Notorious R.O.B.

“There’s no such thing as a free lunch.”

- Milton Friedman

There are certain topics within the real estate industry that keeps coming back from time to time, like Freddy Krueger or Jason Voorhees.  The future of REBarCamp, raising the standards of professionalism, broker brands vs. agent brands, and so on. Some topics, you wish would just freakin’ die already (like one might feel about say Freddy Krueger) while other topics, you wish would live on forever like Mick Jagger and Cher.  Although I doubt I’d shed more than a single ironic tear were Jagger and Cher to hang up their spurs and retire finally, so to speak.

One of the more interesting recurring topics is the issue of “transparency”.  I put quotes around that word because it isn’t really clear what is meant by transparency by the different folks who talk about it, but the general notion appears to be that realtors, brokers, MLS’s, etc. ought to make more data and information available to the public in order to (a) drive innovation, (b) benefit consumers, (c) help brokers, (d) all of the above, (e) and so on and so forth.

An excellent recent post on UrbanDigs, the blog of Noah Rosenblatt, raises the issue of transparency once again.  The nice thing here is that because Noah is a real estate agent in the People’s Republic of Manhattan, where a MLS most definitely does not exist, he has a perspective on transparency that is a wee bit different from that of others who work in MLS-enabled markets.

As I read the blog post and the comments that followed, I began wondering if those who are in full-throated support for “transparency” have truly considered the cost of transparency.  This is not to say that transparency is a bad thing; indeed, I tend to argue for greater openness and greater transparency.  But I do so with some awareness, I think, of the costs involved.  Some folks, however, appear to think that transparency, like “social media”, is some sort of a magic bullet that carries no costs at all.

Well, there ain’t no such thing as a free lunch.  In that spirit, let’s take a moment (or six) to think about transparency, real estate, and the consequences of such.

Read the rest of this entry »

But I don’t want some pretty face
to tell me pretty lies.
All I want is someone to believe.

- Billy Joel

I had a very interesting conversation with a realtor friend of mine today on the topic of personal branding.  She said something like:

You know what phrase I hate the most?  “To be honest with you.”  Like, what else are you gonna be?  And since you’re now going to be honest, does that mean you’ve been lying to me up until now?  I never want to tell someone I’m trustworthy; I want them to know that I am some other way.

A recent buyer’s survey I vaguely recall reading (at 2:10AM, I ain’t gonna go look) said that the number one reason why buyers selected an agent was “trustworthiness”.  It seems that consumers above all value someone they can trust to look out for their interests in the biggest financial transaction of their lives.

So why does it seem that when one thinks of real estate agents, honesty is rarely the first word that pops into one’s head?  (The same goes for, incidentally, marketers….)

Could it be because they (and we marketers) spend so much time telling people that they’re honest and trusthworthy?

Read the rest of this entry »

Forward Operating Base Gibraltar, Afghanistan

In part 1 of this series, we discussed Information Operations and the importance of integrity in counterinsurgency strategy.  I took lessons from the U.S. Military, and the author of those doctrines Gen. David Petraeus, and applied them to the real estate industry.  In this installment, I’d like to take a look at another key principle of counterinsurgency and how those lessons apply to Big Real Estate: Importance of Local.

Petraeus On Local

Counterinsurgency is intensely local, and reflects lessons of Fourth Generation Warfare. Digression follows!

First generation warfare is all about formations, line and column, and massed infantry.  It is what Napoleon was a master of, and conquered half of Europe with, until he ran into better-trained British infantrymen.  [Making this digression even more of one, for a really entertaining look into first generation warfare and what that looked like, check out the Richard Sharpe series from the British historical novelist Bernard Cornwell.]

Second generation warfare emphasized massed firepower (aka, “massed artillery” and machine guns ) instead of massed manpower.  The idea was that artillery would bombard the enemy into submission, while the rifleman simply mops up the mess.  World War I was mostly a second-gen affair.

Third generation warfare emphasized speed and maneuverability (“blitzkrieg”) to neutralize the advantage of massed artillery.

All of these approaches concerned themselves with taking on an established, uniformed opposing army.  When the enemy disperses and become guerrilla forces or insurgents, then these strategies are of limited utility.

Fourth generation warfare is precisely this sort of war — insurgents, terrorism, propaganda, information operations, where the line between combatants and civilians is intentionally blurred, etc.

With all that said… here’s Gen. Petraeus:

Securing and serving the people requires that our forces be good neighbors. While it may be less culturally acceptable to live among the people in certain parts of Afghanistan than it was in Iraq, it is necessary to locate Afghan and ISAF forces where they can establish a persistent security presence. You can’t commute to work in the conduct of counterinsurgency operations. Positioning outposts and patrol bases, then, requires careful thought, consultation with local leaders, and the establishment of good local relationships to be effective.

Positioning near those we and our Afghan partners are helping to secure also enables us to understand the neighborhood. A nuanced appreciation of the local situation is essential. (Emphasis added)

Conducting counterinsurgency means getting close to the local situation, having boots on the ground in the local community, providing security to the local area, and truly understanding the local neighborhood.

He may as well have been talking about real estate. Read the rest of this entry »

In all sincerity, the best and the brightest our nation has to offer.

It may be completely inappropriate to compare the life-and-death work of our military in Afghanistan to the buying and selling of real estate ensconced in our safety… but I could not help but read this with interest:

We also must strive to be first with the truth. We need to beat the insurgents and extremists to the headlines and to pre-empt rumors. We can do that by getting accurate information to the chain of command, to our Afghan partners, and to the press as soon as is possible.Integrity is critical to this fight. Thus, when situations are bad, we should freely acknowledge that fact and avoid temptations to spin. Rather, we should describe the setbacks and failures we suffer and then state what we’ve learned from them and how we’ll adjust to reduce the chances of similar events in the future. (Emphasis added)

General David Petraeus

That is from a recent speech that General David Petraeus gave at the Munich Security Conference talking about the very real, very serious problems of fighting Al Qaeda and Taliban in Afghanistan.

But if he were speaking at just about any real estate industry conference, I don’t know that those words would be any different.

How often have we heard condemnations of NAR, and specifically of David Lereah, former Chief Economist for NAR?  There are even whole websites set up to rant at Mr. Lereah.

And according to at least one real estate professional, David Lereah and the whole ‘head-in-sand’ approach to the RE market hurt her directly by undermining the credibility of the profession, forcing her to un-educate then re-educate consumers, and establish her own credibility as a realtor.

What’s more, not one big brokerage or big brand in real estate was sounding the alarm back in 2005 or so, while individual realtors were starting to get real skeptical of home values, and blogs like Patrick.net were in full bubble-warning mode in 2005.

What has that done to the brand image of all Realtors?  What has the failure to freely acknowledge that situations are bad, the failure of so-called ‘real estate experts’ to warn about the housing bubble, the failure of so-called ‘mortgage experts’ to warn about the credit bubble, and the failure of so-called ‘ethical professionals with fiduciary duty to clients’ to properly advise buyers during what was obviously a bubble done to the industry?

Post-bubble, has there been any major statement by NAR or by a major brokerage acknowledging the “setbacks and failures” and stating “what they’ve learned from them and how they’ll adjust to reduce the chances of similar events in the future”?  If so, I missed it. Read the rest of this entry »