If this blog goes where I think it's going, it might make me slightly less popular among the AR crowd...
A few months ago, I was interviewed by someone at RIS Media about my views on the current state of the real estate industry. Blah Blah Blah, we covered all the generic, pithy topics and then moved onto some juicier ones. Yeah!
He asked me "What do you think it will take to turn the public's perception from thinking of us on the same level as used car salesmen and politicians, to thinking of us as trusted advisors?
Great question. I'd never been asked that before, so I took a moment to think. And the answer hit me like a load of used cars.
If we want to shift the public perception away from thinking of us as people who just want to sell someone something, with as little effort as possible, we need to attract a different kind of practitioner.
A career selling real estate is much like a career as a financial planner, an insurance salesperson or a mortgage broker. Most people enter these fields, not because they have a passion for property, mutual funds, long-term care insurance or good faith estimates, but because they are drawn to the idea of working on commission, hopefully significant commission. They are, basically, natural salespeople in search of a product to sell.
Nothing wrong with that. Selling for a living can be an honorable profession if it's done ethically.
But the perception of the real estate agent as a salesperson will forever lump us in with other people who sell, and will always be held in general suspicion. No way around that - when you're paid on commission, our clients and customers are always going to wonder if we have their best interests at heart.
Especially if they aren't nearly as blown away by our service as they were by our sales pitch.
So, if we want to change the public's perception of us, we need to change our approach, which possibly means a change in our compensation structure. Are we ready for this? I don't know, frankly. I like being paid on commission as much as the rest of you do, and I love the idea that working harder and smarter brings more money in the door. But is there a compromise? A way to satisfy our entrepreneurial needs for performance-based pay without sacrificing the perception that our integrity might be for sale?
Do we care? Or, are we okay with remaining in that bottom five of the infamous list of America's most UNtrusted professions?
RELATED BLOGS:
- "Curing" the Reluctant Salesperson
- An Unsoulful Tidbit from Broker/Agent News
- Doctors, Lawyers & Real Estate Agents?
I think your post is great Jennifer and it leaves a lot to think over. I am still new to the business and I guess I am always wondering why consumers have this perception. To me, there aren't many positions where you could work over 40hrs per week for a client with the chance that there might not be a paycheck waiting at the end. I also feel that most of us that are in this industry chose it because of the customer service aspect. I love talking and meeting new people. Being able to choose hours is great too. Commissions "can" be great, however, I think if I wanted a stable paycheck every week...I definately would have picked another career.
How about using ris media to support a new view. I have found that they prefer to support the views of their advertisers more than what is good for the public or the business. Understandable to subbort those who pay you, but then calling yourself "the leader in real estate information services" is not being completely upfront. LOL - even the real estate "reporting" needs some work in the honor area.
Tina - I love the customer service aspect of our industry (LOVE IT), but I think you'll find that many in our industry feel they are first and foremost salespeople. Especially as you start to work with other agents (on the other side of the deal), you might be very dismayed at how little attention they pay to it. That's not to say that all are this way NOT AT ALL, but enough so that our industry has a credibility problem.
Heath - I'm not sure the media can "fix" the problem is the problem really exists. It needs to be corrected from within our ranks - with a new definition of what an exceptional real estate agent ought to be.
Jennifer, You have a great post, anything to promote thought. I disagree with you though. I don't believe our pay structure has that much to do with how the public perceives us. A lot has to do with the behavior of our peers.
Heath - forgive me, I mis-read your comment! I didn't see the words "ris", just "media"! Good point!
Cindy - I think we're in agreement, actually. In that we ATTRACT people who behave that way due to our compensation structure - what do you think?
Jennifer- yes, that will definately put a damper on my "everyone is compassionate" way of thinking. I surely do not want anyone to think of me as just a salesperson. I hope the industry can turn it around for those of us with real hearts.
Hey Jennifer,
I like the post.I didn't get into the business for the comission structrure nor do I try to come across as a pushy salesperson. At first, I thought the money would come easily but I was wrong. Though I changed my thought process as being someone they (customers/clients) can come to for answers. I like to talk to people and help him them but also be looked at as source for information to help with their real estate needs. Then the money comes. Have a great day!
Jennifer, I think we NEED commission. I honestly think the world should be based on commission or bonus system. Think how much better service would be?
