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…

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ARDELL is a Managing Broker with Better Properties METRO King County. ARDELL was named one of the Most Influential Real Estate Bloggers in the U.S. by Inman News and has 33+ years experience in Real Estate up and down both Coasts, representing both buyers and sellers of homes in Seattle and on The Eastside. email: cell: 206-910-1000

59 thoughts on “How did the industry get broken and how do we fix it?

  1. Hmmm…

    I’ve never worked anywhere near a top producer — except me, that is. In both of the brokerages I worked in before we started Bloodhound, I hated everything about the business models. To the extent that I feel like I learned anything from other agents, it has been by their bad examples — directly from their marketing and indirectly from horror stories shared by clients. It’s not hard to figure out how to do this business right. I think, as with most things, people simply don’t want to do what’s right, and they’ll use any excuse to rationalize their laziness.

  2. When everyone sat in the desks in the office, Greg, there wasn’t as much “room at the inn” for the slackers. Now brokers can hire 1,000 agents who work from home out of a Kiosk.

  3. We have a surfeit of inexperienced agents, but they’re chasing fewer and fewer viable prospects. Some will get work now and then, which is bad for the experienced agents, but in the long run the new entrants will starve and seek their fortunes elsewhere. Your main point stands, that brokers can continue to add new bodies, but this will prove to be a diminishing return as the idea spreads that real estate doesn’t pay well — which it doesn’t if you look at average or median income. The real solution, though, is competition for reputation. Minimum standards always become de facto maximum standards. If license = qualified, the marginal value of measuring for quality is diminished. I have an answer for all of this…

  4. Great post, Ardell.

    Following this line of thinking reinforces the importance of reading and contributing to Real Estate blogs. Could something as simple as blogging improve the entire industry? I know I feel like I’ve been mentored by you and the rest of RCG more than once (and I’m not even a Realtor).

  5. Oh NO…Greg is holding out on us up there. We’ll have to run over to Bloodhound Blog to find out what his “answer for all of this…” is.

    Speaking of which, it’s awfully busy around here for a Saturday.

  6. David G.

    Yes and double YES! Blogging can indeed and already has, IMNSHO, improved the industry. At least RCG has for sure! πŸ™‚ Credit is ALL DUSTIN’s on THAT count. Kudos Dustin!! Kudos and Kudos again.

    For those who haven’t met Dustin in person, he’s like the “Second Coming”.

  7. I’m not teasing you, Ardell. I do have a post planned on the subject, but I have no idea when I’ll get to it. I shouldn’t even be talking to you, but I’m bored with what I’m doing.

  8. I should be out buying that penicillin the dentist told me to start taking.. Thank God everyone and their mother is over at Dustin and Anna’s getting it ready for the Open House tomorrow, while I’m trying to get well enough to finish staging it tonight and tomorrow morning and do the Open House 1-4. I was there till almost midnight last night, which is probably why I’m sick as a dog today.

    Wouldn’t it be great to sell it at the first Open House?

  9. Help me understand how the industry is broken. The definition of broken means ‘does not function; does not work’. The real estate industry seems to be thriving to me. Granted, so did the Internet boom thrive in the late 1990s.

    I agree with Greg. Most issues, if they are due to the performance of mediocre agents (boy, it’s easy for the seasoned agents to blame the new ones), this problem will be corrected as the market flattens, prices depreciate, the bubble pops and real estate goes out of vogue (such as working for an Internet start-up did).

    Who will survive and flourish, and push the industry forward? Not the individual agent (like Ardell), but agents like Ardell who figure out how to turn a nice profit from creating the systems needed to create good agents. Who’s in a position to do this? I would think the top 10% of producing agents who have scalable organizations that can be leveraged. In this case, the established brokerages have no reason to ‘fix’ things if no other organization has yet proven it can be done better, and at a profit.

    Don’t get me wrong, I love reading Ardell’s posts, but frankly, and I don’t mean any disrespect, but she reminds me of a politician who knows how to play to an audience, but who won’t actually dig in and do the dirty work needed to reach the lofty goals orated from the podium.

    How are blogs changing the way agents do business? I don’t see evidence of it. I don’t see a grass roots, successful initiative to ‘right’ what is ‘wrong’. All I read is theory, and pie-in-the-sky missives.

    As a newer agent, I’d like to see someone transform the ‘talk’ into a ‘walk’. Otherwise, how is this blog – and others – any better an agent for change that talk radio, with its blowhards in it simply to stir up controversy?

    Where’s the disclaimer – “for entertainment purposes only”. There’s only a handful of individuals that participate in posting, and perhaps a magnitude greater contributing comments.

    Ardell loves to blog, and I love to read her posts, but she seems tied down to the soapbox, and unwilling to put her money where her mouth is.

    I’m sure I’m doomed to go to the RCG electric chair for this comment, but I seem to hear a lot of whining and complaining here without any action (not just Ardell, either).

  10. Eric,

    I can’t find the meat in that comment in order to respond appropriately, but I’ll try.

    “Broken” to me is an agent who picks up their check, but doesn’t walk through the property to make sure the seller left it in good condition for the buyer’s move in day.

    “Broken” to me is an agent who tells me she doesn’t WANT to show that place for $450,000 that is a good deal for the buyer, because the buyer is willing to spend $650,000 and she makes more money if the buyer spends $650,000.

    “Broken” to me is a seller with a listing agent who sticks up a sign and makes them sign in advance that they will lower the price by 5% every 30 days if it doesn’t sell.

    “Broken” to me is an agent who tells me “She doesn’t care if the buyer knows or doesn’t know about the asbestos in the house…that ain’t her problem. He hired his own inspector and if the inspector doesn’t tell him about the asbestos…oh well…I just want my $18,000 cause I’m sick and tired of this buyer.”

    “Broken” to me is an agent who lets me as the seller’s agent write the contract to be sure that everything the seller wants in there is in there so they don’t have to show the buyer any more houses.

    “Broken” to me is a listing agent who tells me the LP siding has been totally replaced until I dig and dig and end up having the buyer talk directly to the seller to find out only half of it was replaced.

