Paradigm Shift: Changing the Human Experience

What will be the tipping point that creates the paradigm shift that is needed in the Real Estate Industry? 

To begin, I would like to quote a small portion of “Productive Workplaces Revisited” noted in the second link above.  “He put into…context, the age old struggle between authority and dependency”…In so doing he found an audience hungry to find alternatives to bureaucracy, authoritarianism, alienation…not simple ideology…an expression of life’s purpose – affirming diginity in every person, finding meaning in valued work, achieving community through mutual support and accomplishment.”

The above is from a book titled “PRODUCTIVE WORKPLACES REVISITED” – Dignity, Meaning and Community in the 21st Century” by Marvin Weisbord in 1987.  That link provides information regarding Mr. Weisbord’s many books.  For the purpose of this blog post, I am simply borrowing the above excerpt which I have modified to fit most any Real Estate Office in the Country, and a movement that is afoot.

The Paradigm Shift is also referred to as “A Mental Revolution” elsewhere in that publication, (use the search feature and put in paradigm shift for more info on that.)

The problem as I see it, in the structure of the Real Estate Industry, may simply be the old “Too many chiefs and not enough Indians”.  What the Real Estate Industry, and every Real Estate Company in the Industry, and every Real Estate Office in every Real Estate Company, has not answered correctly is quite simply this:


In most realities, the customer of the Brokerage is the Agent.  That is something that most buyers and sellers of real estate do not get to see.  The inside of a real estate office is about the customer…the customer being the Agent.  The Agent is paying the Broker.  The Broker cannot survive unless it adequately serves its customers…the agents, not the buyers and sellers of homes.

Take a look at the photo below:

Meeting of Professionals

Meeting of Professionals

If the people gathered around that table were Doctors, you might hear talk such as: “I have a patient…I have tried this and that…has anyone had a similar… Yes, I have found X to work for many of my patients, here is a study on X I found the other day…”  The talk around that table, would be about better treatment for the patient.

If the people gathered around that table were lawyers and paralegals, you might hear talk such as “I have a case where the defendent is…I haven’t found adequate support for this client’s…. Try X vs. X, I’ll go get it for you.  Is there any other way we might tackle this in Court to show that our client…”  The talk around that table, would be about helping this client win this case.”


Rarely, if ever, do you find a room full of real estate agents discussing ways to find a better answer for a particular buyer or seller. 


The reality is that most times a Broker will set up meetings that help agents sell more houses.  Rarely is the discussion about the buyers and sellers of homes.  If an agent has a problem selling a home, then agents will filter ideas that ultimately do help the seller.  But when the client/customer is a buyer, the conversation all too often revolves around helping the agent “sell a house TO” that buyer.

There are many discussions with regard to “Real Estate ProfessIonals“.  Some of us equate ourselves to doctors and lawyers.  Many more view themselves as (merely) salespeople, and then complain when “real estate agent” comes up on a list next to “used car salesman” on consumer confidence and trust lists.


The Tipping Point that will create the needed Paradigm Shift is A Mental Revolution with this Call to Arms:












TO THE GOVERNOR OF THE STATE OF WASHINGTON (& possibly other States, as well)


There are many, many real estate agents who aspire to assist their clients well.  There are many, many real estate agents who “hung(er for) alternatives to bureaucracy, authoritarianism, alienation…not simple ideology…an expression of life’s purpose – affirming diginity in every person, finding meaning in valued work, achieving community through mutual support and accomplishment.

Painting the Industry with a Broad Brush

[photopress:paintcanc.gif,thumb,alignright]Before I take the full rap for painting the industry red with a broad brush, let’s look at this line from an interview in Inman News today. “To bring buyers and sellers together requires lying, cheating and manipulating.”

Defending bad behavior does not invoke change. Let’s hear from some agents regarding how they were trained:

1) How and why they should not consider the amount of their eventual commission, when selecting homes for their buyer clients.

2) How they should advise seller clients, and assist them in getting the property in proper showing condition, before taking photos and entering them in the mls.

3) What classes are available to assist agents in taking better photos and in photo editing, now that this skill has become such an important role in selling a home for top dollar.

4) How they are taught never to use a listing to promote themselves, and to get new clients, from a seller’s most valuable asset.