Our industry has attracted to many part timers. I think that is the issue. If there was more of a commitment required other than hanging a license on a wall in an office I think it would weed out some of the bad. But then again, the bad folks make us good ones look GREAT.. so lets just keep them! :)
This is why "Thought Leadership" is the new hot buzzword. As in, "I am not a salesperson, I am a Thought Leader."
I am in complete agreement as well with Cindy Edwards! And with your response, yes we attract people into this business because of our pay structure but that is not a green light to lie, cheat and do whatever it takes to make a sale!
Terrie - I agree, too! But it can't be denied that the way we are paid (and not just us - anyone on commission) does lead someone to wonder if our compensation affects our judgment and advice. Buyers think we push them to purchase more house than they want so that our commission is higher (yeah, by like $200) and sellers wonder if we try to underprice their home so we get a quick sale. License to lie, steal, cheat or kill? Of course not! But the perception that we might? Probably.
Steve - never heard of that! Tell me more!
Robert - I LOVE LOVE LOVE the idea of pay for performance! And I, too, wish the world ran on that basis. But are you really saying that in general, those who work on commission provide excellent service? I WISH!
Jennifer - this is a very good post, and thought provoking for sure. I do not like the idea of being in one of the most untrusted professions. That is unfortunate, there are many ethical professionals in our business however.
I have always looked at myself more as a mortgage consultant rather than a mortgage salesman. Being an introvert, I have never been the pushy sales type guy, but then again, my income reflects that. I agree with you totally. If we are going to change peoples perception of us, we are going to change our tactics!
Jennifer, awesome post----thanks for having the kahunas to post it. I think it raises some important questions.
Jennifer - I don't think the commission structure leads to a public distrust. I think that comes from years of agents providing bad service and putting their own interests above those of the clients.
I also think that if we were to charge by the hour, buyers and sellers would be more reluctant to use our services, since they'd be billed weekly or monthly. They'd demand things happen quickly, probably too quickly to actually accomplish meet goal. They'd have to pay not only for the half hour to 45 minutes for us to write a contract, but also for the hour it takes us to explain what they're signing.
And an hourly rate raises questions, such as how do we estimate and propose our time and charges in advance? Or if we charge for travel time to pick them up or meet with them. Like most of you, I've spent four to six hours on a weekend shuttling folks around without them finding what they want. I don't think they'll be pleased to find costs rising just because the market doesn't have what they're looking for.
And they can't see all the behind-the-scenes things do we do for them. They'd have to have enormous trust in us to accept our bills -- even if it turns out to be less than they might pay as commission.
Speaking as one who recently hired a lawyer for a zoning problem, I was appalled at what I wound up being charged. The firm (which did a good job) initially told us our $2,500 retainer would likely cover the services involved. But their ultimate bill was more than twice that, and I just received a trailing bill for another $700. I am not pleased. How can I expect one of my clients to be pleased in a similar circumstance?
Ed, everyone already knows there is no hope for lawyers:)
Ed - now, now, now. It appears to be YOU who isn't reading every single line (you know what I'm referring to!). I never said anything about our being paid hourly or salaried or anything like that, although I'm not opposed to the concept in theory. And I'm not saying that the fact that we are paid on commission implies that we are dishonest. The flip side can certainly be argued (as Rob did above) that being paid for performance SHOULD increase the public's trust in us instead of the opposite. BUT IT DOESN'T.
My point is that if we want to change our public perception (and do we?) then we need to change our behavior. But that's not likely to change as long as we perceive ourselves as (and therefore attract) those who are primarily sales-driven instead of service-driven.
I don't know the answer - how to inspire fantastic service when it's not service, but sales that is rewarded & celebrated. So for now, I'll work within our imperfect system and provide the best possible service I can in my little world!
Jennifer - Like Michael Delp, I have always considered myself as a mortgage consultant and/or professional and not a salesperson. When I started my mortgage career, I came from a career as a Human Resources Manager. The thing that appealed the most to me about the biz was not the sales part (I had zero sales experience) but rather all the rules, regulations, guidelines and ethics. That suited me to a tee.
