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.

144 thoughts on “Paradigm Shift: Changing the Human Experience

  1. My God I love ARDELL.

    Interestingly, I presented something fairly similar to my old C21 broker about 13 months ago. I was pretty much laughed out of his office.

    2 months after that, we left his brokerage and went independent.

    A couple of weeks ago, I saw his big giant sales board (and no, we don’t have one) and thought it was interesting that our little office with 8 agents is kicking his 40+ agents office ass in both listings and sales.

  2. Jay,

    First, thanks for the props.

    Second, I implemented this briefly, and so I know how easy it is to do it. The agents who participated in “the experiment” who work for many and varied companies today, still call me to thank me for “their personal mind shift”. They attribute the shift to “changing their lives for the better”…not necessarily their income, but their mode of operandi and personal respect for themselves and their clients.

  3. Ardell – brilliant post. I’ve always felt that in order to prosper in the current economy as well as on a move-forward basis, one needs to focus on drilling-down deeper in their existing clientele. Better, more relevant services. Timely news. Less focus on the “I” and “Me” and more on the YOU of the customer.

    The same rules apply for real estate professionals (or anyone for that matter) in the social media realm. “How may I help YOU” as opposed to “What can you do for me?”

  4. Superb… and fits our business model perfectly.

    I tell buyers that I am trained as an engineer, and genetically incapable of selling anything to anyone.

    What we do provide is the information for our clients to make informed decisions.

    If the decision is to NOT buy a home, that is a good result. Why? Because they know that their interests were paramount, and “good mouth” us to everyone they know

    If the decision is TO buy a home, that is a good result. Why? Because

    Perhaps I’ll live long enough to see real estate brokerage become a profession, with professional standards and credentials and certification based upon objective and consistent criteria.

    Perhaps one day, having a real estate license won’t mean that you solely invested a few hundred dollars and a weekend of your life.


  5. In today’s climate, the unwillingness of the Big Broker to see the elemental flaw in their way of operating the business is the reason that I also have left to establish my own brokerage…and Jay…and so many others that have recently taken the leap. Once you make the mental shift you spoke so eloquently about, it becomes impossible to ignore any longer.

    Look at the dated marketing methods that promote agents and brokers rather than really marketing the homes in an effective manner and you know that the clock is ticking on this method of doing business.

  6. You note doctors and lawyers in there, both of which are professionals who charge an hourly rate and not a commission. A doctor or lawyer who was self-interested in pay the way a RE agent currently is would likely lose their license and/or go to jail.

    I don’t really think mental exercises can ever get you thinking properly when your pay check boils down to basically “screw the buyer”, unless you are totally uninterested in your pay (e.g. already wealthy). For most people, it would probably just end up making them justify their actions even further to feel good about that last $1k they squeezed out. Human nature in a capitalism society.

  7. Interesting discussion, but one that I think you will find very frustrating until more agents and brokers begin to really understand that the current model will never again work as it has in the past. Many more agents and brokers need to go hungry before they’ll accede to major changes.

    I have an MBA from the U of W, an experience I consider a waste of time with one exception. I had a marketing professor who kept asking, as a foundation for any further discussion, “what business are you really in?” The answer you choose will go a long way toward setting the goals, approaches, and indeed limits to the way any business presents itself to the public. A simple example he used was to ask whether you manufactured lawn mowers, or whether you were in the lawn care business. The later obviously offered a much wider range of potential opportunities.

    As the real estate industry reformulates, the first question they need to answer is “what business are you really in?”

  8. Thanks Glenn. I sent the Tweet to Matt asking that question, as I couldn’t find your Twitter Name, and wasn’t sure how much you followed on Twitter.

    I initially had a paragraph in this piece indicating that I would not expect to see a “sales board” at Redfin, but eliminated it for multiple, and obvious, reasons.

  9. Scotsman,

    The book I referenced was written in 1987.

    Almost every change in the Appraisal Industry including the introduction of any kind of standards and oversight, was implemented about the same time.

    “yes we can; yes we will” is a call to address these issues, and be part of change.

    Unfortunately, it appears to take a recession for people to go back and heed “Ask not what this Country can do for you; but what you can do for your Country.”

    Every recessionary period invokes change in ways no one cares about when times are good. Creating good in the midst of chaos is the beauty of understanding Watershed Experience.

