulated and that the agent put his or her best interests first – not the client’s. So what if you closed the deal and screwed the consumer? I would say that yes, it’s important to have what’s measureable, but true success may be a little more elusive than that easy answer.
March 24, 2008 — 9:20 am
Kevin Wilhelm says:
Barry,
I recently discovered this blog, and your post was the first one I had the pleasure of reading. WOW! Thank you for my first “Black Pearl”.
March 24, 2008 — 1:04 pm
REBlogGirl says:
Excellent post, my controversial friend.
As a consumer I can say I definitely want to know a Realtor’s track record when it comes to selling a home. I love the batting average type stats but I doubt you would find a whole bunch of Realtors that would agree to that.
As a recent home buyer myself, I must say, our Realtor was a full commission agent and was worth every penny becasue we ended up in a bidding war which he was uniquely qualified to guide us through. Therefore, I think justifying a commission is important- but after that experience, I can understand why certain agents do not discount their services- they are flat out worth every penny and more.
That being said, I realize, we are a different class of buyer- it was not about price for us, but rather about getting our dream home. So, I believe discounted services make perfect sense for first time home buyers and relocations that know they will only be in an area for a given amount of time but for people shopping for dreams, the full commission agent is a worthy guide.
March 24, 2008 — 3:41 pm
Norm Fisher says:
Barry,
Congratulations on a well-deserved award!
Thank you for opening this discussion. Please forgive this lengthy comment. Writing is a challenge for me but for some reason I just couldn’t stop, so I appreciate the inspiration.
It was sometime during October 2006 that Kerry and David called to say that they were considering building a house. They asked me to visit their home and provide a “ballpark,” which I gladly did. At the time, their home was worth around $140,000, considerably more than they’d paid a few years back and they were pleased to learn of this positive change.
About a month later, they suddenly showed up at my office to announce that they’d purchased a lot and they would soon begin construction on their new home. They wanted to list their existing home now to take advantage of a buoyant market. Even though the new place would be eight months in the making they felt comfortable with the idea of cashing out and taking up residence in his parent’s home until the new place was done.
I told them that its value had probably increased around $15,000 since I’d been to the house. Resale inventory had since sunk to a record low for our area and demand was strong. In spite of Kerry’s tendency to stress a little bit over that which is unresolved, she agreed that they should wait and I promised that we would keep on top of market changes, and from one month to the next, we would reassess the situation.
Like clockwork, we spoke each month and each time I gave the same advice: “Let’s wait a bit longer.” Construction delays stretched eight months to ten, and in May we finally offered the property for sale and soon secured an offer of $225,000. When I presented it she cried. He danced. It was a wonderful moment for all of us. They paid me about $5,000 after expenses.
Kevin, Carla and I had been looking for a long time but that perfect house just wasn’t coming. One day, they stumbled across a property which was listed “exclusive” that met their needs in almost every way. I could hear the hesitation in his voice as he explained that the listing agent was not prepared to cooperate with me and he asked, “What should we do Norm? The property is just right and the price is a steal.”
“I think you should buy it Kevin,” I told him.
A few days later they had me to their current home. They wanted to get it on the market, hoping that they could negotiate a late possession so they could complete some renovations on the new place and not have to move twice. They wondered if they might be able to get $300,000 for their home. At the time that seemed a smidge optimistic to me but again, I told them that I thought the market would continue to appreciate, at least for a few months and given the time that they had, they might want to consider waiting a bit.
We let a few months pass. In the mean time, their “dual agent” from the purchase tried several times to poach the listing. Who could blame him for trying?
When we decided it was time, we got together to execute the documents and agreed to a price which was tens of thousands above the numbers we originally discussed. When that was done, talk turned to commissions. Kevin is a car dealer and his whole professional life involves the back and forth of offers and counter-offers. He proudly informed me that he doesn’t “pay retail” and that the other guy was willing to work for less. I did my best to establish my value and Kevin hung in there too. “C’mon Norm, you know this is going to be easy.”
“Kevin, it also would have been easy to take your listing three months ago, but I didn’t do that. I didn’t do that because I’m more interested in being your agent than I am in the commission but I cannot afford to give the best advice and then work for less. I promise that I will always do my best to do what’s best for you but I won’t be offended if you feel it’s best to go elsewhere.”
Suddenly, the value of my offering was apparent to both of them and they wanted me to “get paid.” He smiled, picked up the pen and signed the listing. “I know you’re going to knock it out of the park for us Norm. Let’s get it done.”