5) How they are taught that doing an Open House is not solely or primarily a means to obtain new clients.

6) How to recognize when their buyer client is a victim of predatory lending, and being pushed to spend more on a home than they can reasonably afford.

7) How NOT to push in house listings on the buyer clients of other agent’s in the office.

8) How to stop in their tracks when a buyer or seller client looks uncomfortable, as in sweating profusely or shaking with tremors, and determine the root of their concerns, before proceeding.

9) How to get up from the table without getting something signed by the client, if the matter at hand does not have immediacy issues to the client’s advantage, and give the client time to consider the information presented to them until they are satisfied that their answer is a well thought out and informed decision.

10) How to determine why a house has been lingering on market, without taking verbatim the listing agent’s representation of same to properly advise your client, if they like the property enough to make an offer.

11) How to deal with inspectors who don’t write what they say, and point out problems verbally, that they do not write in the inspection report and summary.

12) How to forewarn sellers, especially of older homes, that there will likely be a few things to negotiate at time of inspection, and put a misc. buffer amount to cover repairs, in the estimate of seller’s net proceeds before they sign the listing contract.

13) How to stay involved with the process during escrow, and be proactive in the escrow process and not just hand over the file and walk on to the next sale.

There’s a Baker’s Dozen of issues, that could literally fill volumes. Where did you as an experienced agent learn these things and where do new agents get this training today?

How did the industry get broken and how do we fix it?

[photopress:dentist_patient_chair.jpg,thumb,alignright]I’m actually writing this from the dentist chair. First time I’ve actually put my laptop on my lap. Kinda cool.

There is a very, very simple explanation as to how the real estate industry got broken. How we fix it is another story that will take more heads than mine to figure out.

While technology and the internet has helped consumers, it has actually been the downfall of the real estate industry with regard to agent competency. Agents never learned how to sell a house from the licensing classes. Agents never learned how to sell a house from the Broker. Agents never learned how to be competent Buyer Agents from either of these places.

Every good agent in this Country, learned how to do these things from their peers IN THE OFFICE. Not by asking questions, but by listening and watching them at every opportunity. Good God man, could I possibly name all the agents I learned everything I know from? Never. It takes a Village. Well guess what? The Village burned down…the people in the Village all went “home” to their “home offices”. New agents sit in offices like the blind leading the blind. The poor Broker just gives them pep talks and lead generating tips wondering how come it don’t seem to work the way it used to.

Brokers really never knew how we learned what we know. Their job was to keep the shelves lined with supplies and give us pep talks when we felt down and listen to our rants when we needed to vent. We did NOT learn how to sell a house from the Broker…we learned from the best of the best, the top agents. We “mirrored” them, we listened when they were on the phone, we peeked into their files to see a sample contract and how they dealt with oddball scenarios. And the very, very lucky ones like me were chosen by the top agents to help them and they tutored me in exchange. I did their Open House and they taught me how to do a successful Open House in exchange. I helped them with their flyers and CMAs and paperwork, and I learned real fast from the volume of transactions passing through my hands. Eileen Friedland, Peter and Gail Rubin, I’ll have to do a whole list sometime, but not now while I’m sitting here in the dentist chair, as I think the drill is about to come out and I’ll have to go…

The industry BROKE when the agents could work from HOME!! When mls services became internet based, no one had to go to the office to work! The busiest of agents, the available great mentors work from home in their robes (like me, LOL) in the early hours of the morning and the wee, small hours of the evening. We go from our homes to meet our clients. We are no longer available for new agents to watch and learn from…

Oh, oh…Here comes the dentist…

Future of the Real Estate Industry?

Hint: It is being discussed and decided this week, but not in San Francisco.

John Cook picks up this quote from Glenn Kelman of Redfin on what he will testify about when placed in front of U.S. House of Representatives’ Subcommittee on Housing and Community Opportunity:

“I am going to say how much friction there is in the business,” said Kelman, adding that as one of the first online brokers Redfin has been “kicked and spat on” by the Multiple Listing Services in California and Washington.