Nearly eight years later, that is still what keeps me going, not the sales part or the commissions. I am still not a salesperson but rather a service person. I am more concerned with getting my clients the most affordable loan for their needs, even if it's not with me or PacFin. Over the years, I have often referred clients to other lenders or mortgage professionals who could help them when I could not. That way, when they walk away, hopefully, they know that it's their best interests that I had in mind and not mine.
There are always going to be people who think realtors are the scum of the earth and others who think we do a great job, just like there will always be 1/2 the country think the Democrats should be in power and the other half think the Republicans should be.
Here is what I think is a thought provoking debate over raising our perception with the public. In the past few years there has been this crusade about keeping banks out of Real Estate. I have always thought that if banks could were allowed to sell real estate and open brokerage houses under the names of some of the bigger ones, like Wells Fargo Real Estate Services, Bank of America Real Estate Brokers e.t.c and I was to work for them either under some kind of commission structure or even some kind of salary that this would raise the perception with the public being affiliated with a bank. Of course after the bank bailout lately maybe that reputation is now tarnished.
Donne - I"ve never considered myself a salesperson of any sort, but I tell ya - make that pronouncement in public ("I'm a real estate agent and I'm not a salesperson!") and you'll get beaten into submission by the majority of our industry (real estate anyway) who do consider what we do "selling." I just don't get it - as I expressed in the "Curing the Reluctant Salesperson" blog I linked to above!
I came from Human Resources, too!
Alan - I could go for that... will I see you next month at your association meeting I'm speaking at?
Hi Jennifer, I have to admit, while I do enjoy (most) people, I got into this business because I want to make more money than is generally available in the 'job world'. I have been self employed for much of my working life because I could make more on my own and also for the freedom to not punch a clock. Many fear the insecurity while I have generally gravitated to it.
All that said, what I willingly put in writing and, to the best of my ability, into action for my clientele, is 1) a sense of realism, 2) the desire to understand their needs and wants, 3) the intention to treat others the way I wish to be treated and 4) the perseverance to get the job done.
Any field of endeavor has good people who want to do right by others and then, of course, there are those who don't. They are unfortunately the ones who spoil the field for everyone else. However, I have finally learned that I can't change others, or the perceptions of the world at large. What I can do is to make my small world a little bit better, one person at a time.
I'm still wondering about the 'thought leader' idea posted above by Steve Richman and thanks for your provocative post.
I wrote this post figuring I'd get attacked on all sides by those whom I might have offended and au contraire! All of y'all are so on the same page as I am - we WANT to earn our money, we WANT to serve our clients, we WANT to create careers to be proud of! Thanks!
Jennifer - Ok, I admit, I hadn't previously read your link to the Reluctant Salesperson (my bad). However, having read it now, BULLSEYE!!! I love the line "Do Unto Others as We'd Hate for Them to Do Unto Us". I'm sure that's why I am not a good salesperson because I won't try and "sell" someone a loan they don't want or need.
I also don't understand why is it that when other professionals do a good job for a client it's not considered selling but when we (real estate/mortgage professionals) do a good job for a client it's called selling. It doesn't seem fair and we (real estate/mortgage professionals) are getting the raw end of the deal.
However, I have never cringed at or been beaten into submission for admitting or proclaiming that I am not a salesperson. Perhaps, this could be a small difference between the Realtor and the mortgage professional. Hmmm?
Ed - now, now, now. It appears to be YOU who isn't reading every single line (you know what I'm referring to!). I never said anything about our being paid hourly or salaried or anything like that, although I'm not opposed to the concept in theory. And I'm not saying that the fact that we are paid on commission implies that we are dishonest.
Oops.
Both Colleen Fischesser and I each wrote about this subject recently so it must be on everyone's mind! I truly believe that the real estate industry is in flux, and the eventual outcome will probably be a move away from commission only. I do think that will improve the image - since people see real estate agents as making way too much money for what they do, which leads to suspicion and distrust.
In fact, I read recently that real estate agents in Denmark gave up the commission structure. Interesting, isn't it?
Interesting, Kelly! I've done a little reading into the consultant-based idea of selling real estate - who's the woman who has promoted that? It sounds interesting and I've often tossed around the idea of offering the alternative of a reasonable upfront fee that's much less than what my commission would be. But as I mentioned in the original post, that sort of structure would attract a whole different type of practitioner - which might be a good thing...