    “Broken” to me is a listing agent that says the seller WANTS this so get your buyer to SHAPE UP so we can DO THIS DEAL, even though the property has been on and off market since the beginning of time.

    “Broken” to me is the listing agent who says “don’t bring the buyers round that side or we’ll lose this deal”.

    “Broken” to me is ANY agent who can’t understand that a buyer pays the Buyer Agent Fee in the sale price and in his mortgage payment.

    “Broken” to me is a rule that says a seller has to put his house on the market pronto, before it is ready, because agents whine about it if he doesn’t.

    “Broken” to me is a listing agent telling a seller to pay HIM 6% AND hire a painter and a landscaper and a cleaning lady and a stager and while your at it, a lawyer and he doesn’t understand that the seller’s net is being chopped away by all of these so called “experts”.

    “Broken” to me is an agent who wants my advice on how to convince a seller to put his house on market TODAY even if TODAY is NOT a good time to put his house on market.

    “Broken” to me is an agent who wants to know how to get more leads but never wants to know how to value a property properly or negotiate in his client’s favor properly.

    “Broken” to me is an agent who never explains to a family with small children buying a home built in 1917 in Mt. Baker, that “lead based paint” is more than a piece of paper to be signed and a pamphlet to be handed to someone who, by the way, doesn’t speak English all that well.

    “Broken” to me is an industry that spends millions on leads and courses on how to get more leads and courses about how to do their taxes and courses about how to twist people’s arms into buying something they don’t want to buy…but has no courses on how to represent people WELL.

    “Broken” to me is an ABR course that teaches how to chain a buyer to your leg and what language to use to do so, but doesn’t teach a lick about how to EARN the right to have a buyer chained to your leg.

    “Broken” to me is not about agents not being able to SELL property and make a ton of money.

    “Broken” to me is about agents pretending to be “agents” that are merely sellers selling their own wares within the system.

    “Broken” to me is any agent who runs around saying the house will be worth twice as much as it is now in 3 years.

    “Broken” to me is any agent who says “it’s ALWAYS a good time to BUY just about anything anywhere.

    “Broken” to me is an agent who lets me and my buyers in the house while the owner is walking around in her panties on Sunday when they are sending her to the nursing home on Wednesday…can you wait a few days and give the lady a little dignity.

    As to “putting my money where my mouth is” I do it every day, Eric. When you called me on the phone for some help because “your Broker wasn’t available” I gave of my time and experience the best I could. I didn’t hesitate, did I? I help agents every day. I negotiate the fees with my clients in a very fair and responsible manner, every day, both buyer clients and seller clients.

    Do you see me in my work Eric? Have we even met? What money where my mouth is are you speaking of there, Eric. I have been a voice in this industry for eight years…long before blogging. I have been working from within for many years…now I’m working from without…because within doesn’t want the same changes that I do.

    No disrespect taken, Eric. I always consider the source.

  11. Don’t get me wrong. I did appreciate the help you gave me. I know you have vast amounts of experience, and I have no doubt that you avail yourself to anyone, should they ask.

    However, you write as if the majority of agents are ‘broken’. You paint a picture of doom and gloom. Everything you mention above is a valid reason that a particular agent is incompentent.

    However, I would argue that this has always existed. I would argue that since the beginning of real estate time, agents have made one or more of these ‘wrongs’ above.

    For the vast majority of people reading this blog, this is the ONLY exposure to you they get! Why is it so wrong to make the statements I made, when you make sweeping, and damning statements about the state of the industry today. You list a litany of ‘damnedables’ above, but what good does your rhetoric acheive?

    THAT’S what frustrates me, especially as a newer agent. The first several posts of yours I read were great advice pieces (how to stage effectively, etc.). However, when you go on a diatribe about how messed up the industry is, I’m waiting for you to lead the charge towards a solution. If it were a single column, I would categorize it as an opinion piece, and would expect nothing more. However, you go on and on about how messed up the industry is, but seem to offer no solutions.

    Clearly, my post pissed you off, and you took offense (your parting comment notwithstanding). I love to read many of your posts; however, when you go on and on, post after post about ‘the problems with the industry’, and when you write a post that references your status as one of real estate’s ‘top bloggers’, and given that readers have no other contact or exposure to you, there is the risk that you will be perceived differently that you perceive yourself or others that know you personally may perceive you.

    It was this Nth post of yours about the problems of the industry that finally got to me. Enough bitching and complaining! I think everyone is clear on your thoughts on the state of the industry.

    Finally, perhaps you should consider the source. I represent the new agent looking for industry expertise and guidance. I could care less about the old guard, and about ‘the way it used to be’, especially when their ways are rammed down my throat like so many beatitudes. You insult me as a new agent by making comments such as “every good agent learned by working in the office”. Without knowing me, you categorize me as a bad agent. Talk about generalizations.

    There’s no DOUBT that you’re a GREAT agent for your clients. I’m not saying that you aren’t in any respect. However, I thing you are diluting the influence you could have over new agents (and perhaps you could care less what they think about what you have to say…fine) by focusing so often on the negatives in the industry.

    All said, you are tougher than me…in the dentist chair blogging. I’d be in lala land with the laughing gas. πŸ™‚

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  13. How can you say you “appreciate the help I gave you” and say I don’t “walk my talk”? Of all people, Eric. The ONLY, one and ONLY time we have EVER interacted is when you have asked for my help. I gave it willingly, without hesitation, and without regard to what was in it for me. Didn’t I? I stopped everything I was doing and responded to your need, as a newer agent.

    I walk the walk, Eric. And your ONLY personal experience with me was during my walk. You have never seen me NOT walk my talk…so where is that coming from Eric? What’s your real beef today?

    I’ve written hundreds of informative posts on this blog and my blog. I’ve explained Earnest Money and Closing Costs and HUD 1s and even done an entire Anatomy of a Transaction in color coded format. Clearly a very small percentage of my articles are about the industry at large.