  10. Along the line of “what business are you really in” – I do think Real Estate Professionals need to move more toward a service model from a sales model. RE Professionals need to start thinking about themselves as “agents” or experts that provide a valuable service, rather than “sales people” who are trying to close a sale.

    To me this means a bigger move toward hourly rates (or salaried positions ala RedFin) from commission-based compensation.

    Personally, I think this makes sense for the (better) agents as well. This puts a necessary — and strong — link between how much and how well you do your work, to compensation.

    The changes coming in the industry are going to be painful, but they are pretty necessary.

  11. b)

    See my note to the Governor in that regard.

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


  12. Jay,

    See my comment above to b.

    Washington Law holds us to a different standard by default position equalling buyer agency. Automatic. Not every state has that, and ours is one of the few that does.

    Last I looked, Oklahoma (as example) outlawed agency altogether. Florida espouses non-agency Transaction Brokerage.

    That is why national curriculums are often contradictory to various State Agency Laws, and why many NAR sponsored classes teach agents things contrary to their indivdual state laws.

    Also the Licensing Exam itself has “national questions” for the bulk of that test that contain questions we must answer incorrectly, by our state mandates, in order to pass the exam.

  13. On a side note, I received this Tweet from someone I do not know:

    “Just saw your comment on RickSanchez’s show on CNN. Congrats!”

    It was before I wrote this post. Did anyone see the Rick Sanchez show on CNN today? Do you know what the topic was that contained “my comment”?

  14. To every agent in this country:

    Call your broker right now and ask them if “it is the right time for your client to buy?”

    See if they give you a list of “talking points” to convince your buyers that it IS the right time to buy, vs. asking which buyer? What are the circumstances of that particular buyer?

    Will the broker or Office Manager probe you about the particulars of “your buyer client” or will they hand you a list of “talking points” to sway the buyer toward “getting off the fence?”

  15. I feel a bit stupid to just now getting around to your writing. My sincerest apologies. 😉

    As someone who grew up around both the delivery and business sides of medicine, I especially appreciated your analogies.

    I recently wrote about my side in the real estate biz – it’s all backwards here too:

    “The lament voiced by so many agents regarding vendors arises from the fact that the system in place to familiarize you with technology emphasizes the interests of everyone besides you. There are many “gatherings

  16. As long as agents’ compensation is based on sales they will continue to be salespeople. This isn’t a behavior unique to RE agents, rather it is just a part of human nature.

  17. I don’t disagree, Matthew. But in this industry of mandatory participation in cooperative efforts, and broad responsibility to “the publc trust”. by law…BEST should not be left to chance offerings by a few.

  18. Joel,

    I agree that “the hardest part” of “this job” is fighting human nature to provide a fiduciary level of care to the client.

    The argument in favor of retaining this system, is that people do not want to pay the agent whether the house sells or not, and whether they buy a house or not.

    Do you agree? Would it be possible for people to pay a lesser amount for work vs. an inflated amount for result, in a game that can end in zero payment?

    The rationale is you pay 10 times more, because 9 people didn’t pay anything. It seems the public perpetuates this insane logic as much as, if not more than, the industry itself.

  19. Pingback: Paradigm Shift - A Wonderful Article about Changing Focus | Nick Bostic

  20. “mandatory participation in cooperative efforts”
    The phrase “mutually exclusive” comes to mind.

    “broad responsibility”
    Maybe. But specific responsibility is in the hands of the caregiver.

    To be an agent for someone else’s good – what a beautiful world.

  21. “The answer isn’t to find new ways to fight human nature because you will always lose that fight no matter what you do.”


    That is not true. I only hope that you live long enough to meet many people who fight and win that battle on a daily basis. Perhaps become one yourself.

  22. Pingback: I am not a Salesman | The Phoenix Real Estate Guy

  23. The industry needs discussion like this and I’m so very glad to see you raising the bar and leading the way in this discussion.

    If implemented, the paradigm shift you speak of would probably make the ilk of Mike Ferry and all the others on the seminar circuit useless and keep money in agents pockets where it belongs. When people in the industry see the tangible benefits of being a resource and consumer driven vs. agent/commission centered, it could lead the way to fostering the long term business relationships they strive for.

    This is the cultural change within the industry that has to gain a firm foundation to move forward in a positive manner.

  24. Ardell- OK, let’s have coffee and biscotti this week. Will Thursday or Friday work?

    Great post!! I once heard an excellent speaker pose these questions: What do you think would happen if, at every sales/business meeting, there was a statue of the “customer” placed in the middle of the table? What if you conducted your meeting as if you had to answer to the statue as if your customer were there, listening?

