The Real Estate Agent Problem

Are real estate agents selling or counseling? Are they expected to be cheerleaders or shepherds; to paint the “happily ever after” or “be careful” picture? Having almost three decades of appraisal and sales experience allows me to offer the opinion that the number of agents filing the role of “counselor” are few and far between. They also happen to be the very small segment of true professionals. Most agents that I have and continue to interact with are focused on getting the transaction closed and getting paid. “Always be closing” is doctrine from the top down; if you’re not closing you’re not eating. Good for the agents and industry, bad for the image and the clients. Doubt that? Consider how low on the public respect scale real estate agents are. I wrote about this same issue for Inman Select – it was shared over 7500 times and generated 240+ comments…

…and wet stuff called water comes out of this

The public’s perception is largely shaped by TV and media. The public sees the buyer’s agent provide critical info like “this is the kitchen, this is a closet, look at that view”. Does a home buyer need an agent to tell them what they like or what they need? Is a home buyer so inept that they need an agent to “imagine what this basement would look like finished”? How many buyer agents are simply “yes people”; simply agreeing with their buyer because they either just want to close them or simply lack the required skill, knowledge and candor to be effective counselors?

How about a dose of professionalism? How about looking at present or potential issues, functional or external obsolescence, deferred maintenance, known problems like synthetic stucco or defective LP/GP siding? How about treating that buyer like something other than a kid looking for a new bike; “isn’t that a neat seat Timmy, won’t you be cool riding it”? They’re buying a home which will likely eat up a significant portion of their monthly income, and that’s under the best of circumstances. What happens when something breaks or their economic situation changes? Agents must make buyers think and make them understand the ramifications both present and into the future.

This industry lives on agent fees. Agents selling homes doesn’t matter; agents not bouncing checks to their brokers, local MLS’s, local and state boards and the National Association of Realtors does. There is no industry incentive to raise the bar to become or remain an agent: the more, the better.

Arguably the biggest problem the industry has is the agent that will do anything and or say anything to secure a listing. That seller is looking to sell the home for as much as possible, as fast as possible and with as little headache as possible. Along comes a “yes” agent that agrees with everything the seller says, throws out the compliments like chicken feed and simply ignores anything that might cause the seller angst – like data that conflicts with the seller’s opinion of price. Of course a month later, the “market changes” and the price cutting begins. Professional agents have been bypassed and the seller now has a listing that develops a history.

This manipulation is the text book example of “sales” and it’s not unique to real estate. But isn’t the role of the agent to honestly evaluate the home; be candid and present the applicable data as it applies. “List to Live”…“Get the Listing”…”No Such Thing as a Bad Listing”; worry about price, appraisal issues, inspection issues or any other potential problems later because they might not ever occur. If (when) issues do arise, do the best you can and hope it works out; but hope is not a strategy.

Our industry leaders push sales first, they are selling the dream, the sizzle. Everything is predicated upon agent fees, that anyone can be a successful agent, about how to “sell sell sell” everyone you know and meet. At every level, businesses exist to “serve” agents. From national-regional-local membership organizations to MLS’s to marketing to training to…all there to “help” agents…at a price. But the comedic irony is obvious; the very ones told to “sell” are being sold themselves. The “get rich in real estate” pitch is being swallowed hook line and sinker by agents themselves; home ownership is at 40 year lows, why are there over a million agents? The 90/10 rule applies; the majority of agents cannot earn a living and over half of new agents are gone within two years. Why? Because agents want to believe the nonsense. They want to believe that they’ll just obnoxiously annoy and guilt friends and family for business, it’ll take off and they’ll be cashing checks. The work, dedication and time required to be an effective and successful agent isn’t considered or discussed.

The public – you buyers and you sellers – are going to have to effect change. Until you demand experience and productivity, nothing changes. Complaining that an agent is useless? Didn’t earn the commission? Didn’t tell you X Y or Z? Doesn’t communicate? Look in the mirror – YOU picked them.

While there has been plenty of chatter about “raising the bar” it’s just that, chatter. Nothing has changed and nothing will change. What if law mandated that agents be considered employees? How an agent is an independent contractor baffles me since we are required to work under one supervising broker. How can the IRS consider agents “independent” with that requirement? If agents were employees, perhaps performance and qualifications would suddenly matter to the local offices? Why are there no apprenticeship requirements? Why does a hairdresser or appraiser have to complete thousands of hours of supervised work before becoming eligible to work independently? And no, working under a broker is not the same as an apprenticeship, nor is sitting in class. A broker, despite the job description, cannot and does not mentor and shape an agent; there are not enough hours in the day for them to recruit (the main purpose in life) and act as a mentor to rookies.

The best agents are the ones no one hears about. They make problems go away before their client gets wind of them. They’re working or thinking about work, anticipate problems and have solutions waiting; they are candid, attentive and completely focused on their clients. They make transactions smooth and look easy; they smile hearing “man, I should go into real estate; you hardly worked and made all of that”. Their objective for every transaction is to make it look boring.

Am I cynical? Perhaps, but I prefer pragmatic and realistic. I’m an advocate for this industry; someone that wants it to be recognized as the profession it is. Someone annoyed by the public perception that we are simply a walking, talking, commission chasing clown show. I’m annoyed by the so called leadership that yaps about raising standards like an ankle biting dog on the porch. Either bite or go lay down, it’s well past the time that the entry and retention bar be raised to cull the massive amount of bloat in the agent ranks. Mandatory apprenticeships and tiered licensing levels are overdue; it’s time to legitimately address the issues. We’re not splitting atoms, let’s get to it.

Questions? Maybe we should talk.

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