    Why wouldn’t I be “pissed off” when a “Fellow Contributor” no less of this site deems to say that “I don’t put my money where my mouth is and I do not Walk the Walk”.

    An apology is in order there Eric, because even you have to admit that your only personal experience, with me personally, does not back up that accusation. Rescind it.

  14. I met George Bush briefly during his reelection campaign. He’s our president, and I respect him as a person, and enjoyed my short interaction with him. However, I feel his positions on certain issues are shortsighted, and often focused more on the nation’s problems than on the solutions.

    You’re George Bush. The help you offered me on the phone was my conversation with Bush. My comments on your oft posted criticisms of the industry is analagous to how I feel about Bush’s policies.

    In my opinion, in the context of your criticism of the industry, I don’t see you walking the walk. I just see a person ranting about how crappy things have gotten. Just as I expect solutions from Bush, I would like to see you complement your criticisms with real solutions. Otherwise, what’s the point?

    I fully apologize to you if you (or any readers) felt that I was slandering your character or track record. That can’t be further from how I feel. You rock! However, I grow tired of reading your “this is what’s wrong with the industry’ posts when you don’t offer any leadership (in your posts, anyway) towards finding solutions to them. If you feel you do offer solutions, they are secondary to the fiery condemnations you issue, and aren’t the points I’m left with. Again, this is all my opinion. Your posts generated this reaction within me. Other readers may think I’m nuts. Fine.

    Like I said, it’s not personal, and I don’t mean any disrespect. There are some people who hate Bush as an extension of hating his policies. That’s not me. I’m commenting and criticizing your specific comments on a specific issue, and am not making any sweeping criticism of you. A better analogy is that we’re senators from different parties. We can have drinks together at the club, but I’ll make clear my dislike of your policies if I disagree with them.

    I won’t apologize for criticizing you on this dimension, just as you surely won’t change your opinion on how you see things.

  15. Absent, the pissing contest…
    Seattle Eric’s point seems valid to me: Ardell’s long list of “brokens” indicts bad agents, not the industry or agents generally.

    Ardell says everybody else–the whole industry–screws their clients. It ends up reading like an advertisement for Ardell more than a thoughtful critique of a whole industry.

    Appropriate on Ardell’s blog, less persuasive on RCG.

  16. Joe,

    If most of that list happened over 16 years instead of 14 days, I’d agree with you. And Seattle is MUCH better than L.A.

    Ya know, I understand that you like my informative posts better. But the DOJ is suing NAR! The Department of Justice is suing NAR. David Barry is suing everyone he can. My “friend” Lois died in the middle of one of those suits before she could get her “just due”.

    There’s a lot going on in this industry. Moreso now than ever before. I don’t talk about it all that much. But I don’t bury my head in the sand and pretend it doesn’t exist out there either. I personally know many of the players in this arena. It’s not just idle chit chat over some Inman news story.

    This is a real estate blog. And it ain’t all peachy keen and rosy out there. Count em guys. Hundreds of posts…most NOT about the industry at large. I’m sick today. I’m entitled to a rant now and then.

  17. Yes Joe, The DOJ has not gotten involved with NAR for a Century or so nor with mls issues for 35 years. Something’s broken enough to get their attention, and it is NOT just the “opt out” provision. If agents were continuing to represent the public well and fairly, the DOJ would not be expending time, money and effort just as they have not for a very long time. Did you now that NAR removed the word “fair” from the Code of Ethics? They kept “honest” and removed “fair”.

    NAR has been given the privelege of being a “self-governing” body for a long time because the industry did not work against the consumer’s best interests.

    DOJ invovled equals somethings broken…and it is NOT simply IDX and opt out provisions. That is simply the hook they found to hang their hat on, but the hearings aren’t going well for the DOJ, I hear, so far.

    Thanks for your good wishes. Will be a couple of days before the antibiotics kick in. May have to do the Open House tomorrow with a big chunk of ice on my face…won’t be the first time πŸ™‚

  18. I’ve been licensed since Nixon’s first year in office. The listing contracts were one page, 5X7 with the contract on one side and the measurements on the other. The ‘industry’ was not much different then than now.

    I was barely 18 then, and the guys from whom I learned the business were solid, professional, courteous, and hard working. In almost 40 years of doing what I enjoy most I’ve learned so much from those ‘old school’ guys, and not much from ‘the industry’. What I have learned from NAR, CAR, and all the rest is that they should all be called the National Organization of Captain Obvious.

    Any time I’ve learned anything of real value it’s been from an individual, not an organization. I don’t mean newbies can’t learn from their local boards, or that NAR doesn’t have any wisdom to pass on, but in my experience, 80% of my success has come from hard work and what I was taught by individuals in the business.

    Although Ardell’s rant makes a valid point, the fact that she’s told others how to interpret a Hud1 isn’t impressive, and certainly won’t take the industry down the road she wishes it to take. She has her heart in the right place, but like (please forgive me for this) liberal politicians, she thinks good intentions makes poor results acceptable.

    That doesn’t mean what she does to help others isn’t exactly what others did for me. She just needs to do it on a deeper level, and I’ll bet five bucks to five hundred that’s what she does regularly. She’s just frustrated at what she thinks she sees.

    Real estate hasn’t changed really since I was a teenager. It’s just doing the same things with computers. πŸ™‚ I’m an investment broker with my own company, and I set my fees/commissions in three different states. And it’s always six per cent. Why? Because the client believes I’m worth it. Period. And if I don’t prove it, I get fired. I haven’t been fired since Reagan was in office.

    Here’s the bottom line: This business will only change and become a real ‘profession’ when agents/brokers behave that way, and they won’t behave that way unless they see it being done, up close and personal. That’s how I learned, and I owe at least a few dozen very kind people a debt which can never be fully paid.

    I do try to though, and I do it by following their advice. I give to other agents at whatever level they wish, even if it involves concepts I took years to master. That’s how I learned. And because of those incredibly selfless folks who took the time to tutor me I’ve made a cartoonishly good living, drive a six figure car, and have created more millionaires, and retired more people than I could have ever dreamed.