    The NAR isn’t listening to it’s members.
    The Multiple isn’t listening to the Brokerages.
    The Brokers are not listening to the Agents.
    And, you guessed it, agents have been tone deaf about the market for a couple of years now.

    I’ve expressed this before, and I’ll say it again, there are tens of thousands of agents working for NOTHING because of the commission structure in the industry. Agents deserve to be compensated for work done. Until the commission paradigm changes, I fear agents will be handcuffed to an antiquated system that serves neither the clients nor themselves.

  25. Ardell is right on. I have often told my clients that I am here to represent your interests! For me the salesmanship comes when it’s time to present your clients offer or list a home. It is not my job to sell a home to my clients that is why we are called “Agents.” It has always been the philosophy of us at Northstone to put our clients first. That is why I work at a smaller brokerage and not one of the big box brokers. Let’s hope they start thinking more and more about the customer, it will be good for our industry as a whole.

  26. I have enjoyed the opportunity of working with a smaller Company in L.A. where our weekly meetings were more like “go fish”. “Anyone have an x coming soon? I have a client who needs…” “Has anyone seen a change in the pricing over at X…yes, I know Joe over at (another brokerage) is working a negotiation that will put prices at X”

    Once a month we even had an open meeting where agents from 2 other brokerages joined in.

    “Cooperation” is a word we toss around a lot in this business, but to see it actually in action is a beautiful sight to see. Fabulous Broker, Bob Schumann. Company – Real Estate West. He never, ever talked about anything but real, real estate.

  27. In response to b (and partially to Joel),

    While it may seem that agents must be motivated by self serving interests when working with a buyer and will always fall back to being salespeople with the commission in mind, perhaps you haven’t thought it all the way through. If you are an ethical Realtor and have been in the business long enough, you will realize that there is a lot more money to be made by actually helping the Buyer get what they want, even if in means less commission in the short run.

    There are a number of reasons why this is true. First of all, the buyers are generally not idiots and will realize what you are doing for them and will reward you with a lifetime of referrals. Second, many of the buyers of today are Sellers in 5-7 years. If they trust you and you keep in touch you will be the one to sell the house. If you let them buy a house with some issues that most people won’t like, or let them pay too much, you won’t be able to sell it on round two.

    What always burns me up in these type of discussions is the basic assumption that in our business agents are motivated by greed more than any other type of profession. Hourly people can pad their hours, builders can use substandard materials, cooks can substitute inferior ingredients, organic bakers can use non organic flour, taxi drivers can go the long way, doctors can recommend more expensive procedures, contractors can get kickbacks from their subs, psychiatrists can string their patients along for a lifetime of therapy, mechanics can fix things that aren’t broken…there are generally ways that in any profession, the customer can be taken to the cleaners. Morality and ethics are in question in every business transaction that every person is ever involved in. Just because more money can be made, doesn’t mean “human nature” dictates taking advantage. For many people human nature means doing the right thing! If you don’t believe that I would suggest taking a look in the mirror.

  28. “Hourly people can pad their hours”

    People often compare the hourly rates for attorneys. In bankruptcy you often get to review the hours charged by others. Let’s just say some are a bit looser with their time reporting than others (reference old joke about attorney in heaven who is only 40, but whose billing records indicate they are 87).

    I had one case where I spent less time representing a chapter 11 debtor than an attorney representing an over-secured bank that really had next to nothing at risk. I had a lot of things to deal with, the other attorney just had to deal with me. Much of that was due to the reporting of hours. My 6 minute phone call to that attorney took that attorney 18 minutes.

    Rather than asking billing rate, I’d suggest it would be better to ask the attorney how many hours they bill a year, or at least to also ask that question.

  29. Dan,

    A paradigm shift is about structure and framework. Any agent who worked in this business when we all represented sellers, recognizes that the office structure and banter regarding sales and awards for selling, has not changed.

    For 85-90 years out of 100, that was appropriate. All agents represented sellers and they sold homes and we sold homes with and for them. What we are talking about is, “what massive changes in the last 10 years reflect the change from that?”

    If you took a film of an office 20 years ago…if you recorded the agent banter inside of an office 20 years ago, when all agents represented sellers, and put it side by side to an office today…would there be a startling difference between the two?

