As a professional industry, we are one of the few which is challenged to set the bar of entry at the proper height to best serve the public and our collective interests. As a result we have an over-supply of practitioners, short term presence / high turnover, and marginal performers.

I believe that all of these avoidable factors diminish our perceived value to our client publics, and also needlessly negatively impacts our businesses, regardless of business model or brand identity.

For most of us, our utlimate brand is “Realtor”, and while most people don't recognize this as a trade name associated with a code of ethics and other professional standards indicia, we are mostly judged at this aggregatre level – with our professional vulnerabilities getting more public attention than our strengths.

Let's get some serious light and discussion on where and how to set the bar to get the best results for our consumers and for our industry.

As a professional industry, we are one of the few which is challenged to set the bar of entry at the proper height to best serve the public and our collective interests. As a result we have an over-supply of practitioners, short term presence / high turnover, and marginal performers.

I believe that all of these avoidable factors diminish our perceived value to our client publics, and also needlessly negatively impacts our businesses, regardless of business model or brand identity.

For most of us, our utlimate brand is “Realtor”, and while most people don't recognize this as a trade name associated with a code of ethics and other professional standards indicia, we are mostly judged at this aggregatre level – with our professional vulnerabilities getting more public attention than our strengths.

Let's get some serious light and discussion on where and how to set the bar to get the best results for our consumers and for our industry.

Consumers are frustrated with the system and the expense. Its more about perception than reality.

You and I have been around and around re the brokerage model and we both know it's not working in it current configuration. While there are many Brokers trying to make changes agents are leaving in droves from “greener pastures” – and you know what they say about those….

The simple problem is the agents that are most productive and on the highest splits are not making enough profit for the Brokerages. The Brokers which relied on a constant stream of “newbies” who would sell and home to a few family members and friends would pick up the slack at a 50% split.

In order to change a Broker will somehow have to convince the producing agent their value proposition, and reducing the amount of commission or charging “admin fees” is not going to do it – they will leave for the “greener pastures” or strike out with boutique brokerages. Not until then will they realize the true cost of doing business, but alas its too late for the Broker that lost the rain maker.

We both agree, it's a complexed problem.

It's a complex problem, but at its heart is the brokerage firm (in whatever shape/form) and how it does things.

-rsh

Change I believe will come from outside the industry when the consumer demands it. The industry is way to inefficient and way to many players or “want to be” players.

Someone has to come up with an improved more efficient system – the consumer is desperate for it!

-rsh

And yes, the whole business is based on the ego train, praise for the “Top Broker”, for the “Top Agent”, “Best Company, top listings, top sales, etc.

Ken Brand just said it so much better than I….

“The truth is, it's possible to sorta suck at what you do, but if you hustle harder (show up), create more engagement and in-person and on-purpose contact, an agent can create a competitive advantage over less aggressive (fewer engagements) but more skilled, experienced competitors.”

He is someone that is in the business day to day and realizes many of the lofty ideals that you would like to see are not always the reality of the business. Just like in most other industries it is not always the best, brightest, or most ethical that win or that the public seeks out.

I have the highest respect for Ken Brand, who I have never meet in person but I know he is a man that understands and lives our business. And yet I have almost unsubscribed to his streams as it contains “Top Agents, Most Sales, Top Company, Etc. Then I remember the reality of the system and what powers the locomotive and look at his beautiful writing style and give him the benefit of the doubt. He knows the cold hard “reality” of the industry and what it takes to be a success.

Selling real estate is a hard business with lots of rejection. Most ultra-successful agents have to develop a larger than life ego to survive and many are motivated not by money, but by recognition and awards.

So Rob, while I have the highest hopes that you'll be able to destroy “this pernicious idea”, sadly the reality in the trenches continues to show otherwise. Good luck my friend your going to need it.

There are many currently, so called, successful models built on the “Agent Is The Customer”, subscription model. I'm talking mostly about the it's ok to work out of the trunk of your car, sell a house or two or year, don't break the law – but it's ok to deliver any level of service and charge what ever you want – or nothing – all I ask is that you pay this franchise fee, marketing fee, administrative fee, network fee, fee+fees. Doesn't matter if you ever sell a house or satisfy a client, just pay your fees please, oh, and invite your friends too-doesn't matter if they're any good, it only matters if they can pay the subscription fees.

I don't think this approach will last over time, I could be wrong. Consumerism, technology and search will change things, when I don't know. Anyway, focusing primarily on the agent will lead to unsuccess in the future. MHU.

I believe the key to profitability is and will be both. Basically, a broker has to establish their consumer brand identity/aspiration and provide the tools, leadership, support and accountability to equip their agents to find, attract, engage and deliver on the promises that attracted them to the brokerage brand philosophy. This approach will attract, serve and loyalize compatible agents and consumers. Theoretically, sustainable profits follow (Alice In Wonderland opens this weekend).

Nirvana, if it exists (hope springs eternal), is attracting, cultivating and retaining agents who are career minded, service oriented and led to aggressively out hustle, out deliver and out engage the skilled but slow and the aggressive but unskilled/lazy/opportunist. I understand that profits are possible (and the market is broad) by delivering stupid stuff to stupid people, but that's not my idea of fun.

One of biggest obstacles to all this (my) speculation is the number of true leaders/visionaries and the polluted by the past mind set of the majority of the agents. If you've been a business a while, you begin to believe that it is all about you, and your freedom to do what you want, how you want, when you want. Plus, the industry (I'm guilty too) has lovingly water-boarded agents to focus on production and volume and units and egoism as THE way to demonstrate greatness. Then as Sales Managers, leaders and brokers we wonder why agents aren't more bottom-line (profit), business oriented and consumer centric. Virtually every reward is skewed.

My conclusion, the future belongs to leaders who concentrate on a consumer focused brand and provide their agents with what's needed, including accountability, to deliver.

This is harder to do if you have to make this happen with a legacy structure and polluted (not fault of theirs, they've been playing the game by the old rules) mind sets. It's easier to do when you start from scratch, ala Redfin (Well, it's easier in some ways, but maybe not so profitable for a long, long time.)

Thanks.

I had the exact same problem you did in looking at this industry:

The truth is, it's possible to sorta suck at what you do, but if you hustle harder (show up), create more engagement and in-person and on-purpose contact, an agent can create a competitive advantage over less aggressive (fewer engagements) but more skilled, experienced competitors.

Shift the thinking. The buyer/seller is not the broker's customer; the agent is. That one shift in perspective changes everything analytically.

-rsh

We'll be talking about this more, I suspect. It's a great topic, and one worth exploring.

-rsh