    I have a friend who is fond of say he was never on M.I.T.’s short list, and anyone who knows me knows I wasn’t either. But I was smart enough to listen to the real pros and that’s why I succeeded. Ardell, keep on ranting because God knows you ain’t lyin’. But just know the couple hours you spend with an up and coming newer agent will do more to imrove the ‘industry’ than 100 rants.

    But you already knew that, didn’t you?


  19. I just know that when I started there were NINE big top agents sitting in the office with nine completely different styles. I learned a lot from them.

    How many new agents have more than five top agents in their office willing to help new agents who don’t work gor them?

    Maybe they do. Maybe their are. Let’s hear from the newbies out there. Are there top agents sitting around you that you can hear talking on the phone and that you can learn from?

    I really didn’t mean to rant. I just thought my short list on “How I
    Really Feel” deserved a breakdown of each point. Heck, I’m not going to go through the rest of them after this mess.

    Brings up a good point though regarding “Group Blogs”. Do the participants hold any responsibility to one another? Are we a team…a point/counter point. How do other group blogs function? Do they interact with one another like we do? Do they take out big sticks and club each other over the heads πŸ™‚

    The group blogs I’ve seen don’t comment on each other’s articles at all, they just post away. But I haven’t seen too many Group Blogs. Dustin? What are your toughts on “Frequent Contributor” etiquette toward one another? Can I get you to whack Eric upside the head for me? Even though you are much younger than I, I kind of think of you as the Dad around here. Does he at least get no desert?

  20. Real Estate agents today are in the best position ever! With all the internet tools, software, and many other resources. Real Estate agents should not need a broker to tell them what to do. Each agent is the CEO of their own business. The sooner they learn that, the sooner they will prosper. If an agent needs their hand held, then they should not have started in the first place. Case in point: How many agents write out a business plan? For the year? There are plenty of resources for a person to learn about business and Real Estate before ever taking the test for the license.

  21. Taking the test to obtain a real estate license is a small drop in a large bucket of what it takes to become a competent realtor. 60 hours of study is nothing to get your license. A beautician’s license takes 1600 hours! Where’s the logic there? After 60 hours, I can convince someone else to spend $500,000. But it takes 1600 hours to convince someone else to give me $50 to cut their hair?! We wonder why there is such a big influx of realtors? Now, welcome to the real world…..80% of us newbie realtors won’t be here next year. Competition is fierce and rightfully should be. You’re playing with someone else’s biggest investment, you’d better be competent.

    I am a newbie and I chose to go with one of the 3 big agencies in my area. When I signed on, I was immediately sent to 2 weeks of training. We studied everything from legalities, contracts, negotiating, market analysis, marketing, technology, etc. My head was ready to explode with information overload! The company I am associated with has their own school with ongoing continuing education. When I was there, I met other realtors who had interviewed with other companies, offering no such support. I can’t imagine going out there in the real world of real estate without the additional education I received.

    I am in an office with even more educational support. I meet weekly with a group for new agents taught by a very successful and very busy realtor team. I also meet weekly with another group, hosted by my broker, to discuss contracts. We pick one form from the list of legal forms offered by the MLS and spend 90 minutes discussing all of the legalities tied to it. I am also associated with a mentor. This still isn’t enough! I further educate myself with additonal classes offered through many other avenues of support; the NAR, mortgage companies, title companies, even blogs like yourself. This is an industry that should require a real estate degree, not a 60 hour license.

    These classes are all taught by active REALTORS or industry specialists. There is support out there. It might not be the seasoned agent in your office. That doesn’t mean you can’t call her/him. I’ve gone to open houses of top agents and introduced myself. When it’s their assistant, I’ve called them directly. I’ve taken them out to lunch and picked their brain.

    I’m new, so maybe I’m naive. I choose to look at this industry with the glass half full. I don’t see it as broken, but it definitely has taken a different avenue. It’s incredibly competative and you have to find your spot in the sea of realtors out there. As with any other industry, it has it’s good and bad players. It’s also based on reputation and referral, so I can’t see the players who don’t genuinely care staying around for any length of time, or if so then it’s for a mediocre income at best.

    Ardell, I will take your list of brokens and archive it under my list of don’ts. You once again have helped a new agent. You might not sit next to me in my office, but I do learn a lot from you.

  22. Ardell,

    You said,

    “If agents were continuing to represent the public well and fairly, the DOJ would not be expending time, money and effort just as they have not for a very long time. Did you now that NAR removed the word β€œfair

  23. There is a disconnect in Ardell’s logic on this point of the industry being broken because there is no mentoring going on and the DOJ suit.

    While mentoring certainly can be a good thing, mentoring by definition involves teaching by the mentor of how things should be done. This promotes and preserves the status quo. If one has been successful “doing business” a certain way, then teaching the newbie the mentor’s “keys to success” will usually result in the newbie trying to do it the same way.

    The DOJ lawsuit is all about innovation and the lack thereof in the organized real estate. Without boring everyone on this point, the DOJ took a gigantic turn in the mid-90s (hint: beginning of the commercial web) under the Clinton admin. and started looking at anti-trust enforcement as a way to spur innovation. The Microsoft and Visa litigations were prime examples of this new perspective.

    While mentoring can be a very good thing, it also can reinforce questionable practices. I used to teach a lot of residential agents on how to stay out of trouble. My approach was always to combine best practices both from the legal and the client services perspective. They usually go hand in hand!

    Anyway, I can’t tell you how many times I would ask if there was a requirement to recommend a certain number of referrals to a client (e.g. inspectors, lenders, attorneys, etc.) and invariably the class would all say in unison “at least 3.” I would ask why 3 and the class would again in unison say because if you give 3, you won’t be responsible if the chosen service provider screws up. In actuality, it doesn’t matter whether you give one or 50 names. The liability (or really lack thereof) is the same. I would then try to encourage the class that giving one name, the very best person, the person that the agent would call on because they were the very best, is all that is necessary. That this approach was far more client-oriented as clients usually don’t want to interview a bunch of folks, they just want someone to call that is good because they have a problem to solve. In the end, most people in the class would not believe me. They stuck to their guns because this was how they had always been “taught.”