    There simply is not enough change in the overall framework between all agents representing sellers, and that not being so. There should be many and more classes helping agents represent buyers…I don’t think anyone will disagree with that.

    When did you ever hear an office say “hey everyone, hold up, tell your sellers they should wait a couple of months until…” Or “hey everyone, hold up, tell your buyer clients to wait a couple of months for…”

    Answer that last question honestly, Dan. Did you ever hear an entire office ever say “rates are coming down everyone, tell your buyers to wait for that.” Do offices talk about selling things…or representing people? Not the agents on the street when they are with their clients…IN THE OFFICE?

    It’s as simple as the difference between, “I heard your deal fell apart, sorry.” and “How are your buyer clients handling this, are they OK, sad for them.” It’s as simple as that. Which do you hear more often?

    It’s as simple as the same government that changed the law to say you represent buyers…removing “salesperson” from the license at the same time. They didn’t do that. They give an agent a license to “sell” and when representing buyers…that is not appropriate.

    As I said to Jay Thompson, if you tell someone to go out and SELL and give them classes on how to convince people to buy…that is what they will do. If you tell someone they represent people for a living and do not SELL things for a living…THAT is what they will do. The conflict/confusion for an agent is not with them and their client…it is with them and their office.

    Clearly for the five years from 1993 to 1998 one would expect change to be slow. But by 2010 you might expect the office structure to be totally revamped from its previous system when we all represented sellers.

  30. “Did you ever hear an entire office ever say ‘rates are coming down everyone, tell your buyers to wait for that.’ . . . Clearly for the five years from 1993 to 1998 one would expect change to be slow. But by 2010 you might expect the office structure to be totally revamped from its previous system when we all represented sellers.”

    Maybe the reason for this is not everyone thinks they can predict the future! 😀

    Seriously, mortgage brokers have a hard enough time trying to figure out when to lock a loan during the 30 days that a transaction is pending, and you expect agents to be able to tell their clients to hold off looking for 60 days because they think rates might be going down? Anyone who can predict rates like that shouldn’t be selling real estate–they should be investing in bonds.

  31. That miight be true, Kary, if they weren’t saying “rates are the lowest in years”. “Now is a great time to buy”.

    It’s not like you can’t Google and find all kinds of predictions…they are just always predictions that lead to now being the best time.

    “How do I convince a seller to list now and not wait for…”
    “How do I convince a buyer to get off the fence…”

    These are topics that do come up, and often. Salestalk.

    If everyone was taking the 5th across the board, it would be another story 🙂

  32. Oh, come on. The answer is easy.

    We will have a paradigm shift when we begin to think outside the box to actualize a game plan with intellectual capital to incentivize cross functional teams empowered to leverage synergies and operationalize increased bandwidth while conceptualizing customer-directed mission statements.

    We will need the bean counting department to report Total Cost of Ownership (TOC) efficiencies.

  33. Ardell, I came upon your post from Jay. His blog stating “I am not a salesman” caught my eye. But, most brokers or office managers are not a salesman. They relie on us agents who are in fact, salesman. For Jay, sales may be just an extention or reward to providing a good service. Jay provides that service almost weekly in one or more of his posts. I don’t know where he gets his drive to write and run his real estate company. Anyway, the your example of our discussions during meetings is the problem in real estate.
    First, why would I, or any agent, want to attend a meeting; let alone a meeting every week? Brokers don’t have that much knowledge or coffee and donuts to make the meetings worthwhile. I have been in a lot of different offices and the only time there is a “team” enviornment is when the boss is talking about the other broker down the street.
    Second, there is no big discussion about the needs and wants of our buyers and sellers because the table is filled with phineas and sharks. They were hired by the broker – the guy who teaches us ethics. We have met the enemy and he is us. Before you go off thinking I just have a bad attitude, let me qualify my remark. At one office meeting and for the next four meetings the discussion in one office where I hung my license was in regards to a question raised by one of our own. “How long must we wait before we can go after an expired listing of another in house agent?” Yes, this office had several “meetings” about the proper amount of time to lapse before another agent from the same office could go after the home owner to try and acquire the “listing”. And, isn’t that the name of the game? He who gets the most listings, wins!
    Third, it is the listings. Our Code of Ethics may state we are not to mislead the homeowner on the market price of home. But, I can tell you, you would need to be brain dead to put three quarters of the current inventory out there at the price where the listing agents start. And then they WORK them down to the correct price. That’s why they call it work!
    The Paradigm Shift has already occurred in real estate. Thanks to the internet the old system of a brick and mortar building is gone. Advertising in newspaper and free home magazines are a waste of money. There is nothing left that makes real estate a local commodity. With a move of the mouse and click of the button our customers can find out about everything a town or school district has to offer. With a few more clicks they even know the complete inventory of homes and addresses. And, the really smart ones will find out the average price and income of the homes in that community where they want to buy.
    Maybe, just maybe, this change will sweep out the old and bring in a new level of service that has been missing in this business. Then we and the people we are suppose to serve will see us in a different light. But, in the meantime, enjoy this little video on how we see ourselves today by one of our own.

