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Craftsmanship in Real Estate

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The perennial discussion around “what makes an agent bad, good or great” has taken an interesting turn. Some sixty odd comments into the thread, which featured numerous adjectives, we get this exchange between two brilliant people who know of which they speak.

Josette Skilling, a REALTOR from Maryland, wrote:

Great is in the eye of a beholder who does this once every 10 years of so. It’s a lot easier to understand great when you do it over and over again and recognize the difference between bad and good, and even good and great. I’ve had a million cups of coffee and know instantly which one is right…

Most people spend $1M once and may not know until much later on that what they thought was great actually sucked. Yet there was a referral. Ooh rah.

Today someone walked in to an open and talked to me. She bought a house in the path of a light rail project and her agent didn’t tell her. She referred that agent and found out later that the trail would be going through her back yard. She lost a lot of money on the resale.

Really? Get a referral and you’re great? Nah.

Sustain referrals for years and years. Have the respect of the industry. Do the right thing from your gut every day. Yea, maybe then you’re great. Learn your craft and be very good at it so the effortless referrals just happen. Yea, maybe then you’re great.

To which Marc Davison, of the kilowatt fellas, responded:

Even great agents make mistakes and I wouldn’t be so quick to believe that person’s story about her agent. I’m not an agent but I know you guys know all too well how you bend over backwards, kill for a client and then they turn on you anyway and blame you for things that are unwarranted.

But regardless, given all that has been written on this topic, and how all it does it lead us around a maze with no finish line, can someone remind me of the point of trying to define this thing? Maybe Josette’s last paragraph above is all we need as the final answer. It works for me.

I know what Marc is talking about. We’ve been around this topic of “agent quality” for years now, without much progress being made. After all, it was over three years ago that I asked What Makes An Agent Good? and got not much of an answer then. I made the same point that Josette Skilling makes above over a year ago in suggesting that only other agents can rate the quality of an agent, that consumers don’t have enough experience or background to judge an agent’s performance. And I don’t know that we’ve gotten very far.

So Marc is wholly justified in feeling frustrated with this topic; I know I can get frustrated with it. But as he said, maybe Josette’s last paragraph is all we need as the final answer. But it doesn’t quite work for me, because of this:

Learn your craft and be very good at it so the effortless referrals just happen.

Okay… what is your craft?

On Craftsmanship

Dictionary.com defines “craft” (the root of craftsman and craftsmanship) as follows:

craft

1. an art, trade, or occupation requiring special skill,especially manual skill: the craft of a mason.

2. skill; dexterity: The silversmith worked with great craft.

The origin of the word is from Old English craeft meaning power, strength, and might, but during the Middle Ages, it acquired the sense it does today, of a special skill or knowledge. The Medieval guilds zealously guarded their secrets and techniques:

The most important processes used in manufacturing were guarded. In Florence a worker who possessed any essential trade secrets and for some reason fled to a foreign territory must be tracked down and killed lest he divulge the information.

The only way to learn these secrets and techniques was to join as an apprentice, work your way to journeyman, and then to achieve the rank of master by creating a “masterpiece” that showed that you had learned all of the techniques and skills. And the rest of the guild — all masters themselves — would be able to judge the masterpiece work to determine whether the young journeyman had indeed mastered all of the skills.

Even in today’s global economy, a number of professions operate with the same mentality as the medieval trade guilds. Lawyers cannot practice law until they have satisfied the “guild” (the Bar, with assistance of the courts) that they have learned the skills and techniques for practicing law via the Bar Exam. Doctors cannot practice medicine until they have satisfied the “guild” through medical school, grueling internships, and Board exams. Accountants have created their own “guild” through the Certified Public Accountant designation, and even investment bankers (never something considered either a profession or a trade historically) do things like Chartered Financial Analyst to create the “trade guild” mentality.

In all of these cases, the attempt is to measure the skill, technique, and knowledge of the practitioner. Client relationships, caring for the customer, reputation in the industry, and so on have no real role in assessing the craftsmanship of the aspiring professional. The Bar Exam does not test you on how you should implement CRM, only on whether you know the difference between different kinds of torts.

The Craft of Real Estate

In all the discussion about agent quality, this is probably the core that I’ve been dancing around. So I’m grateful to both Marc and to Josette for drawing it out.

What is the craft of real estate? What are the skills and techniques that a newbie should master before she is accorded respect from the “guild”?

Doing the right thing from your gut is neither a skill nor a technique. That’s just character. Putting the client’s needs before one’s own is not a craft; it’s basic fiduciary responsibility.

So what is the craft? What are the skills and techniques?

Some possibilities off the top of my head would be things like:

  • Marketing skill
  • Pricing knowledge
  • Negotiation skills

Let’s just take those three things.