    This is a narrow example but the broader implications are far reaching in the industry. Preservation of the status quo by an industry that has significant market power is what the DOJ suit is all about. It would seem that Ardell’s conclusion that the industry has lost its mentors would be exactly the situation the DOJ would like to see occur. People come in new, try new things, innovate, fail, succeed, fail again, succeed again, all without the mantra of the old guard.

    In the end, won’t the market determine what is better?


  24. That is one of the reasons I thought Eric’s friend trying an auction was very interesting. The jury’s still out with regard to what will happen. Do you really thing the old guard will lose? I hear it is not going that way generally.

    To some extent I’m on the sidelines on this one as to the end result, I don’t like the polarized positions as if it’s one side with a “mission” against the other. Five very intelligent “old guard” brokers in a room couldn’t agree with each other on much recently. I think that’s a good sign πŸ™‚

    I would like to see the old guard change enough to make things better. Many would like to see the old guard simply disappear and the new take over. We’ll see. I’m still rooting for the former and not the latter, generally speaking.

    Mostly I am disappointed in the fact that Buyer Agency didn’t progress as many hoped and expected. It’s been many, many years and it seems to be going in reverse now.

  25. A month a go or so, there was a debate that went from this blog to just about every blog from here to kingdom come, regarding “Buyer Agency”. I am a broker here in NYC and we don’t act in buyer agency. We are all one in the same – we represent the seller. Period. This agency relationship is made loud and clear at intial contact of a buyer. We make them aware that we (brokers and agents) work for the seller. We owe the buyers fair and honest dealings – that is it. There are many times that we become a “dual agents” (meaning we are still working FOR the seller but the buyer is working WITH us as well). There are attorneys that are involved here from the signing of contracts to the title closing. I don’t think that this is the best way to handle buyers, but this is what WE have here to work with. I think that all the “mess ups” here in NY lead to this – I think that the unfair treatments that agents gave to buyers was eliminated to a degree. There will always be a**hole agents that ruin it for the rest of us.
    When I started working in th real estate field – I did it because I myself was looking for a home to buy – so many hours and countless days to be pushed to buy a home that I would not allow my dog to sleep in was just insane. I got my license to find my family a home. I see what agents do – from both sides as a buyer and now as a broker. But I have to say that I don’t think that the industry in itself is doomed. I hire agents almost monthly and out of every 10 agents I hire there are MAYBE 1-2 agents that will make it. I see such a huge turn around. My agents have to be mentored. They have to work under my guidance for many months before I take the holds off. I want to see how they handle people – not just sellers and buyers but people in general. Its like the saying “dont marry the man – until you see how he treats his mother”.
    I think that the the industry is changing – I find it harder and harder to gain trust from people – but I don’t blame them. I find that under every good act there is a motive behind it – I find that if someone does something nice for you – it gets thrown in your face. I find that people will stab family members to get ahead. So, when having a world like this – why is it the real estate agents fault? I mean seriously..

  26. I don’t live in that world, Christine. I do not live in THAT world. There are NO backstabbers in my World. No, “I want all the chips on my side of the table when we’re finished here”, people in my world. I will not have it.

    Maybe you should take a vacation to “Ardell’s World” LOL when you need a break from the rat race.

    As to buyers being OK with not being represented, I cannot believe it after all these years. Maybe in Podunkville…but NYC?? Why do buyers put up with that? Don’t they scream bloody muder?

  27. Russ,

    The word “fair” was in the COE for a very, very long time when we were all subagents. Being fair to the buyer was stricken from the COE shortly after Buyer Agency came into being. Yes, the “rationale” used, to take having to act fairly out, is as you say.

  28. Michele,

    All a buyer really wants is someone to advise them as if they are family. Try pretending your client is: Choose One (Mother) (Daughter) (Sister) This works better for me with women because my Dad died when I was 19 and I have 3 daughters and no sons and of two brothers, one died and the other is a traveling minstrel who should not own a house ever (again) πŸ™‚

    Usually I do the “If I were you, I would do this” test. Trick to that is you have to be a bit of an actress and step into the role of *them*. You can’t be yourself when you answer the question “If I were *you*, I would to this…” That’s hard, but it really works well for me, though it is much easier for me to *be* a woman than a man.

    Don’t sweat the small stuff. When you look at things as if it were your own money being spent to buy that house, or your own money being gained when you sell that house, you will always give good advice. And giving good advice always leads to referrals and all the business you will ever need.

    Sometimes when someone wants to make a so-so choice, I let them. But if they insist on making a bad choice, I just say “not with me, you’re not” nice knowin’ ya”.

    When it’s a listing I do a full blown final report when I hand back the listing. Usually the owners do what they need to do and “hire me back” on my terms. Same with buyers except the few times when I just totally refuse to work with them.

    Don’t be afraid to take a stand on behalf of the client and risk “losing” them in the process. Trust your instincts always. If something doesn’t “feel” right about a situation, don’t stop digging until you get to the bottom of it. We all KNOW a whole lot me than we think we do. Have great confidence in your gut instincts.

    My $.02 of “training” today

  29. I don’t believe throwing a blanket accusation over the uselessness of brokers really cuts to the core … there are good agents and clueless agents and good brokers and useless brokers.

    A buddy of mine got his license and started selling real estate up in the White Mountains. He outsold me, got no support from his broker and ended up with a smaller net at the end of the year.

    I was fortunate enough to end up with my broker and have learned a great deal (mostly at happy hour, but that’s another story.) Real-life scenarios, real-life solutions, etc. And I got up to speed in a hell of a hurry.

    Just as there are agents who care more about their check than their client, there are brokers who care more about their check then the clients or their agents.

    But this isn’t a universal situation.

    And on Ardell’s last post, I recall from my recent NAR biennial ethics training that we still have an obligation to be fair to all parties in the transaction. Can’t quote chapter and verse, but that theme came up more than once.