  34. Hi Gregory,

    I saw Brian’s video when he first made it as a part of a contest on Active Rain. I had a feeling it was going to come back and bite him in the butt one day.

  35. Ardell, Brian’s little video doesn’t bite him in the butt. It bites everyone in real estate in the butt. A broker hired the individual he tries to portary. When I was a soldier in the military, we received mandatory classes on how to behave when are sent overseas. They told us we were “Ambassadors to the United States” and act accordingly. That didn’t stop some of my peers from going downtown and getting into a fight with our nation hosts, or, engaging in blackmarket activities. Watch the movie “in the Valley of Elah” to see how “some” act in conflict.

    The real issue is our we see ourselves. And, we are salesman. We are no better or worse than a used car salesman. We sell by what we say or don’t say. We talk up a house, or, point out the things that make the house sit on the shelf. The profession is rated below lawyers, but I know more attorney jokes than real estate agent jokes. Brian is a joke.

    A change in the system that allows so many “brokers” who hire so many agents that learn so many dirty little tricks from the “broker” is the true paradigm shift needed in this business. Everyone talks about how easy it is to get a real estate license when the easy follows right up to the broker. Easy to start a business that locks in employees that are not his employee.

    How great is that? To open a store that pays no employee taxes or wages. They are your team to get the job done, yet they are individual contractors in competition with each other for their next pay check. No health insurance and no unemployment insurance and thanks to the local board, state, and national associations that the salesman is forced to pay into almost no liability for the conduct of those agents.

    That change is coming fast to a business model that as more brokers in real estate than car dealerships. We should be happy for the comparison.

  36. Greg,

    And yet aren’t you the pot calling the kettle black?

    “Second, there is no big discussion about the needs and wants of our buyers and sellers because the table is filled with phineas and sharks.”

    If you view your peers in this manner, what does that say to the people who rely on the people around you to not be “sharks”?

  37. No! I am not the pot calling the kettle black. You openned a discussion about our business(its not an industry) with;

    “To begin, I would like to quote a small portion of “Productive Workplaces Revisited

  38. Greg,

    Blaming “the broker” for everything is so old school. You make you own world these days. Be your own Broker if you have to, or set up your own meetings “by invitation only” and boycott the one with the sharks in it.

    Change is easy…just takes action. The world you are painting can be eradicated by simply refusing it. Not rocket science.

  39. Harm I’ve done? I did not create the videos that anyone with half a brain can view over on YouTube with common search engine phrases. Nor did I open a dialog about needed change for our business. My limited writing skills would not allow me to attempt to provide any quick answers to the many problems facing our business as an aurthor of such a blog. However, I did find yours via another blogger whom I respect.

    I found your article well written and intellectually stimulating. But, nonetheless wrong.

    You can re-package yourself, re-invent yourself, and as they say about an onion, tear away layer by layer just to discover there is nothing there. We, real estate agents, are salesman. We are not representatives, consultants, housing experts, or, any other grand name that is meant to give the general public a different view of us and what we are hired to do.

    It is almost criminal for us to portray ourselves in the same vain as a doctor or a lawyer. If you don’t beleive me, go see what is being said on Zillow. It’s not rocket science. We are no better or worse than a car saleman. It requires a little different style and a lot more time with the customer, but it is the same type of work. And, there is no shame in that.

    In the end, it appears you want change for our business – but, don’t want to acknowledge where the real change needs to take place. That’s called loyalty to the system. And, I guess that because the system has paid you well.

    For the record, I did not say ALL brokers are EVIL. Nor did I say all real estate agents are phineas and sharks. What I tried to express to you is that there are enough agents, that operate as phineas and sharks, who were hired by the many brokers who are EVIL in this business, that we should look at changing the system that allows so many to operate under the protection of the dues paid by the workers.