The reason that I work hard for my clients is because I don't want to disappoint them. I do the same amount of follow up and work for every client and sale regardless of the commission. Do I always feel that the amount of commission paid is fair- not really because its based on sales price and not the amount of effort we put in. I think part of the reason we get a bad rep is because of the issues that surround some of our sales.
I'm with you Christina, I hate disappointing people, which is why I also go waaayyy out of my way not to disappoint. I'm paid on loan amount and I work just as hard for 200k loan as I do for a 500k loan.
Jennifer I don't think that the commission is the problem. The problem is the few that are in this business to make money at any cost. Every industry has these kinds of people, but the problem with Real Estate is that we seem to have more than our fair share.
A USED CAR SALESMAN ? PERCEPTION IS EVERYTHING . I THINK THAT AS A REALTOR IF YOU GOT CAUGHT UP IN THE FRENZY OF ALLOWING YOUR CLIENTS TO PURCHASE HOMES YOU KNEW THEY COULD NOT AFFORD OR FOR THAT MATTER LOOKED THE OTHER WAY WHEN THEY SUBMITTED FRAUDULANT DOCS OR CLOSED YOUR EYES WHEN THE DISSAPEARING SECOND MORTGAGE WAS SIGNED THAN YOU DESERVE TO BE LOOKED AT IN THAT LIGHT . AND RIGHTFULLY SO .
Good luck with this one Jennifer. I don't see it changing any time soon. In fact, currently I see it sliding a bit backward.
Great post! We need to title ourselves as not the Real Estate Agent, but a Marketer for Homes.
Jennifer, this is a really good post, thank you for broaching this subject. To me, the answer to this problem is simple--we AGENTS need to pick a side. We need to either represent sellers ONLY or we need to represent buyers ONLY. Period!
I am an Exclusive Buyer's Agent (which means that NO agent in my office EVER works for sellers) and even though our business model is clearly unique, buyers are still skeptical about our service--they think there must be a catch. What we do seems "too good to be true". Plus, the waters are muddied by agents who call themselves "buyer's agents" or "designated buyer's agents" and claim to offer the same service that we do--but do NOT offer the same level of service. Buyers (especially first time buyers) tend to be naive about representation and many buyers think that "double dipping" is rare--we agents know that it happens A LOT....
If we REALTORS, want to be thought of as trusted advisors, then we need to put our client's interests before our own and we can't EVER "represent" both sides in a transaction. Our clients (be they sellers or buyers) deserve our undivided loyalty. If we are truly looking out for our client's (and ONLY our client's) best interests, then we will more than earn our commission.
If all we care about is making money, then we deserve the reputation we have....
You didn't answer the question!
Me? Which one?
Fascinating & wish I had time to see the reaction of the realtors but ... not tonight
Early up - someone said he felt the problem was with "part timers." I have to take issue with that - even though I am not a part timer myself.
I have seen many so-called "full time" agents do crappy jobs, and at the same time have seen part time agents run circles around their full time counterparts because they are conscientious and competent (RCHBs at work!)
You are right - we need to change our tactics. Agents need to stop spouting nonsense just to get the sale or the listing (that includes "bidding" on a listing by claiming you'll get them a price $50,000 higher than the previous agent HONESTLY shared..). We need to do a COMPETENT and PROFESSIONAL job for our clients, and that includes spelling things correctly, taking decent pictures, getting the info right on the MLS...
I'm disgusted by what I see many agents doing and have the nerve to charge a full commission on a crappy job - and yeah, they're "FULL TIME."
Maybe I missed the point but I got sidetracked...lol
Oh Jennifer I do not think you are getting the blowback that you expected. So let's stick our necks out a little farther. Commission no, hourly no...how about flat rate fees. Say Joe and Mary Homeseller pays their Realtor ® $500 to $1,000 up front...that gets the house listed in MLS, pictures and or video for the many web sites that will carry the property. Flyers get made and put next to the broker sign in the yard. The up front fee is not refundable if the house does not sell...the fee is however credited at closing. Charge fees based on the property...yes a 2 bedroom 1 bath 750 sq ft will pay less than the 5,000 sq ft 5 bedroom 6 bath 4 car garage located between the lake and the 14th green.