  30. Jonathan

    1) I never said “Brokers are useless”, what I said was that their “role” is not what many would believe it to be. Never was. That doesn’t downgrade them in the least, just takes them off the pedestal some would put them on. Believe me, they do not want to be put on that pedestal. They want their agents to be big boys and girls and not act like children who need a Dad.

    2) Your trainer’s must have been “old school” because as Russ confirmed “fair” was removed from the COE…in 1995 I think.

  31. Excellent possibility he was old school. Just something that stuck with me. And thanks for clarifying your point … I think I was starting to blend blogs with the dual discussions going on about brokers.

    Like the advice about providing advice as is if the client were family. The fun starts when their actual family starts to throw in their two cents with information based on fantasy: like telling them this is a reasonable offer – a $500 earnest deposit, requesting the seller pay all fees including inspections and asking for a garage door-opener to be installed and offering $30,000 below the asking price.

    Sometimes, the question – do you really want the house – is the one that needs to be asked. Some buyers seem to be more interested in negotiating the last $1,000 rather than actually buying – family as a whole tends to encourage the thinking. Of course, the family already has their home while the buyer will lose the house they wanted.

  32. Ahhh, Jonathan, first ask yourself this.

    When a seller says “All seller services, seller picks title, seller picks escrow etc.” do you agree that the seller is unreasonable when the buyer doesn’t get to pick the closing agent?

    When a seller wants more than he should, are you as critical of sellers as you are of buyers who want to pay less?

    Just a question, not an accusation as I have no clue what your answer may be. If a seller wants say $10,000 more than the comps; do you view that the same as when a buyer wants to pay $10,000 less than the comps?

    My experience is the same agent who says to a seller, “Sure I can get you more than the comps!” will complain bitterly when a buyer offers what the comps suggest the home is worth on that same property.

  33. Perhaps a buyer’s perspective might be useful here.

    I don’t know jack about real estate. My husband and I have been burned in the past by a string of dishonest agents, most recently in January when we relocated to Seattle. We were so full of loathing for the industry in general that we seriously considered Redfin, simply because we had no hope of finding a “real person” we could trust, and we couldn’t bear the idea of spending any more time trying to wade through the crap spewing from agents’ mouths to try and find a tiny grain of useful information…

    Here’s a lesson for all of you: Note that I freely admit we don’t know jack about RE, and yet we were still willing to consider a discount broker where we would be essentially on our own. That’s the value proposition that agents offered in our eyes. It wasn’t about the money that we might save with a discount broker – it was about not seeing any benefit to working with an agent, period. The question was, is it a bigger mistake to work with an agent that may very well work against our interests, or do it ourselves and risk making some huge novice mistake that even the worst agent would catch? We were full of fear at either prospect.

    Buyers aren’t stupid. We’ve become complacent because what we really need in the way of services doesn’t exist. No buyer really understands why an agent would help them negotiate a lower price on a house, when that means the agent gets paid less in the end – especially with the sadly pervasive view of agents as close relatives of used car salesmen. As much as we want to believe that we could have someone in our corner, someone out there fighting for our interests, the logic in the reward structure just doesn’t hold up under scrutiny.

    And that’s how Redfin hooks you – once they tell you “Our agents aren’t compensated based on the amount you pay, so they’re truly motivated to negotiate in your favor” buyers remember what they’ve tried so hard to shove out of their minds … why on earth would a “real” agent help me negotiate a lower price on a house when it means they get less money?? You remember that you’re relying on the generosity and good will of a near stranger, you get scared, you lose hope… and you think “hell, I might as well just do it myself.” Buyers have to find that needle in the haystack – that one person who is willing negotiate a fair price, at their own detriment, because it’s the right thing to do. Your reward structure is simply at odds with ethics and common decency.

    Anyway, we realized that if we were going to consider a discount broker, we would need to educate ourselves about Seattle RE as much as we could on our own. That’s how I happened on to RCG in the first place. Which is where I found Ardell. Full disclosure – we’re working with her now. I’ll tell you this, she walks the freaking walk. Moreover, if anyone else on here was as gung-ho and transparent as she is – if her posts were followed with comments from any of you about how you are taking her ideas and acting on them, or building on them in new ways, innovating on your own, excited about bringing change, etc. – we would have had options when it came to picking an agent. Instead, she stood out.

    I’m not trying to write an ad for Ardell here (and I don’t think she is either – RCG content on the whole isn’t geared toward the average consumer). It’s just so shocking to see that the response she gets on RCG is the polar opposite of how we, and I’d wager the average buyer, sees things. Her message resonated with us. She made sense. But I have no compelling reason to defend her in this forum, except that if by some horrible turn of fate she up and moves back east, I don’t see anyone here to step up and be my new agent. So I hope you’ll take this as an unbiased take on things from your customers’ perspective. We need you to be better.

    As a side note… Eric, you’re clearly full of ambition as a new agent and that’s great, but here’s a piece of advice, and it’s anything but RE specific. Mentors come in all flavors – old school and innovative. Experience does not always equal a traditional mindset. In fact, really good experienced people often got where they are by rejecting the old school all along, even before it was old (that is, mentoring doesn’t have to further the status quo, Russ). But here’s the thing about mentors: to the extent that they are good, they aren’t going to fall into your lap. They aren’t going to bang down your door and beg to mentor you. You have to bury your ego, suck it up, and ask to learn from them. Not just one piece of advice when you’re in a jam, but real, long-term learning.

    Different strokes for different folks yes, but keep in mind that each of you builds the reputation for your industry – each of you contributes to the benchmark by which agents are measured in the public eye. To the extent that, through your own behavior, you fail to gain the trust of the public (which by Christine’s account is getting continually more difficult), you damage the industry as a whole. And you open the door for discount service providers to be way more than “good enough.” How do you expect to convince me, the average buyer, that if customer service is but one of many cogs in the wheel of your Giant Big Box Superagency, you are still that selfless guy who will willingly cut his own commission by talking a seller down to a fair price for me?