    Changing the title on our business card to say “representive” instead of SALESMAN, will change nothing.

  40. Ardell,
    A house, to the buyer client, for a commission.

    Maybe some don’t treat it as a sales job but you at least have to admit there is a heck of a conflict of interest.

  41. Cautious Buyer,

    There is, for sure. WA removed fiduciary duties and replaced with statutory duties, believing fiduciary standard was unrealistic. Oklahoma outlawed agency all together, but most agents offer services “with advices” or “without advices”, but the price is the same whichever you pick LOL.

    The tangle has been since the early nineties do you reduce the high standard or the commission…seems the talk is to the high standard to match the commission, but the call to meet that standard is met with scorn.

  42. Cautious Buyer,

    Depends if you think you are paying your agent (in the sale price) or the seller is paying it. When we all represented sellers and the seller paid us to sell you his house, and buyers had no representation, we clearly sold houses. It got a bit murky when buyer agency came in to play.

  43. Ardell wrote: “There is, for sure. WA removed fiduciary duties and replaced with statutory duties, believing fiduciary standard was unrealistic.”

    I don’t know of the legislative debate on this, but I suspect they thought the statutory duties were superior. Fiduciary duties are too vague and require interpretation by the courts (as I’ve been arguing somewhere lately with respect to mortgage brokers being fiduciaries). Setting forth specific duties (and prohibiting specific activities) is much better than just magically declaring that someone is a fiduciary.

    As to the conflict of interest that Cautious Buyer sees, where doesn’t that exist? Does the doctor have a conflict of interest in recommending treatment? Does the lawyer have a conflict of interest in advising as to a course of action? Does the car mechanic have a conflict of interest in servicing your car? Does the suit salesman at Nordstrom have a conflict of interest suggesting items to you to try on? Anytime you’re dealing with someone and they have an opportunity to make more money, there’s a conflict of interest. You deal with those situations by doing more research yourself and/or dealing with people you have a reason to trust.

    BTW, on the doctor thing, contrary to popular belief, the white coat does not constitute a reason to trust them.

  44. Ardell, I am old school. I remember when sales of vacuums, encyclopedias, and life insurance were sold door to door to the “little lady” because it was always understood she controlled the money and the man. I remember when every man was required to serve his country by a draft. I remember when people took responsibility for their actions and didn’t try to re-invent what they do for a living.

    Today, a garbage man is a sanitation engineer, a data entry clerk (who can’t type 30wpm) is a computer programer. And, the real estate guru (who hasn’t sold in the past 5 years) is paid to teach the rest of us how to sell. Yeah, I’m old school.

    Who pays me my commission when I act as a buyers agent is an age old arguement. If you want me say where most HUD-1 will place the number then it is the seller. If you want me to tell you who gets to deduct the cost from the sales transaction then it is the seller (most of the time). The amount is built into the sale of the house. This has always been the sticking point to those For Sale By Owner groups who think we should always be willing to bring a buyer to an unlisted home, or, that they should have access to OUR system for FREE. It is a complete diferent issue than the change you have suggested take place.

    The commission doesn’t get paid until the SALE has been completed and the commission is built into the price of the home. Therefore, the buyer always pays the commission. The CMA that the agent provided to the seller includes the cost of doing business. And, yes it costs more than people think to operate a business – just ask Foxton (gone) and Help U Sell ( under bankruptcy). I am always “selling” a house.

    And to sell a house without the cesspool of people who have slipped into the system, I suggest that the BROKER be required to pay a minimum wage and commission above those wages for the production by the sales staff. That would be real change. That would require the broker to “hire” people and have accountability for those people. That would give the consumer more protection than a CODE of ETHICS.

    Please NOTE: I did not call the real estate business or the entire group of individuals I work with a cesspool. I am referring to the many recruited by the brokers to act as “representatives”, “consultants”, or, whatever name you want to call those who “sell” houses for a living.

  45. Kary,

    I would have to agree that even when fiduciaries are salaried, they do not necessarily drop self interest issues. It’s not all about comission. In fact they are more likely to be hanging out at the water cooler or waiting for it to be 5:00 🙂 speaking from many years as a Trust Officer with fiduciary duties. I was a lot more conscious of fiduciary standards than my peers then, as now, because I was often offered bribes, given the nature of my work.

    And I don’t think hourly changes things, as I’m often suspect people would just rack up more hours unnecessarily.