Ouch! I’m sure that once he testifies, relationships with the local MLS organizations will quickly be healed. 🙂

If this topic interests you, then definitely check out John’s column because he provides some great links. – a strategic shift

We, here in the Seattle area, are in the unique position of seeing first hand, the coming of change. There is no place in this country on a parallel path with technology and the future, like the Seattle area. The hiring of Dustin Luther by is as significant as BECOMING It is a sign that the butterfly may finally be springing from its cocoon. MOVE hiring Dustin Luther as the Director of Consumer Innovations, is the starting bell we have all been waiting for, announcing the metamorphosis to come, in an industry long overdue for change.

Back in October, when hired Allan Dalton as President of it appeared to be simply another dose of “same old; same old”. I attended Allan’s recent “seminar” in Bellevue earlier this year, and left with the feeling that he was somehow chastising the industry at large and its professionals in the room. It was as if he were screaming “embrace change or BE changed!”

I am sitting here with my signed copy of “REAL ESTATE TECHNOLOGY GUIDE” authored by the “Tres Amigos”, Saul Klein, John Reilly and Mike Barnett of Internet Crusade. These three men have almost “single handedly” moved the real estate industry into the present with regard to technology, since they met one another in 1995. And yet it would seem that they too are screaming “embrace change or BE changed!”

The hiring of Dustin Luther by “MOVE” is a huge pendulum swing from the hiring of Allan Dalton by “”

It is a sign that the movers and shakers of this industry may be attempting to “moult from their skins”. For too many years they have lain constrained in the hardened cocoon they themselves have weaved. Like the “constrainedness of the caterpillars and chrysalises, their range of activity and movement has been very little as they have been cumbersomely tied to their food source”, the REALTOR organization.

[photopress:dustin_1.jpg,full,alignright] Time and again we have seen the cocoon harden around the “would be” innovators. Will the industry escape? Is the hiring of Dustin Luther and the Title: Director of “Consumer Innovations”, a sign that the largest and most powerfull conveyor of national home listing info, may be willing to shed its REALTOR shackles and MOVE into the consumer’s long awaited public venue? With the hiring of the white butterfly, instead of another caterpillar needing a food source, I am hopeful. I am very hopeful.

What do real estate industry people talk about?

My 10-12 weeks of “blogging” have been quite interesting for me, in that for 15 years I mostly have talked about the real estate industry with other industry people, and talked about local real estate with my own clients and local agents. Blogging opens up talking to consumers generally about the industry, which is in and of itself, quite a revelation.

Given I will be attending the MIT dinner event tomorrow, I am contrasting the speakers of that event with the participant theories of my normal industry discussions. Tomorrow’s event will be “the newbies” Zillow and Redfin plus HouseValues, whom I wouldn’t call a “newbie”.

I am “lifting” this discussion of the past few days from the forum that has been around since 1995 or so, and I have participated in since 1998. I thought this particular discussion was a huge complement to whatever I may hear tomorrow night. For the benefit of those attending tomorrow night, you might want to read this beforehand for “balance”. I have removed the names, except mine, since I am “lifting” it out. I think at least Robbie’s interest will be peaked by that part of the discussion that suggests that the MLS may cease to exist as an end result to all of this.


Agent A says:

I would guess that there is not a large brokerage in the country that doesn’t have plans to withdraw from MLS depending on the outcome of the DOJ suit. I believe that many large brokers are considering withdrawing from MLS REGARDLESS of the outcome of the DOJ suit…

All across America, in every major city there are 3 or 4 large brokers who control around 80% of the inventory. If COURT mandated MLS rules don’t make competitive sense to those brokers MLS will END.

Even if you and Attorney Barry and the rest of the majority of the NAEBA are victorious your victory will be pyrrhic– MLS will be run YOUR way but it won’t contain enough listings to be a market force.

“Ardell” wrote:

What I am asking everyone one to focus in on is what “should be” as opposed to what “has been” since before buyer agency existed.


My major beef with the industry is that buyer agency was set into a system, parts of which should have been revised accordingly, and still need to be revised.

Agent B says…

Could it be that buyer agency will be given as the justification for the large brokers pulling out of the MLS? As Ardell notes, the whole system is a carry-over from a time before buyer agency. Does it really make sense to “cooperate” with other brokers in an adversarial relationship in the same way as when it was a subagency relationship?