There that ought to stir things up a little.
Chuck - I'm actually a fan of a flat fee. In my market, a $200,000 house is every bit as marketable as a $400,000 one, although once you get into jumbo's - that changes. But I don't see any reason to charge twice as much for a house just because it's more expensive, if it's equally marketable. But what you're saying is that we should charge a retainer of sorts and still charge a commission on top?
What about buyers?
Karen - So, Karen, how do you really feel about the part-time debate?
JA-
No % commission just a flat fee. My broker charges 7% so take that 200,000 home we would get 14,000 compared to 28,000 on the 400K. I really do not change my marketing...both homes get the same service.
Jumbos are not much of a factor here. Median home price is about $120,000.
What about buyers? How about the buyer paying the buyer agent's fee.
Oh and by the way (BB creeping in here) my comments here are are just for discussion only. I am in no way attempting to set prices or collude with other real estate agents. There that should take care the anti-trust cops who troll this site.
Okay, but you said that you refund the retainer fee at closing... I must be missing something. I actually DO charge an upfront fee of $500 which is not refundable in exchange for a reduced commission at closing - is this what you're referring to? Where does the $14k come from? Sorry, I'm an idiot this morning! What IS the flat fee?
JA-
My bad...I was not clear. I work for a traditional broker who charges 7% no upfront fee. I think flat fee is an idea that needs to be explored. Say I charge seller $10,000 for the sale of the home. I take the $500 upfront...that fee is nonrefundable but at closing the seller pays the balance of $9,500.
I think there is a place for "Fee for Service"...menu pricing, or some other way. I all to often hear we charge a percentage "because that is the way it has ALWAYS been done before"
Not to swerve too much off topic but in your opinion what percentage of home sales in your market are FSBO?
Oh, I get it. Makes sense to me - I like it. That way you can come up with a flat fee price depending on your opinion of the marketability of the home... and maybe reduce it a bit if your seller agrees to stage, price more aggressively, etc.
I don't know how many FSBO's we have - I don't see many at all, though.
I posted this as you can see, last year. Yes, we need to do some work...seems appropriate to revisit my comments..
Is It Any Wonder...why REALTORS, don't get any respect or trust.
Jim Towner - March 31, 2008
An article written by Matin Crutsinger, Associated Press, appeared in the Business section of Virginia's Roanoke Times with the title "New home sales hit 13-year low". Not exactly a breaking story or a shocker for anyone who has not been a castaway for the last twelve months or so. Blood and Sex sells papers so the ..13-year low.. part must have really been a winner, readership wise.
The local Roanoke, VA resale housing market was also tagged with a round house punch when the article noted that the Roanoke Valley market was glutted with over-abundance (not just abundance but an Over-Abundance) or a 12.9 months supply compared to 9.8 month supply nationally. The article also noted that the 9.8 month supply was the highest national number in 26 years. I guess that is where the "over-abundance" comes in?
Sounds ominous...let's take a look from another perspective. The article talks about the Roanoke, VA market and states that the 259 homes put under contract in February 08 represented a decrease of more than 20% for the same period last year. So that would mean that last year 323 homes were put under contract in 07. Was 07 good or bad, no one said? Now let's divide the total sales for 07 & 08 by the number of licensed real estate agents in the Roanoke Valley Association of REALTORS. The Association website states that it represents over 1,000 sales professionals reaching as far as Smith Mountain Lake. So another look would determine that in 07 the average productivity per licensed sales associate was .324 sales per associate compared to the more current 08 productivity measure of .259 sales per associate. Now if you double every pending sales contract to represent the seller and buyer sides the sales associate productivity changes to .648 sales per agent in 07 vs. .568 sales per agent in 08. If national statistics are brought to bear on these numbers, of the 518 sides completed in 08, 80% were probably done by fewer than 200 of the 1,000 plus agents. I wonder what the other 800 agents were doing? So when the market was ok we sold .648 homes per month per agent but when it is bad we sold .568 per month per agent? So in good times or bad it looks like it takes the average real estate person two months to get one sale? If the average sale was over $1,000,000 I guess these numbers would not be so bad, but the average price was just over $200,000 per sale.