  46. Gregory,

    Regarding your question on Jay’s blog, no I don’t use a Ghost Writer 🙂 Rain City Guide is a bit different from many blogs, as we don’t use the comment section like a message board for many and varied opinions, when we feel strong about the topic of the post. The writer continues to bring the point back to where it started, not always, but often. Sometimes the post is a question, and open debate is always great…but rarely will the writer vary from the post message unless someone who comments changes their mind along the way. It happens sometimes, but not often.

    I have been in real estate in 5 states and have practiced under every possible form of agency that exists. I’m not as likely to change my mind on the topic based on someone’s experience in another area.

  47. Ardell wrote: “And I don’t think hourly changes things, as I’m often suspect people would just rack up more hours unnecessarily.”

    Unnecessarily? I think I’d use the term fictitiously.

    I’ve said in addition to knowing the hourly rate of an attorney, you also need to know how many hours a year they bill. I mentioned recently that on one of my cases a creditor’s attorney out billed me when I represented a Chapter 11 debtor. The amount of work an individual creditor attorney has to do in a case is minuscule (deal with the creditor’s issues) compared to what a debtor’s attorney has to do (deal with all the debtor’s creditors and issues). But what I really recall in that case is somehow my 6 minute phone conversation with that attorney took him 18 minutes.

  48. I don’t know much about attorney billings, but these two examples come to mind.

    1) If in court for 2 hours waiting for their 2 cases to come up, I think they bill both clients for that waiting time.

    2) I once had a billing for 3 attorneys in one office on a file because they decided to talk to each other about the file and all 3 billed for that time.

    From an agent standpoint that could play out as going out to preview homes for 5 clients, and charging all 5 for the time spent previewing homes.

  49. As to the first, I’d always split the time, but the client whose case was argued last would be billed more, because I had to stay there longer for them. That really gives them each a reduction over what they’d have had to pay if I’d only gone for one client.

    As to the second, I don’t have a big problem with that one. Let’s say the conversation lasts 12 mintutes. That 36 minutes of time could be very productive, leading to new strategies and greater efficiencies going forward. I have more of a problem with a senior partner dragging an associate to a meeting (or hearing) just for show. At best it’s office training, and shouldn’t be billed.

  50. Pingback: Austin Real Estate Blog | National Real Estate Review | Real Estate Scene

  51. I think you are wasted in the industry you are in. I would not have expected such an approach to things in life from such a mundane perspective. However, it looks as if your message is heard, judging from a furtive look of the responses. May be that is what is needed, that from within all the industries, fresh approaches emerging will create new ways of looking at things.

  52. chaosnet3,

    For the most part, tipping points do come from the mundane approach, as it takes masses of people to shift, in order for the behavior to “tip” in a new direction.

  53. Our testimonial book is on our conference table. We are consultants who serve with a servants heart and like Ire Serkes, if they buy or don’t buy, that is OK. ( Our gas bill may be hurt) We have an interim sruvey and a final survey. The interim survey alows us to keep on track. Some people won’t tell you face to face if something was bothering them. This feedback allows us to correct and tweak our delivery so we satisfy the client and hopefully earn a raving fan. Annual referral business is usually 50 percent or higher. Great post! @annarborrealtor

  54. chaosnet3,

    It would be simple to say that technology is the tipping point for most all things, these days. Initially embraced only to perform the same mundane tasks, more easily.

    Sometimes the shift takes place in the industry itself, first. But not often. More often it takes the people outside of the group performing its mundane tasks, day in and day out, for years upon end, to say we want…in fact demand…that you do it differently.

  55. OK, someone has to stop this love fest. Salesmanship is not a bad word. Too many people associate it with the shoddy tactics employed by used car salesman. True salesmanship is helping the customer or client make the right decision. Enough of this counselor, helpmate nonsense. If you want to use those terms to help you endear yourself to your clients, great! Most people, especially in todays environment are frozen, they cannot move forward or take action. You can use all the semantics you wish, but you need to be a salesperson and close the deal. In so doing, you are helping your client to be decisive and to not miss an opportunity that they would regret later. Being a good salesman is not self serving, you are serving the client’s best interests. It is not a bad thing to be pursuasive if you have your client’s best interests at heart. That is essential! If you do not want to learn good closing techniques but would rather be some kind of zen master or hand holder, I wish you good luck in taking good care of your clients and feeding your family. Sell on my friends, it is OK. Say it with me, “I am a salesman and I will succeed by helping others”.

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