Presumably, the masters in real estate — those agents who have been through whatever the apprenticeship and journeyman stages are and know what they’re doing — can look at the marketing that a particular agent does for a property and judge its level of craftsmanship.

Similarly, when an agent puts a listing on the market with a price that the masters deem as being far too high, based on their intimate knowledge of the local market, buyer trends, economic realities, and so on, they can judge that agent as lacking the craft of proper pricing.

And in negotiation, presumably those who have mastered the craft of real estate could go through a negotiation with an agent and determine whether that agent was a skillful negotiator or a rank newbie who served her client poorly.

Can we assume for the sake of discussion that some group of brokers and agents, with many years of experience, with intimate local knowledge, and with full mastery of whatever the skills and techniques are, could discern the level of craftsmanship of another agent?

The Issue of Evidence and Standards

If we assume that there exists a group of real estate professionals who have mastered the craft, and that this group can discern the level of craftsmanship on the part of another realtor… then the question becomes one of evidence and standards.

A master surgeon might look at the work done by another surgeon and determine that the incision was too long, or in the wrong place, or the sutures weren’t perfectly done, or whatever it is that they use to determine craft. A top lawyer might look at the summary judgment motion of another lawyer and marvel at its forceful logic, or criticize it for sloppy writing. A master CPA might be able to look at the tax returns prepared by another accountant and find errors that cost the client thousands of dollars in unnecessary taxes.

What do master realtors look at to determine the quality of work?

For example, Vicki Lloyd said on the Facebook thread:

You can start by asking to see the last 3 MLS listings that the agent sold. Check for quality & quantity of photos, descriptions, spelling errors, accuracy of the data, etc. Look at #days on market, and sale price as % of original list price.

What is sufficient quantity of photos that would make master realtors nod their heads and say, “that was masterful”? Is it 10? 20? 50? What is adequate quality of listing photos that would make master realtors consider the listing agent to be a craftsman? Is it professional photography only? Do they judge the white balance and exposure of such photos? What is it that they look at?

In looking at property descriptions, what is it that the master realtors are looking for? Is a longer description always better? How many words is adequate to meet their criteria? Do the paragraphs have to express a coherent theme, and each sentence articulate a single idea?

Looking at Days on Market, how many days is too many days such that the master realtors would dismiss the agent as having no marketing skill? Is it 90 days? 180 days? What is an acceptable number of DOM that a master realtor would acknowledge the other realtor as being a fellow master? If DOM makes no sense except as a percentage of the average of the market area, then what % is too low to be considered a master? Is it 50% longer than the average that would disqualify an agent as being on top of her craft? How about 25% longer?

How would a master realtor determine pricing knowledge of a fellow realtor? Is it based on sale price vs. listing price ratio? If so, what is an unacceptable ratio? Is 50% sale-to-list unacceptable? Is 70%? Is 90%?

And these are kinds of things that might be susceptible to quantification. What about things that are difficult/impossible to put into numbers?

How does a master realtor judge the transaction management skills of another realtor? What about market analysis techniques? Are there CMA’s that are done with a great deal of craft, and other CMA’s that are pieces of junk done by newbies? How would a master realtor tell the difference, using what criteria?

Consumer Knowledge

The problem of consumer knowledge, as Josette Skilling pointed out, is significant. The average consumer simply does not buy and sell a home frequently enough to know how to evaluate a realtor.

But the more frustrating thing for me throughout this multi-year discussion is that I don’t get the sense that the realtors themselves, who do buy and sell homes every week, have much of a consensus on what the craft of real estate actually is. It goes without saying that the “guild” of real estate masters has no real sense of minimum standards required for “mastery”, even in areas subject to numerical analysis, such as DOM and price-to-list ratio and number of photographs.

The point of trying to define this thing, as Marc asked, seems to me to establish the minimum standards of mastery around which the ‘guild’ of master realtors can agree, beneath which a person should not be allowed to advise consumers on buying and selling a home. The point of defining the Craft is to be able to judge one realtor vs. another in terms of skills and techniques that a consumer might not know enough to evaluate, but could certainly understand.

I may not know enough to judge the marketing skills of a realtor, but I can understand concepts like “anyone who is 20% or more over the average DOM is someone to be avoided”. Consumers might not know enough to judge a realtor’s pricing ability, but they could understand standards — provided by the guild of master realtors — that someone who routinely comes in at 70% price-to-list is someone who isn’t a master.

And I do think it is incumbent on the industry, on the guild of master realtors, and on the people participating in a Facebook Group like “Raise the Bar” to define the craft of real estate. Because I can’t; I’m no master realtor. In fact, I’m not a real estate agent at all. So it’s on you to define the craft so as to explain what “Learn your craft and be very good at it.”

-rsh