Four days later, Kevin and Carla accepted a firm offer for $365,000. “In our wildest dreams Norm, we couldn’t have imagined this.” They paid me about $6,500 after expenses.
Do these true examples make me a hero Barry? No. What they make me is an agent. You see, I am in love with agency. Head over heels in love, to be clear. I find great rewards being in my clients corner, and whenever possible, “knocking one out of the park.” Some wins are bigger than others but I always do my best to do my best and I challenge myself to remain faithful to what I love. I almost always prefer not to muck things up by dividing my loyalties, even though the financial reward is only half as much when you I don’t.
Now, you can say, “This can’t be quantified.” You may say, “This is just rhetoric.” You may even suggest that people in Saskatoon must be just a little bit stupid. I hope that you can appreciate that I’m not facing a whole bunch of internal struggles about my “value.” Both of these clients have provided enthusiastic endorsements which have since led to additional business. Hopefully as the years go by my reputation as an advocate will speak loudly about the value of my services.
I know you’d like to boil this down to advertisements and salesmanship and I do understand that these things are important in the real estate business. However, if that’s where we’re going, then the real estate business has seriously lost sight of what should be most important; agency. It’s time to focus on changing that.
I know things aren’t perfect out there and we have a lot of work to do but we’ve never been closer than we are right now. There are thousands of excellent agents out there who care about their clients and know how to do right by them. Sometimes it’s hard to see past the many who are in it only for themselves.
I don’t have my eyes closed. I understand that lower fees are inevitable and I look forward to those changes. However, we should be focused on getting better before we focus too much on getting cheaper. I think this business can be challenged to re-embrace agency. We can renew our love for this worthy idea. We can use these tools of transparency to apply pressure to those who would sully such a beautiful idea. We can put them out of business. It’s already happening and when the momentum starts to build we will have better agents and lower fees. Your vision may bring lower fees but I don’t think we’d be very happy with the impact that it has on our business or the consumer. I see less cooperation and more self-interest. Less focus on the consumer and more focus on the commission.
All that said, I can understand why you would be interested in diminishing the value of a seller’s agent. With “hundreds of deals” to your credit, I can imagine that you’re extremely sophisticated and you would enjoy a strong advantage going one on one with almost any prospective seller. This is not to insult you or to question of your character. We all accept the fact that every buyer and seller has his or her own interests at heart. It’s the way that it should be in a free and open market. I’m simply stating what’s obvious to me. Your vision works better for you than it does for a typical seller. I’ll admit that my vision serves me better than it serves you.
I’m very excited to watch your experiment unfold and I have no doubt that the support being offered to Lindsay will go a long way. May I be so bold as to suggest one enhancement to the program? See if you can twist Greg’s arm to pick up an additional responsibility. Have him instruct her in the value agency. Few understand it as well as he does. I believe he is also in love with it. With that, and the others tools at her disposal, she will be well prepared for a long and rewarding career that delivers results beyond her expectations. Without it, I fear she’ll be another flash in the pan. You just can’t do this forever if you don’t understand what it’s really supposed to be about.
I will be doing the homework you’ve proposed. I’m not clear where I’ll go with it yet, but I do see a valuable guide to improvement in the answers.
Thank you again. Sorry everyone. 🙂
March 24, 2008 — 6:06 pm
Norm Fisher says:
Barry,
By the way, just want you to know that I support your “five point plan” with the exception of the devaluation of the seller’s agent. There’s nothing else there that’s frightening to me and I can see how they would improve the business.
March 24, 2008 — 7:12 pm
Barry Cunningham says:
To Kris…from the San Diego Home Blog (per her linkback)
Hello Kris,
Knowing your Alexa ranking is not an obscure question and is most assuredly not silly. The reason we all blog is for traffic. Meaning we all hope people actually read what we write.
Many agents are now placing their listings on their blogs as a form of additional marketing to help move a listing.
If you are , or are planning to show your listings on your blog then your Alexa ranking would be pertinent to your presentation.
Having a hyperlocal blog that makes you an authority in your farming area would translate into people in your area, and prospective buyers and sellers visiting your blog.
So if a part of your package would be to tell the Seller that you have a great blog and many readers come to it and that you intend on featuring their property on your blog, as many successful realtors do, then one in turn would want, and should be entitled to know if anyone is actually reading your blog.
Hence..the Alexa ranking helps determine the validity of the traffic visiting your blog.
FYI…yours is a very respectable 584,173.