    I don’t know anything about the DOJ suit you keep talking about. I do know that (a) the Equal Employment Opportunity Commission has defined the word “fair” for my own field in an objective and enforceable manner that I’m bound to enact every day and (b) in a world where all of Ardell’s examples can be waived off as “just a few bad agents” rather than a list of people who should have had their licenses revoked, something is most certainly broken. And I’ll tell you this – it’s not going to change with a single post. It’s going to take some harping.

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  35. Great comments, Polly. What your testimony makes clear is that trust, honesty and delivering what is promised are the keys to good agents. I can’t believe the experiences you had. I think you make a good case why there should be 1) a higher barrier to entry for licensing, and 2) better oversight for agents.

    Like I said. I know that Ardell is a rocking agent. However, the best agent I’ve met is one who represented us on our two residential home purchases. She wasn’t touchy feely; her role wasn’t to be camp counselor or shrink. She had an MBA (which appealed to my data side), she knew real estate backwards and forwards, she kept her promises, and we could trust her implicitly. She was a very different agent than Ardell, but probably just as successful (she’s now sailing around the world, returning to work 3 months out of the year).

    I think we can all agree that the measuring stick for a successful agent – no matter what his/her approach may be – is creating clients as satisfied as Polly is.

  36. I still don’t think you “get it”, Eric. What does “delivering what is promised” mean? Sounds like Russ’ long list in a contract of “services and metres”.

    When the lender says the buyer is “qualified for a house at a price of X”, do you represent the buyer by talking over the qualifying ratios? Or do you leave that up to the lender and buyer to figure out? Many agents don’t “get involved” at all in the lending phase. They say “No one gets in my car until I know they can buy something today.” And they say stupid script things like “Let me ask you, if I can find you the perfect home today, did you bring your checkbook?”

    I still get the feeling that you think we *sell* something for a living. We cannot be compared to Walmart, even if we charge a quarter. We are NOT Costco even if we sell in bulk. We cannot be compared to either of these companies because we do not SELL anything for a living.

    We represent people for a living.

    Do you know what the buyer’s monthly payment is going to be before you put someone in your car? Do you know how much of their gross monthly income that represents? When I first moved to the Seattle area, two out of the first three buyers had lender letters saying they could buy a home for x dollars and the monthly payment represented 50% or more of their gross income. (see my blog for protecting yourself against predatory lending.)

    Eric, too many agents get into this business thinking they can hire a bunch of people who fax papers back and forth and stand in line for a big fat check and then pay “all the little people”. When you delegate all of the responsibility to people who do not represent the client, but work for *you*, then who exactly is representing them?

    If you are “the boss” and the assistant is faxing disclosures and home inspection reports back and forth to the buyer and the other agent, and the lender is getting his business done by “closing the deal”, who exactly is representing the person?

    You are using a benchmark of making a lot of money as the goal. We “make the big bucks” for representing people. And as to your “touchy feely” comment, try this one. Maybe 6% is for people who need representation and 1% is for people who don’t. If you only want to represent people who don’t need much representation…I know a Company you can work for who will pay you a salary.

    The business has become a lot of agents who want to do no more than Redfin or MLS4U, but at a higher price. And there are way too many people who need more than that.

    I am sorry you couldn’t hear that. There are WAY TOO MANY people out there who need MORE than that. And as “Polly” said, they certainly don’t need to pay the “big bucks” for the same as they can get from Redfin or MLS4U.

    I really feel badly for “sparring” with you, but you seem to keep jumping at me with the red gloves. I’m not sure why.

  37. To other new agents, is it really everyone’s goal to be the agent who “Sails around the world and works only 3 months a year”? Who wants an agent like that to represent them?

  38. Russ – I have to object to your definition of mentor. I think what you’ve described (reinforcing the status quo) is usually the result of the narrowest definition of mentorship. Where you merely seek out someone more senior than yourself and directly model yourself after them. To me that’s less of a mentor and more of a “model”.

    Far from enforcing the status quo, I get my mentors to see things through my eyes, and vice versa. I synthesize what they say with what I see and benefit from a more seasoned perspective. I’m not saying they always know more than me, but they certainly know “different” than me. I don’t think I’m unusual in seeing mentors this way, and I’d guess people like Ardell think the same way. The mentors I seek out are certainly more senior than myself, and they need to understand the types of challenges I face, but I’m looking for situational awareness, diplomacy skills, advanced business thinking – not a “script” or a “paint by numbers”. They rarely do exactly what I do. In that way, RE agents should be seeking mentors in sales or marketing, but not necessarily other RE agents.

    If the only kinds of mentors for RE agents are “crusty ol’ timers” stuck in the past, then sure, the RE industry is racing to the bottom. But I seriously doubt that’s the case. Many of the long-time agents I know (15, 20 years) don’t operate in a way most people would describe as “the status quo” – and the people that work with/under them are doing their best to avoid perpetuating the negative business practices.

    What’s far worse for the RE industry is the lax licensing – leading to an oversupply of agents (which has resulted in a general dumbing down of standards), the mega-agents concerned only with their own sales growth and the anti-competitive industry associations. I’d say the NAR is more interested in enforcing its MLS restrictions and trademark on the word REALTOR than it is in making sure that REALTORs actually live up to the spirit of the “code of ethics”. Better yet, who is working to improve the quality of service from agents? If the NAR wants REALTORs to be the professionals that consumers think of, how about addressing the negative perceptions (and realities) their own business practices have helped create? As Greg at BloodHound Realty points out, how has the licensing “floor” become the defacto “ceiling” for what agents/brokers are willing to do?

  39. Comment #16 second paragraph: “You (Ardell) are George Bush.” LOL I never thought I’d be called George Bush. Judge Judy maybe…but George Bush?

  40. Ardell, we’ll just have to agree to disagree. You clearly have a point of view that cannot co-exist with other perspectives. In any client service business I have EVER worked in, success is measured as being able to beat the expectations of that client.