So why don't REALTORS get any respect or trust? Inman news recently posted an article by Marc Davison of 1000wattconsulting.com "Real Estate: the least trusted profession" Davison sited a 2006 Harris Poll titled "Doctors, Dentists and Nurses Most Trusted Professionals to Give Advice.
The poll was trying to determine the Trust in Various Professionals to Give Good Advice: The poll asked the question; "If you were getting professional help or advice from each of the following, how much would you trust them to give you advice which was best for you?" The respondents were given four choices: Completely, Somewhat, Not At All, Not Sure.
The Davison article picked out the 7% "completely trust" response for Real Estate Agents and compared it the 50% "completely trust" number given to doctors. Sounds ominous. What is not clearly revealed, without using the link provided in the article, is the balance of the info gathered by this survey. Please check it out to get the whole picture.
When you combine the "Completely and Somewhat" responses Doctors score 83% compared to real estate agents with a combined score of 72%. An 11% difference vs. a 43% difference. This however does not vindicate the Real Estate Agent or the Industry. When it came to the "Not At All" response Doctors scored a 4% while Real Estate Agents Scored 20%. Think about this, 20 out of 100 people you might talk to about real estate do not believe one word you are saying! That should hurt. Why are we not trusted? The Harris Poll did not elaborate on that, Marc did offer his opinion and if you just consider the per agent productivity numbers I discussed earlier in this post I would hope you begin to get the idea.
There are many factors that make up consumers attitudes and perceptions. Good old nosey Harris conducts lots of polls. Consider the August, 2007 poll conducted to determine the Prestige of 23 Professions and Occupations. You can see this poll on the same Harris Poll link. Respondents were given the following choices: Very Great Prestige, Considerable Prestige, Some Prestige, Hardly any Prestige At All, and Not Sure/Refused. Want to take a stab at how Real Estate Agents fared? The winner of the "Very Great Prestige" was Firefighter with 61%, followed by Scientist, & Teacher tied at 54%, Doctor & Military Office tied at 52%, Real Estate Agent, dead last with 5%.
Wonder why? I hope so. Let's return to the beginning of this article where I reference the .."13-year low" article. Generalities abound. There is not effort made to delineate or examine if there is any hope for any price range or location. Certainly the price demographic of a major resort area such as Smith Mountain Lake has an impact on the Roanoke Valley statistics, both in price and total sales units. Are all price ranges, communities, subdivisions equally affected? This type of information is readily available. There was nice graph included in the article which just illustrated that "Yup" there are a lot more homes listed for sale. A veritable "Over-Abundance" of all houses but with no distinction of where or what price range or any differentiation of D.O.M just all houses lumped into the same rather distasteful stew. I hope that is not how we do CMAs or provide advice, perhaps this plays into the trust factor?
In the same Roanoke Times, I noticed a number of real estate ads. One Ad for what appears to be a nice New Home Community displayed pictures of houses, some narrative, phone numbers next to agents photos....but not one email or website address....I seem to have read somewhere that the internet was playing a somewhat important role in the real estate business these days. Something like upwards of 80% of today's buyers begin their search on line. I guess we don't want the consumer to get better informed before they talk with us?
If we want trust we must be trusting, if we want prestige we must perform professionally and demand the same of our peers. The Harris surveys tell us we have a ways to go and our own actions prove it.
There is hope here. There is still opportunity for anyone who wants to be a professional. Like politics, real estate is local. Start your own poll. Have you ever turned to your client at the settlement table, pointed to your commission on the RESPA statement and asked them flat out, "was I worth it"? Have you ever had a client point to the commission amount on the RESPA statement and ask you "was this enough"? Make that a goal.
I know hundreds of real estate agents. I am fortunate to know many real estate agents and brokers that score much higher than any of the Harris polls and have earned the respect and loyalty of consumers. I know other agents who have not done so well. But I know Real Estate Brokers and agents can earn trust. What will you do about it?
Aloha, Jennifer... Great post! Taking the law of attraction into account, I think there is definitely an energetic component to our compensation structure that attracts a certain sort of person and a certain response (one way or the other) from the public to our profession. Most of us are so willing to "help" our clients - proven by the comments above - that we often work way more hours than we "should" and we give away way too much of our time and energy and typically we're the types that take care of everyone else before ourselves. Seriously, do you know how many Realtors I see now in the gym that weren't there when the market was cranking? So, if we are so willing to DEVALUE our own time, if we are so willing to give away our time for free, if we're so willing to work 100 hours on something before we see a dime, then yes, I think you can absolutely make the connection that our compesation method has something to do with the type of person attracted to this industry as practitioners, as well as how we are perceived to the public.