March 25, 2008 — 9:12 am
Barry Cunningham says:
Hi Norm,
Just read your post..wow..had to get two muffins to finish it..LOL
Let me add some clarity. I am not at all interested in diminishing the value of a seller’s agent.
I am wholly interested in Seller’s agents quantifying their value. For a few reasons none more than helping an increasingly concerned consumer, and to help agents overcome this public scrutiny with answers that make sense and are not abstract ambiguities.
Let’s face it, we can all dictate that we will not lower ourselves or dignify the question of value but the truth of the matter is the business is changing.
I am not by any means saying that what works now won’t work tomorrow. But I as a business man, take various forecasts, projections and studies and look to the future. I plan accordingly. I want to be here for the long haul.
I see a trend, supported by substantive datas that indicates where the real estate industry is headed and to me one would be more prudent to plan for the future than resist change because something is working today.
The eradication of a business culture steeped in the supression of competition is something we in the real estate industry need to keep our collective eyes on.
The alternative is a business culture that faces the changes that will be inevitable and the belief that the status quo will prevail. This in my opinion is irresponsible.
March 25, 2008 — 9:25 am
Norm Fisher says:
Barry,
I agree.
I have to say that this particular discussion (including other recent posts which sprung from it) has reached me at a deeper level than anything else I’ve read online over the past year. Some real eye opening moments. You, and the others who have contributed have given me much to think about.
Thanks again for this conversation.
March 25, 2008 — 9:37 am
Barry Cunningham says:
the Small Business SEm trackback says that Google analytics is the best and that Alexa is only utilized by developers and such…Bloodhound, Longbeach Home…Rss Pieces..and many more must be on the desktop of a lot of developers for that to be true…sort of like not being a Believer…hate to find out the reality if I were to be proven wrong…but thanks for he comment and and otherwise solid review.
March 26, 2008 — 7:37 pm
Matt McGee says:
Hi Barry — I’m not suggesting Google Analytics is the best, actually. GA and Alexa are two different things entirely.
Alexa data comes from tracking the behavior of people who’ve installed the Alexa toolbar — it’s an incredibly small piece of the Internet population, and it’s mainly comprised of web geeks. It’s fairly well-known that if you want to increase your Alexa ranking, just install the toolbar and ask a handful of friends to do the same, then have them visit your site. (A couple years ago, Alexa was also huge in Korea. I don’t know if that’s still true.)
Google Analytics is a full web metrics system. You install the code on your site and it tracks actual behavior on your site of ALL visitors — not just people with a toolbar installed. It’s not necessarily the best, although it is free and I do recommend it for many small business clients.
The point of my post is that you can’t rely on Alexa for valuable data. (You need a real metrics system for that.) And that not every blog is about traffic acquisition. For me, it’s all about feed subscriptions.
March 26, 2008 — 11:23 pm
Barry Cunningham says:
hi Matt,
We find that Google Analytics can be gamed..but I guess so can many of the metrics. We have begun using Visistat which seems to be the best of them all. For my own stats if I used google I would have tons more traffic. I find as most do that the most reliable numbers are your server logs.
What are your thoughts on Visistat? It is quite comprehensive.
Back to the post itself, the main thing is if you are advertising or holding out to the public that you will be posting a listing, you might want to be able to quantify your statements by actually having measurable traffic.
Whatever that metric maybe, I think you would agree.
March 27, 2008 — 5:23 am
Bobby says:
Barry – Excellent post! I do have an observation. You wrote “Will MY property be featured prominently on your blog?”
Just curious, why did you choose to include this question? Isn’t it a waste of time posting listings on a blog? IMHO-any blogger who post listings isn’t using their blog properly or wisely. Of course, the agent should clearly explain that a blog isn’t the proper platform to feature properties, especially with so many listing syndication websites available.
March 27, 2008 — 5:39 pm
Greg Swann says:
> Isn’t it a waste of time posting listings on a blog?
A common misconception. The purpose of real estate marketing is to sell real estate.
March 27, 2008 — 6:02 pm
Barry Cunningham says:
I see Greg already submitted an answer and I defer..because he’s right about this!
March 27, 2008 — 7:38 pm
tlw says:
Greg…
I don’t usually engage you but I am curious and have a question for you.
When we break down our marketing doesn’t Blogging fall into the category of self promotion?
Looking forward to your thoughts on that. Be nice to me 🙂
March 28, 2008 — 5:34 am
Greg Swann says:
> When we break down our marketing doesn’t Blogging fall into the category of self promotion?
That’s a big question. I’ll come back to this, later today.
March 28, 2008 — 8:31 am