    Does this mean that I have to do everything that you do for your client engagements? No. Once I LISTEN to what the client’s needs are, I set out to MEET and EXCEED the expectation a client has of me. Could they do better if you were their agent, ABSOLUTELY. Do they suffer by working with a newer agent? Only if I screw up – and that’s surely not limited to rookies, Ardell.

    After the transaction is closed, and they thank me profusely for helping them buy or sell their home, for taking care of last second glitches on closing day, for calling them and keeping them apprised, and for simply doing what I say I’ll do (which is what they want me to do), I can sleep well at night knowing that I made a difference.

    You may see what I wrote as the signs of a rookie, a less than perfect agent who “doesn’t get it”. Oh well. I’d rather you just say, “good for you, Eric”, and send me on my way.

  41. Hey Ardell

    Seems to me that Eric just said “different strokes for different folks” and you came back at him with guns ‘blazin. You have a way of doing business that apparently works for you (and Polly). Is your way the only way? Your consistent references to Redfin as “bad” appears to support some dogma that Ardell’s way is good, everything else is bad. Might there be a world where Redfin (or some other innovative broker) is wildly successful and you are too?

    Just an observation….


    p.s. I could care less what my agent does in his or her spare time as long as they do a great job for me

  42. And you don’t even have a last name πŸ™‚

    Eric, I don’t know where you are getting this “new” agent thing. I’ve mentored tons of new agents and told them after representing 3 buyers and 3 sellers, you’re pretty much good to go. Clearly there are many different types of agents for many different types of clients. For example…I could never represent Russ. We’d probably kill each other πŸ™‚

    Russ, I think you would do very well as a Redfin buyer. Very well, indeed. But for some people it’s like throwing darts at a dart board.

    Eric, your last comment was excellent. Not that you need my approval.

  43. Ardell, thank you for your 2 cents. Your advise is always appreciated and useful. JCricket defined mentoring well. Learning this business is about absorbing good information from senior agents then putting that to work within your own plan.

    Polly is yet another eye opener, emphasizing how the general public perceives realtors and unfortunately with good examples.

    Where are the good examples of agents doing the right thing and not just Ardell?

    Not broken: After the buyers moved into their new home and discovered a leaking skylight, their agent replaced it out of his own pocket. Yes, this is after he collected his commission.

    Not broken: The first time buyers who didn’t have enough for closing cost and their agent that pitched in her commission to help.

    Not broken: The agent who covered the costs of the inspection on the second house the buyer made an offer on.

    Not broken: The agent that made multiple runs to the dump in his truck to remove what was left from the seller after the buyer had moved in. Again, after he received his commission check.

    Can someone add to this list? I’m beginning to feel that I’ve chosen an industry to work in that is full of sharks and weasels and I’m constantly scratching my way around defending my worth as a knowledgable, honest and caring ally with someone who simply wants to buy or sell a home.

  44. Michele,

    I have always been very tough on agents. Not because they are “bad”, but because I try to help them do better. Your list to me is a good example of a a few lessons learned, hopefully, by the agents involved in the transaction.

    1)The leaking skylight should have been either a seller disclosure item or a home inspection item before it closed and not a surprise to the buyer after they moved in.

    2) The buyers not having enough money for their closing costs probably caused them a great deal of worry at the end. The estimated closing costs they received before they made an offer, may have been less than a true picture of the amount of cash they needed to close.

    3) Depends on what happened at the first inspection and if the inspector found something that the seller should have disclosed in the first place or that the agent should have noticed before the offer was written.

    4) If the agent was running to the dump AFTER he received his commission check, it means he didn’t do a walkthrough before it closed and put the seller on notice before it closed and didn’t get rid of the stuff before it closed.

    I am very tough on agents, but I do realize that if they only do 80% of the things I train them to do…they will be doing a great job. Thinking ahead and preventing problems quietly, and often without anyone noticing, is often better than putting out fires. The fires singe the clients before an agent can jump in to put them out. Better to prevent the fires in the first place.

  45. Michelle – I agree with you. There have been times that I myself helped a seller finish clearing out the furniture of the house we sold, when his wife was having a fit – nasty divorce story. Staying there until 12am to do the clean out with him – while my children were home with a sitter – I did not get my commission until we closed –
    There were times during a walk thru when a buyer who bought a co-op for her father and he was NOT thrilled about (because he wanted to stay at her home, which she refused) that I bought a new refridge – and saw him smile for the first time. I did not get paid my commission until we closed.
    Michelle – how about the times when as an agent might get a call from a seller/buyer who just got beat up by her husband and needs diapers for her baby – and you go to the store buy the diapers and some extra food for her and the baby – and you cut your commissions in half so she can get on her feet again. (Meaning I got paid nothing – my broker did but my part went to her). There was nothing expected in return – but to find out later that the two get back together and go on vacation with your commission…
    Michelle, there will be days and deals like this – not everything has a reason. My advice to you is to YOU worry about HOW YOU TREAT OTHERS. Don’t watch the police cars going to get the “bad people” Walk away from it. Worry about your deals, your conscience and if YOU can sleep at night!!

  46. Michelle writes: Where are the good examples of agents doing the right thing and not just Ardell?

    They’re probably not blogging πŸ™‚

    The blogosphere is an intensly navel-oriented realm, and after reading many blogs for years I’m just starting to realize that the “signal/noise” ratio in blogs is no different/better than Usenet or BBSes before that.

    The good agent (singular) I have worked with is busy doing his thing. Serving clients. Trying to stay abreast of the market trends. Spending time with his family. He’s not necessarily obsessed (like the rest of us) with making himself heard, reforming the entire industry, or getting caught-up in a blog cat fight every week or two.

    None of this is to say I don’t appreciate reading this blog or the comments people post, but I keep a sense of perspective on how “representative” something like the blogosphere can ever be. Nicholas Carr at Rough Type has written a bunch of informative posts recently about the intense amount of “Kool-Ad drinking” involved in Web 2.0, Social Networking and blog communities.

  47. Pingback: Real Central VA - Tracking the Charlottesville and Central VA real estate market and more » Tuesday Links - 22 August 2006

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