One could argue that a listing agent is not truly acting in their seller’s best interest by making the property available to buyers working with their own agents until they have made every effort to find a buyer themselves. If a buyer agent is really going to save their buyer money, help them get more concessions, etc, isn’t it in the seller’s best interests for their agent to find an unrepresented buyer?

Consider this hypothetical situation:

Large brokerage with a state-of-the-art website and large advertising budget decides that they will take all of their listings as exclusive, non-MLS, non-cooperating listings for 45 days. No lockbox, the listing agency will conduct every showing, and there will be no showings to buyers who have not gotten a mortgage pre-approval. During this period, they will not do dual agency, and will attempt to find buyer customers for their listings. If they do not sell in 45 days, the listing will then be entered into the MLS. Their justification for this is that they believe that this maximizes the chances that the seller will get an offer that is in their best interests. Is there anything that would be illegal or unethical about this?

I think it is very easy to come up with scenarios in which the MLS becomes the dumping ground for the bottom of the barrel properties and over-priced dogs. It’s also easy to see scenarios in which MLS entries are very bare bones affairs with just enough info to generate a lead from, but not enough to be useful for other agents anymore. I find it very hard, though, to picture a scenario in which the large brokerages will just happily keep providing data-rich, picture-laden MLS entries for all of their listings, if they lose control over how and where these listings will be used and displayed.

I thought this might be food for thought for those who have not considered how the industry might change in order to counteract the events currently taking place with regard to mls access.

What makes Commercial Real Estate Different from Residential Real Estate?

(Editor’s Note: I recently came across an interesting blog put together by Stephen Cugier and Nick Papa from Grubb & Ellis that focuses on Seattle’s commercial real estate market. In talking with them, I thought it would be interesting to have them post an occasional article on aspects of commercial real estate that might be of interest to people who generally follow the residential side of things. This first post by Nick will likely be particularly interesting for investors thinking of expanding into commercial real estate. )

The fundamental difference between commercial and residential real estate is the fact that all commercial properties are potentially income producing while most homes are occupied by their owners. While you can obviously purchase a home and rent it out, it is not considered commercial real estate. The four main product types that comprise commercial real estate are office, industrial, multi family (apartment) and retail properties. There are other commercial property types such as hotel/motel or mobile home parks, but these are the primary products and those that an individual investor might consider investing in.

Each product type has its pluses and minuses depending on a variety of factors including, but not limited to the management of the property, the size of the investment and amount of inventory available. Naturally the value of any particular property is also subject to typical market conditions such as location, physical attributes and current demand for that type of product.

For most investors entering the marketplace who have owned residential properties that they have rented out, multi-family is where they feel most comfortable. The benefit to these investors is that multi-family properties tend to be the most attainable commercial properties because you can start with something simple like a duplex and go up from there. One note here; apartment property five units and larger comes with much stricter financing requiring a higher LTV (loan-to-value) ratio while duplexes to fourplexes can be purchased within single-family financing parameters. Apartment properties also allow owners to save money on property management fees by maintaining and managing the properties themselves, typically for buildings less than 10 units.

Office, industrial and retail properties typically require a greater amount of initial investment because it is more difficult to find smaller properties (i.e. less than $1M) to purchase. These types of properties also require, in most cases, some form of professional management. This is because negotiating commercial leases with businesses is much more complicated and difficult than negotiating leases with individuals in rental property. This element can also be a benefit as it allows the investor to simply purchase and monitor their property without having to deal with the day-to-day hassles of management. These types of investments can be very attractive when there is a solid long-term tenant in place or where there is potential to substantially increase rents on the property.

rain city video

One other factor that needs to be mentioned in this discussion is IRS Code 1031. This part of the tax code allows owners of commercial property to defer the payment of capital gains taxes when they sell an investment property as long as they purchase a property of greater value within 180 days. This is very common in commercial real estate and is a great way for an investor to increase their real estate holdings and as a vehicle to gain tax free cash while leveraging their real estate assets.

If you do consider commercial real estate as an owner or user, it is best to work with trained commercial specialists. They can help guide you through the complicated process of identifying and purchasing (or leasing); which often entails working through proposals, offers and considerable analysis. Commercial specialists often know of unlisted properties that may be available through their network of landlord and owner contacts. They are also a great resource in assessing the financial viability of properties, which ultimately will determine their worth as an investment.