Ed may not have been pleased with the amount his lawyer charged him, but he still says they "did a good job." Why? Because lawyers are paid up front. In fact, the good ones won't even talk with you unless you bring a check to their office for a first meeting. Lawyers insist energetically and literally that they are "valuable" to a client and to the larger community because they are paid up front for their services. We are telling the public the exact opposite - that we aren't "valuable" in the same way as a lawyer because we "don't care" when we get paid, as long as it happens eventually... People may not like lawyers, they may be judged harshly in our society, but certainly, they are seen as "trusted advisors" and we are not. Or - let's take financial advisors. Perhpas you don't "pay" them a fee upfront, but definitely they get "paid" as soon as you open an account and move money from somewhere else to them for them to manage on your behalf. The money is "paid" up front, even if the financial practicitioner gets paid on salary or gets a commission check at the end of the month from their company. They are "trusted advisors." We are not.
I am seriously considering implementing a "retainer fee" for both buyers and sellers up front - a nominal amount that I will refund to them at closing, but that also sends the clear message that my time is valuable. My goal would be to have this in place by the end of the year. Will I piss off some clients who don't want to pay up front? Sure, but then the question is, would they have bought or sold anything from me anyway if they don't value my time or my expertise, or would they have been another one of those "prospects" we spend so much time with that never pan out?? Truly, I only WANT to work with clients who see me as a professional and value my time anyway, so if I'm putting out there in the world that I'm valuable, law of attraction tells me those who use my services will also believe I'm valuable, and will compensate me appropriately, and those that don't and won't, will simply not call. That seems like an effective way to streamline my business and if it frees up more time to go to the beach, then that's all good too!
Happy Aloha Friday! Katie Minkus, R(B).
Katie- now THAT is an angle I have never considered. I like it... gonna stew on that one...!
I like the upfront fee or retainer fee ideas too.
I think part of the problem is simply that there are so many real estate agents out there. Perhaps if we came up with a formula to limit the number of agents per transaction to be comparable to the number of doctors per illness, we wouldn't be so 'common'.
I remember telling someone I was getting my license and he said, "Great - you already can't swing a dead cat by the tail without hitting a real estate agent!" "But I'm going to be a good one!" I thought. Since then, I've found it extremely difficult to convince people who don't know me that I really am ethical, hardworking, interested in helping them, and want to do a better job than the 'other guy'.
Hence, the large amount of 'free' work I do - newsletter, blogs, market analysis with monthly updates when people plan to sell or buy 'in a few months', etc.
Mahalo, Jennifer!! Let me know what you come up with, soul sister, I love to think and talk about this stuff!!! :)
warm aloha, Katie
Hi Jennifer,
Great conversation topic! I think that some have tried a different approach (I.e. Redfin and ZIP). I feel that their service is inferior to mine. I know others who agree ... part of the problem with moving away from a commission structure is that it tends to reduce the motivation (and competition) to work hard (unless it's really high pay - which is not possible because these people would already be doing well and not likely looking for a salary, etc.).
I think that the biggest change that needs to be made is the industry's admittance to the fact that WE ARE sales people. Sales people in EVERY industry drive corporate revenue.
The problem with real estate "professionals" is that they try to be a "friend or consultant." I openly tell my clients that I'm a sales person. I'm confident in the process, I guide them through the process and they know what to expect from me (and know what I expect from them). So, here's my point: I think that the real estate agent who tries to be anything but a salesperson comes across as the sales-y and an in-genuine person. We need to face the fact that most people aren't calling us because they need a new friend ... they contact us to buy or sell a property.
Best regards,
Mike
If I agree with you 100%, which I don't, what is your solution? I didn't see any.
Mike - I don't have a solution. I do think about it from time to time and have yet to come up with something. But the question stands... do we really care about our position at the bottom of "the list" and if so, are we willing to do something about it ... something that would require a change in our perception of who we are and what we do?
I dunno.