A reader of Dustin’s sent him an email that both were kind enough to allow to be published at 4realz. The reader, a member of a MLS committee, raises some very interesting and very important questions provoked by the discussion on Cluetrain marketing in real estate between Dustin and myself. Read the whole thing.
This is, of course, right up my alley so uh… let me clear my virtual throat here. 🙂 The reader (and the MLS members) face a real conundrum here.
This conversation issue is not driven by the word “control” but rather by the “agency relationship” created to the client to “market” their property for highest and best sales price. The conversation is also with consideration that at the MLS it is a cooperative membership to assist the process of buying and selling property. It could be devastating to the industry to get caught up in a war of words about the value of any one property. Why would I list my home with an agency if when the listing is posted online It gets poor (or worse –slanderous) reviews by MLS members or public on the very same site that is suppose to market the property for sale?
So back to the idea that broker members of the MLS recognize the value of an open, interactive dialogue with the consumers to grow their web presence at their individual web sites. However they are reluctant to allow this dialogue with opinion of the competing brokers/agents (which may be an opinion rooted in competition and not fact) or the potential “sensationalism” that can be created through “negative news” allowed to be expressed by the public or within the MLS membership.
So in context of the ClueTrain and with the legal regard for agency relationship in mind my questions to you are; 1) what would your opinion of the MLS discussion be and how would you advise the MLS to proceed with this line of thought. And 2) If you were an individual owner of a real estate company, how far would you go (or allow to go) on your company/agent’s websites to allow what may be disparaging comment on a competitor’s listing or your own company listings?”
Although this MLS committee member didn’t ask for my opinion, I’m going to give it anyway. That’s just how we roll here. Heh.
My take on it is as follows: take one step at a time, very gingerly.
Fact is that there are laws and regulations that bind up real estate and real estate brokerage. Even as I rail against such laws, I can’t advise anyone to incur legal liability while the laws are on the books. Having said that, we need to do much more in terms of earning the consumer’s trust through authenticity.
So first, with respect to the MLS discussion and how I would advise the MLS to proceed, I would suggest that they debate the meaning of “agency relationship” in the current context. Is it really in the client’s interest to be seen as selling a house that is badly mispriced and pretending that it is not? Does the agency relationship impose a duty of telling the client that he has to update his kitchen to the 20th century or face significantly lower bids? I think they do.
In fact, if I were selling my house, I would want my agent to have the intestinal fortitude and professional pride to tell me when I’m being an idiot. I might insist that the deep purple shag carpet in the master bedroom is teh sexay; it’s your job to tell me that I’m smokin’ the devil weed too much. If I elect to ignore your advice, then it’s on me. If you never tell me in the first place, because you’re afraid that I’ll just go find some kiss-ass agent who’ll tell me that I’m an interior design genius just to avoid annoying me, then that’s on you.
Why would I list my house with an agency if upon being posted online, it gets hammered by criticism? Because the agent in question would have prepped me for it. She would have sat me down and explained the facts of life in real estate, so that such negativity doesn’t faze me. In fact, I might incorporate that into the overall marketing plan:
“Total 70’s era house available for sale. I know the place needs major renovations to tear out the tigerprint carpeting, and the mirrored disco ball in the master bedroom, and yes, you may have to replace the leopard print wallpaper, but that’s why I’ve priced it below market. I don’t want to repaint the place while I’m still here, as my agent tells me to do, but you can after you buy the place from me. The structure is solid, all of the fixtures work, and the boiler was replaced last year. So it’s a bargain for you if you don’t mind a bit of interior redesign work.”
In addition, what I would expect is for my agent to defend the house using facts and expert analysis, thereby silencing the uneducated rabble, through the conversation. For example, suppose some consumer gets on the site and trashes my house.
“Man, that is the UGLIEST house I’ve ever seen. I wouldn’t buy that for a dollar, nevermind $350K.”
I want my agent to get on and respond, something like this:
“The owner has already agreed the aesthetics might not be for everyone, which is why he’s priced the house at $350K when comparable homes in this neighborhood have been selling at an average price of $370K. Fact is that the house is located in South Mountain school district, one of the top elementary schools in the county (link to PDF), and pricing has been bucking the downward trend (link to graph). Indeed, the owner would not sell it for a dollar, but will entertain reasonable negotiation.”
That is the key to resolving the consumer vs. competing agent issue as well. As an MLS, I would prohibit members from posting personal opinions — they can and should post professional opinions. I would absolutely discipline a MLS member for a personal opinion driven more by competition, but encourage professional opinion driven by facts and expertise. The distinction might be fine, but honestly, I think people know the difference when they see it.
For example, compare these two opinions:
“Wow, is this house terrible. I’ve got three other houses for sale right now that are far better value.”
“I think this house is overpriced. The sales comps for similar properties in this neighborhood going back six months is $15K lower. Further, the zoning for that area has change to mixed residential/industrial. I don’t know that I could sustain this pricing given those factors. Perhaps there is some special amenity or unknown factor here that would warrant the higher price, but in my opinion, this property is overpriced.”
It’s fairly obvious which one is just competitive bullshit and which one is a professional opinion. The latter can be debated, while the former cannot.
As a matter of fact, I would advise the MLS not to open up for public comments if their members are not allowed to comment. Because without expertise, without leadership, the public tends to become a mob. If consumers who know jackshit start badmouthing a property, the calm, expert, and knowledgeable professional opinion of an agent can help calm the waters and reveal the naysayers for the idiots that they are. If they are silenced, however, then the mob mentality just takes over and it gets ugly, fast.
So my recommendation to the second question follows naturally. As the owner of a brokerage, I would positively encourage commenting on my website and listings, and encourage my people to comment on competitors’ listings as well, provided that my people restrict themselves to professional opinions that can be backed up with evidence and data and expertise, and that my people stomp out the idiot consumers who just flame for the hell of it. In fact, part of the value that we would provide to those who list with us is our vigorous defense, based on facts, research, and expertise, against morons who got nothing but emotional flaming. This overall effort has to be tightly coupled with a generall “Whole Truth, And Nothing But the Truth” policy as it comes to dealing with our seller clients.
We will spare them nothing in our honest, authentic, and well-considered professional opinion. If such an opinion leads them to go elsewhere to list their house, then so be it. I will consider it a point of professional pride that I and my people have never refrained from telling a potential seller client our absolutely honest opinion about their property, about the pricing, and about their neighborhood.
If one applies this standard, then I think even commenting on competitor’s listings is a valid part of the Cluetrain method. If your competitor has a listing up that is really just wrong in your professional opinion, then you owe it to the market-that-is-conversation to let your opinion show. If he’s a professional, then he will defend it with professional expertise, facts, and data. If he’s not a professional, but one of these sham-agents, then he needs to get out of the business, and his client needs to find better, more ethical representation.
I think MLS and broker organizations can make Cluetrain marketing work. But the conversation must involve the client. And the standards of expertise, leadership, and fact-based professional opinions must be kept in order to provide value (not just entertainment) to the community (not the mob).